GEOI Georesources, Inc. (MM)

GeoResources, Inc., (NASDAQ:GEOI), today announced its financial results for the quarter ended March 31, 2008, compared to the results for the same period in 2007. In a separate press release issued May 1, 2008, GeoResources, Inc. announced its operations update, including horizontal drilling in Texas and North Dakota. For the three months ended March 31, 2008, the Company reported net income of $4.2 million, or $0.29 per share compared to $790,000 or $0.15 per share in 2007. Total revenue increased 482% to $23.9 million in the first quarter of 2008 compared to $4.1 million the same quarter in 2007. Oil and natural gas production increased substantially in the first quarter. Natural gas production increased to 809 MMcf from 192 MMcf in the first quarter of 2007, an increase of 321%. Oil production for the first quarter increased to 200 MBbls from 46 MBbls in the prior year�s period, an increase of 335%. Properties acquired in the 2007 Merger accounted for increased production of approximately 57,000 Mcf of gas and approximately 36,000 barrels of oil during the first quarter of 2008. Properties acquired in the fourth quarter of 2007 accounted for increased production of approximately 420,000 Mcf of gas and approximately 108,000 barrels of oil during the first quarter of 2008. The remaining increases were due to our drilling program, re-engineering and workovers, as well as increased commodity prices. The average realized price of natural gas was $7.73 per Mcf for the first quarter of 2008, 27% more than the first quarter of 2007. The average realized price of oil for the first quarter of 2008 was $81.00 per barrel or 56% more than the first quarter in the prior year. Earnings before interest, income taxes, depreciation, depletion and amortization, and exploration expense (�EBITDAX�) increased 563% to approximately $12,267,000 for the first quarter 2008 compared to $1,878,000 in the prior year�s similar quarter. The following table reconciles reported net income to EBITDAX for the periods indicated: � EBITDAX (1) � Three Months Ended March 31, 2008 � 2007 � � Net income $ 4,224,683 $ 789,350 Add back: Interest expense 1,569,175 156,152 Income tax 2,596,438 4,202 Depreciation, depletion and amortization 3,876,949 928,568 Exploration expense � - � � - � EBITDAX $ 12,267,245 � $ 1,878,272 (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. 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 � � � March 31, � December 31, 2008 2007 (unaudited) ASSETS Current assets: Cash $ 17,163,949 $ 24,430,181 Accounts receivable: Oil and gas revenues 23,125,008 20,365,111 Joint interest billings and other 5,074,769 3,913,461 Affiliated partnerships 3,745,134 3,360,017 Notes receivable 120,000 600,000 Oil and gas properties held for sale 9,694,654 - Prepaid expenses and other � 1,902,159 � � 1,430,445 � Total current assets � 60,825,673 � � 54,099,215 � � Oil and gas properties, successful efforts method: Proved properties 176,537,239 187,640,420 Unproved properties 6,872,150 5,139,309 Office and other equipment 1,031,375 995,365 Land � 96,462 � � 96,462 � 184,537,226 193,871,556 Less accumulated depreciation, depletion and amortization � (14,568,762 ) � (12,430,174 ) Net property and equipment � 169,968,464 � � 181,441,382 � Other assets: Equity in oil and gas limited partnerships 2,003,514 1,880,361 Deferred financing costs and other � 3,019,951 � � 2,937,312 � $ 235,817,602 � $ 240,358,270 � LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 8,394,747 $ 11,374,221 Accounts payable to affiliated partnerships 5,298,816 4,271,238 Revenues and royalties payable 23,275,950 19,833,732 Drilling advances 542,876 882,367 Accrued expenses 2,563,241 2,599,915 Income taxes payable 1,211,456 1,239,172 Derivative financial instruments � 12,659,158 � � 6,527,360 � Total current liabilities 53,946,244 46,728,005 Long-term debt 86,000,000 96,000,000 Deferred income taxes 7,643,752 6,476,433 Asset retirement obligations 5,140,372 7,826,856 Derivative financial instruments 22,718,164 15,295,948 Stockholders' equity: Common stock, par value $.01 per share; authorized 100,000,000 shares; 14,703,383 shares issued and outstanding 147,034 147,034 Additional paid-in capital 79,838,738 79,689,720 Accumulated other comprehensive income (loss) (31,345,975 ) (19,310,316 ) Retained earnings � 11,729,273 � � 7,504,590 � Total stockholders' equity � 60,369,070 � � 68,031,028 � $ 235,817,602 � $ 240,358,270 � GEORESOURCES, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) � � � Three Months Ended March 31, 2008 2007 � Revenue: Oil and gas revenues $ 22,462,739 $ 3,537,494 Partnership management fees 312,474 155,636 Property operating income 314,271 237,758 Gain on sale of property and equipment 409,754 - Partnership income 225,193 59,746 Interest and other � 222,504 � 126,923 Total revenue 23,946,935 4,117,557 � Expenses: Lease operating expense 5,791,117 1,060,409 Severance taxes 1,889,467 268,942 Re-engineering and workovers 697,163 78,187 General and administrative expense 1,783,588 827,717 Depreciation, depletion and amortization 3,876,949 928,568 Hedge ineffectiveness 1,518,355 4,030 Interest � 1,569,175 � 156,152 Total expense � 17,125,814 � 3,324,005 � Income before income taxes 6,821,121 793,552 � Income taxes: Current 1,429,119 1,862 Deferred � 1,167,319 � 2,340 � 2,596,438 � 4,202 � Net income $ 4,224,683 $ 789,350 � Net income per share (basic and diluted) $ 0.29 $ 0.15 � � Weighted average shares outstanding (basic and diluted) � 14,703,383 � 5,378,893