SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 2002.
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________.
Commission File Number 0-8041
GeoResources, Inc.
(Exact name of small business issuer as specified in its charter)
Colorado 84-0505444
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1407 West Dakota Parkway, Suite 1-B, Williston, ND 58801
(Address of principal executive offices)
Issuer's telephone number: (701) 572-2020
_________________________________________
CHECK WHETHER THE ISSUER (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY
SECTION 13 OR 15(d) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR
SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),
AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES ____X____ NO________.
_________________________________________
State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at October 31, 2002
Common Stock, par value $.01 per share 3,787,477 shares
_____________________________________________________________
GEORESOURCES, INC.
INDEX
PAGE
NUMBER
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
(September 30, 2002, and December 31, 2001)
Consolidated Statements of Operations 4
(Three months ended September 30, 2002, and 2001
and nine months ended September 30, 2002, and 2001)
Consolidated Statements of Cash Flows 5
(Nine months ended September 30, 2002, and 2001)
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Item 3. Controls and Procedures 10
PART II. OTHER INFORMATION 10
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
GEORESOURCES, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2002 2001
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 243,292 $ 191,328
Trade receivables, net 839,053 626,359
Inventories 243,609 196,858
Income tax receivable 50,032 23,000
Prepaid expenses 34,117 25,155
------------ ------------
Total current assets 1,410,103 1,062,700
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Oil and gas properties, using the
full cost method of accounting:
Properties being amortized 22,453,594 21,594,355
Properties not subject to amortization 228,499 239,067
Drilling rig and equipment 1,072,382 968,064
Leonardite plant and equipment 3,244,605 3,244,605
Other 757,931 759,742
------------ ------------
27,757,011 26,805,833
Less accumulated depreciation, depletion
amortization and impairment (20,332,812) (19,689,932)
------------ ------------
Net property, plant and equipment 7,424,199 7,115,901
------------ ------------
OTHER ASSETS 14,375 23,118
------------ ------------
TOTAL ASSETS $ 8,848,677 $ 8,201,719
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 705,126 $ 938,807
Accrued expenses 232,999 222,675
Current maturities of long-term debt 133,026 125,000
------------ ------------
Total current liabilities 1,071,151 1,286,482
LONG-TERM DEBT, less current maturities 1,941,478 1,035,228
DEFERRED INCOME TAXES 346,000 344,000
------------ ------------
Total liabilities 3,358,629 2,665,710
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, par value $.01 per share;
authorized 10,000,000 shares;
issued and outstanding, 3,787,477
and 3,794,227 shares, respectively 37,875 37,942
Additional paid-in capital 384,185 395,290
Retained earnings 5,067,988 5,102,777
------------ ------------
Total stockholders' equity 5,490,048 5,536,009
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,848,677 $ 8,201,719
============ ============
See Notes to Consolidated Financial Statements.
GEORESOURCES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
OPERATING REVENUES:
Oil and gas $ 858,197 $ 860,597 $ 2,096,737 $ 2,532,319
Leonardite 202,110 191,190 446,180 744,565
Drilling 3,188 -- 177,599 --
----------- ----------- ----------- -----------
1,063,495 1,051,787 2,720,516 3,276,884
----------- ----------- ----------- -----------
OPERATING COSTS AND EXPENSES:
Oil and gas production 396,925 492,133 1,159,452 1,392,038
Cost of leonardite sold 161,106 149,204 429,611 606,414
Drilling costs 7,378 -- 131,459 --
Depreciation and depletion 225,369 182,306 642,880 500,718
Selling, general
and administrative 141,681 101,647 394,164 342,860
----------- ----------- ----------- -----------
932,459 925,290 2,757,566 2,842,030
----------- ----------- ----------- -----------
Operating income (loss) 131,036 126,497 (37,050) 434,854
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (25,443) (10,473) (66,397) (35,275)
Interest income 451 12,626 11,558 19,726
Other income, net 4,950 5,074 14,100 15,725
----------- ----------- ----------- -----------
(20,042) 7,227 (40,739) 176
----------- ----------- ----------- -----------
Income (loss) before
income taxes 110,994 133,724 (77,789) 435,030
Income tax (expense) benefit (7,000) (17,000) 43,000 (54,000)
----------- ----------- ----------- -----------
Net income (loss) $ 103,994 $ 116,724 $ (34,789) $ 381,030
=========== =========== =========== ===========
EARNINGS PER SHARE:
Net income (loss),
basic and diluted $ .03 $ .03 $ (.01) $ .10
=========== =========== =========== ===========
See Notes to Consolidated Financial Statements.
