______________________________________________________________________________
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): November 10, 2008
GEORESOURCES,
INC.
(Exact
name of registrant as specified in its charter)
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COLORADO
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0-8041
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84-0505444
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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110
Cypress Station Drive, Suite 220
Houston,
Texas 77090
(Address of principal executive
offices) (Zip Code)
(281)
537-9920
(Registrant’s
telephone number, including area code)
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Not
Applicable
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(Former
Name or Former Address, if Changed Since Last
Report)
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
___
Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
______________________________________________________________________________
On
November 10, 2008, GeoResources, Inc. (the "Registrant") issued a press release
announcing financial results for the third quarter ended September 30, 2008.
A copy of the
press release is furnished with this report as Exhibit 99.9, and is incorporated
herein by reference.
Additionally,
on November 10, 2008, the Registrant issued a press release providing
an operations update.
A copy of the press
release is furnished with this report as Exhibit 99.8, and is incorporated
herein by reference.
The
information in this report is being furnished, not filed, for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, and will not be
incorporated by reference into any filing under the Securities Act of 1933, as
amended.
ITEM 9.01
FINANCIAL STATEMENTS AND EXHIBITS
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(d)
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Exhibits:
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The
following exhibits are included with this Current Report on
Form 8-K:
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Exhibit No.
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Description
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99.8
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GeoResources,
Inc. Press Release dated November 10, 2008.
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99.9
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GeoResources,
Inc. Press Release dated November 10,
2008.
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SIGNATURE
Pursuant to the requirement of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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GEORESOURCES,
INC
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By:
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/s/ Frank A.
Lodzinski
Frank
A. Lodzinski, President
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Date:
November 13, 2008
EXHIBIT
INDEX
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Exhibit No.
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Description
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99.8
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GeoResources,
Inc. Press Release dated November 10, 2008.
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99.9
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GeoResources,
Inc. Press Release dated November 10,
2008.
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EXHIBIT
99.8
Contact: Cathy
Kruse
Telephone:
701-572-2020 ext 113
cathyk@geoi.net
FOR IMMEDIATE RELEASE
GeoResources,
Inc. Provides Operations Update
Continues
successful horizontal drilling in Texas and North Dakota
Plans
to proceed with its capital budget as planned.
Houston, Texas, November 10, 2008
– GeoResources, Inc., (Nasdaq:GEOI), today provided an operations
update. The Company is continuing its full capital budget as
planned.
DRILLING
RESULTS
GeoResources continues its successful
exploitation of the Austin Chalk formation in the Giddings Field, Grimes County,
Texas and is presently completing the Bax #1 which is the fourth dual lateral
well which was drilled to a vertical depth of 14,395 ft and included two
horizontal laterals of 6,528 ft and 6,241 ft. The previously reported
Keisler #2-H horizontal dual lateral well had an initial production rate in
excess of 20 MMCFPD commencing on August 9, 2008, has produced in excess of 1.3
Bcf to date and is currently producing approximately 8
MMCFPD. Previously, the Company reported that the Jeff Haynie was
completed for 17 MMCFPD. Since initial production on May 23, 2008,
this well has produced 1.67 BCF and is still making about 5
MMCFPD. The Company has achieved a 100% success rate in drilling
these Austin Chalk horizontal wells. The Company continues to pursue
its development strategy and expects to spud the Hurst-Bay 1-H as a dual lateral
within the next two weeks. The Company is the operator of these wells
and holds a direct 7.2% working interest. In addition, an affiliated
partnership owns an 82.8% working interest. The Company holds a 2%
general partner interest in the partnership, which interest increases
significantly in accordance with economic performance parameters under the terms
of the partnership agreement. At present the Company has at least
nine additional locations, including both dual and single laterals and pending
continued technical evaluation, commodity price levels, successful leasing and
acceptable well performance, GeoResources expects to retain the current drilling
rig and crew and spud a new well approximately every 60-75 days.
