HOUSTON, TX--(Marketwire - April 1, 2010) - GeoMet, Inc. (
Under the terms of the proposed rights offering, on the applicable record date the Company would distribute to the holders of its common stock rights to purchase up to an aggregate of 4,000,000 new shares of convertible preferred stock at a subscription price of $10.00 per share. The convertible preferred stock would be convertible into shares of the Company's common stock at a conversion price of $1.30 per share, subject to customary adjustments. In the event that the Company's stockholders do not subscribe for all 4,000,000 shares of preferred stock offered, NGPC and North Shore would purchase the remaining unsubscribed shares of preferred stock pursuant to the terms of a definitive backstop agreement to be negotiated between the Company, NGPC and North Shore.
The preliminary terms of the Company's convertible preferred stock to be issued in connection with the proposed rights offering include the following:
- Dividends payable quarterly either in cash at an annual rate of 9.6% or, until the fifth anniversary of the closing date, in additional shares of preferred stock at an annual rate of 12.5%, at the option of the Company;
- After the fifth anniversary of the closing date, the Company may elect, subject to certain limitations based on recent trading volume in its common stock, to convert portions of the convertible preferred stock if the average trading price of the Company's common stock exceeds 225% of the conversion price ($2.93 based on a conversion price of $1.30);
- Redeemable at the option of the holder upon the earlier of (i) a liquidation event or (ii) the eighth anniversary of the closing date, and the redemption price for each share of convertible preferred stock will be equal to the price paid for such share plus any accrued and unpaid dividends on such share.
The commitment letters represent the preliminary agreement among the parties with respect to the basic terms of the convertible preferred stock and the backstop arrangement. The commencement of a rights offering by the Company is subject to the execution of a definitive backstop agreement between the Company, NGPC and North Shore, completion of title and environmental due diligence satisfactory to NGPC and North Shore, the approval of our stockholders and other terms and conditions.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of GeoMet, Inc. nor shall there be any sale of such securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
Forward-Looking Statements Notice
This press release contains "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 events or results to differ materially from the events or results described in the forward-looking statements. In addition, the Company cannot assure that it will be successful in obtaining additional financing on the terms outlined in this press release or otherwise. Careful consideration should be given to the risk factors and other cautionary statements included in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission. GeoMet undertakes no duty to update or revise these forward-looking statements.
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 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 Baldissera with BPC Financial at (800) 368-1217, or visit our website at www.geometinc.com.
Contact Information:
Contact
Stephen M. Smith
(713) 287-2251
)
John Baldissera
BPC Financial
(800) 368-1217
www.geometinc.com