GEOI Georesources, Inc. (MM)

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Filed Pursuant to Rule 424(b)(1)
Registration Statement No. 333-155681

SUPPLEMENTAL PROSPECTUS

(To prospectus dated November 12, 2009)

3,000,000 Shares

Common Stock

 

 

We are offering 3,000,000 shares of our common stock.

Our common stock is quoted on The NASDAQ Global Market under the symbol “GEOI.” On November 24, 2009, the last reported sale price of our common stock on The NASDAQ Global Market was $10.41 per share.

Investing in our common stock involves risk. You should carefully consider the risks which we have described under the section captioned “ Risk Factors ” in this supplemental prospectus on page S-11 before buying shares of our common stock.

 

		Per share			Total
Public offering price		$	10.20		$	30,600,000
Underwriting discount		$	0.561		$	1,683,000
Proceeds to us (before expenses)		$	9.639		$	28,917,000

We have granted the underwriters a 30-day option to purchase up to 450,000 additional shares of our common stock at the public offering price, less the underwriting discount, solely to cover over-allotments, if any.

The underwriters expect to deliver the shares of common stock on or about December 1, 2009.

Neither the Securities and Exchange Commission, any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this supplemental prospectus or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

 

Sole Book-Running and Lead Manager

SMH Capital Inc.

 

 

Co-Lead Manager

Rodman & Renshaw

 

 

Co-Manager

C.K. Cooper & Company

The date of this prospectus is November 24, 2009

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TABLE OF CONTENTS

 

		Page
Supplemental Prospectus
About this Supplemental Prospectus and the Prospectus		S-ii
Summary		S-1
Risk Factors		S-11
Forward-Looking Statements		S-13
Use of Proceeds		S-14
Dividend Policy		S-14
Price Range of Common Stock		S-15
Capitalization		S-16
Description of Capital Stock		S-17
Underwriting		S-18
Incorporation by Reference		S-20
Where You Can Find More Information		S-21
Legal Matters		S-21
Experts		S-21
Glossary of Industry Terms		S-22
		Page
Prospectus
Forward-Looking Statements		1
About This Prospectus		1
Information About Georesources, Inc .		5
Risk Factors		5
Use of Proceeds		6
Ratio of Earnings to Fixed Charges		6
Plan of Distribution		6
Description of Securities to be Registered		8
Legal Matters		10
Experts		10
Transfer Agent and Registrar		10
Incorporation of Certain Information by Reference		11
Disclosure of Commission Position on Indemnification for Securities Act Liabilities		12

 

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ABOUT THIS SUPPLEMENTAL PROSPECTUS

AND THE PROSPECTUS

This document is in two parts. The first part is this supplemental prospectus, which describes the specific terms of this offering and also adds to and updates information contained in the accompanying prospectus and documents incorporated by reference herein. The second part, the accompanying prospectus, gives more general information, some of which may not apply to this offering. You should read this entire supplemental prospectus, as well as the accompanying prospectus and the documents incorporated by reference herein that are described under “Where You Can Find More Information” and “Incorporation by Reference.” To the extent there is a conflict between the information contained in this supplemental prospectus and the accompanying prospectus or any document incorporated by reference herein, you should rely on the information contained in this supplemental prospectus.

You should rely only on the information contained in this supplemental prospectus, the accompanying prospectus and the documents we incorporate by reference. We have not and the underwriters have not authorized any other person to provide you with additional or different information. If anyone provides you with additional, different or inconsistent information, you should not rely on it. We are not and the underwriters are not making any offer to sell these securities in any jurisdiction where the offer to sell is not permitted. You should not assume that the information we have included in this supplemental prospectus and the accompanying prospectus is accurate as of any date other than the date hereof or thereof respectively, or that information we have incorporated by reference is accurate as of any date other than the date of the document incorporated by reference. Our business, financial condition, results of operations and prospects may have changed since those dates.

All references in this supplemental prospectus to “we,” “our,” “us,” or “GeoResources” refer to GeoResources, Inc. and its subsidiaries on a consolidated basis, unless otherwise indicated or the context otherwise requires. Except as otherwise indicated, the information in this supplemental prospectus assumes that the underwriters do not exercise their option to purchase additional shares to cover over-allotments.

 

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RISK FACTORS

Investing in our common stock involves risk. Prior to making a decision about investing in our common stock, you should carefully consider the following risk factors, as well as the risk factors discussed under the heading “Risk Factors” in our 2008 Annual Report on Form 10-K/A and our Form 10-Q for the period ended September 30, 2009, in addition to the other information contained or incorporated by reference in this supplemental prospectus and the accompanying prospectus. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. If any of these risks actually occurs, our business, results of operations and financial condition could suffer. In that case, the trading price of shares of our common stock could decline, and you could lose part or all of your investment.

Risks Relating to Our Common Stock

The price of our common stock may be volatile.

The trading price of our common stock has historically fluctuated significantly. For example, during the 12 months ended November 24, 2009, the high sales price per share of our common stock on The NASDAQ Global Market was $13.45 and the low sales price per share was $4.97. The price of our common stock could be subject to wide fluctuations in the future in response to many events or factors, including:

 

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fluctuations in commodity prices;

 

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actual or anticipated fluctuations in operating results;

 

•

changes in expectations as to future financial performance or buy/sell recommendations of securities analysts;

 

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acquisitions, strategic alliances or joint ventures involving us or our competitors;

 

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actions of our current shareholders, including sales of common stock by our directors, executive officers and their affiliates;

 

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the arrival or departure of key personnel; and

 

•

the operating and stock price performance of other comparable companies.

General market conditions and domestic or international macroeconomic factors may also affect the price of our common stock.

There may be future sales or other dilution of our equity which may adversely affect the market price of our common stock.

We are not restricted from issuing additional common stock, including securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. We are offering up to 3,000,000 shares of common stock (3,450,000 shares of common stock if the underwriters’ over-allotment option is exercised in full).

Sales of a substantial number of shares of our common stock could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our common stock or other equity-related securities would have on the market price of our common stock.

There are a substantial number of shares of our common stock eligible for future sale in the public market. The sale of a large number of these shares could cause the market price of our common stock to fall.

There were 16,241,717 shares of our common stock outstanding as of November 12, 2009. As of that date, members of our management and their affiliates owned approximately 8,685,183 shares of our common stock,

 

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representing 53.5% of our outstanding common stock. Sale of a substantial number of these shares would likely have a significant negative effect on the market price of our common stock, particularly if the sales are made over a short period of time. These shares may be sold publicly pursuant to effective registration statements with the SEC.