GEORESOURCES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
----------------------------
2002 2001
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (34,789) $ 381,030
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and depletion 642,880 500,718
Deferred income taxes 2,000 54,000
Other 8,743 6,156
Changes in assets and liabilities:
Decrease (increase) in:
Trade receivables (212,693) 128,933
Inventories (46,751) 59,768
Income tax receivable (27,032) --
Prepaid expenses and other (8,963) (29,168)
Increase (decrease) in:
Accounts payable (207,937) (108,653)
Income taxes payable -- (75,000)
Accrued expenses 10,324 18,900
------------ ------------
Net cash provided by
operating activities 125,782 936,684
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (976,922) (1,143,004)
Collection of mortgage loans receivable -- 103,321
------------ ------------
Net cash used in
investing activities (976,922) (1,039,683)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term borrowings 1,010,000 425,000
Principal payments on long-term debt (95,724) (83,333)
Debt issue costs -- (15,000)
Cost to purchase common stock (11,172) (187,748)
------------ ------------
Net cash provided by
financing activities 903,104 138,919
------------ ------------
NET INCREASE (DECREASE) IN
CASH AND EQUIVALENTS 51,964 35,920
CASH AND EQUIVALENTS, beginning of period 191,328 315,191
------------ ------------
CASH AND EQUIVALENTS, end of period $ 243,292 $ 351,111
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ 66,397 $ 122,343
Income taxes 1,758 1,320
See Notes to Consolidated Financial Statements.
GEORESOURCES, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In our opinion, the accompanying unaudited financial statements contain
all adjustments (consisting of only normal recurring accruals) necessary
to present fairly our financial position as of September 30, 2002, and
the results of operations and cash flows for the three months and nine
months ended September 30, 2002, and 2001.
The results of operations for the periods ended September 30, 2002, are
not necessarily indicative of the results to be expected for the full
fiscal year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. Therefore, it is
suggested that these financial statements be read in connection with the
audited consolidated financial statements and the notes included in our
Annual Report on Form 10-KSB for the year ended December 31, 2001.
2. Certain accounts in the prior-year financial statements have been
reclassified for comparative purposes to conform with the presentation
in the current-year financial statements.
3. We assess performance and allocate resources based upon our products
and services, which consist principally of: A) oil and gas exploration,
development and production; B) mining and processing of leonardite; and C)
oil and gas drilling. All operations are conducted within the United
States. Operations of the drilling segment commenced in January 2002.
Accordingly, there are no amounts in the prior year period for this
segment. Sales and other material transactions between the segments have
been eliminated. Certain corporate costs, assets and capital expenditures
that are considered to benefit the entire organization are not allocated to
our operating segments. Interest income, interest expense and income taxes
are also not allocated to operating segments. There are no significant
accounting differences between internal segment reporting and consolidated
external reporting.
