Georesources (GEOI) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Contact:  Cathy Kruse

Telephone: 701-572-2020 ext 1

cathy@georesourcesinc.com

FOR IMMEDIATE RELEASE

GeoResources, Inc. Reports Fourth Quarter and

 2010 Annual Financial Results

Reports 2010 Earnings of $23.3 Million and EBITDAX of $69.1 Million.

Houston, Texas, March 9, 2011 – GeoResources, Inc., (NASDAQ:GEOI), today announced its financial and operating results for the twelve and three month periods ended December 31, 2010. The following tables summarize the results of operations compared to similar periods in 2009.

	Twelve Months Ended December 31, (In thousands, except Earnings per share)
	2010		2009
Total revenue	$	107,017	$	80,998
Net income	$	23,331	$	9,775
Earnings per share (diluted)	$	1.16	$	0.59
EBITDAX (1)	$	69,119	$	48,159

	Three Months Ended December 31, (In thousands, except Earnings per share)
	2010		2009
Total revenue	$	27,106	$	23,583
Net income	$	5,178	$	2,371
Earnings per share (diluted)	$	0.26	$	0.14
EBITDAX  (1)	$	15,891	$	14,080

_________

(1)   See additional detail below.

	Percent Increase (Decrease)	Twelve Months Ended December 31,
		2010	2009
Oil Production (MBbls)	25%	1,060	851
Gas Production (MMcf)	(3%)	4,789	4,944
Barrel of oil equivalent (MBOE)	11%	1,858	1,675
Average Price Oil before Hedge Settlements (per Bbl)	28%	$ 72.05	$ 56.37
Average Price Oil after Hedge Settlements (per Bbl)	15%	$ 70.33	$ 61.09
Average Price Gas before Hedge Settlements (per Mcf)	24%	$ 4.07	$ 3.28
Average Price Gas after Hedge Settlements (per Mcf)	34%	$ 5.30	$ 3.97

	Percent Increase (Decrease)	Three Months Ended December 31,
		2010	2009
Oil Production (MBbls)	12%	280	250
Gas Production (MMcf)	(25%)	1,132	1,514
Barrel of oil equivalent (MBOE)	(7%)	469	503
Average Price Oil before Hedge Settlements (per Bbl)	7%	$ 72. 83	$ 68.19
Average Price Oil after Hedge Settlements (per Bbl)	6%	$ 69.82	$ 65.57
Average Price Gas before Hedge Settlements (per Mcf)	(8%)	$ 3.48	$ 3.77
Average Price Gas after Hedge Settlements (per Mcf)	24%	$ 5.00	$ 4.02

The following tables reconcile reported net income to EBITDAX for the periods indicated (in thousands):

	Twelve Months Ended December 31,
	2010			2009
EBITDAX (1)
Net income	$	23,331		$	9,775
Add back:
Interest expense		4,712			4,984
Income taxes:
Current		8,861			412
Deferred		3,062			4,655
Depreciation, depletion and amortization		24,686			22,409
Hedge and derivative contracts		(893	)		299
Non-cash compensation		1,071			1,424
Exploration and impairments		4,289			4,201
EBITDAX(1)	$	69,119		$	48,159

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	Three Months Ended December 31,
	2010			2009
Net income (loss)	$	5,178		$	2,371
Add back:
Interest expense		763			1,435
Income taxes :
Current		(1,838	)		588
Deferred		4,478			(637	)
Depreciation, depletion and amortization		6,169			6,906
Hedge and derivative contracts		83			(28	)
Non-cash compensation		278			360
Exploration and impairments		780			3,085
EBITDAX (1)	$	15,891		$	14,080

(1) As used herein, EBITDAX is calculated as earnings before interest, income taxes, depreciation, depletion and amortization, and exploration expense and further excludes non-cash compensation, impairments, hedge ineffectiveness and income or loss on derivative contracts.  EBITDAX 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 evaluation of our operating performance.

