Contact Information: Contact: Stephen M. Smith (713) 287-2251 John Baldissers BPC Financial (800) 667-0938 www.geometinc.com
GeoMet Announces Proved Reserves of 209 Bcf at December 31, 2009
| Source: GeoMet, Inc.
HOUSTON, TX--(Marketwire - March 8, 2010) - GeoMet, Inc. (NASDAQ : GMET ) today announced
that its proved natural gas reserves as of December 31, 2009 prepared by
DeGolyer and MacNaughton ("D&M"), independent petroleum engineers, totaled
209 billion cubic feet (Bcf). After consideration of production for the
period, proved reserves decreased less than 1% from the 213 Bcf of reserves
as of September 30, 2009 which were audited by D&M and reported by the
Company in its filing on Form 10-Q with the SEC for that period. Proved
reserves at year-end 2009 were calculated using the average
first-day-of-the-month Henry Hub natural gas price for the prior twelve
months of $3.87 per thousand cubic feet (Mcf) and adjusting for regional
pricing differentials. The resulting price of $4.07 per Mcf was 8% lower
than the $4.43 natural gas price used to calculate proved reserves at
September 30, 2009.
As compared to September 30, 2009, proved reserves at year-end 2009 include
negative adjustments of approximately 5 Bcf related to the impact of
applying the new SEC rules, offset by approximately 3 Bcf of positive
performance revisions.
J. Darby Seré, GeoMet's Chairman and Chief Executive Officer, commented,
"Although we did not drill any wells in 2009, our production increased
slightly year-over-year. We believe this reflects the low production
decline rates of our proved reserves. In addition, we implemented
significant cost reduction initiatives which lessened the negative impact
of lower natural gas prices. The average price of natural gas reported by
the Company during 2009 was $4.05 per Mcf, 56% lower than the average price
of $9.17 per Mcf reported in 2008. Since the end of 2009 we have drilled
three wells in the Virginia portion of our Pond Creek field and plan to
drill at least another five wells in that area by August."
The present value of proved reserves discounted at 10% (PV-10 value) was
approximately $98 million at December 31, 2009 as compared to approximately
$119 million at September 30, 2009. Using a year-end price of $6.00 per
Mcf, which includes adjustments for regional pricing differentials,
(pursuant to SEC pricing guidelines in effect on September 30, 2009), the
year-end proved reserves would have totaled 221 Bcf with a PV-10 value of
approximately $215 million.
The Company's proved reserves at December 31, 2009 are 100% coalbed methane
and 75% developed. Approximately 62% of total year-end 2009 proved
reserves are in the Pond Creek and Lasher fields in West Virginia and
Virginia, and 38% are in the Gurnee field in Alabama.
In addition to proved reserves, D&M estimated the Company had probable
reserves of 108 Bcf at December 31, 2009. The probable reserves were
calculated using a sensitivity natural gas price case, including
adjustments for regional pricing differentials, of $6.00 per Mcf held
constant over the life of the reserves.
Forward-Looking Statements Notice
This press release may contain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements are subject to certain risks, trends and
uncertainties that could cause actual results to differ materially from
those projected. Among those risks, trends and uncertainties are our
estimate of the sufficiency of our existing capital sources, our ability to
raise additional capital to fund cash requirements for future operations,
the uncertainties involved in estimating quantities of oil and natural gas
reserves, in prospect development and property acquisitions and in
projecting future rates of production, the timing of development
expenditures and drilling of wells, and the operating hazards attendant to
the oil and gas business. In particular, careful consideration should be
given to cautionary statements made in the various reports the Company has
filed with the SEC. GeoMet undertakes no duty to update or revise these
forward-looking statements.
The Securities and Exchange Commission ("SEC") permits oil and gas
companies, in filings made with the SEC, to disclose proved reserves, which
are estimates that geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known
reservoirs under existing economic and operating conditions. Beginning with
year-end reserves for 2009, the SEC permits the optional disclosure of
probable and possible reserves. Probable reserves are those additional
reserves that are less certain to be recovered than proved reserves but
which, in sum with proved reserves, are as likely as not to be recovered.
Possible reserves include those additional reserves that are less certain
to be recovered than probable reserves. GeoMet has elected not to disclose
the Company's probable and possible reserves in its filings with the SEC;
however, the Company's probable reserves are disclosed above. Actual
quantities that may be ultimately recovered from the Company's interests
may differ substantially. Factors affecting ultimate recovery include the
scope of our ongoing drilling program, which will be directly affected by
the availability of capital, drilling and production costs, availability of
drilling services and equipment, drilling results, lease expirations,
transportation constraints, regulatory approvals and other factors; and
actual drilling results, including geological and mechanical factors
affecting recovery rates. In addition, our production forecasts and
expectations for future periods are dependent upon many assumptions,
including estimates of production decline rates from existing wells and the
undertaking and outcome of future drilling activity, which may be affected
by significant commodity price declines or drilling cost increases.
About GeoMet, Inc.
GeoMet, Inc. is an independent energy company primarily engaged in the
exploration for and development and production of natural gas from coal
seams ("coalbed methane") and non-conventional shallow gas. Our principal
operations and producing properties are located in the Cahaba Basin in
Alabama and the Central Appalachian Basin in West Virginia and Virginia.
We also control additional coalbed methane and oil and gas development
rights, principally in Alabama, British Columbia, Virginia, and West
Virginia.
For more information please contact Stephen M. Smith at (713) 287-2251
(ssmith@geometcbm.com); John Baldissers with BPC Financial at
(800) 667-0938; or visit our website at www.geometinc.com.