Presented below are our identifiable net assets as of September 30,
2002, and December 31, 2001:
2002 2001
------------ ------------
Oil and gas $ 6,105,459 $ 5,539,560
Leonardite 965,569 976,107
Drilling 996,306 968,064
General corporate assets 781,343 717,988
------------ ------------
$ 8,848,677 $ 8,201,719
============ ============
Presented below is information concerning our operating segments for the
three- and nine-month periods ended September 30, 2002, and 2001:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
Revenue:
Oil and gas $ 858,197 $ 860,597 $ 2,096,737 $ 2,532,319
Leonardite 202,110 191,190 446,180 744,565
Drilling 3,188 -- 177,599 --
----------- ----------- ----------- -----------
$ 1,063,495 $ 1,051,787 $ 2,720,516 $ 3,276,884
=========== =========== =========== ===========
Income (loss) before income taxes:
Oil and gas $ 295,252 $ 218,087 $ 472,041 $ 734,485
Leonardite 7,544 10,550 (77,466) 37,765
Drilling (32,002) -- (36,780) --
General corporate
activities (139,758) (102,140) (394,845) (337,396)
Other income and
expenses (20,042) 7,227 (40,739) 176
----------- ----------- ----------- -----------
$ 110,994 $ 133,724 $ (77,789) $ 435,030
=========== =========== =========== ===========
4. In September 2002, the Company received a notice from the bankruptcy
trustee of a former leonardite customer alleging that the Company received
preferential transfers from this customer within 90 days of the customer's
bankruptcy petition filed in November 2000. The amount in question is
approximately $110,000, and the trustee requested that the Company repay
the entire amount. The Company believes that it is probable that a suit
will be filed against the Company in late 2002. If so, the Company will
either pursue a settlement of the suit for substantially less than $110,000
or defend its position that the payments it received were not preferential
transfers but rather were payments on account that were received in the
normal course of business and, therefore, should not be repaid to the
trustee. As of September 30, 2002, the Company has recorded a reserve of
$25,000 with respect to this matter.
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
This discussion and analysis of financial condition and results of
operations, and other sections of this report contain forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995, that are based on management's beliefs, assumptions, current
expectations, estimates and projections about the oil, gas and leonardite
industry, the economy and about us. Words such as "may," "will," "expect,"
"anticipate," "estimate" or "continue," or comparable words are intended to
identify forward-looking statements. These statements are not guarantees
of future performance and involve risks, uncertainties and assumptions that
are difficult to predict with regard to timing, extent, likelihood and
degree of occurrence. Therefore, our actual results and outcomes may
materially differ from what may be expressed or forecasted in our forward-
looking statements. Furthermore, we undertake no obligation to update,
amend or clarify forward-looking statements, whether as a result of new
information, future events or otherwise.
The following discussion should be read in conjunction with our
consolidated financial statements and related notes included elsewhere
herein. Important factors that could cause actual results to differ
materially from the forward-looking statements include, but are not limited
to, changes in production volumes; worldwide supply and demand which affect
commodity prices for oil; the timing and extent of our success in
discovering, acquiring, developing and producing oil, natural gas and
leonardite reserves; risks inherent in the drilling and operation of oil
and natural gas wells and the mining and processing of leonardite products;
future production and development costs; the effect of existing and future
laws, governmental regulations and the political and economic climate of
the United States; and conditions in the capital markets.
We caution the reader that a number of important factors discussed
herein, and in other reports filed with the Securities and Exchange
Commission, particularly our Annual Report on Form 10-KSB for the Year
Ended December 31, 2001, could affect our actual results and cause actual
results to differ materially from those discussed in forward-looking
statements.
Results of Operations - Three Months and Nine Months Ended September 30, 2002,
compared to Three Months and Nine Months Ended
September 30, 2001.
Information concerning our oil and gas operations for the three months
and nine months ended September 30, 2002, is set forth in the table below:
Oil and Gas Operations
% Increase % Increase
Three Months (Decrease) Nine Months (Decrease)
Ended From 2001 Ended From 2001
Sept. 30, 2002 Period Sept. 30, 2002 Period
-------------- ---------- -------------- ----------
Oil and gas production
sold (BOE) 35,898 (13%) 104,642 (9%)
Average price per BOE $ 23.91 14% $ 20.04 (9%)
Oil and gas revenue $ 858,197 --% $ 2,096,737 (17%)
Production costs $ 396,925 (19%) $ 1,159,452 (17%)
Average production
cost per BOE $ 11.06 (8%) $ 11.08 (9%)
Oil and gas production sold, expressed in barrels of oil equivalent
(BOE), declined 5,246 BOE or 13% and 9,812 BOE or 9% for the three- and
nine-month periods ended September 30, 2002, compared to the same periods
in 2001. These changes basically reflect the normal declines of our wells
due to our reduced level of drilling in years prior to 2002 and to our
focus on secondary recovery drilling during 2002. Virtually, all of our
oil and gas drilling operations during 2002 were targeted toward
development drilling in our South Starbuck Madison Unit located in
Bottineau County, North Dakota, and the drilling of one well needed for
another unit. We intend to file this year with working interest owners,
royalty owners and regulatory agencies to form that unit.