Comments

Frank A. Lodzinski, CEO and President, commented “We are pleased to report our results of operations for 2010. We closed out 2010 after achieving several financial milestones, including record revenues, EBITDAX, and net income. These records were achieved both on an absolute dollar basis and also on a per share basis.  Importantly, on the production side we reported a 25% increase in oil production and our gas production only declined slightly as a result of our conscious decision to suspend our natural gas drilling early in 2010. As we enter 2011, we are working diligently to address the challenges in our industry and continue our profitable growth.  Our capital position is excellent, having completed our public offering of 5,175,000 shares of common stock in January, resulting in net proceeds of $122.9 million and allowing us to pay down all $87 million of our debt, leaving us with $45 million of cash to fund operations and drilling and development expenditures.”

About GeoResources, Inc.

GeoResources, Inc. is an independent oil and gas company engaged in the development and acquisition of oil and gas reserves through an active and diversified program that includes the acquisition, drilling and development of undeveloped leases, purchases of reserves, exploration and re-engineering activities, currently focused in the Southwest, Gulf Coast, and the Williston Basin.  For more information, visit our website at www.georesourcesinc.com.

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Forward Looking Statements - Information included herein contains forward-looking statements that involve significant risks and uncertainties, including our need to replace production and acquire or develop additional oil and gas reserves, intense competition in the oil and gas industry, our dependence on our management, volatile oil and gas prices and costs, uncertain effects of hedging activities and uncertainties of our oil and gas estimates of proved reserves and reserve potential, all of which may be substantial.  In addition, past performance is no guarantee of future performance and results.  All statements or estimates made by the Company, other than statements of historical fact, related to matters that may or will occur in the future are forward-looking statements. Readers are encouraged to read our December 31, 2009 Annual Report on Form 10-K and Form 10-K/A and our other documents subsequently filed with the SEC regarding information about GeoResources for meaningful cautionary language in respect of the forward-looking statements herein.  Interested persons are able to obtain copies of filings containing information about GeoResources, without charge, at the SEC’s internet site (http://www.sec.gov).  There is no duty to update the statements herein.

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GEORESOURCES, INC and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
			December 31,
			2010			2009
ASSETS
Current assets:
	Cash		$	9,370		$	12,660
	Accounts receivable
		Oil and gas revenues		17,017			14,860
		Joint interest billings and other		16,631			13,734
		Affiliated partnerships		969			933
	Notes receivable			120			120
	Derivative financial instruments			4,282			764
	Income taxes receivable			222			2,077
	Prepaid expenses and other			2,645			2,297
		Total current assets		51,256			47,445
Oil and gas properties, successful efforts method:
	Proved properties			341,582			285,363
	Unproved properties			32,403			10,281
Office and other equipment				1,140			828
Land				146			96
				375,271			296,568
	Less accumulated depreciation, depletion and amortization			(72,380	)		(48,182	)
		Net property and equipment		302,891			248,386
Equity in oil and gas limited partnerships				2,272			3,532
Derivative financial instruments				851			1,360
Deferred financing costs and other				2,420			3,574
			$	359,690		$	304,297

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GEORESOURCES, INC and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
	December 31,
	2010			2009
LIABILITIES AND  EQUITY
Current liabilities:
Accounts payable	$	14,616		$	6,452
Accounts payable to affiliated partnerships		2,931			8,361
Revenue and royalties payable		12,450			13,928
Drilling advances		4,203			390
Accrued expenses		1,331			1,574
Derivative financial instruments		7,433			4,794
Total current liabilities		42,964			35,499
Long-term debt		87,000			69,000
Deferred income taxes		19,289			15,778
Asset retirement obligations		7,052			6,110
Derivative financial instruments		1,650			3,233
Equity:
Common stock, par value $0.01 per share; authorized 100,000,000
shares; issued and outstanding: 19,726,566 shares in 2010
and 19,705,362 in 2009		197			197
Additional paid-in capital		148,172			146,966
Accumulated other comprehensive income (loss)		(3,000	)		(3,288	)
Retained earnings		54,133			30,802
Total GeoResources, Inc. stockholders' equity		199,502			174,677
Noncontrolling interest		2,233			-
Total equity		201,735			174,677
	$	359,690		$	304,297

