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May 16, 2012
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| 11:36 EDT |  | GMET |
| theflyonthewall.com: | GeoMet expects borrowing base deficiency | | William C. Rankin, GeoMet's President and CEO, had the following comments, "As a result of the current low gas price environment, we expect a borrowing base deficiency. Due to these factors, we incurred significant non-cash charges which adversely impacted our results for the quarter and our balance sheet resulting in disclosures related to going concern risks. However, despite the lowest natural gas prices in a decade, the company recorded its fifth consecutive quarter of Adjusted Net Income. Cash generation was in line with our expectations for the quarter largely as a result of our hedging strategy and our effective control of costs. The Vitruvian acquisition completed in November of last year doubled our production and lowered our cash breakeven point per Mcf by approximately 30%." Rankin added, "We face significant challenges but are continuing to meet all of our obligations on a timely basis. The company has hedged more than 80% of estimated sales volumes for the last three quarters of 2012 and for all of 2013 at levels well above the current NYMEX forward natural gas price curve. We are negotiating with our bank group to address a borrowing base deficiency that will exist at the pending June determination. We expect to resolve this matter in a manner acceptable to the company but can provide no assurances of such at this time." :theflyonthewall.com |
| | 11:33 EDT |  | GMET |
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