GeoResources, Inc. Doubles Reserves and Production Base
18 Outubro 2007 - 10:00AM
PR Newswire (US)
HOUSTON, Oct. 18 /PRNewswire-FirstCall/ -- GeoResources, Inc.,
(NASDAQ:GEOI), today announced that it has acquired all of the
limited partner interest in an affiliated partnership, from an
undisclosed financial institution, for $91.1 million. This
acquisition effectively doubles the reserves and production base of
the Company and includes oil and gas properties located in
Louisiana, the Gulf Coast, South Texas, the Permian Basin and the
Black Warrior Basin. As of October 1, 2007, the acquired proved
reserves are estimated, by the Company, at 16.3 Bcf and 4.9 MMBLS
or 7.6 MMBOE and current production from the properties is 5,194
Mcfd and 1,096 BOPD or 1,962 BOEPD. The Company was the general
partner of the affiliated partnership and operator of a majority of
the properties, and accordingly, no additional staffing is required
to operate the properties. The Company intends to dissolve the
partnership in the normal course of business. In addition, the
Company expects to divest certain existing and acquired non-core
properties. (Logo:
http://www.newscom.com/cgi-bin/prnh/20051114/CGM073LOGO) In
connection with the transaction, the Company paid approximately
$12.95 million to unwind certain commodity price hedges and, in
addition, the Company assumed certain natural gas hedges with an
estimated current unwind cost of approximately $4.8 million. The
majority of those hedges apply to 2009 and the Company will
consider replacing those hedges. Further, in order to attract its
financing and maintain predictable cash flows, the Company entered
into new commodity price hedges, for four years commencing January
1, 2008, for approximately 77% of projected production, from
currently producing reserves excluding expected divestitures. The
Company entered into fixed price swaps for oil and costless collars
for natural gas as follows: Oil Swap, Gas Floor, Gas Cap, Year
$/bbl $/mmbtu $/mmbtu 2008 $80.19 $7.00 $9.80 2009 $76.00 $7.00
$10.75 2010 $74.71 $7.00 $9.90 2011 $74.37 $7.00 $9.20 The net cost
of the oil & gas reserves acquired was approximately $97.4
million and was funded with cash and borrowings of $96.0 million
from an amendment and restatement of the Company's Senior Secured
Revolving Credit Facility ("Facility"), which was underwritten by
Wachovia Capital Markets, LLC, as sole lead arranger and sole book
runner. The increased $200 million Facility, has an initial
available borrowing base of $110 million. Frank A. Lodzinski, Chief
Executive Officer of GeoResources, said, "This acquisition is
immediately accretive and doubles the size of the Company in terms
of reserves, production, revenues and cash flow. Importantly, it
can be operated without additional staffing. Further, the
acquisition has been financed entirely with reasonable levels of
senior secured debt under our increased Facility, at favorable
interest rates. We have also entered into commodity price hedges to
take advantage of high oil prices and to negotiate favorable
financing terms. We expect to sell or trade certain properties to
reduce debt, streamline operations and to focus our personnel on
the upside in our portfolio and generate additional opportunities
for growth." "Fiscal 2007 has been truly a transitional and
defining year for the Company," Lodzinski added. "We closed a
significant merger and two property acquisitions, expanded our
drilling inventory and implemented our drilling and development
programs -- actions consistent with our business strategy. Now,
having built our reserve and cash flow foundation, we can turn our
attention to our capital expenditure program and generation of
additional drilling opportunities. We will continue to search for
accretive acquisitions and mergers. We believe our diversified
approach will allow the Company to continue to grow profitably."
About GeoResources, Inc. On April 17, 2007, the Company completed
its mergers with Southern Bay Oil & Gas L.P. and Chandler
Energy, LLC. The management of Southern Bay and Chandler became the
principal management of the combined entity. Corporate headquarters
are located in Houston, Texas. The Company conducts its exploration
development and production operations through wholly owned
subsidiaries. Activities in the Southern Region are conducted
through Southern Bay Energy, LLC, located in Houston, Texas and
Northern Region operations are conducted through G3 Energy LLC,
located in Denver, Colorado. The Company also maintains a regional
office in Williston, North Dakota. For more information, visit our
website at http://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,
particularly its Form 10-KSB for the Fiscal Year Ended December 31,
2006, for meaningful cautionary language disclosure.
http://www.newscom.com/cgi-bin/prnh/20051114/CGM073LOGO
http://photoarchive.ap.org/ DATASOURCE: GeoResources, Inc. CONTACT:
Cathy Kruse of GeoResources, Inc., +1-701-572-2020 ext 113, Web
site: http://www.georesourcesinc.com/
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