April 26, 2006
Via U.S. Mail
J. Darby Sere
President and Chief Executive Officer
GeoMet, Inc.
909 Fannin, Suite 3208
Houston, Texas 77010
Re: GeoMet, Inc.
Amendment No. 1 to Registration Statement on Form S-1
Filed April 14, 2006
File No. 333-131716
Dear Mr. Sere:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. We remind you of prior comment 1 and 2 and await the
information
requested in prior comments 3 and 7. We note your decision
regarding
an underwritten public offering. Any amendments to this
registration
statement filed subsequent to, or concurrently with, such a filing
should be revised to discuss that offering and reflect changes
resulting from that offering.
Management`s Discussion and Analysis of Results of Operations and
Financial Condition, page 26
Corporate Information, page 7
2. We note your response to prior comment 14 and reissue the
comment.
Revise to provide further information regarding how you have or
intended to achieve the results you indicate in the revised text
by
virtue of the merger to provide further clarification regarding
the
reasons for the merger.
Liquidity and Capital Resources, page 36
3. We have reviewed your expanded disclosure surrounding your
dewatering of coalbeds in response to prior comment 26. Please
confirm, if true, that you do not incur any environmental
liability
with the disposal of the water from the wells or expand your
disclosure accordingly.
Business, page 42
Areas of Operation, page 42
4. We are unable to locate, in your expanded disclosure in
response
to prior comment 32 where you have provided disclosure (i) of the
amount of the estimated future development costs and (ii) to
indicate
whether or not the historical sources of your reserve additions
are
expected to continue, as previously requested. Please advise or
expand your disclosure accordingly.
Appalachian Basin, page 43
5. You reference the precedent agreement entered into in March
2006
between the company and East Tennessee Natural Gas, LLC.
Consistent
with the requirements of Item 601 of Regulation S-K, please file
this
agreement as an exhibit to the extent it constitutes a material
contract.
Executive Compensation, page 56
6. Consistent with the requirements of Item 402 of Regulation S-K,
please include a description of the Incentive Bonus Pool Plan
filed
as Exhibit 10.5 to the registration statement.
Consolidated Statements of Operations and Comprehensive Income,
page
F-4
7. Please revise your caption Income tax provision to include
reference to the benefit for the fiscal year ended December 31,
2005.
8. Please revise your presentation of the components of other
comprehensive income (loss) to comply with paragraph 25 of SFAS
130,
which requires disclosure of the amount of income tax expense or
benefit allocated to each component either on the face of the
statement in which those components are displayed or in the notes
to
the financial statements. Refer to paragraphs 24 and 25 of SFAS
130.
Stock Based Compensation, page F-12
9. We note from your response to prior comment 42 that you applied
the "income approach" for purposes of valuing your privately
issued
common stock. Please explain the difference between the income
approach you reference in your response with the "net asset value
methodology" you identify under this heading as your approach to
estimate the market value of your common stock at grant date. In
addition, please expand your disclosure to address the following:
* Disclose the following for equity instruments granted during the
12
months prior to the date of the most recent balance sheet:
o For each grant date, the number of options or shares granted,
the
exercise price, the fair value of the common stock, and the
intrinsic
value, if any, per option;
o Whether the valuation used to determine the fair value of the
equity instruments was contemporaneous or retrospective.
* Discuss the following in your MD&A:
o The significant factors, assumptions, and methodologies used in
determining fair value;
o A discussion of each significant factor contributing to the
difference between the fair value as of the date of each grant and
the estimated price that the selling share holders will obtain
from
the sale of their shares through this registration statement`
o The valuation alternative selected and the reason management
chose
not to obtain a contemporaneous valuation by an unrelated
valuation
specialist.
Supplemental Financial and Operating Information On Gas
Exploration,
Development and Production Activities (Unaudited), page F-24
10. We note from review of your calculation of historical finding
and
development costs in response to our prior comment 32 that you do
not
include asset retirement costs in your presentation of capitalized
costs incurred under your SFAS 69 disclosures. Please revise your
presentation of capitalized costs incurred, as required by
paragraph
21 of SFAS 69, to include asset retirement costs within the
appropriate line items. Refer to our February 2004 industry
letter
at http://www.sec.gov/divisions/corpfin/guidance/oilgasletter.htm
for
further guidance. In this regard, the letter states, under its
reference to paragraphs 21-23, that "We believe an entity should
include asset retirement costs in its Costs Incurred disclosures
in
the year that the liability is incurred, rather than on a cash
basis."
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of an amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Jennifer Goeken, Staff Accountant at (202)
551-
3721 or Jill Davis, Accounting Branch Chief at (202) 551-3683 if
you
have questions regarding comments on the financials statements and
related matters. Please contact Mellissa Campbell Duru, at (202)
551-3757 or me at (202) 551-3745 with any other questions.
Sincerely,
H. Roger Schwall
Assistant Director
cc: via facsimile
Kirk Tucker, Esq.
Thompson & Knight LLP
(713) 654-1871
Mr.Sere
GeoMet, Inc.
April 26, 2006
Page 5
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
100 F Street, NE
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE
MAIL STOP 7010