FOR IMMEDIATE RELEASE
For:
GeoResources, Inc.
Contact:
Cathy Kruse
P. O. Box 1505
Telephone:
(701) 572-2020
Williston, ND 58802
ir@geoi.net
GEORESOURCES, INC. REPORTS INCREASED EARNINGS
Williston, ND, April 5, 2004 – GeoResources, Inc. (Nasdaq: GEOI) 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 declined 3.5% 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 of those 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 December 31, 2003 | | Year Ended December 31, 2003 |
| | | |
| | | | | |
Income before cumulative effect | | $ 46,000.00 | | $ 470,000.00 |
of change 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 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.
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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 |
