GeoResources, Inc., (NASDAQ:GEOI), today announced its financial results
for the first six-months and the quarter ended June 30, 2008, compared
to the results for the same periods in 2007.
For the three months ended June 30, 2008, the Company reported net
income of $7.8 million, or $0.50 per share (diluted) compared to a net
loss of $1.3 million or $0.09 per share in 2007. Total revenue increased
240% to $28.2 million in the second quarter of 2008 compared to $8.3
million the same quarter in 2007.
For the first half of 2008, net income was $12.0 million, or $0.80 per
share, on revenue of $52.2 million versus a net loss of $463,000, or
$0.05 per share on revenue of $12.4 in the first half of 2007.
Oil and natural gas production increased substantially in the second
quarter. Natural gas production increased to 719 MMcf from 361 MMcf, an
increase of 99%. Oil production for the second quarter increased to 186
MBbls from 82 MBbls in the prior year’s
period, an increase of 127%.
For the six months ended June 30, 2008, natural gas sales totaled 1,528
MMcf or 177% greater than the 552 MMcf sold during the first half of
2007. Oil sales for the first half of 2008 increased 204% to 386 Mbbls
from 127 Mbbls in the first half of 2007.
The average realized price of natural gas was $9.74 per Mcf for the
second quarter of 2008, 41% more than the second quarter of 2007. The
average realized price of oil for the second quarter of 2008 was $97.66
per barrel or 75% more than the second quarter in the prior year.
The average realized price of natural gas was $8.68 per Mcf for the
first half of 2008 or 31% more than the first half of the prior year.
The average realized price of oil was $89.01 per barrel or 63% more for
the first half of 2008 than the first six months in the prior year.
Earnings before interest, income taxes, depreciation, depletion and
amortization, and exploration expense (“EBITDAX”)
increased 581% to approximately $17.7 million for the second quarter
2008 compared to $2.6 million in the second quarter 2007. EBITDAX for
the first six-months of 2008 increased 552% to approximately $30.0
million compared to $4.6 million in prior year’s
first half.
The following tables reconcile reported net income to EBITDAX for the
periods indicated (in thousands):
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
7,790
|
|
|
|
$
|
(1,349
|
)
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
1,314
|
|
|
|
|
199
|
|
|
|
Income tax
|
|
|
4,546
|
|
|
|
|
1,849
|
|
|
|
Depreciation, depletion and amortization
|
|
|
3,573
|
|
|
|
|
1,932
|
|
|
|
Exploration and impairments
|
|
|
502
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDAX (1)
|
|
$
|
17,725
|
|
|
|
$
|
2,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
12,014
|
|
|
|
$
|
(463
|
)
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
2,883
|
|
|
|
|
355
|
|
|
|
Income tax
|
|
|
7,142
|
|
|
|
|
1,854
|
|
|
|
Depreciation, depletion and amortization
|
|
|
7,450
|
|
|
|
|
2,861
|
|
|
|
Exploration and impairments
|
|
|
502
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDAX (1)
|
|
$
|
29,991
|
|
|
|
$
|
4,607
|
|
(1) EBITDAX is defined as earnings before interest, income taxes,
depreciation, depletion and amortization, and exploration expense.
EBITDAX should not be considered as an alternative to net income (as an
indicator of operating performance) or as an alternative to cash flow
(as a measure of liquidity or ability to service debt obligations) and
is not in accordance with, nor superior to, generally accepted
accounting principles, but provides additional information for
evaluation of our operating performance.
SemGroup Bankruptcy
Some investors have expressed concern about the possible impact on our
Company of the recent bankruptcy filing by SemGroup LP and its
subsidiary, SemCrude. SemCrude accounted for a very minor portion of our
oil sales and we estimate that our maximum potential losses are
approximately $100,000.
About GeoResources, Inc.
GeoResources, Inc. is an independent oil and gas company engaged in the
acquisition and development of oil and gas reserves through an active
and diversified program which includes purchases of reserves,
re-engineering, and development and exploration activities, currently
focused in the Southwest and Gulf Coast, Williston Basin and Rocky
Mountains. For more information, visit our website at www.georesourcesinc.com.
Forward-Looking Statements
Information herein contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, which
can be identified by words such as "may," "will," "expect,"
"anticipate," "estimate" or "continue," or comparable words.
