Geokinetics Announces 2009 Capital Expenditure Budget and Amendment to Revolving Credit Facility
February 17 2009 - 4:51PM
PR Newswire (US)
HOUSTON, Feb. 17 /PRNewswire-FirstCall/ -- Geokinetics Inc. (NYSE
Alternext: GOK) announced today that its Board of Directors has
approved a capital expenditure budget for 2009 of $37.3 million,
which is a reduction of over 50% from capital expenditures in 2008.
The Company expects investments in 2009 to be targeted toward
maintenance and selective additions of vessels and other equipment
to improve the efficiency of the Company's shallow water
operations, support equipment for long-term projects in South
America and West Africa and the continued implementation of new
information technology systems. In addition, the Company's Board of
Directors approved a $12.7 million investment in an interest in
data that the Company will retain in conjunction with a data
acquisition survey that will be completed by the Company. The data
will be acquired in the United States and co-owned by the Company
and its customer. The Company expects that license revenues already
committed will be sufficient to cover the Company's share of cash
costs for data acquisition. The Company also amended its existing
$70 million revolving credit facility with PNC Bank on February 11,
2009. Among other things, the amended agreement increases the
Company's borrowing base that can come from eligible fixed assets
to $55.0 million, up from the original $45.0 million and deferred
any reductions to this new amount until June 30, 2009, at which
time, the amount of the borrowing base that can come from eligible
fixed assets will be reduced by $0.9 million per month until
maturity. Once started, the reduction will affect only the amount
of the borrowing base that can come from eligible fixed assets and
will not reduce the overall amount of the revolver. Based on the
current borrowing base calculation, the Company has immediate
access to the maximum availability of $70.0 million. As of December
31, 2008, outstanding borrowings on the revolver were $44.0 million
of principal and $2.3 million in letters of credit. The revolving
credit facility matures in May 2012. Richard Miles, President and
Chief Executive Officer, said: "In today's challenging financial
environment, it is more important than ever that companies align
their spending patterns with client demand. In light of reduced
spending by many exploration and production companies combined with
lower commodity prices, we have decided to reduce our investments
in capital expenditures in 2009. The reduced capital budget
reaffirms our commitment to financial discipline and strategic
growth. It strengthens our ability to remain well-capitalized and
positions us for increased opportunities as consumer demand
increases. Our worldwide backlog is very strong and we remain
committed to maintaining and strengthening our leadership position
in shallow water data acquisition and will continue to make prudent
investments in upgrades to our international crews where it
improves productivity or enhances our competitive advantage. In
addition, we are excited by our joint-investment in data that we
will acquire and we are encouraged to partner with our client for
future data sales. We expect this endeavor to utilize two crews in
the United States for the majority of this year." Scott McCurdy,
Vice President and Chief Financial Officer, said: "Amending our
credit facility with PNC increases our financial flexibility and
strengthens our financial position during these uncertain times. We
appreciate the support of PNC and the confidence of our bank group
in our business plan and strategy going forward." About Geokinetics
Inc. Geokinetics Inc., based in Houston, Texas, is a leading global
provider of seismic data acquisition and high-end seismic data
processing services to the oil and gas industry. Geokinetics has
strong operating presence in North America and is focused on key
markets internationally. Geokinetics operates in some of the most
challenging locations in the world from the Arctic to mountainous
jungles to the transition zone environments. More information about
Geokinetics is available at http://www.geokinetics.com/.
Forward-Looking Statements This press release includes
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). All
statements, other than statements of historical facts, included in
this earnings release that address activities, events or
developments that Geokinetics expects, believes or anticipates will
or may occur in the future are forward-looking statements. These
statements include but are not limited to statements about our 2009
capital expenditure budget, the business outlook for the year,
backlog and future jobs, business strategy, related financial
performance and statements with respect to future benefits. These
statements are based on certain assumptions made by Geokinetics
based on management's experience and perception of historical
trends, industry conditions, market position, future operations,
profitability, liquidity, backlog, capital resources and other
factors believed to be appropriate. Such statements are subject to
a number of assumptions, risks and uncertainties, many of which are
beyond the control of Geokinetics, which may cause actual results
to differ materially from those implied or expressed by the
forward-looking statements. These include risks relating to
financial performance and results, job delays or cancellations,
reductions in oil and gas prices, the continued disruption in
worldwide financial markets, impact from severe weather conditions
and other important factors that could cause actual results to
differ materially from those projected, or backlog not to be
completed, as described in the Company's reports filed with the
Securities and Exchange Commission. Backlog consists of written
orders and estimates of Geokinetics' services which it believes to
be firm, however, in many instances, the contracts are cancelable
by customers so Geokinetics may never realize some or all of its
backlog, which may lead to lower than expected financial
performance. Although Geokinetics believes that the expectations
reflected in such statements are reasonable, it can give no
assurance that such expectations will be correct. All of
Geokinetics' forward-looking statements, whether written or oral,
are expressly qualified by these cautionary statements and any
other cautionary statements that may accompany such forward-looking
statements. Any forward-looking statement speaks only as of the
date on which such statement is made and Geokinetics undertakes no
obligation to correct or update any forward-looking statement,
whether as a result of new information, future events or otherwise.
DATASOURCE: Geokinetics Inc. CONTACT: Scott A. McCurdy, Vice
President and CFO of Geokinetics Inc., +1-713-850-7600, or fax,
+1-713-850-7330 Web Site: http://www.geokinetics.com/
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