Drilling
activity in the Bakken Shale play of Mountrail County, North Dakota remains
active and successful, as reported by numerous operators and
participants. Likewise, the Company continues to benefit from
favorable results. After a recent period of production
cutbacks due to oil pipeline capacity limitations, the Pathfinder #1-9H (5.1%
WI) and Prowler #1-16H (6.2% WI) were returned to full production at the
beginning of September at 1,297 BOPD and 539 BOPD,
respectively. Additionally, the following wells commenced production
since our last operations update: the Prospector #1-36H (5.1% WI) at
274 BOPD in July; Payara #1-21H (6.2% WI) at 403 BOPD in August; Voyager #1-28H
(9.4% WI) at 743 BOPD in October and the Golden Eye #1-2H (4.1% WI) at 650 BOPD
also in October. We currently are drilling the Bandit #1-29H (7.35%
WI), moving on location to drill the Nightcrawler #1-17H (4.7% WI), and awaiting
completion of the Peacemaker #1-28H (3.8% WI). The Company presently
has an additional seven wells scheduled in this play with numerous others in
process of being planned and permitted.
The
Company holds a 10-15% working interest in more than 26,000 acres in Mountrail
County, North Dakota and is participating in numerous Bakken Shale wells through
a joint venture with Slawson Exploration. Continuous drilling is
anticipated throughout the remainder of 2008 and 2009. In addition,
GeoResources presently has minor interests in 15 wells that are producing or in
various stages of completion as well as an additional 19 that are scheduled or
permitted by other operators. These small participations should
result in valuable engineering and geological data, and while the Company
concentrates on Slawson operated wells, it evaluates all available technical
information while seeking to increase its position in this expanding
play.
As
previously announced, the Company has unitized certain producing shallow oil
fields in Bottineau County, ND for water-flood operations and is continuing
these activities. The Company is continuing its capital expenditures,
as planned. Phase two of the development plan, consisting of drilling
additional injection and recovery wells and installation of facilities, is
underway at the Starbuck Madison Unit which includes 6,619 gross acres and 6,346
net acres. The Company has a 95.88 % working interest and 81.22 % net
revenue interest. Phase one, which included drilling injection wells
and installing a water plant and flow lines for initial water injection, was
completed in early 2008. The flood design includes two productive
zones: the Midale (Mississippian Charles) and the Berentson (Mississippian
Charles B-1) Zones, which are being flooded separately. Concurrent
flood installation provides significant development cost
economies. The Starbuck Midale has produced 584,000 Bbls on primary
and the Berenson has produced 754,000 Bbls on primary, for total field
production of 1,338,000 Bbls. The flood installation will capture and
accelerate recovery of existing primary reserves, as well as capture incremental
water flood reserves. Collectively, management estimates that the
project has remaining primary and secondary reserves of more than 1.5 million
Bbls and a development cost of under $5.00 per Bbl. The Company has also
successfully unitized its SW Starbuck Field and intends to unitize its 71% owned
NE Landa Field. The SW Starbuck Field, which includes 560 gross acres
with a 97.52 % working interest and 75.42 % net revenue interest is being
developed in connection with phase two of the larger Starbuck Madison Unit,
which is in close proximity and can share certain facilities, thereby enhancing
economics. Management believes that the economics of these projects
remain attractive at reduced commodity prices.
The West Sherwood prospect, the vertical Knox Farm 13-33 (75% Company
working interest (“WI”)) was drilled and abandoned as a dry hole. At
East Landa Field, a step out vertical well (Kjelshus 5-3: 100% WI)
was drilled and plugged. The well encountered hydrocarbons in a
structurally high position in the prospective zone, but the zone lacked
sufficient reservoir qualities to result in commercial
production. However, the geologic information obtained is being
processed and may set up additional prospective drilling at an offsetting
location.