All statements other than statements of historical facts that
address activities that the Company expects or anticipates will or may
occur in the future are forward-looking statements. Readers
are encouraged to read the SEC reports of the Company, readers
are encouraged to read our Annual Report on Form 10-KSB/A for the year
ended December 31, 2007, and any and all other documents filed with the
SEC regarding information about GeoResources for meaningful cautionary
language in respect of the forward-looking statements herein. Interested
persons are able to obtain free copies of filings containing information
about GeoResources, without charge, at the SEC’s
Internet site (http://www.sec.gov).
|
|
GEORESOURCES, INC. and SUBSIDIARIES
|
|
|
CONSOLIDATED BALANCE SHEETS
|
|
|
(In thousands, except share and per share amounts)
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash
|
|
|
$
|
23,578
|
|
|
$
|
24,430
|
|
|
|
Accounts receivable:
|
|
|
|
|
|
|
|
Oil and gas revenues
|
|
|
|
32,472
|
|
|
|
20,365
|
|
|
|
Joint interest billings and other
|
|
|
|
4,287
|
|
|
|
3,913
|
|
|
|
Affiliated partnerships
|
|
|
|
4,162
|
|
|
|
3,360
|
|
|
|
Notes receivable
|
|
|
|
120
|
|
|
|
600
|
|
|
|
Federal income tax receivable
|
|
|
|
251
|
|
|
|
-
|
|
|
|
Prepaid expenses and other
|
|
|
|
2,250
|
|
|
|
1,430
|
|
|
|
Total current assets
|
|
|
|
67,120
|
|
|
|
54,098
|
|
|
|
|
|
|
|
|
|
|
Oil and gas properties, successful efforts method:
|
|
|
|
|
|
|
|
Proved properties
|
|
|
|
199,071
|
|
|
|
187,641
|
|
|
|
Unproved properties
|
|
|
|
3,520
|
|
|
|
5,140
|
|
|
Office and other equipment
|
|
|
|
989
|
|
|
|
996
|
|
|
Land
|
|
|
|
96
|
|
|
|
96
|
|
|
|
|
|
|
|
203,676
|
|
|
|
193,873
|
|
|
|
Less accumulated depreciation, depletion and amortization
|
|
(18,106
|
)
|
|
|
(12,430
|
)
|
|
|
Net property and equipment
|
|
|
|
185,570
|
|
|
|
181,443
|
|
|
Other assets:
|
|
|
|
|
|
|
|
Equity in oil and gas limited partnerships
|
|
|
|
3,319
|
|
|
|
1,880
|
|
|
|
Deferred financing costs and other
|
|
|
|
2,695
|
|
|
|
2,937
|
|
|
|
|
|
|
$
|
258,704
|
|
|
$
|
240,358
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
11,349
|
|
|
$
|
11,374
|
|
|
|
Accounts payable to affiliated partnerships
|
|
|
|
20,575
|
|
|
|
9,538
|
|
|
|
Revenues and royalties payable
|
|
|
|
21,164
|
|
|
|
14,567
|
|
|
|
Drilling advances
|
|
|
|
445
|
|
|
|
882
|
|
|
|
Accrued expenses
|
|
|
|
3,673
|
|
|
|
3,839
|
|
|
|
Derivative financial instruments
|
|
|
|
33,955
|
|
|
|
6,527
|
|
|
|
Total current liabilities
|
|
|
|
91,161
|
|
|
|
46,727
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
50,000
|
|
|
|
96,000
|
|
|
Deferred income taxes
|
|
|
|
10,860
|
|
|
|
6,476
|
|
|
Asset retirement obligations
|
|
|
|
5,217
|
|
|
|
7,827
|
|
|
Derivative financial instruments
|
|
|
|
55,062
|
|
|
|
15,296
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Common stock, par value $.01 per share; authorized 100,000,000
shares; 16,236,717 shares issued and outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
162
|
|
|
|
147
|
|
|
|
Additional paid-in capital
|
|
|
|
112,290
|
|
|
|
79,690
|
