GeoResources, Inc. Reports Third Quarter and
 Nine-Month Financial Results

Reports nine-month earnings of $7.4 million and EBITDAX of $33.0 million.

Houston, Texas November 5, 2009 – GeoResources, Inc., (NASDAQ:GEOI), today announced its financial and operating results for the three and nine months ended September 30, 2009. The following tables summarize the results of operations as compared to similar periods in 2008.

For the three months ended September 30, 2009, the Company reported total revenues of $23.0 million and net income of $3.4 million, or $0.21 per basic and diluted common share. Oil and natural gas production increased substantially in the third quarter 2009 compared to the same period in 2008.  Natural gas production increased to 1,678 MMcf from 723 MMcf, an increase of 132%.  Oil production for the third quarter increased to 212 MBbls from 167 MBbls in the prior year’s period, an increase of 27%. The average realized price of natural gas after hedge settlements was $3.87 per Mcf for the third quarter of 2009, 58% less than the third quarter of 2008.  The average realized price of oil after hedge settlements for the third quarter of 2009 was $63.55 per barrel or 30% less than the third quarter in the prior year. 
For the first nine-months of 2009, revenues totaled $56.8 million and net income was $7.4 million or $0.46 per basic and diluted common share.  For the nine months ended September 30, 2009, natural gas production totaled 3,430 MMcf or 52% greater than the 2,251 MMcf produced during the first nine months of 2008.  Oil production for the first nine months of 2009 increased 9% to 601 Mbbls from 553 Mbbls in the first nine months of 2008. The average realized price of natural gas was $3.95 per Mcf for the first nine months of 2009 or 55% less than the first nine months of the prior year.  The average realized price of oil was $59.23 per barrel or 34% less for the first nine months of 2009 than the first nine months in the prior year. 
Earnings before interest, income taxes, depreciation, depletion and amortization, and exploration expense (“EBITDAX”) increased 8% to approximately $14.7 million for the third quarter 2009 compared $13.6 for the third quarter 2008.  EBITDAX for the first nine months of 2009 decreased 26% to approximately $33.0 million compared to $44.5 million for the same period in 2008. 
The following tables reconcile reported net income to EBITDAX for the periods indicated (in thousands):

Comments

Mr. Frank A. Lodzinski, CEO and president, commented “Our results for the third quarter reflect our continued profitable growth. The third quarter comparison to last year is particularly relevant, as it demonstrates our production growth excluding prior year divestitures and also demonstrates the considerable improvement in per unit lease operating expenses. On a unit-of-production basis, costs decreased by 54%. While part of this decrease is a result of general cost reductions within the industry, the greater impact is a direct result of our business strategy and reflects re-engineering projects, development drilling, acquisitions of properties with lower operating costs and divestitures of properties with higher operating costs. Increased production is a direct result of our successful drilling programs in the Bakken Shale of the Williston Basin and our Giddings Austin Chalk program and of the acquisitions we have made in these core areas. These programs are expected to continue to contribute to our growth through continuous drilling. To that end, our joint venture in the Bakken is currently running three rigs and a fourth rig may be added from time to time. In addition, we will spud our next Austin Chalk well this month after a suspension of drilling for the past several months. While our eastern Grimes County wells were predominately gas, our next several locations are located in western Grimes County and are expected to yield approximately 50% oil and natural gas liquids. We realized substantial net income and EBITDAX for the third quarter, in the amounts of $3.4 million and $14.7 million, respectively.  We expect our future earnings to benefit from further increases in production and lower per-unit lease operating expenses.  While reductions in the costs of materials and services favorably impacted lease operating expenses, the bulk of the reductions are a direct result of our field re-engineering and development drilling activities. We will continue to focus on cash flow and our bottom line while we pursue our business plan.”

Lodzinski further commented, “In July, we entered into our Second Amended and Restated Credit Agreement. The facility was increased to $250 million and extended to October 16, 2012.  The initial borrowing base was set at $135 million and provided for interest rates of (a) LIBOR plus 2.25% to 3.00% or (b) the prime lending rate plus 1.25% to 2.00%, depending upon the amount borrowed.  The increased and extended facility requires a redetermination of the borrowing base as of November 1 and May 1 of each year.  Accordingly, our borrowing base redetermination is currently pending and we expect our borrowing base to, at least, be maintained until the next redetermination. The participating banks include, Wachovia Bank, Comerica Bank, BBVA Compass, U.S. Bank, Frost National Bank, Bank of Texas and Natixis. Our strong cash flows, working capital and liquidity, position us favorably to continue our growth.” 

About GeoResources, Inc.
GeoResources, Inc. is an independent oil and gas company engaged in the acquisition and development of oil and gas reserves through an active and diversified program which includes purchases of reserves, re-engineering, and development and exploration activities primarily focused in three core areas – the Southwest, Gulf Coast, and the Williston Basin.  For more information, visit our website at www.georesourcesinc.com.

Forward-Looking Statements
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.  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 our 10-K/A for the year ended December 31, 2008 and the other  SEC reports of the Company and any and all other documents 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 free copies of filings containing information about GeoResources, without charge, at the SEC’s Internet site (http://www.sec.gov).

Copyright (C) 2009, GeoResources, Inc . All right reserved.
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