OKLAHOMA
ACQUISITION
The
previously announced Oklahoma acquisition, which closed in June 2008, added
approximately 100 drilling locations with the vast majority being proved
undeveloped locations. The Company believes that the acreage provides
significant exploration and development opportunities directly associated with
the acquired interests and in regional proximity thereto. The Company
has scheduled the first four wells for drilling commencing in the first quarter
of 2009.
HURRICANES
GUSTAV AND IKE
Production volumes for the third
quarter were down approximately 15,800 net barrels of oil due to the subject
hurricanes. Oil production started to be phased back in beginning in
late October but is still not fully restored. At present, about 180
net BOPD is still shut in but is expected to be fully restored by
mid-December. The Company has incurred additional operating and
capital expenses as a result of the hurricanes. Estimated
expenditures in the third and fourth quarter are expected to total about $1.1
million and we believe a significant portion will be covered by
insurance. Amounts can not be determined with certainty at this
time.
CAPITAL
BUDGET
At present, the Company will
continue its previously announced capital budget. Based on internal
projections, Management believes the Company should be able to continue its
capital budget out of discretionary cash flow, even if Nymex prices drop to
$50.00 per Bbl and $5.00 per Mcf.
ACQUISITIONS
The Company believes that rapid and
steep reductions in commodity prices has made the acquisitions market more
attractive and accordingly is increasing efforts to pursue asset or corporate
acquisitions. While there can be no assurance that the Company will
acquire additional assets, acquisitions, when favorably priced, are an integral
and important part of the Company’s business strategy. Further, a
large portion of the Company’s capital budget is held by production operations
and accordingly, drilling and development can be deferred if favorable
acquisitions are located and closed. On November 5, 2008, the Company
received notice from its bank that the Company’s borrowing base was being
increased to $100 million. For more information, please refer to the
Form 10-Q as and for the period ended September 30,
2008. Furthermore, the Company believes it has access to incremental
capital either in the form of partnerships or corporate finance or both if it
can locate favorable transactions.
COMMENTS
Frank A. Lodzinski, Chief Executive
Officer of GeoResources, said, “Our drilling and development program continues
to deliver positive results. We are pleased with our entry into
Oklahoma, where we have considerable prior experience. Initial
Oklahoma drilling will commence in the first quarter of 2009. In
spite of the recent steep decline in commodity prices, we are forging ahead with
our drilling programs and are continuing with our plans. We expect to
continue to develop our assets and expand our acreage and prospect inventory,
particularly in this environment when many are cutting back and acreage and
asset valuations are declining. Even in this reduced price
environment, our cash flows remain strong and it is probable that we will not
have to reduce our capital program even if prices fall to $50 per
Bbl. A large portion of our inventory is “held by production” and
accordingly, can be deferred in favor of opportunities with lease
expirations. We believe we can remain cash flow positive and fulfill
all of our current lease obligations, without incremental borrowings, even with
prices below $50 per Bbl. Accordingly, our borrowing capacity and
access to additional capital can be used to fund acquisitions of acreage,
producing assets or corporate entities, should attractive opportunities be
located. We believe our diversified approach contributes to our
strength and staying power and will allow the Company to continue to grow
profitably.”
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, the Williston Basin and the 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, 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).
EXHIBIT
99.9
Contact: Cathy
Kruse
Telephone:
701-572-2020 ext 113
cathyk@geoi.net
FOR IMMEDIATE RELEASE
GeoResources,
Inc. Reports Third Quarter and
Nine
Month 2008 Financial Results
Houston, Texas, November 10, 2008
– GeoResources, Inc., (NASDAQ:GEOI), today announced its financial
results for the nine months and the quarter ended September 30, 2008, compared
to the results for the same periods in 2007.
For the
three months ended September 30, 2008, the Company reported net income of $5.8
million, or $0.35 per share (diluted) compared to a net income of $1.4 million
or $0.10 per share in 2007. Total revenue increased 174% to $23.6
million in the third quarter of 2008 compared to $8.6 million the same quarter
in 2007.