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(85,567
|
)
|
|
|
(19,310
|
)
|
|
|
Retained earnings
|
|
|
|
19,519
|
|
|
|
7,505
|
|
|
|
Total stockholders' equity
|
|
|
|
46,404
|
|
|
|
68,032
|
|
|
|
|
|
|
$
|
258,704
|
|
|
$
|
240,358
|
|
|
GEORESOURCES, INC. and SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
|
2008
|
|
|
|
2007
|
|
2008
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and gas revenues
|
|
$
|
25,118
|
|
|
|
|
$
|
7,060
|
|
|
$
|
47,581
|
|
|
|
|
$
|
10,598
|
|
|
Partnership management fees
|
|
|
522
|
|
|
|
|
|
256
|
|
|
|
834
|
|
|
|
|
|
412
|
|
|
Property operating income
|
|
|
357
|
|
|
|
|
|
445
|
|
|
|
671
|
|
|
|
|
|
682
|
|
|
Gain (loss) on sale of property and equipment
|
|
|
1,551
|
|
|
|
|
|
(15
|
)
|
|
|
1,961
|
|
|
|
|
|
(15
|
)
|
|
Partnership income
|
|
|
429
|
|
|
|
|
|
154
|
|
|
|
655
|
|
|
|
|
|
213
|
|
|
Interest and other
|
|
|
228
|
|
|
|
|
|
385
|
|
|
|
450
|
|
|
|
|
|
512
|
|
|
Total revenue
|
|
|
28,205
|
|
|
|
|
|
8,285
|
|
|
|
52,152
|
|
|
|
|
|
12,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expense
|
|
|
5,789
|
|
|
|
|
|
2,255
|
|
|
|
11,580
|
|
|
|
|
|
3,315
|
|
|
Severance taxes
|
|
|
2,428
|
|
|
|
|
|
534
|
|
|
|
4,317
|
|
|
|
|
|
803
|
|
|
Re-engineering and workovers
|
|
|
984
|
|
|
|
|
|
415
|
|
|
|
1,682
|
|
|
|
|
|
433
|
|
|
Exploration and impairment expense
|
|
|
502
|
|
|
|
|
|
-
|
|
|
|
502
|
|
|
|
|
|
-
|
|
|
General and administrative expense
|
|
|
1,861
|
|
|
|
|
|
2,457
|
|
|
|
3,645
|
|
|
|
|
|
3,247
|
|
|
Depreciation, depletion and amortization
|
|
|
3,573
|
|
|
|
|
|
1,932
|
|
|
|
7,450
|
|
|
|
|
|
2,861
|
|
|
Hedge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ineffectiveness
|
|
(582
|
)
|
|
|
|
|
(7
|
)
|
|
|
937
|
|
|
|
|
|
(3
|
)
|
|
Interest
|
|
|
1,314
|
|
|
|
|
|
199
|
|
|
|
2,883
|
|
|
|
|
|
355
|
|
|
Total expense
|
|
|
15,869
|
|
|
|
|
|
7,785
|
|
|
|
32,996
|
|
|
|
|
|
11,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
12,336
|
|
|
|
|
|
500
|
|
|
|
19,156
|
|
|
|
|
|
1,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
1,330
|
|
|
|
|
|
94
|
|
|
|
2,759
|
|
|
|
|
|
96
|
|
|
Deferred
|
|
|
3,216
|
|
|
|
|
|
1,755
|
|
|
|
4,383
|
|
|
|
|
|
1,758
|
|
|
|
|
|
4,546
|
|
|
|
|
|
1,849
|
|
|
|
7,142
|
|
|
|
|
|
1,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
7,790
|
|
|
|
|
$
|
(1,349
|
)
|
|
$
|
12,014
|
|
|
|
|
$
|
(463
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share (basic)
|
|
$
|
0.51
|
|
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.80
|
|
|
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income per share (diluted)
|
|
$
|
0.50
|
|
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.79
|
|
|
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (basic)
|
|
|
15,214
|
|
|
|
|
|
14,573
|
|
|
|
14,959
|
|
|
|
|
|
10,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (diluted)
|
|
|
15,505
|
|
|
|
|
|
14,573
|
|
|
|
15,146
|
|
|
|
|
|
10,106
|
|
|
GEORESOURCES, INC. and SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
2008
|
|
|
|
2007
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
12,014
|
|
|
|
|
$
|
(463
|
|