If our shareholders, particularly management and their affiliates, sell a large number of shares of our common stock, the market price of shares of our common stock could decline significantly. Moreover, the perception in the public market that our management and affiliates might sell shares of our common stock could depress the market price of those shares.

As of November 12, 2009, we had warrants outstanding to acquire 613,336 shares of common stock, and 1,540,000 shares of common stock underlying options granted under our stock option plan, and 460,000 shares reserved and available for future issuance under our stock option plan. The issuance of these new shares, the common stock offered by this supplemental prospectus and the sale of additional shares that may become eligible for sale in the public market from time to time upon the exercise of warrants and stock options could have the effect of depressing the market price for our common stock.

Because we have no plans to pay dividends on our common stock, investors must look solely to stock appreciation for a return on their investment in us.

We have never declared or paid cash dividends on our common stock. We currently intend to retain all future earnings and other cash resources, if any, for the operation and development of our business and do not anticipate paying cash dividends in the foreseeable future. Payment of any future dividends will be at the discretion of our Board of Directors after taking into account many factors, including our financial condition, operating results, current and anticipated cash needs and plans for expansions. In addition, our credit agreement restricts our ability to pay cash dividends on our common stock. Any future dividends may also be restricted by any loan agreements which we may enter into from time to time and from the issuance of preferred stock should we decide to do so in the future.

 

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FORWARD-LOOKING STATEMENTS

Certain statements contained in this supplemental prospectus and the accompanying prospectus (and other documents to which they refer) are not statements of historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”), including, without limitation, the statements specifically identified as forward-looking statements within this supplemental prospectus and the accompanying prospectus. Many of these statements contain risk factors as well. In addition, certain statements in our future filings with the Securities and Exchange Commission (the “SEC”), in press releases, and in oral and written statements made by or with our approval which are not statements of historical fact constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements, include, but are not limited to: (i) projections of capital expenditures, revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure, and other financial items, (ii) statements of our plans and objectives or our management or Board of Directors including those relating to planned development of our oil and gas properties, (iii) statements of future economic performance and (iv) statements of assumptions underlying such statements. Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “may,” “will” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Such forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made to reflect the occurrence of unanticipated events.

 

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USE OF PROCEEDS

We expect the net proceeds from the offering to be approximately $28.7 million, after deducting underwriting discounts and estimated offering expenses. If the underwriters’ over-allotment option is exercised in full, we expect the net proceeds will be approximately $33.1 million.

We expect to utilize substantially all of the net proceeds from this offering to reduce the balance of our outstanding debt under our credit agreement, dated July 13, 2009 with an unaffiliated bank (the “Credit Agreement”). The Credit Agreement amended our prior credit facility and extended the term of the agreement and maturity of amounts outstanding to October 16, 2012. In November 2009, our borrowing base was increased from $135 million to $145 million. The Credit Agreement provides for interest rates at the London Interbank Offered Rate (“LIBOR”) plus 2.25% to 3.00%, or the prime lending rate plus 1.25% to 2.00%, depending upon the amount borrowed. The principal outstanding under the Credit Agreement was $102.0 million as of November 13, 2009. The annual interest rate in effect at September 30, 2009 was 3.00% on the entire amount of outstanding principal. In May 2009, we completed two oil and gas property acquisitions for aggregate consideration of $58.8 million, and funded the acquisitions through borrowings under the Credit Agreement.

DIVIDEND POLICY

We have never paid any cash dividends on our common stock and do not expect to pay any such dividends for the foreseeable future. The declaration of dividends is within the discretion of our Board of Directors, and will be dependent upon our financial condition and capital requirements, business prospects, and other relevant factors at the time a dividend may be under consideration. In addition, our Credit Agreement limits our ability to pay dividends and make other distributions.

 

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PRICE RANGE OF COMMON STOCK

Our common stock is listed on The NASDAQ Global Market under the symbol “GEOI.” The following table sets forth, for each of the periods indicated, the high and low closing sale prices per share of our common stock as reported by The NASDAQ Global Market.

 

		Common Stock Price
		High			Low
2009
Fourth Quarter (through November 24, 2009)		$	12.95		$	10.40
Third Quarter			11.94			9.19
Second Quarter			10.67			6.64
First Quarter			9.19			5.02
2008
Fourth Quarter			15.29			5.61
Third Quarter			20.74			9.62
Second Quarter			29.08			14.51
First Quarter			15.35			8.00
2007
Fourth Quarter			9.68			6.62
Third Quarter			7.13			5.60
Second Quarter			7.64			6.01
First Quarter			6.97			5.40

On November 24, 2009, the last sale price of our common stock as reported by The NASDAQ Global Market was $10.41 per share. As of November 12, 2009, there were approximately 600 record holders of our common stock. The number of holders does not include holders whose common stock is held in street name.

 

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CAPITALIZATION

The following table sets forth our unaudited cash and cash equivalents and capitalization as of September 30, 2009:

 

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on an actual basis; and

 

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on an as adjusted basis to reflect our sale of the common stock in this offering (assuming the underwriters’ option to purchase additional shares of our common stock is not exercised) and our receipt of $28.7 million estimated net proceeds, after deducting underwriting commissions and expenses, and the application of the net proceeds as described in “Use of Proceeds.”

You should read this table in conjunction with “Use of Proceeds” and “Description of Capital Stock” in this supplemental prospectus, and our financial statements and the related notes incorporated by reference into this supplemental prospectus and the accompanying prospectus.

 

		As of September 30, 2009
($ in thousands)		Actual				As Adjusted
		(unaudited)
Cash and cash equivalents		$	11,936			$	11,936
Total debt – credit agreement			104,000				75,283
Shareholders’ equity:
Preferred stock, $0.01 par value, 20,000,000 shares authorized, 0 shares issued and outstanding			—				—
Common stock, $0.01 par value, 100,000,000 shares authorized, 16,241,717 shares issued and outstanding, actual, 19,241,717 shares issued and outstanding, as adjusted			162				192
Additional paid-in capital			113,587				142,274
Accumulated other comprehensive (loss) income			(1,318	)			(1,318	)
Retained earnings			28,431				28,431
Total shareholders’ equity			140,862				169,579
Total capitalization		$	244,862			$	244,862

 

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DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.01 per share, and 20,000,000 shares of preferred stock, par value $0.01 per share. As of November 12, 2009, there were 16,241,717 shares of common stock issued and outstanding and no shares of preferred stock were issued and outstanding.

