GeoMet Inc. (GMET, Financial) filed Annual Report for the period ended 2010-12-31.
Geomet Inc. has a market cap of $63.2 million; its shares were traded at around $1.59 with a P/E ratio of 79.5 and P/S ratio of 1.9.
In the current natural gas pricing environment, the Company intends to limit capital spending to its internally generated cash flows from operations. Accordingly, it is unlikely to consider any significant exploration activities until conditions improve, as such investments would likely not be economical. We currently intend to drill our proved undeveloped locations in the Pond Creek field and to continue to conduct hydraulic fracturing in new infill wells or in behind pipe shallow zones in the Gurnee field on a limited basis. Our current focus is to complete the developmental drilling program in the Pond Creek field and, in the Gurnee field, improve production and determine the commerciality of future development through hydraulic fracturing techniques. At current gas prices, it is unlikely that we would seek, nor could we obtain on reasonable terms, significant additional financing necessary to acquire additional properties or otherwise expand beyond our current developmental drilling and hydraulic fracturing programs. At December 31, 2009 and 2010, we had $15.5 million and $9.5 million, respectively, in available borrowing capacity. This business plan is consistent with our past actions taken in unfavorable pricing environments. For example, when the price of natural gas declined precipitously at the end of 2008, we stopped substantially all of our development activities, and in 2009 did not drill any new wells.
In January 2011, we agreed to sell gross volumes of 16,000 MMBtu/day of natural gas from our Pond Creek field for the period February 2011 through March 2012 through a forward physical sale contract with our existing purchaser at a price equal to the last day settlement price for the NYMEX contract for the month of sale plus $0.15, $0.115, and $0.13 for the periods February 2011 through March 2011, April 2011 through October 2011, and November 2011 through March 2012, respectively. Additionally, we fixed the NYMEX settle on a portion of the aforementioned forward sale as follows: (1) 4,000 MMBtu /day for the period April 2011 through October 2011 was fixed at a total price for physical gas sales, including the aforementioned basis, of $4.915/ MMBtu and (2) 3,000 MMBtu /day for the period November 2011 through March 2012 was fixed at a total price for physical gas sales, including the aforementioned basis, of $5.33/ MMBtu. These contracted volumes represent approximately 89% of total expected gross production volumes for the contract period from the Pond Creek field. If we are unable to fulfill our commitment, or a portion thereof, we are obligated to reimburse our counterparty for any price paid to replace the quantity of natural gas we failed to deliver which is in excess of the contract price. This obligation is limited to the spot price for natural gas at the delivery point on the day we fail to deliver.
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Geomet Inc. has a market cap of $63.2 million; its shares were traded at around $1.59 with a P/E ratio of 79.5 and P/S ratio of 1.9.
Highlight of Business Operations:
The aggregate market value of common stock, par value $0.001 per share, held by non-affiliates (based upon the closing sales price of $1.14 on the NASDAQ Global Market on June 30, 2010) on the last business day of registrants most recently completed second fiscal quarter was approximately $24.6 million.In the current natural gas pricing environment, the Company intends to limit capital spending to its internally generated cash flows from operations. Accordingly, it is unlikely to consider any significant exploration activities until conditions improve, as such investments would likely not be economical. We currently intend to drill our proved undeveloped locations in the Pond Creek field and to continue to conduct hydraulic fracturing in new infill wells or in behind pipe shallow zones in the Gurnee field on a limited basis. Our current focus is to complete the developmental drilling program in the Pond Creek field and, in the Gurnee field, improve production and determine the commerciality of future development through hydraulic fracturing techniques. At current gas prices, it is unlikely that we would seek, nor could we obtain on reasonable terms, significant additional financing necessary to acquire additional properties or otherwise expand beyond our current developmental drilling and hydraulic fracturing programs. At December 31, 2009 and 2010, we had $15.5 million and $9.5 million, respectively, in available borrowing capacity. This business plan is consistent with our past actions taken in unfavorable pricing environments. For example, when the price of natural gas declined precipitously at the end of 2008, we stopped substantially all of our development activities, and in 2009 did not drill any new wells.
In January 2011, we agreed to sell gross volumes of 16,000 MMBtu/day of natural gas from our Pond Creek field for the period February 2011 through March 2012 through a forward physical sale contract with our existing purchaser at a price equal to the last day settlement price for the NYMEX contract for the month of sale plus $0.15, $0.115, and $0.13 for the periods February 2011 through March 2011, April 2011 through October 2011, and November 2011 through March 2012, respectively. Additionally, we fixed the NYMEX settle on a portion of the aforementioned forward sale as follows: (1) 4,000 MMBtu /day for the period April 2011 through October 2011 was fixed at a total price for physical gas sales, including the aforementioned basis, of $4.915/ MMBtu and (2) 3,000 MMBtu /day for the period November 2011 through March 2012 was fixed at a total price for physical gas sales, including the aforementioned basis, of $5.33/ MMBtu. These contracted volumes represent approximately 89% of total expected gross production volumes for the contract period from the Pond Creek field. If we are unable to fulfill our commitment, or a portion thereof, we are obligated to reimburse our counterparty for any price paid to replace the quantity of natural gas we failed to deliver which is in excess of the contract price. This obligation is limited to the spot price for natural gas at the delivery point on the day we fail to deliver.
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