GEOI Georesources, Inc. (MM)

GeoResources, Inc. Reports Increased Earnings WILLISTON, N.D., April 5 /PRNewswire-FirstCall/ -- GeoResources, Inc. today reported 2003 net income increased to $447,000 or $0.12 per share on revenue of $4,843,000 compared to 2002 net income of $91,000 or $0.02 per share on revenue of $3,988,000. Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) for the year was $1,326,000, a 49% increase from the prior year. For the fourth quarter, the company reported net income of $46,000 or $0.01 per share on revenue of $1,558,000 versus net income of $126,000 or $0.03 per share on revenue of $701,000 in the fourth quarter of 2002. EBITDA for the quarter was $269,000. GeoResources' production declined3.5% in 2003 to 137,237 net BOE due to normal production declines that were not offset by new drilling. Total proved oil and gas reserves declined to 2,523,000 BOE at year-end 2003 versus 2,557,000 BOE at year-end 2002. The after tax SEC PV-10 value ofthose reserves increased slightly to $15.5 million, primarily due to higher year-end commodity prices. J.P. Vickers, GeoResources President said, "In 2003 we drilled three wells and completed numerous workovers. Most of our significantly improved financial results for the year were the result of higher values for the oil we produce which substantially increased cash flow. Assuming commodity prices remain strong we expect to remain busy in 2004. We have budgeted $1 million for drilling and recompletion projects this year. We will spud the Grann et al 28-33, a development well in our Landa Field of Bottineau County, North Dakota this week. We own a 75% working interest and are the operator of the well. Our Western Star Drilling Rig E-25 is being used to drill the well." EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, EBITDA 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 evaluating us. Our measure of EBITDA may not be the same as similar measures described by other companies. EBITDA is calculated as follows: Quarter Ended Year Ended December 31, December 31, 2003 2003 Income before cumulative effect of change $46,000.00 $470,000.00 in accounting principle Add back: Interest expense 18,000.00 84,000.00 Income tax expense -- 13,000.00 Depreciation and amortization 205,000.00 760,000.00 EBITDA $269,000.00 $1,327,000.00 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. In addition, all statements otherthan statements of historical facts that address activities that the Company expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the SEC reports of the Company, particularly its Form 10-KSB for the Fiscal Year Ended December 31, 2003, for meaningful cautionary language disclosure. GEORESOURCES, INC., AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2003 AND 2002 ASSETS CURRENT ASSETS: 2003 2002 Cash and equivalents $343,419 $329,302 Trade receivables, net 1,084,678 821,459 Inventories 233,306 207,998 Income tax receivable -- 50,192 Prepaid expenses 35,335 28,326 Total current assets 1,696,738 1,437,277 PROPERTY, PLANT AND EQUIPMENT, at cost: Oil and gas properties, using the full cost method of accounting: Properties being amortized 24,711,298 22,636,316 Properties not subject to amortization 280,565 251,714 Drilling rig and equipment 1,176,940 1,077,551 Leonardite plant and equipment 3,267,634 3,262,200 Other 756,211 757,431 30,192,648 27,985,212 Less accumulated depreciation, depletion, amortization and impairment (20,310,113) (20,386,789) Net property,plant and equipment 9,882,535 7,598,423 OTHER ASSETS 5,000 12,500 TOTAL ASSETS $11,584,273 $9,048,200 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $985,766 $659,282 Accrued expenses 404,485 335,219 Current maturities of long-term debt 479,457 132,260 Total current liabilities 1,869,708 1,126,761 LONG-TERM DEBT, less current maturities 1,599,479 1,910,228 ASSET RETIREMENT OBLIGATIONS 1,735,200 -- DEFERRED INCOME TAXES 406,000 395,000 Total liabilities 5,610,387 3,431,989 CONTINGENCIES (NOTE H) STOCKHOLDERS' EQUITY: Common stock, par value $.01 per share; authorized 10,000,000 shares; issued and outstanding, 3,723,977 and 3,787,477 shares, respectively 37,240 37,875 Additional paid-in capital 295,932 384,185 Retained earnings 5,640,714 5,194,151 Total stockholders' equity 5,973,886 5,616,211 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $11,584,273 $9,048,200 GEORESOURCES, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001 2003 2002 2001 OPERATING REVENUES: Oil and gas $3,614,592 $2,980,228 $3,064,135 Leonardite 822,219 726,920 1,152,267 Drilling 406,141 280,538 -- 4,842,952 3,987,686 4,216,402 OPERATING COSTS AND EXPENSES: Oil and gas production 1,786,379 1,619,049 1,856,159 Cost of leonardite sold 850,373 726,552 1,062,995 Drilling costs 369,869 237,729 -- Depreciation, depletion and amortization 759,907 696,857 744,742 Selling, general and administrative 537,141 545,368 471,517 4,303,669 3,825,555 4,135,413 Operating income 539,283 162,131 80,989 OTHER INCOME (EXPENSE): Interest expense (84,432) (95,635) (44,834) Interest income 8,362 11,635 20,294 Other income and losses, net 18,898 18,955 22,369 (57,172) (65,045) (2,171) Income before income taxes 482,111 97,086 78,818 INCOME TAX EXPENSE 12,548 5,712 37,000 Income before cumulative effect of change in accounting principle 469,563 91,374 41,818 Cumulative effect on prior years accounting change, net of tax (23,000) -- -- Net income $446,563 $91,374 $41,818 EARNINGS PER SHARE: Income before cumulative effect of accounting change $.13 $.02 $.01 Cumulative effect of accounting change(.01) -- -- Net income, basic and diluted $.12 $.02 $.01 Weighted average number of shares outstanding 3,748,396 3,787,750 3,846,176 Dilutive potential shares - Stock options -- -- -- Adjusted weighted average shares 3,748,396 3,787,750 3,846,176 DATASOURCE: GeoResources, Inc. CONTACT: Cathy Kruse of GeoResources, Inc., +1-701-572-2020, Web site: http://www.georesources.net/

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