GeoMet agrees to amended, restated $250 million credit facility

By Angela McDaniels

Tacoma, Wash., Oct. 20 - GeoMet, Inc. plans to finance an upcoming acquisition with a new amended and restated bank credit facility, according to a company news release.

The new credit facility will become effective when the acquisition closes, which is expected to occur in the next four to eight weeks.

The key elements of the new credit facility are as follows:

• The size will be increased to $250 million from $180 million, and the borrowing base will be increased to $180 million from $90 million;

• The group of lenders will be increased to six banks from five;

• The new credit facility will have a four-year maturity, an extension of the current facility by more than two years; and

• The borrowing rate will be reduced by 50 basis points, and some financial and other covenants will be improved.

Bank of America, NA is the administrative agent, BNP Paribas is the syndication agent, and US Bank NA and Bank of Scotland plc are the documentation agents.

The proceeds will be used to finance the company's acquisition of coalbed methane assets in Alabama and West Virginia, some natural gas hedge positions and a license to use a certain drilling technology. The total payment for the acquired assets is $90.2 million, subject to adjustment.

GeoMet explores for and produces natural gas from coal seams and non-conventional shallow gas. It is based in Houston.

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