The average oil price for the third quarter increased to $23.91, rising
$2.99 or 14% above the same period in 2001. The 2002 nine-month period
average price of $20.04, however, continued to lag below the prior year,
which was $22.13. Oil and gas revenue for the three-month period ended
September 30, 2002, was essentially flat due to the 13% lower production
and 14% higher commodity values discussed above. Oil and gas revenue for
the nine-month period was impacted by the combination of the lower average
oil price thus far this year compared to 2001 and the production declines
discussed above. This resulted in oil and gas revenue of $2,097,000 for
the nine months ended September 30, 2002, compared to $2,532,000 for the
same period last year.
Oil and gas production costs declined $95,000 or 19% and $233,000 or 17%
for the three- and nine-month periods of 2002, respectively, when compared
to the same periods in 2001. The decrease in both periods was primarily
due to efforts to control repair, maintenance and workover costs with a
looming threat of lower commodity prices due to uncertainties in the Middle
East. These lower production costs resulted in costs expressed on a per-
equivalent-barrel basis declining 8% for the three-month period and 9% for
the nine-month period of 2002 when compared to the same periods in 2001.
These decreases in costs reflect our effort to bring per barrel costs down
to their historical range of about $10.
Information concerning our leonardite operations for the three months
and nine months ended September 30, 2002, is set forth in the table below:
Leonardite Operations
% Increase % Increase
Three Months (Decrease) Nine Months (Decrease)
Ended From 2001 Ended From 2001
Sept. 30, 2002 Period Sept. 30, 2002 Period
-------------- ---------- -------------- ----------
Leonardite production
sold (tons) 2,277 26% 4,902 (38%)
Average revenue
per ton $ 88.76 (16%) $ 91.02 (3%)
Leonardite revenue $ 202,110 6% $ 446,180 (40%)
Cost of leonardite
sold $ 161,106 8% $ 429,611 (29%)
Average production
cost per ton $ 70.75 (14%) $ 87.64 15%
Leonardite production sold increased 465 tons or 26% and decreased 3,027
tons or 38%, respectively, for the three- and nine-month periods ended
September 30, 2002, compared to the equivalent periods in 2001. The year
started out slow and picked up considerably during the third quarter until
hurricane season in the Gulf States caused evacuation of some of the
offshore rigs.
Leonardite revenue increased $11,000 or 6% and decreased $298,000 or 40%,
respectively, for the three- and nine-month periods ended September 30,
2002, compared to the same periods in 2001. The change in revenue in the
three-month period was primarily due to the reasons explained above.
Average revenue per ton for the three months ended September 30, 2002, was
down 16% and for the nine-month period, down 3%. This was due to the
decrease in special product sales during the third quarter where we have a
larger profit margin. Our basic leonardite product has lower processing
costs and selling prices, and the profit margin is lower to remain
competitive.
Cost of leonardite sold was 8% higher for the three-month period ended
September 30, 2002, and decreased 29% for the nine-month period compared to
the same periods in 2001. The increase for the quarter was due to an
increase in equipment repair costs, while the nine-month decrease was
related to the overall decline in sales. Average per ton production costs
decreased 14% and increased 15%, respectively, for the three- and nine-
month periods ended September 30, 2002, compared to the same periods in
2001.
Drilling Operations
Our oil and gas drilling subsidiary, Western Star Drilling Company,
commenced operations January 2, 2002, and has drilled two wells for us and
two wells for other operators. Drilling revenues from the external
projects were $178,000, and associated costs of those projects were
$131,000, yielding an operating income from drilling operations of $47,000
before depreciation. These results of operations can not be compared to
the previous year, because drilling operations did not exist. During the
third quarter 2002, this subsidiary did not drill any wells but it did quote
several projects that we hope will be drilled in the remainder of 2002 or
early 2003.
