Exhibit 99.1
NEWS RELEASE
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 THIRD QUARTER AND
NINE-MONTH RESULTS
Williston, ND November 17, 2004 – 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.
1EBITDA 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 Ended
Nine Months 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.
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GEORESOURCES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | Three Months Ended September 30, | | Nine Months Ended 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 |
| | | | | | | | |