For the
first nine months of 2008, net income was $17.8 million, or $1.14 per share
(diluted), on revenue of $75.7 million versus a net income of $949,000, or $0.08
per share on revenue of $21.0 million in the first nine months of
2007.
The
foregoing information is summarized below in tabular form (in thousands, except
per share information):
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Three
Months Ended September 30,
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2008
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2007
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Total
revenue
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$
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23,593
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$
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8,635
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Net
income
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$
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5,799
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$
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1,412
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Earnings
per share (diluted)
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$
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0.35
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$
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0.10
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EBITDAX
(See below)
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$
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14,464
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$
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4,099
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Nine
Months Ended September 30,
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2008
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2007
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Total
revenue
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$
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75,745
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$
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21,037
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Net
income
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$
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17,813
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$
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949
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Earnings
per share (diluted)
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$
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1.14
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$
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0.08
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EBITDAX
(See below)
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$
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44,455
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$
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8,707
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Oil and
natural gas production increased substantially in the third quarter 2008
compared to the same period in 2007. Natural gas production increased
to 723 MMcf from 330 MMcf, an increase of 119%. Oil production for
the third quarter increased to 167 MBbls from 88 MBbls in the prior year’s
period, an increase of 90%.
For the
nine months ended September 30, 2008, natural gas sales totaled 2,251 MMcf or
155% greater than the 883 MMcf sold during the first nine months of
2007. Oil sales for the first nine months of 2008 increased 156% to
553 Mbbls from 216 Mbbls in the first nine months of 2007.
The
average realized price of natural gas was $9.12 per Mcf for the third quarter of
2008, 62% more than the third quarter of 2007. The average realized
price of oil for the third quarter of 2008 was $90.60 per barrel or 41% more
than the third quarter in the prior year. The average realized price
of natural gas was $8.82 per Mcf for the first nine months of 2008 or 41% more
than the first nine months of the prior year. The average realized
price of oil was $89.50 per barrel or 53% more for the first nine months of 2008
than the first nine months in the prior year. Production and price
information is shown below in tabular form:
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Percent
Increase (Decrease)
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Three
Months Ended
September
30
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2008
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2007
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Gas
Production (MMcf)
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119
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%
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723
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330
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Oil
Production (MBbls)
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90
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%
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167
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88
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Barrel
of oil equivalent (MBOE)
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101
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%
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288
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143
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Average
Price Gas before Hedge Settlements (per Mcf)
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68
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%
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$
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9.13
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$
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5.45
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Average
Price Oil before Hedge Settlements (per Bbl)
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64
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%
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$
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116.01
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$
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70.80
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Average
Price Gas after Hedge Settlements (per Mcf)
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62
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%
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$
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9.12
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$
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5.63
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Average
Price Oil after Hedge Settlements (per Bbl)
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41
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%
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$
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90.60
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$
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64.08
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Percent
Increase (Decrease)
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Nine
Months Ended
September
30
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2008
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2007
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Gas
Production (MMcf)
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155
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%
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2,251
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883
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Oil
Production (MBbls)
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156
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%
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553
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216
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Barrel
of oil equivalent (MBOE)
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156
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%
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928
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|
363
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Average
Price Gas before Hedge Settlements (per Mcf)
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47
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%
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$
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9.24
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$
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6.29
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Average
Price Oil before Hedge Settlements (per Bbl)
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71
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%
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$
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109.81
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$
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64.07
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Average
Price Gas after Hedge Settlements (per Mcf)
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41
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%
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$
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8.82
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$
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6.26
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Average
Price Oil after Hedge Settlements (per Bbl)
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53
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%
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$
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89.50
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$
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58.40
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Earnings
before interest, income taxes, depreciation, depletion and amortization, and
exploration expense (“EBITDAX”) increased 253% to approximately $14.5 million
for the third quarter 2008 compared to $4.1 million in the third quarter
2007. EBITDAX for the first nine months of 2008 increased 411% to
approximately $44.5 million compared to $8.7 million for the same period in
2007.
