GeoMet lenders OK asset sale; company will repay at least $52 million

By Angela McDaniels

Tacoma, Wash., May 7 - GeoMet, Inc. received an amendment to its credit facility on May 1. The amendment provides the necessary consents to sell the company's coalbed methane properties in Alabama, according to an 8-K filing with the Securities and Exchange Commission.

GeoMet agreed to sell the coalbed methane properties to Saga Resource Partners LLC for $63.2 million. The sale is expected to close by June 14.

GeoMet plans to use the cash proceeds to repay borrowings under the credit facility.

The amendment requires repayment of a minimum of $52 million of borrowings, which will result in the elimination of the "non-conforming" tranche B portion of the total outstanding borrowings.

Following the expected repayment, GeoMet's borrowing base will be the lesser of $83 million and actual outstanding borrowings at such time.

Houston-based GeoMet explores for, develops and produces natural gas from coal seams.

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