Common Stock

Each outstanding share of common stock entitles the holder to one vote on all matters presented to the shareholders for a vote. Holders of shares of common stock have no cumulative voting, preemptive or conversion rights. Our Board of Directors determines if and when distributions may be paid out of legally available funds to the holders. We do not anticipate paying cash dividends on the common stock in the foreseeable future.

The holders of a majority of the outstanding shares of common stock constitute a quorum at any meeting of the shareholders. A plurality of the votes cast at a meeting of shareholders elects our directors. The common stock does not have cumulative voting rights. Therefore, the holders of a majority of the outstanding shares of common stock can elect all of our directors. In general, a majority of the votes cast at a meeting of shareholders must authorize shareholder actions other than the election of directors. Most amendments to our articles of incorporation require the vote of the holders of a majority of all outstanding voting shares.

Preferred Stock

Under our articles of incorporation, as amended, our Board of Directors may issue up to 20,000,000 shares of preferred stock from time to time in one or more series. The Board of Directors is authorized to fix by resolution as to any series the designation and number of shares of the series, the voting rights, the dividend rights, the redemption price, the amount payable upon liquidation or dissolution, the conversion rights, and any other designations, preferences or special rights or restrictions as may be permitted by law. Unless the nature of a particular transaction and the rules of law applicable thereto require such approval, our Board of Directors has the authority to issue these shares of preferred stock without shareholder approval.

Transfer Agent and Registrar

Our Transfer Agent and Registrar is Wells Fargo Shareowner Services, 161 North Concord Exchange Street, South St. Paul, Minnesota 55075.

 

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UNDERWRITING

Subject to the terms and conditions set forth in the underwriting agreement between us and the underwriters named below, for which SMH Capital Inc., Rodman & Renshaw, LLC and C.K. Cooper & Company are acting as representatives (collectively, the “underwriters”), we have agreed to sell to the underwriters 3,000,000 shares of our common stock and each underwriter has severally agreed to purchase the number of shares of our common stock indicated in the following table.

 

Underwriter		Number of Shares
SMH Capital Inc		1,500,000
Rodman & Renshaw, LLC		900,000
C.K. Cooper & Company		600,000
Total		3,000,000

The underwriting agreement provides that the obligation of the underwriters to purchase the shares included in this offering is subject to approval of legal matters by counsel and to other conditions. The underwriters are obligated to purchase all of the shares, other than those covered by the over-allotment option described below, if they purchase any of the shares.

The underwriting agreement provides that the underwriters will purchase the shares of common stock from us at the public offering price shown on the cover page of this supplemental prospectus less the underwriting discount shown on the cover page of this supplemental prospectus.

The following table summarizes the underwriting discounts the underwriters are to receive on a per share basis and in total from us. The information is presented assuming either no exercise or full exercise of the underwriters’ option to purchase additional shares of stock to cover over-allotments.

 

		Per Share			Total
					Without Option			With Option
Underwriting discount paid by us		$	0.561		$	1,683,000		$	1,935,450

We have also agreed to reimburse the underwriters for all reasonable out-of-pocket expenses incurred in connection with this offering excluding their legal fees and expenses. We estimate that the total expenses of the offering, including registration, filing and listing fees, printing fees, blue sky fees and legal, accounting and transfer agent expenses, but excluding the underwriting discount, will be approximately $200,000.

In compliance with guidelines of the Financial Industry Regulatory Authority, Inc. (“FINRA”), the maximum compensation or discount to be received by any participating FINRA members or independent broker dealers in connection with the offer and sale of any securities will not be greater than 8% of the aggregate amount of the securities offered pursuant to this supplemental prospectus.

The underwriters propose to offer the shares of our common stock to the public at the offering price set forth on the cover page of this supplemental prospectus and to selling group members at that price less a concession of $0.3366 per share. After the public offering, the underwriters may change the offering price and other selling terms. The underwriters reserve the right to reject an order for the purchase of shares, in whole or in part.

We have granted to the underwriters the option, exercisable for 30 days from the date of this supplemental prospectus, to purchase up to 450,000 additional shares of common stock at the price set forth on the cover of this supplemental prospectus. The underwriters may exercise the option, in whole or in part, solely for the purpose of covering over-allotments, if any, in connection with the offering. If any additional shares are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered.

 

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We, each of our executive officers and directors, and Vlasic FAL, L.P., VILLCo Energy, L.L.C., Chandler Energy, LLC and Wachovia Capital Partners 2005 LLC have agreed that none of us will issue, sell, transfer or dispose of any shares of our common stock or securities convertible into or exercisable for any shares of our common stock, without the prior written consent of SMH Capital Inc., for a period of ninety 90 days after the date of the underwriting agreement.

Our shares of common stock are listed on The NASDAQ Global Market under the symbol “GEOI.”

In connection with this offering, the underwriters may purchase and sell shares of our common stock in the open market. These transactions may include short sales, syndicate covering transfers and stabilizing transactions in accordance with Regulation M adopted by the SEC. Short sales involve syndicate sales of shares in excess of the number of shares to be purchased by the underwriters in this offering, which creates a syndicate short position. “Covered” short sales are sales made in an amount up to the number of shares represented by the underwriters’ over-allotment option. In determining the source of shares to close out the covered syndicate short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the underwriters may purchase shares through the over-allotment option. Transactions to close out the covered syndicate short position involve either purchases in the open market after the distribution has been completed or the exercise of the over-allotment option. The underwriters may also make “naked” short sales of shares in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares of common stock in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase shares in the offering. Stabilizing transactions consist of bids for, or purchases of, shares in the open market while the offering is in progress, subject to a specified maximum price.

Any of these activities may have the effect of preventing or retarding a decline in the market price of our common stock. They may also cause the price of the shares of our common stock to be higher than the price that would otherwise exist on the open market in the absence of these transactions. The underwriters may conduct these transactions on The NASDAQ Global Market or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

 

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INCORPORATION BY REFERENCE

We have elected to “incorporate by reference” certain information into this supplemental prospectus and the accompanying prospectus. By incorporating by reference, we can disclose important information to you by referring you to another document we have filed with the SEC. The information incorporated by reference is deemed to be part of this supplemental prospectus and the accompanying prospectus, except for information incorporated by reference that is superseded by information contained in this supplemental prospectus and the accompanying prospectus. This supplemental prospectus incorporates by reference the documents set forth below that we have previously filed with the SEC.

