GEOI Georesources, Inc. (MM)

GeoResources, Inc. Reports Third Quarter and Nine Months Results WILLISTON, N.D., Nov. 17 /PRNewswire-FirstCall/ -- GeoResources, Inc., today announced financial results for the quarter and nine months ended September 30, 2003. The company reported net income for the quarter of $171,153 or $0.05 per share on revenue of $1,216,015 versus net income of $103,994 or $0.03 per share on revenue of $1,063,495 in the comparable quarter of 2002. Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) for the quarter was $431,154 versus EBITDA of $361,806 in the third quarter of 2002. 1 Oil and natural gas prices received during the quarter averaged $25.87 per barrel of oil equivalent (BOE), an increase of 8% over the year ago quarter. The price increase completely offset a small sales volume decline to 33,976 BOE for the quarter. The company sold 1,468 tons of leonardite during the quarter at an average price of $88.79 per ton. Drilling revenue was $206,787 during the quarter versus $3,188 a year ago. For the nine-month period, the company reported a net income of $400,328 or $0.11 per share versus a net loss of $34,789 or $0.01 per share for the nine months ended September 30, 2002. EBITDA for the nine months was $1,057,869 versus $631,488 for the same period in 2002. Year-to-date sales of 100,516 BOE at an average price of $26.19 per BOE represents an increase in price of 31% from the prior year, contributing to a 26% revenue increase. Leonardite sales for the nine months equaled 4,871 tons, just 1% less than the same period in 2002. The average price of $91.36 per ton was flat when compared to first nine months of 2002. Drilling revenue for the nine months totaled $206,787 as compared to $177,599 during the same period in 2002. During the third quarter, GeoResources began drilling the Anderson et al #3-24 in the Leonard Field in Bottineau County. The well is currently being completed in the Madison formation and should be connected to sales before year-end. A second well planned for the Leonard field may not commence before year-end because the Western Star drilling rig is currently under contract with another operator. Western Star has drilled a total of five wells this year, three for GeoResources and two for third party operators. Commenting on the results, company President J. P. Vickers said, "During this period of high commodity prices we are focused on maintaining our cost structure and improving profitability. Although our lease operating expenses have increased slightly as a result of higher production taxes and increased workover activity, we have kept our general and administrative costs flat while our depreciation expense has declined. We continue to implement secondary recovery strategies that we believe will ultimately add to our production and extend the life of our properties." GeoResources, Inc. is a Williston, North Dakota-based diversified natural resources company engaged in three principal business segments - oil and gas exploration, development and production; oil and gas drilling; and leonardite mining and the manufacture of leonardite-based products. GeoResources, Inc. is traded on the NASDAQ Small Cap Market under the symbol "GEOI." 1) 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 Quarter Ended September 30, September 30, 2003 2002 Income (loss) before cumulative effect of change in accounting principles. $171,153 $103,994 Add back: Interest expense 21,837 25,443 Income tax 19,000 7,000 Depreciation and amortization 219,164 225,369 EBITDA $431,154 $361,806 Nine Months Ended Nine Months Ended September 30, September 30, 2003 2002 Income (loss) before cumulative effect of change in accounting principles. $423,328 $(34,789) Add back: Interest expense 66,428 66,397 Income tax 13,000 (43,000) Depreciation and amortization 555,113 642,880 EBITDA $1,057,869 $631,448 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 other than statements of historical facts that address activities that the Company expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the SEC reports of the Company, particularly its Form 10-KSB for the Fiscal Year Ended December 31, 2002, for meaningful cautionary language disclosure. GEORESOURCES, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 OPERATING REVENUES: Oil and gas $878,889 $858,197 $2,632,859 $2,096,737 Leonardite 130,339 202,110 445,029 446,180 Drilling 206,787 3,188 206,787 177,599 1,216,015 1,063,495 3,284,675 2,720,516 OPERATING COSTS AND EXPENSES: Oil and gas production 426,967 396,925 1,263,489 1,159,452 Cost of leonardite sold 133,620 161,106 460,668 429,611 Drilling costs 118,702 7,378 118,702 131,459 Depreciation and depletion 219,164 225,369 555,113 642,880 Selling, general and administrative 109,531 141,681 405,963 394,164 1,007,984 932,459 2,803,935 2,757,566 Operating income (loss) 208,031 131,036 480,740 (37,050) OTHER INCOME (EXPENSE): Interest expense (21,837) (25,443) (66,428) (66,397) Interest income 461 451 8,168 11,558 Other income, net 3,498 4,950 13,848 14,100 (17,878) (20,042) (44,412) (40,739) Income (loss) before income taxes 190,153 110,994 436,328 (77,789) Income tax (expense) benefit (19,000) (7,000) (13,000) 43,000 Income (loss) before cumulative effect of change in accounting principle 171,153 103,994 423,328 (34,789) Cumulative effect on prior years accounting change, net of tax -- -- (23,000) -- Net income (loss) $171,153 $103,994 $400,328 $(34,789) EARNINGS PER SHARE: Income (loss) before cumulative effect of accounting change $.05 $.03 $.12 $(.01) Cumulative effect of accounting change -- -- (.01) -- Net income (loss), basic and diluted $.05 $.03 $.11 $(.01) PRO FORMA AMOUNTS, assuming retroactive application of new accounting method: Net income (loss) $171,153 $87,170 $423,328 $(75,965) Net income (loss) per share, basic and diluted $.05 $.02 $.12 $(.02) DATASOURCE: GeoResources, Inc. CONTACT: Cathy Kruse of GeoResources, Inc., +1-701-572-2020, Web site: http://www.georesources.net/

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