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GEORESOURCES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)
	Year Ended December 31,
	2010			2009		2008
Revenue:
Oil and gas revenues	$	99,913		$	71,618	$	85,263
Partnership management fees		550			1,007		1,725
Property operating income		1,865			1,710		1,430
Gain on sale of property and equipment		953			1,355		4,362
Partnership income		2,240			4,318		1,061
Interest and other		1,496			990		765
Total revenue		107,017			80,998		94,606
Expenses:
Lease operating expense		20,944			18,763		22,914
Production taxes		6,589			4,193		7,517
Re-engineering and workovers		1,962			2,807		3,518
Exploration expense		849			1,406		2,592
Impairment of oil and gas properties		3,440			2,795		8,339
General and administrative expense		9,474			8,500		7,168
Depreciation, depletion and amortization		24,686			22,409		16,007
Hedge ineffectiveness		(891	)		137		(123	)
(Gain) / loss on derivative contracts		(2	)		162		563
Interest		4,712			4,984		4,820
Total expense		71,763			66,156		73,315
Income before income taxes		35,254			14,842		21,291
Income taxes:
Current		8,861			412		866
Deferred		3,062			4,655		6,903
		11,923			5,067		7,769
Net income	$	23,331		$	9,775	$	13,522
Less: Net income attributable to noncontrolling interest		-			-		-
Net income attributable to GeoResources, Inc.	$	23,331		$	9,775	$	13,522
Net income per share (basic)	$	1.18		$	0.59	$	0.87
Net income per share (diluted)	$	1.16		$	0.59	$	0.86
Weighted average shares outstanding:
Basic		19,720,652			16,532,003		15,598,244
Diluted		20,142,297			16,559,431		15,751,185

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GEORESOURCES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
	Year Ended December 31,
Cash flows from operating activities:	2010			2009			2008
Net income	$	23,331		$	9,775		$	13,522
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation, depletion and amortization		24,686			22,409			16,007
Exploratory dry holes and unproved property impairments		-			-			2,241
Impairment of proved properties		3,440			2,795			8,339
Gain on sale of property and equipment		(953	)		(1,355	)		(4,362	)
Accretion of asset retirement obligations		405			368			391
Unrealized (gain) loss on derivative contracts		(325	)		(238	)		563
Amortization of loss on cancelled hedges		-			482			-
Hedge ineffectiveness (gain) loss		(891	)		137			(123	)
Partnership income		(2,240	)		(4,318	)		(1,061	)
Partnership distributions		3,500			2,406			653
Deferred income taxes		3,062			4,655			6,903
Non-cash compensation		1,071			1,424			661
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		(599	)		(7,923	)		3,958
Decrease in notes receivable		100			275			480
Decrease (increase) in prepaid expense and other		707			(1,116	)		(1,990	)
Increase (decrease) in accounts payable and accrued expense		4,237			(5,732	)		(3,844	)
Net cash provided by operating activities		59,531			24,044			42,338
Cash flows from investing activities:
Proceeds from sale of property and equipment		1,018			1,991			26,789
Additions to property and equipment, net of cost recoveries
of $40,230 in 2010 and none in 2009 and 2008		(81,974	)		(89,396	)		(51,824	)
Investment in oil and gas limited partnership		-			-			(978	)
Cancellation of hedge contracts		-			-			(2,975	)
Net cash used in investing activities		(80,956	)		(87,405	)		(28,988	)
Cash flows from financing activities:
Issuance of common stock		135			33,054			32,187
Issuance of long-term debt		38,000			64,000			-
Reduction of long-term debt		(20,000	)		(35,000	)		(56,000	)
Net cash provided by (used in) financing activities		18,135			62,054			(23,813	)
Net increase (decrease) in cash and cash equivalents		(3,290	)		(1,307	)		(10,463	)
Cash and cash equivalents at beginning of period		12,660			13,967			24,430
Cash and cash equivalents at end of period	$	9,370		$	12,660		$	13,967
Supplementary information:
Interest paid	$	3,958		$	4,064		$	5,073
Income taxes paid	$	8,629		$	664		$	3,970
Stock issue for services	$	2		$	59		$	35

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