 

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our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed with the SEC on March 25, 2009 as amended by Form 10-K/A filed with the SEC on June 11, 2009;

 

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our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009 filed with the SEC on May 8, 2009;

 

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our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2009 filed with the SEC on August 6, 2009; and

 

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our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009 filed with the SEC on November 5, 2009;

 

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our Current Reports on Form 8-K filed with the SEC on February 6, 2009; on June 4, 2009 and as amended on July 24, 2009; and on July 17, 2009.

You should read the information relating to us in this supplemental prospectus and the accompanying prospectus together with the information in the documents incorporated by reference.

You may obtain a copy of any of the above-referenced documents, at no cost, from our website at www.georesourcesinc.com. The information contained in, or that can be assessed through, our website is not part of this supplemental prospectus and the accompanying prospectus. We will also furnish without charge to you, on written or oral request, a copy of any or all of the documents incorporated by reference, including exhibits to these documents. You should direct your request for documents to:

Howard E. Ehler

Chief Financial Officer

GeoResources, Inc.

110 Cypress Station Drive, Suite 220

Houston, Texas 77090

 

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WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information we file with the SEC at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Our SEC filings are also available to the public from commercial document retrieval services and at the website maintained by the SEC at www.sec.gov.

LEGAL MATTERS

The validity of our common stock being offered under this supplemental prospectus and the accompanying prospectus will be passed upon for us by Jones & Keller, P.C., Denver, Colorado. Reid A. Godbolt, a member of Jones & Keller, P.C., beneficially owns 12,753 shares of our common stock held of record by a limited liability company he owns jointly with his spouse. Certain matters will be passed upon for the underwriters by Bracewell & Giuliani LLP, Houston, Texas.

EXPERTS

The consolidated financial statements of GeoResources, Inc. as of December 31, 2008 and 2007 and for the years ended December 31, 2008, 2007 and 2006, the effectiveness of internal control over financial reporting of GeoResources, Inc. as of December 31, 2008, and the statements of revenues and direct operating expenses of SBE Partners’ properties for the years ended December 31, 2008 and 2007, incorporated by reference in this supplemental prospectus and the accompanying prospectus, have been so incorporated by reference in reliance upon reports of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as experts in giving said reports.

The information included in or incorporated by reference into this supplemental prospectus and the accompanying prospectus regarding estimated quantities of proved reserves, the future net revenues from those reserves and their present value is based, in part, on estimates of our proved reserves and present values of proved reserves as of January 1, 2009, including estimates of reserves as of such date acquired by us effective May 1, 2009 as set forth in our Current Report on Form 8-K/A dated July 24, 2009, and prepared by or derived from estimates prepared by Cawley, Gillespie & Associates, Inc., an independent petroleum engineering firm. These estimates are included in or incorporated by reference into this supplemental prospectus and the accompanying prospectus in reliance upon the authority of Cawley, Gillespie & Associates, Inc. as an expert in petroleum engineering.

 

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GLOSSARY OF INDUSTRY TERMS

We have included below the definitions for certain terms used in this Supplemental Prospectus:

Bbl – One stock tank barrel, or 42 U.S. gallons liquid volume, used herein in reference to crude oil or other liquid hydrocarbons.

Bbls/d – barrels per day.

Bcf – Billion cubic feet.

Bcfe – Billion cubic feet equivalent, determined using the ratio of six thousand cubic feet (Mcf) of natural gas to one Bbl of crude oil, condensate or natural gas liquids.

Boe – Barrel of oil equivalent, determined using a ratio of six Mcf of natural gas equal to one barrel of oil equivalent.

Boe/d – Barrel of oil equivalent, determined using a ratio of six Mcf of natural gas equal to one barrel of oil equivalent per day.

Completion – The installation of permanent equipment for the production of oil or natural gas or, in the case of a dry hole, the reporting of abandonment to the appropriate agency.

Compression – A force that tends to shorten or squeeze, decreasing volume or increasing pressure.

Dry hole or well – A well found to be incapable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production exceed the related oil and natural gas operating expenses and taxes.

Exploitation – The act of making oil and gas property more profitable, productive or useful.

Field – An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition.

GAAP – Generally accepted accounting principles in the United States of America.

Gross acres or gross wells – The total acres or wells, as the case may be, in which a working interest is owned.

MBbls – One thousand barrels of crude oil or other liquid hydrocarbons.

MMBbls – One million barrels of crude oil or other liquid hydrocarbons.

MBoe – One thousand barrels of oil equivalent, determined using a ratio of six Mcf of natural gas equal to one Boe.

MMBoe – One million barrels of oil equivalent, determined using a ratio of six Mcf of natural gas equal to one Boe.

Mcf – One thousand cubic feet.

Mcfe – One thousand cubic feet equivalent determined by using the ratio of six Mcf of natural gas to one Bbl of crude oil, condensate or natural gas liquids, which approximates the relative energy content of crude oil, condensate and natural gas liquids as compared to natural gas. Prices have historically been higher or

 

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substantially higher for crude oil than natural gas on an energy equivalent basis although there have been periods in which they have been lower or substantially lower.

MMcf – One million cubic feet.

MMcf/d – One million cubic feet per day.

MMcfe – One million cubic feet equivalent.

Net acres or net wells – The sum of the fractional working interests owned in gross acres or gross wells.

NRI or Net Revenue Interests – The share of production after satisfaction of all royalty, oil payments and other non-operating interests.

PV-10% – The present value of estimated future revenues to be generated from the production of proved reserves calculated in accordance with Securities and Exchange Commission (“SEC”) guidelines, net of estimated lease operating expense, production taxes and future development costs, using price and costs as of the date of estimation without future escalation, without giving effect to non-property related expenses such as general and administrative expenses, debt service, depreciation, depletion and amortization, or federal income taxes and discounted using and annual discount rate of 10%. Pre-tax PV10% many be considered a non-GAAP financial measure as defined by the SEC.

Proved developed producing reserves or PDP – Proved developed reserves that are expected to be recovered from completion intervals currently open in existing wells and able to produce to market.