Consolidated Analysis
Total operating revenues increased $12,000 or 1% and decreased $556,000
or 17%, respectively, for the three- and nine-month periods ended September
30, 2002, compared to the same periods in 2001. The decrease in the nine-
month period was due to decreased leonardite sales and lower oil production
and prices, which were partially offset by our new drilling revenues.
Total operating expenses increased $7,000 or 1% and decreased $84,000 or
3% for the three- and nine-month periods of 2002, respectively, compared to
the same periods in 2001. Operating expenses for oil and gas, leonardite,
and drilling were previously discussed. Depreciation, depletion and
amortization for the three- and nine- month periods ended September 30,
2002, increased compared to the prior year periods because of depreciation
for the drilling rig that commenced operations in January 2002, and because
of higher depletion of oil and gas properties. Selling, general and
administrative was also up in both periods due in part to a $25,000 reserve
established for a claim by a bankruptcy trustee of a former leonardite
customer.
Operating income increased to $131,000 and decreased to a loss of $37,000
for the three- and nine-month periods ended September 30, 2002, compared to
income of $126,000 and $435,000 for the same periods in 2001. After
provisions for non-operating expenses and income taxes, the result of
consolidated operations yielded a net income of $104,000 or $.03 per share
and a net loss of $35,000 or $0.01 per share, respectively, for the three-
and nine-month periods ended September 30, 2002, compared to a net income
of $117,000 or $.03 per share and $381,000 or $.10 per share for the same
periods in 2001.
Liquidity and Capital Resources
At September 30, 2002, we had working capital of $338,000 compared to
working capital deficit of $224,000 at December 31, 2001. Our current
ratio was 1.32 to 1 at September 30, 2002, compared to .83 to 1 at year-end
2001.
Net cash provided by operating activities was $126,000 for the nine
months ended September 30, 2002, compared to $937,000 for the same period
in 2001. Cash was utilized in 2002 to make payments of $977,000 for
additions to property, plant and equipment, $96,000 for payments on long-
term debt and $11,000 for stock repurchases. During the first half of
2002, we borrowed $1,000,000 to finance our drilling program and the
retrofitting of the drilling rig.
We believe our cash requirements can be met by cash flows from operations
and, if necessary, borrowings on our existing $3,000,000 Wells Fargo Bank
line-of-credit which, subject to collateral requirements, has available
funds of $1,225,000. Future cash requirements might also be provided by
possible forward sales of oil reserves or additional debt or equity
financing.
Item 3. Controls and Procedures
Under the supervision and with the participation of management, including
our Chief Executive Officer/Chief Financial Officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is
defined under Rule 13a-14(c) promulgated under the Securities Exchange Act
of 1934, as amended within 90 days of the filing date of this report.
Based on the evaluation, our Chief Executive Officer/Chief Financial
Officer concluded that our disclosure controls and procedures are
effective.
There have been no significant changes (including corrective actions with
regard to significant deficiencies or material weaknesses) in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation referenced above.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
99.1 Certification of the Chief Executive Officer
99.2 Certification of the Chief Financial Officer
(b) Reports on Form 8-K.
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
GEORESOURCES, INC.
November 14, 2002
/S/ J. P. Vickers
------------------------------------
J. P. Vickers
Chief Executive Officer
Chief Financial Officer
Certification of Chief Executive Officer
of GeoResources, Inc. pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
I, J. P. Vickers, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of GeoResources,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant, and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal controls;
and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: November 14, 2002 /S/ J. P. Vickers
------------------------------------
J. P. Vickers,
Chief Executive Officer
Certification of Chief Financial Officer
of GeoResources, Inc. pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
I, J. P. Vickers, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of GeoResources,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant, and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal controls;
and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: November 14, 2002 /S/ J. P Vickers
------------------------------------
J. P. Vickers,
Chief Financial Officer