GEOI Georesources, Inc. (MM)

GeoResources, Inc. Reports Third Quarter and Nine-Month Results WILLISTON, N.D., Nov. 17 /PRNewswire-FirstCall/ -- GeoResources, Inc., (NASDAQ:GEOI), today reported third quarter 2004 net income of $419,000, or $0.11 per basic and diluted share, on revenue of $1,807,000, compared to a 2003 net income of $171,000, or $0.05 per basic and diluted share, on revenue of $1,268,000. Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) for the third quarter 2004 was $698,000, compared to $431,000 for the third quarter 2003.(1) Net income for the nine-months 2004 was $736,000, or $0.20 per basic and diluted share, on revenue of $4,592,000, versus a net income of $400,000, or $0.11 per basic and diluted share, on revenue of $3,437,000 for the nine months 2004. EBITDA for the nine months 2004 was $1,446,000, compared to $1,058,000 the nine months in 2003. Higher commodity prices, which averaged $34.31 per barrel of oil equivalent (BOE) for the nine months ended 2004, were the primary driver of the improved results. GeoResources sold a total of 31,000 BOE, or 337 BOE per day, during the third quarter 2004, compared to 34,000 BOE, or 374 BOE per day, in the third quarter 2003. The reduced production sold was attributable to normal production declines that were not offset by new production. Although sales volumes were lower, the company received substantially higher average oil value per BOE resulting in an increase of $327,000, or 37%, for the three-months ended September 30, 2004, and $490,000, or 19%, for the nine- months ended September 30, 2004, compared to the same periods in 2003 in spite of the lower sales volumes. Leonardite revenue increased $116,000, or 64%, and $250,000, or 42%, respectively, for the three- and nine- month periods ended September 30, 2004, compared to the prior periods due to higher production sold. Production increased 747 tons, or 51%, and 1,821 tons, or 37%, respectively, for the three- and nine- month periods ended September 30, 2004 compared to the equivalent periods in 2003. Drilling revenue increased $96,000, or 45%, and $414,000, or 200%, respectively, for the three- and nine- month periods ended September 30, 2004 compared to the prior periods due to higher rig utilization. Drilling days of operation increased 3.5 days, or 12%, and 47.7 days, or 163%, respectively, for the three- and nine- month periods ended September 30, 2004, compared to the equivalent periods in 2003. (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 Sept 30, 2004 Sept 30, 2003 Net income $419,000 $171,000 Add back Interest expense 22,000 22,000 Income tax 49,000 19,000 Depreciation and amortization 208,000 219,000 EBITDA $698,000 $431,000 Nine Months Nine Months Ended Ended Sept 30, 2004 Sept 30, 2003 Net Income $736,000 $400,000 Add back: Accounting change -- 23,000 Interest expense 61,000 66,000 Income tax 78,000 13,000 Depreciation and amortization 571,000 555,000 EBITDA $1,446,000 $1,058,000 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, 2003, for meaningful cautionary language disclosure. GEORESOURCES, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 2004 2003 OPERATING REVENUES: Oil and gas sales $1,206,352 $878,889 $3,123,312 $2,632,859 Leonardite sales 297,537 181,840 848,069 597,841 Drilling revenue 302,778 206,787 620,859 206,787 1,806,667 1,267,516 4,592,240 3,437,487 OPERATING COSTS AND EXPENSES: Oil and gas production 500,224 426,967 1,363,964 1,263,489 Cost of leonardite sold 234,363 185,121 737,794 613,480 Drilling costs 250,380 118,702 615,433 118,702 Depreciation and depletion 208,400 219,164 571,368 555,113 Selling, general and administrative 128,637 109,531 453,991 405,963 1,322,004 1,059,485 3,742,550 2,956,747 Operating income 484,663 208,031 849,690 480,740 OTHER INCOME (EXPENSE): Interest expense (21,991) (21,837) (60,617) (66,428) Other income, net 5,256 3,959 25,314 22,016 (16,735) (17,878) (35,303) (44,412) Income before income taxes 467,928 190,153 814,387 436,328 Income tax expense 49,000 19,000 78,000 13,000 Income before cumulative effect of change in accounting principle 418,928 171,153 736,387 423,328 Cumulative effect on prior years accounting change, net of tax -- -- -- (23,000) Net income $418,928 $171,153 $736,387 $400,328 EARNINGS PER SHARE: Income before cumulative effect of accounting change $.11 $.05 $.20 $.12 Cumulative effect of accounting change -- -- -- (.01) Net income, basic and diluted $.11 $.05 $.20 $.11 DATASOURCE: GeoResources, Inc. CONTACT: Cathy Kruse of GeoResources, Inc., +1-701-572-2020, Web site: http://www.georesources.net/

Copyright