Proved developed reserves – Proved reserves that are expected to be recovered from existing wells with existing equipment and operating methods.

Proved reserves – The estimated quantities of crude oil, natural gas and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

Proved undeveloped reserves or PUDs – Proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion.

Recompletion – The completion for production of an existing well bore in another formation from that in which the well has been previously completed.

Reservoir – A porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.

SEC – The Securities and Exchange Commission of the United States of America.

Standardized Measure of Discounted Future Net Cash Flows – Present value of proved reserves, as adjusted to give effect to estimated future abandonment costs, net of estimated salvage value of related equipment, and estimated future income taxes.

3-D seismic – Advanced technology method of detecting accumulation of hydrocarbons identified through a three-dimensional picture of the subsurface created by the collection and measurement of the intensity and timing of sound waves transmitted into the earth as they reflect back to the surface.

Working interest – The operating interest that gives the owner the right to drill, produce and conduct operating activities on the property and share of production, subject to all royalties, overriding royalties and other burdens and to share in all costs of exploration, development operations and all risks in connection therewith.

Workover – Operations on a producing well to restore or increase production.

 

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PROSPECTUS

$100,000,000

Common Stock

Preferred Stock

Depositary Shares

Debt Securities

Warrants

We may offer and sell an indeterminate number of shares of our common stock, preferred stock, depositary shares, debt securities and warrants from time to time under this prospectus. We may offer these securities separately or as units, which may include combinations of the securities. We will describe in a prospectus supplement the securities we are offering and selling, as well as the specific terms of the securities.

We may offer these securities in amounts, at prices and on terms determined at the time of offering. We may sell the securities directly to you, through agents we select, or through underwriters and dealers we select. If we use agents, underwriters or dealers to sell the securities, we will name them and describe their compensation in a prospectus supplement.

Our common stock is quoted on The NASDAQ Global Market under the symbol “GEOI.” On November 11, 2009, the last reported sale price of our common stock was $11.95 per share.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus and any amendments or supplements carefully before you make your investment decision.

Investing in our securities involves certain risks. See “ Risk Factors ” beginning on page 5 of this prospectus and in the applicable prospectus supplement for certain risks you should consider. You should read the entire prospectus carefully before you make your investment decision.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is November 12, 2009

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TABLE OF CONTENTS

 

		Page
Forward-Looking Statements		1
About This Prospectus		1
Information About Georesources, Inc.		5
Risk Factors		5
Use of Proceeds		6
Ratio of Earnings to Fixed Charges		6
Plan of Distribution		6
Description of Securities to be Registered		8
Legal Matters		10
Experts		10
Transfer Agent and Registrar		10
Incorporation of Certain Information by Reference		11
Disclosure of Commission Position on Indemnification for Securities Act Liabilities		12

You should rely on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. Offers to sell shares of common stock will be made only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the shares.

 

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FORWARD-LOOKING STATEMENTS

Certain statements contained in this prospectus are not statements of historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the “Act”), including, without limitation, the statements specifically identified as forward-looking statements within this prospectus. Many of these statements contain risk factors as well. In addition, certain statements in our future filings with the Securities and Exchange Commission, in press releases, and in oral and written statements made by or with our approval which are not statements of historical fact constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements, include, but are not limited to: (i) projections of revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure, and other financial items, (ii) statements of our plans and objectives or our management or Board of Directors including those relating to planned development of our oil and gas properties, (iii) statements of future economic performance and (iv) statements of assumptions underlying such statements. Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “may,” “will” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Such forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made to reflect the occurrence of unanticipated events.

ABOUT THIS PROSPECTUS

General. This is only a summary and does not contain all of the information that you should consider before investing in our common stock. You should read this entire prospectus carefully, including the “Risk Factors” section as well as the information incorporated by reference into this prospectus under “Where You Can Find More Information.”

In this prospectus, the terms “company,” “we,” “us,” and “our” refer to GeoResources, Inc., a Colorado corporation, including our wholly owned subsidiaries.

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission utilizing a shelf registration process. Under the shelf registration process, we may offer shares of our common stock, preferred stock, depositary shares, various series of debt securities and warrants to purchase any of such securities with a total value of up to $100,000,000 from time to time under this prospectus at prices and on terms to be determined by market conditions at the time of offering. This prospectus provides you with a general description of the securities we may offer. Each time we offer a type or series of securities, we will provide a prospectus supplement that will describe the specific amounts, prices and other important terms of the securities, including, to the extent applicable:

 

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designation or classification

 

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aggregate principal amount or aggregate offering price;

 

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maturity;

 

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original issue discount, if any;

 

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rates and times of payment of interest, dividends or other payments, if any;

 

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redemption, conversion, exchange, settlement or sinking fund terms, if any;

 

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conversion, exchange or settlement prices or rates, if any, and, if applicable, any provisions for changes to or adjustments in the conversion, exchange or settlement prices or rates and in the securities or other property receivable upon conversion, exchange or settlement;

 

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•

ranking

 

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restrictive covenants, if any;

 

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voting or other rights, if any; and

 

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important federal income tax considerations.

A prospectus supplement may include a discussion of additional risks or other special considerations applicable to us or the offered securities. A prospectus supplement may also add, update or change information in this prospectus. If there is any inconsistency between the information in this prospectus and any supplement or amendment to this prospectus, you must rely on the information in the prospectus supplement or amendment. Please carefully read both this prospectus and any applicable prospectus supplement or amendment together with additional information described under the heading “Incorporation of Certain Information by Reference – Where You Can Find More Information.”

The registration statement containing this prospectus, including exhibits to the registration statement, provides additional information about us and the common stock offered under this prospectus. The registration statement can be read at the SEC website or at the SEC’s public reading room mentioned under the heading “Incorporation of Certain Information by Reference – Where You Can Find More Information.”

We have not authorized any underwriter, broker-dealer, salesperson or other person to give any information or to make any representation other than those contained or incorporated by reference in this prospectus and any supplement or amendment to this prospectus. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus or any prospectus supplement. This prospectus and any supplement or amendment to this prospectus do not constitute an offer to sell or the solicitation of an offer to buy securities, nor do this prospectus or any supplement or amendment to this prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation. The information contained in this prospectus and any supplement or amendment to this prospectus speaks only as of the date set forth on the cover page and may not reflect subsequent changes in our business, financial condition, results of operations and prospects even though this prospectus and any prospectus supplement or amendment is delivered or securities are sold on a later date.

