WILLISTON, N.D., May 16, 2003 (PRIMEZONE) -- GeoResources, Inc. (Nasdaq:GEOI) today reported first quarter 2003 net income of $162,000 or $0.04 per share on revenue of $1,077,000 compared to a 2002 first quarter loss of $137,000 or $0.04 per share on revenue of $739,000. Higher commodity prices, which averaged $28.47 per barrel of oil equivalent (BOE) were the primary driver of the improved results. Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) for the year was $334,000, a 542% increase from the prior year. (Note)
GeoResources produced 32,000 BOE or 359 BOE per day during the first quarter 2003 compared to 35,000 BOE or 388 BOE per day in the first quarter 2002. The reduced production was attributable to normal production declines that were not offset by new drilling. Since the beginning of the year, the Company has drilled two wells. The SSMU C-101X in the South Starbuck Madison was placed on production this week and the Boll 1-26, an exploratory well, was a dry hole. GeoResources has identified two locations in Bottineau County, North Dakota that are in the process of being permitted and the Company expects to begin drilling during the second or third quarter.
Note: 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
March 31, 2003 March 31, 2002
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Net Income (loss) $185,000.00 $(137,000.00)
(Net income before cumulative
effect of changes in accounting
principles.)
Add back:
Interest expense 22,000.00 17,000.00
Income tax deficit (33,000.00) (35,000.00)
Depreciation and amortization 160,000.00 207,000.00
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EBITDA $334,000.00 $ 52,000.00
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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.
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
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GEORESOURCES, INC., AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2003 2002
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ASSETS
CURRENT ASSETS:
Cash and equivalents $ 356,157 $ 329,302
Trade receivables, net 788,008 821,459
Inventories 230,091 207,998
Income tax receivable 50,192 50,192
Prepaid expenses 34,782 28,326
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Total current assets 1,459,230 1,437,277
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PROPERTY, PLANT AND EQUIPMENT,
at cost:
Oil and gas properties,
using the full cost method
of accounting:
Properties being amortized 23,466,998 22,636,316
Properties not subject to
amortization 262,758 251,714
Drilling rig and equipment 1,100,521 1,077,551
Leonardite plant and equipment 3,262,694 3,262,200
Other 756,931 757,431
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28,849,902 27,985,212
Less accumulated depreciation,
depletion amortization and
impairment (19,717,978) (20,386,789)
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Net property, plant and
equipment 9,131,924 7,598,423
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OTHER ASSETS 10,625 12,500
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TOTAL ASSETS $ 10,601,779 $ 9,048,200
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 584,547 $ 659,282
Accrued expenses 299,967 335,219
Current maturities of
long-term debt 131,450 132,260
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Total current
liabilities 1,015,964 1,126,761
LONG-TERM DEBT, less
current maturities 1,878,978 1,910,228
ASSET RETIREMENT OBLIGATION 1,608,000 --
DEFERRED INCOME TAXES 358,000 395,000
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Total liabilities 4,860,942 3,431,989
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STOCKHOLDERS' EQUITY:
Common stock, par value
$.01 per share;
authorized 10,000,000 shares;
issued and
outstanding 3,763,227
and 3,787,477 shares,
respectively 37,632 37,875
Additional paid-in capital 346,962 384,185
Retained earnings 5,356,243 5,194,151
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Total stockholders' equity 5,740,837 5,616,211
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 10,601,779 $ 9,048,200
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GEORESOURCES, INC., AND SUBSIDIARIES
------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
----------------------------
2003 2002
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OPERATING REVENUES:
Oil and gas sales $ 920,574 $ 552,265
Leonardite sales 156,394 91,550
Drilling revenue -- 95,484
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1,076,968 739,299
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OPERATING COSTS AND EXPENSES:
Oil and gas production 445,112 387,160
Cost of leonardite sold 169,150 126,238
Drilling costs -- 57,989
Depreciation and depletion 160,189 207,159
Selling, general and
administrative 133,872 120,419
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908,323 898,965
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Operating income (loss) 168,645 (159,666)
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OTHER INCOME (EXPENSE):
Interest expense (22,130) (17,328)
Interest income 177 219
Other income, net 5,400 4,500
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(16,553) (12,609)
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Income (loss) before
income taxes 152,092 (172,275)
Income tax (expense) benefit 33,000 35,000
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Income (loss) before
cumulative effect of change
in accounting principle 185,092 (137,275)
Cumulative effect on prior years
accounting change, net of tax (23,000) --
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Net income (loss) $ 162,092 $ (137,275)
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EARNINGS PER SHARE:
Income (loss) before cumulative
effect of accounting change $ .05 $ (.04)
Cumulative effect of
accounting change (.01) --
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Net income(loss), basic
and diluted $ .04 $ (.04)
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PROFORMA AMOUNTS, assuming retroactive
application of new accounting method:
Net income (loss) $ 185,092 $ (151,509)
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Net income (loss) per share,
basic and diluted $ .05 $ (.04)
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