The
following tables reconcile reported net income to EBITDAX for the periods
indicated (in thousands):
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Three
Months Ended September 30,
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2008
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2007
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EBITDAX
(1)
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Net
income
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$
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5,799
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$
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1,412
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Add
back:
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Interest
expense
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975
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25
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Income
taxes :
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Current
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1,679
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553
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Deferred
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2,149
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381
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Depreciation,
depletion and amortization
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3,833
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1,728
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Exploration
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29
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-
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EBITDAX
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$
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14,464
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$
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4,099
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|
|
Nine
Months Ended September 30,
|
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2008
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2007
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|
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Net
income
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|
$
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17,813
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$
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949
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Add
back:
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Interest
expense
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3,858
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381
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Income
taxes :
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Current
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4,438
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649
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Deferred
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6,532
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2,139
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Depreciation,
depletion and amortization
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11,283
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4,589
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Exploration
|
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531
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|
|
-
|
|
|
EBITDAX
|
|
$
|
44,455
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$
|
8,707
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(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.
Comments
Mr. Frank
Lodzinski, CEO and president, commented “We are pleased with our reported
earnings and cash flows. We achieved quarterly earnings of $5.8
million, or $0.35 per fully diluted share, in spite of falling prices and
production that was shut-in due to hurricanes. This shut-in
production has been phased back in and is expected to be fully restored by early
December. We have built this Company with ‘staying power’ to
withstand downturns in the industry and the economy. Our balance sheet is strong
and we have significant cash flows and low cost borrowing
capacity. Our borrowing base actually increased in the
fourth quarter. We believe that we can continue to generate net
earnings and significant cash flows in 2009, even with commodity prices
considerably below current levels.”
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
).
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
(In
thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash
|
|
$
|
26,187
|
|
|
$
|
24,430
|
|
|
Accounts
receivable:
|
|
|
|
|
|
|
|
|
|
Oil
and gas revenues
|
|
|
19,681
|
|
|
|
20,365
|
|
|
Joint
interest billings and other
|
|
|
3,715
|
|
|
|
3,913
|
|
|
Affiliated
partnerships
|
|
|
4,397
|
|
|
|
3,360
|
|
|
Notes
receivable
|
|
|
120
|
|
|
|
600
|
|
|
Refundable
income taxes
|
|
|
-
|
|
|
|
-
|
|
|
Prepaid
expenses and other
|
|
|
3,276
|
|
|
|
1,430
|
|
|
Total
current assets
|
|
|
57,376
|
|
|
|
54,098
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
and gas properties, successful efforts method:
|
|
|
|
|
|
|
|
|
|
Proved
properties
|
|
|
207,273
|
|
|
|
187,641
|
|
|
Unproved
properties
|
|
|
4,697
|
|
|
|
5,140
|
|
|
Office
and other equipment
|
|
|
1,013
|
|
|
|
996
|
|
|
Land
|
|
|
96
|
|
|
|
96
|
|
|
|
|
|
213,079
|
|
|
|
193,873
|
|
|
Less
accumulated depreciation, depletion and amortization
|
|
|
(21,888
|
)
|
|
|
(12,430
|
)
|
|
Net
property and equipment
|
|
|
191,191
|
|
|
|
181,443
|
|
|
Other
assets:
|
|
|
|
|
|
|
|
|
|
Equity
in oil and gas limited partnerships
|
|
|
3,328
|
|
|
|
1,880
|
|
|
Notes
receivable and other
|
|
|
2,473
|
|
|
|
2,937
|
|
|
|
|
$
|
254,368
|
|
|
$
|
240,358
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
7,589
|
|
|
$
|
11,374
|
|
|
Accounts
payable to affiliated partnerships
|
|
|
17,861
|
|
|
|
9,538
|
|
|
Revenues
and royalties payable
|
|
|
15,425
|
|
|
|
14,567
|
|
|
Drilling
advances
|
|
|
212
|
|
|
|
882
|
|
|
Accrued
expenses
|
|
|
4,659
|
|
|
|
3,839
|
|
|
Derivative
financial instruments
|
|
|
12,630
|
|
|
|
6,527
|
|
|
Total
current liabilities
|
|
|
58,376
|
|
|
|
46,727
|
|
|
Long-term
debt
|
|
|
50,000
|
|
|
|
96,000
|
|
|
Deferred
income taxes
|
|
|
12,976
|
|
|
|
6,476
|
|
|
Asset
retirement obligations
|
|
|
5,282
|
|
|
|
7,827
|
|
|
Derivative
financial instruments
|
|
|
22,004
|
|
|
|
15,296
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
Common
stock, par value $.01 per share; authorized
|
|
|
|
|
|
|
|
|
|
100,000,000
shares; issued and outstanding: 16,236,717
|
|
|
|
|
|
|
|
|
|
shares
in 2008 and 14,703,383 shares in 2007
|
|
|
162
|
|
|
|
147
|
|
|
Additional
paid-in capital
|
|
|
112,324
|
|
|
|
79,690
|
|
|
Accumulated
other comprehensive income (loss)
|
|
|
(32,074
|
)
|
|
|
(19,310
|
)
|
|
Retained
earnings
|
|
|
25,318
|
|
|
|
7,505
|
|
|
Total
stockholders' equity
|
|
|
105,730
|
|
|
|
68,032
|
|
|
|
|
$
|
254,368
|
|
|
$
|
240,358
|
|
|
GEORESOURCES,
INC. and SUBSIDIARIES
|
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
(In
thousands, except per share amounts)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended September 30,
|
|
|
Nine
Months Ended September 30,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
and gas revenues
|
|
$
|
21,763
|
|
|
$
|
7,513
|
|
|
$
|
69,344
|
|
|
$
|
18,110
|
|
|
Partnership
management fees
|
|
|
585
|
|
|
|
301
|
|
|
|
1,419
|
|
|
|
713
|
|
|
Property
operating income
|
|
|
381
|
|
|
|
400
|
|
|
|
1,052
|
|
|
|
1,082
|
|
|
Gain
on sale of property and equipment
|
|
|
308
|
|
|
|
-
|
|
|
|
2,269
|
|
|
|
(15
|
)
|
|
Partnership
income
|
|
|
366
|
|
|
|
116
|
|
|
|
1,021
|
|
|
|
329
|
|
|
Interest
and other
|
|
|
190
|
|
|
|
305
|
|
|
|
640
|
|
|
|
818
|
|
|
Total
revenue
|
|
|
23,593
|
|
|
|
8,635
|
|
|
|