We may sell the securities directly to or through underwriters, dealers or agents. We, and our underwriters or agents, reserve the right to accept or reject all or part of any proposed purchase of securities. If we do offer securities through underwriters or agents, we will include in any prospectus supplement or amendment:

 

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the names of those underwriters or agents;

 

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applicable fees, discounts and commissions to be paid to them;

 

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details regarding over-allotment options, if any; and

 

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the net proceeds to us.

Common Stock. We may issue shares of our common stock from time to time. Holders of our common stock are entitled to one vote per share for the election of directors and on all other matters that require shareholder approval. Subject to any preferential rights of any outstanding preferred stock, in the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to share ratably in the assets remaining after payment of liabilities and the liquidation preferences of any outstanding preferred stock. Our common stock does not carry any redemption rights or any preemptive rights enabling a holder to subscribe for, or receive shares of, any class of our common stock or any other securities convertible into shares of any class of our common stock.

 

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Preferred Stock. We may issue shares of our preferred stock from time to time, in one or more series. Under our articles of incorporation, our board of directors has the authority, without further action by shareholders, to designate up to 20,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges, qualifications and restrictions granted to or imposed upon the preferred stock, including dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation preference and sinking fund terms, any or all of which may be greater than the rights of the common stock.

If we issue preferred stock, we will fix the rights, preferences, privileges, qualifications and restrictions of the preferred stock of each series that we sell under this prospectus and any prospectus supplements or amendments in the articles of amendment to our articles of incorporation relating to that series. If we issue preferred stock, we will incorporate by reference into the registration statement of which this prospectus is a part the form of any certificate of designation that describes the terms of the series of preferred stock we are offering before the issuance of the related series of preferred stock. We urge you to read any prospectus supplement or amendment related to any series of preferred stock we may offer, as well as the complete certificate of designation that contains the terms of the applicable series of preferred stock.

Depositary Shares. We may elect to offer fractional shares of preferred stock rather than full shares of preferred stock and, in that event, will issue receipts for depositary shares. Each of these depositary shares will represent a fraction, which will be set forth in any applicable prospectus supplement or amendment, of a share of the applicable series of preferred stock.

Any depositary shares that we sell under this prospectus will be evidenced by depositary receipts issued under a deposit agreement between us and a depositary with whom we deposit the shares of the applicable series of preferred stock that underlie the depositary shares that are sold. If we issue depositary shares, a form of deposit agreement, including a form of depositary receipt, will be incorporated by reference into the registration statement of which this prospectus is a part from reports we would subsequently file with the Securities and Exchange Commission. We urge you to read any prospectus supplement or amendment related to any depositary shares we may offer, as well as the complete deposit agreement and depositary receipt.

Debt Securities. We may issue debt securities from time to time, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt. The senior debt securities will rank equally with any other unsubordinated debt that we may have and may be secured or unsecured. The subordinated debt securities will be subordinate and junior in right of payment, to the extent and in the manner described in the instrument governing the debt, to all or some portion of our indebtedness. Any convertible debt securities that we issue will be convertible into or exchangeable for our common stock or other securities of ours. Conversion may be mandatory or at your option and would be at prescribed conversion rates.

If we issue debt securities, they will be issued under one or more documents called indentures, which are contracts between us and a trustee for the holders of the debt securities. We urge you to read any prospectus supplement or amendment related to the series of debt securities being offered, as well as the complete indenture that contains the terms of the debt securities (which will include a supplemental indenture). If we issue debt securities, indentures and forms of debt securities containing the terms of debt securities being offered will be incorporated by reference into the registration statement of which this prospectus is a part from reports we would subsequently file with the Securities and Exchange Commission.

Warrants. We may issue warrants for the purchase of our common stock, preferred stock, depositary shares and/or debt securities in one or more series, from time to time. We may issue warrants independently or together with our common stock, preferred stock, depositary shares and/or debt securities, and the warrants may be attached to or separate from those securities.

If we issue warrants, they will be evidenced by warrant agreements or warrant certificates issued under one or more warrant agreements, which are contracts between us and an agent for the holders of the warrants. We

 

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urge you to read any prospectus supplement or amendment related to any series of warrants we may offer, as well as the complete warrant agreement and warrant certificate that contain the terms of the warrants. If we issue warrants, forms of warrant agreements and warrant certificates relating to warrants for the purchase of common stock, preferred stock, depositary shares and debt securities will be incorporated by reference into the registration statement of which this prospectus is a part from reports we would subsequently file with the Securities and Exchange Commission.

Post-Effective Amendments. We filed a registration statement on Form S-3 that became effective on February 5, 2009 with respect to the securities covered by this prospectus. Due to the late filing of our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, under applicable Securities and Exchange Commission rules we no longer qualify for the use of a registration statement on Form S-3. To assure that our securities may be sold pursuant to an effective registration statement, we filed post-effective amendments on Form S-1 to the registration statement described above on August 3, 2009 and August 14, 2009.

 

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INFORMATION ABOUT GEORESOURCES, INC.

GeoResources, Inc., a Colorado corporation formed in 1958, 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, development and exploration activities primarily focused in three core U.S. areas – the Southwest and Gulf Coast, the Rocky Mountains and the Williston Basin. As a result of several related transactions the Company underwent a substantial change in ownership, management, assets and business strategy, all effective as of April 17, 2007.

On April 17, 2007, the Company merged with Southern Bay Oil & Gas, L.P. (“Southern Bay”) and a subsidiary of Chandler Energy, LLC (“Chandler”) and acquired certain Chandler-associated oil and gas properties in exchange for 10,690,000 shares of common stock (collectively, the “Merger”). As a result of the Merger, the former Southern Bay partners received approximately 57% of the then outstanding common stock of the Company and thus acquired voting control. Although GeoResources was the legal acquirer, for financial reporting purposes the Merger was accounted for as a reverse acquisition of GeoResources by Southern Bay and an acquisition of Chandler and its associated properties.

On June 9, 2008, we completed a private placement transaction with non-affiliated accredited investors for 1,533,334 shares of common stock at a price of $22.50 per share and warrants exercisable for 613,336 shares of common stock at an exercise price of $32.43 per share.

On June 2, 2009 we announced a material acquisition of additional oil and gas property interests. Together with another acquisition shortly before, we spent approximately $59 million to acquire these properties. See “Incorporation of Certain Information by Reference – Where You Can Find Additional Information.”

