Geokinetics avoids covenants with new revolving credit facility

By Aleesia Forni

Columbus, Ohio, Aug. 16 - Geokinetics Inc. said it will no longer be subject to maintenance covenants under a new $50 million revolving credit facility.

During the company's second quarter earnings conference call, company officials said a primary reason for their choice of the facility was to remove the company from the covenant restrictions.

The senior secured facility with Whitebox Advisors LLC was completed on Aug. 12. Borrowings are at 11.125% and the facility matures on Sept. 1, 2014. The unused fee is 11.125%.

For the second quarter, the company reported EBITDA of $9.2 million, an increase from negative $3.8 million from the same period during the previous year.

"The second quarter was a transitory period, in which we prepared and positioned crews for the second half of this year," said Dick Miles, president and chief executive officer of Geokinetics.

Second quarter results were softer than the company had expected, affected by weather and permitting delays.

"We are optimistic that results in the second half of the year will improve compared to the first half of the year, primarily due to the expected increase in asset utilization internationally and additional contributions from the multi-client business," Miles said.

As of June 30, Geokinetics reported cash equivalents and restricted cash of $65.8 million.

The company expects a small increase in cash flow or to break even between now and the end of the year, company officials said.

Geokinetics also reported second quarter revenue of $144.5 million, an increase of 22% from the same quarter of 2010.

Geokinetics is a Houston-based geophysical services company.

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