75,745
|
|
|
|
21,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
operating expense
|
|
|
5,594
|
|
|
|
2,368
|
|
|
|
17,174
|
|
|
|
5,683
|
|
|
Severance
taxes
|
|
|
2,088
|
|
|
|
605
|
|
|
|
6,405
|
|
|
|
1,407
|
|
|
Re-engineering
and workovers
|
|
|
649
|
|
|
|
302
|
|
|
|
2,331
|
|
|
|
734
|
|
|
Exploration
and impairments
|
|
|
29
|
|
|
|
-
|
|
|
|
531
|
|
|
|
-
|
|
|
General
and administrative expense
|
|
|
1,688
|
|
|
|
1,258
|
|
|
|
5,333
|
|
|
|
4,506
|
|
|
Depreciation,
depletion, and amortization
|
|
|
3,833
|
|
|
|
1,728
|
|
|
|
11,283
|
|
|
|
4,589
|
|
|
Hedge
ineffectiveness
|
|
|
(890
|
)
|
|
|
3
|
|
|
|
47
|
|
|
|
-
|
|
|
Interest
|
|
|
975
|
|
|
|
25
|
|
|
|
3,858
|
|
|
|
381
|
|
|
Total
expense
|
|
|
13,966
|
|
|
|
6,289
|
|
|
|
46,962
|
|
|
|
17,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
|
|
9,627
|
|
|
|
2,346
|
|
|
|
28,783
|
|
|
|
3,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
1,679
|
|
|
|
553
|
|
|
|
4,438
|
|
|
|
649
|
|
|
Deferred
|
|
|
2,149
|
|
|
|
381
|
|
|
|
6,532
|
|
|
|
2,139
|
|
|
|
|
|
3,828
|
|
|
|
934
|
|
|
|
10,970
|
|
|
|
2,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
5,799
|
|
|
$
|
1,412
|
|
|
$
|
17,813
|
|
|
$
|
949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income per share (basic)
|
|
$
|
0.36
|
|
|
$
|
0.10
|
|
|
$
|
1.16
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income per share (diluted
|
|
$
|
0.35
|
|
|
$
|
0.10
|
|
|
$
|
1.14
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
16,237
|
|
|
|
14,703
|
|
|
|
15,385
|
|
|
|
11,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
16,441
|
|
|
|
14,703
|
|
|
|
15,582
|
|
|
|
11,639
|
|
|
GEORESOURCES,
INC. and SUBSIDIARIES
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
(In
thousands)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months Ended September 30
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
17,813
|
|
|
$
|
949
|
|
|
Adjustments
to reconcile net income to net cash provided
|
|
|
|
|
|
|
|
|
|
by
operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
11,283
|
|
|
|
4,589
|
|
|
Gain
on sale of property and equipment
|
|
|
(2,269
|
)
|
|
|
15
|
|
|
Impairment
of unproved properties
|
|
|
483
|
|
|
|
-
|
|
|
Accretion
of asset retirement obligations
|
|
|
304
|
|
|
|
79
|
|
|
Hedge
ineffectiveness (gain) loss
|
|
|
47
|
|
|
|
-
|
|
|
Partnership
income
|
|
|
(1,021
|
)
|
|
|
(329
|
)
|
|
Partnership
distributions
|
|
|
551
|
|
|
|
122
|
|
|
Deferred
income taxes
|
|
|
6,532
|
|
|
|
2,139
|
|
|
Non-cash
compensation
|
|
|
462
|
|
|
|
422
|
|
|
Changes
in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Increase
in accounts receivable
|
|
|
(155
|
)
|
|
|
(11,046
|
)
|
|
Decrease
in notes receivable
|
|
|
555
|
|
|
|
-
|
|
|
Decrease
(increase) in prepaid expense and other
|
|
|
(1,499
|
)
|
|
|
489
|
|
|
Increase
(decrease) in accounts payable and accrued expenses
|
|
|
5,514
|
|
|
|
13,174
|
|
|
Net
cash provided by operating activities
|
|
|
38,600
|
|
|
|
10,603
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds
from sale of property and equipment
|
|
|
20,960
|
|
|
|
1,750
|
|
|
Additions
to property and equipment
|
|
|
(43,012
|
)
|
|
|
(12,277
|
)
|
|
Investment
in oil and gas limited partnership
|
|
|
(978
|
)
|
|
|
(1,632
|
)
|
|
Net
cash used in investing activities
|
|
|
(23,030
|
)
|
|
|
(12,159
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock
|
|
|
32,187
|
|
|
|
23,518
|
|
|
Distributions
to stockholders
|
|
|
-
|
|
|
|
(4,007
|
)
|
|
Issuance
of long-term debt
|
|
|
-
|
|
|
|
3,000
|
|
|
Reduction
of long-term debt
|
|
|
(46,000
|
)
|
|
|
(9,800
|
)
|
|
Net
cash provided by financing activities
|
|
|
(13,813
|
)
|
|
|
12,711
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase(decrease) in cash and cash equivalents
|
|
|
1,757
|
|
|
|
11,155
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at beginning of period
|
|
|
24,430
|
|
|
|
6,217
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at end of period
|
|
$
|
26,187
|
|
|
$
|
17,372
|
|