Our principal executive office is located at 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, and our telephone number is (281) 537-9920. Our internet website is www.georesourcesinc.com.

RISK FACTORS

Before making an investment decision, you should carefully consider the specific risks set forth under the caption “Risk Factors” in the applicable prospectus supplement, under the caption “Risk Factors” as set forth in Item 1A of our Form 10-K for the year ended December 31, 2008 and Amendment No. 1 to our Form 10-K filed on June 11, 2009, under the caption “Risk Factors” as set forth in Item 1A in our Form 10-Q for the quarter ended June 30, 2009, and under the caption “Risk Factors” as set forth in Item 1A in our Form 10-Q for the quarter ended September 30, 2009, which are incorporated by reference in this prospectus, and any subsequent report that is incorporated by reference into this prospectus.

The risks and uncertainties set forth under these captions in the above documents are not the only ones we face. Additional risks and uncertainties not presently known to us, or that we currently deem not material, may also adversely affect our business. Any of the risks discussed in this report or that are presently unknown or not material, if they were to actually occur, could result in a significant adverse impact on our business, operating results, prospects or financial condition.

 

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USE OF PROCEEDS

Unless the applicable prospectus supplement or amendment states otherwise, we expect to use the net proceeds of the sale of our securities for general corporate purposes, including, but not limited to, acquisitions of oil and gas properties, companies or prospects, repayment of existing indebtedness and for working capital. As of the date of this prospectus, we have not identified as probable any specific material proposed uses of these proceeds. If, as of the date of any prospectus supplement or amendment, we have identified any such uses, we will describe them in the prospectus supplement or amendment. The amount of our securities offered from time to time pursuant to this prospectus and any prospectus supplement or amendment, and the precise amounts and timing of the application of net proceeds from the sale of those securities, will depend upon our funding requirements. If we elect at the time of an issuance of our securities to make different or more specific use of proceeds than described in this prospectus, such use will be described in the prospectus supplement or amendment relating to those securities.

RATIO OF EARNINGS TO FIXED CHARGES

If we offer debt securities and/or preference equity securities under this prospectus, then we will, at that time, provide a ratio of earnings to fixed charges and/or ratio of combined fixed charges and preference dividends to earnings, respectively, in the applicable prospectus supplement or amendment for such offering.

PLAN OF DISTRIBUTION

We may sell the securities covered by this prospectus from time to time. Registration of the securities covered by this prospectus does not mean, however, that those securities will necessarily be offered or sold.

We may sell the securities separately or together:

 

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through one or more underwriters or dealers in a public offering and sale by them;

 

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directly to investors; or

 

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through agents.

We may sell the securities from time to time:

 

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in one or more transactions at a fixed price or prices, which may be changed from time to time;

 

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at market prices prevailing at the time of sale;

 

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at prices related to such prevailing market prices; or

 

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at negotiated prices.

We will describe the method of distribution of the securities and the terms of the offering in the prospectus supplement or amendment.

Any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.

If underwriters are used in the sale of any securities, the securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions described above. The securities may be either offered to the public through underwriting syndicates represented by managing underwriters, or directly by underwriters. Generally, the underwriters’ obligations to purchase the securities will be subject to conditions precedent and the underwriters will be obligated to purchase all of the securities if they

 

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purchase any of the securities. We may use underwriters with whom we have a material relationship. We will describe in the prospectus supplement, naming the underwriter, the nature of any such relationship.

We may authorize underwriters, dealers or agents to solicit offers by certain purchasers to purchase the securities from us at the public offering price set forth in any prospectus supplement or amendment, pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. The contracts will be subject only to those conditions set forth in any prospectus supplement or amendment, and any prospectus supplement or amendment will set forth any commissions we pay for solicitation of these contracts.

We may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If any applicable prospectus supplement or amendment indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and any applicable prospectus supplement or amendment, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and will be identified in any applicable prospectus supplement or amendment.

Underwriters, dealers and agents may be entitled to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments made by the underwriters, dealers or agents, under agreements between us and the underwriters, dealers and agents.

We may grant underwriters who participate in the distribution of securities an option to purchase additional securities to cover over-allotments, if any, in connection with the distribution.

Underwriters, dealers or agents may receive compensation in the form of discounts, concessions or commissions from us or our purchasers, as their agents in connection with the sale of securities. These underwriters, dealers or agents may be considered to be underwriters under the Securities Act of 1933. As a result, discounts, commissions or profits on resale received by the underwriters, dealers or agents may be treated as underwriting discounts and commissions. Any prospectus supplement or amendment will identify any such underwriter, dealer or agent and describe any compensation received by them from us. Any initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.

Unless otherwise specified in any related prospectus supplement or amendment, all securities we offer, other than common stock, will be new issues of securities with no established trading market. Any underwriters may make a market in these securities, but will not be obligated to do so and may discontinue any market making at any time without notice. Any common stock sold pursuant to any prospectus supplement or amendment will be listed for trading on the NASDAQ Stock Market or other principal market for our common stock. We may apply to list any series of debt securities, preferred stock, depositary shares or warrants on an exchange, but we are not obligated to do so. Therefore, there may not be liquidity or a trading market for any series of securities.

Any underwriter may engage in over-allotment transactions, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Short covering transactions involve purchases of the securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time. We make no representation or prediction as to the direction or magnitude of any effect that such transactions may have on the price of the securities. For a

 

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description of these activities, see the information under the heading “Underwriting” or “Plan of Distribution” in any applicable prospectus supplement or amendment.

Underwriters, broker-dealers or agents who may become involved in the sale of the common stock may engage in transactions with and perform other services for us in the ordinary course of their business for which they receive compensation.

DESCRIPTION OF SECURITIES TO BE REGISTERED

Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.01 per share, and 20,000,000 shares of preferred stock, par value $0.01 per share. As of November 11, 2009, 16,241,717 shares of common stock were issued and outstanding and no shares of preferred stock were issued and outstanding.

Common Stock

Each outstanding share of common stock entitles the holder to one vote on all matters presented to the shareholders for a vote. Holders of shares of common stock have no cumulative voting, preemptive or conversion rights. Our Board of Directors determines if and when distributions may be paid out of legally available funds to the holders. We do not anticipate paying cash dividends on the common stock in the foreseeable future.

The holders of a majority of the outstanding shares of common stock constitute a quorum at any meeting of the shareholders. A plurality of the votes cast at a meeting of shareholders elects our directors. The common stock does not have cumulative voting rights. Therefore, the holders of a majority of the outstanding shares of common stock can elect all of our directors. In general, a majority of the votes cast at a meeting of shareholders must authorize shareholder actions other than the election of directors. Most amendments to our articles of incorporation require the vote of the holders of a majority of all outstanding voting shares.

Preferred Stock

Under our articles of incorporation, as amended, our Board of Directors may issue up to 20,000,000 shares of preferred stock from time to time in one or more series. The Board of Directors is authorized to fix by resolution as to any series the designation and number of shares of the series, the voting rights, the dividend rights, the redemption price, the amount payable upon liquidation or dissolution, the conversion rights, and any other designations, preferences or special rights or restrictions as may be permitted by law. Unless the nature of a particular transaction and the rules of law applicable thereto require such approval, our Board of Directors has the authority to issue these shares of preferred stock without shareholder approval.

Depositary Shares

We may elect to offer fractional shares of preferred stock rather than full shares of preferred stock and, in that event, will issue receipts for depositary shares. Each of these depositary shares will represent a fraction, which will be set forth in any applicable prospectus supplement or amendment, of a share of the applicable series of preferred stock.

Any depositary shares that we sell under this prospectus will be evidenced by depositary receipts issued under a deposit agreement between us and a depositary with whom we deposit the shares of the applicable series of preferred stock that underlie the depositary shares that are sold. If we issue depositary shares, a form of deposit agreement, including a form of depositary receipt, will be incorporated by reference into the registration statement of which this prospectus is a part from reports we would subsequently file with the Securities and Exchange Commission. We urge you to read any prospectus supplement or amendment related to any depositary shares we may offer, as well as the complete deposit agreement and depositary receipt.

 

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Debt Securities

We may issue debt securities from time to time, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt. The senior debt securities will rank equally with any other unsubordinated debt that we may have and may be secured or unsecured. The subordinated debt securities will be subordinate and junior in right of payment, to the extent and in the manner described in the instrument governing the debt, to all or some portion of our indebtedness. Any convertible debt securities that we issue will be convertible into or exchangeable for our common stock or other securities of ours. Conversion may be mandatory or at your option and would be at prescribed conversion rates.

If we issue debt securities, they will be issued under one or more documents called indentures, which are contracts between us and a trustee for the holders of the debt securities. We urge you to read any prospectus supplement or amendment related to the series of debt securities being offered, as well as the complete indenture that contains the terms of the debt securities (which will include a supplemental indenture). If we issue debt securities, indentures and forms of debt securities containing the terms of debt securities being offered will be incorporated by reference into the registration statement of which this prospectus is a part from reports we would subsequently file with the Securities and Exchange Commission.

Warrants

We may issue warrants for the purchase of our common stock, preferred stock, depositary shares and/or debt securities in one or more series, from time to time. We may issue warrants independently or together with our common stock, preferred stock, depositary shares and/or debt securities, and the warrants may be attached to or separate from those securities.

If we issue warrants, they will be evidenced by warrant agreements or warrant certificates issued under one or more warrant agreements, which are contracts between us and an agent for the holders of the warrants. We urge you to read any prospectus supplement or amendment related to any series of warrants we may offer, as well as the complete warrant agreement and warrant certificate that contain the terms of the warrants. If we issue warrants, forms of warrant agreements and warrant certificates relating to warrants for the purchase of common stock, preferred stock, depositary shares and debt securities will be incorporated by reference into the registration statement of which this prospectus is a part from reports we would subsequently file with the Securities and Exchange Commission.

 

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LEGAL MATTERS

The validity of the common stock being offered from time to time under this prospectus will be passed upon for us by Jones & Keller, P.C., Denver, Colorado. Reid A. Godbolt, a member of Jones & Keller, P.C., beneficially owns 12,753 shares of our common stock held of record by a limited liability company he owns jointly with his spouse.

EXPERTS

The consolidated financial statements and the effectiveness of internal control over financial reporting incorporated by reference in this prospectus and elsewhere in the registration statement have been so incorporated by reference in reliance upon the reports of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as experts in giving said reports.

TRANSFER AGENT AND REGISTRAR

Our Transfer Agent and Registrar is Wells Fargo Shareowner Services, 161 N. Concord Exchange Street, South St. Paul, Minnesota 55075.

 

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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

General.

We have elected to “incorporate by reference” certain information into this prospectus. By incorporating by reference, we can disclose important information to you by referring you to another document we have filed with the SEC. The information incorporated by reference is deemed to be part of this prospectus, except for information incorporated by reference that is superseded by information contained in this prospectus. This prospectus incorporates by reference the documents set forth below that we have previously filed with the SEC.

 

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our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed with the SEC on March 25, 2009 and Amendment No. 1 thereto filed with the SEC on June 11, 2009;

 

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our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009 filed with the SEC on May 8, 2009;

 

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our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2009 filed with the SEC on August 6, 2009;

 

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our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009 filed with the SEC on November 5, 2009; and

 

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our Current Reports on Form 8-K filed with the SEC on June 4, 2009 and as amended on July 24, 2009; and July 17, 2009.

You should read the information relating to us in this prospectus together with the information in the documents incorporated by reference.

You may obtain a copy of any of the above-referenced documents, at no cost, from our website at www.georesourcesinc.com. The information contained in, or that can be assessed through, our website is not part of this prospectus. We will also furnish without charge to you, on written or oral request, a copy of any or all of the documents incorporated by reference, including exhibits to these documents. You should direct your request for documents to:

Howard E. Ehler

Chief Financial Officer

GeoResources, Inc.

110 Cypress Station Drive, Suite 220

Houston, Texas 77090

281-537-9920

Where you can find more information.

We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information we file with the SEC at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Our SEC filings are also available to the public from commercial document retrieval services and at the website maintained by the SEC at www.sec.gov.

 

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DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION

FOR SECURITIES ACT LIABILITIES

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of registrant pursuant to the above, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

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Table of Contents

3,000,000 Shares

Common Stock

 

 

Sole Book-Running and Lead Manager

SMH Capital Inc.

 

 

Co-Lead Manager

Rodman & Renshaw

 

 

Co-Manager

C.K. Cooper & Company

 

November 24, 2009