WILLISTON, N.D., April 3 /PRNewswire-FirstCall/ -- GeoResources, Inc., (Nasdaq: GEOI - News), today reported net income of $1,742,337, or $0.46 per basic share, on revenue of $8,877,506 for the year ended December 31, 2006. This compares to net income of $2,179,473 or $0.58 per basic share, on revenue of $7,183,921 in 2005. In 2005, net income included a one time gain of $348,743, on the involuntary conversion of the Company's leonardite facility and 2006 net income included $407,993 of expense related to the merger agreement with Southern Bay Oil & Gas, L.P. and Chandler Energy, LLC. Operating income for 2006 was $2,807,485 versus $2,244,016 in 2005. Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) for the year was $3,283,248 compared to $3,272,837 during 2005.
Oil and gas revenue in 2006 was $7,235,423 on production of 137,347 net BOE, for an average realized price of $52.68 per BOE. In 2005 the company generated $5,824,049 of revenue on 120,714 BOE, an average of $48.25 per BOE. The oil and gas business segment generated $3,661,727 of operating income before SG&A in 2006 versus $2,964,640 of operating income before SG&A in 2005. Proved reserves were 2,766,000 barrels of oil and 1,130,000 Mcf of natural gas or 2,954,000 BOE at year-end 2006 versus 3,045,000 BOE at year-end 2005. The standardized measure of discounted future cash flows was $28,891,000.
For the quarter ended December 31, 2006, GeoResources sold a total of 36,772 BOE, versus 34,894 BOE sold during the same period in 2005 and 33,548 BOE sold during the third quarter of 2006.
GeoResources' subsidiary, Western Star Drilling Company (WSDC), reported 126 operating days for the year generating drilling revenue of $1,642,083, a 21% increase compared to $1,359,872 of drilling revenue in 2005.
J.P. Vickers, President of GeoResources, said, "Increases in revenue and operating income were driven by higher production volumes and strong oil prices that were somewhat offset by slightly lower natural gas prices. Much of the production increase came from the Hammond Field in Carter County Montana, which we successfully brought online in late September."
(1) 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:
Year Ended Year Ended
December 31, 2006 December 31, 2005
Net Income $1,742,337 $2,179,473
Add back:
Interest expense 25,445 87,592
Income tax 523,043 263,087
Depreciation and amortization 992,423 742,685
EBITDA $3,283,248 $3,272,837
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, 2006, for meaningful cautionary language disclosure.
GEORESOURCES, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2006 AND 2005
ASSETS
CURRENT ASSETS: 2006 2005
Cash and equivalents $889,766 $1,669,882
Trade receivables, net 1,437,093 1,109,202
Crude oil inventory 141,549 113,648
Prepaid expenses 47,268 25,827
Total current assets 2,515,676 2,918,556
PROPERTY, PLANT AND EQUIPMENT, at cost:
Oil and gas properties, using the full
cost method of accounting:
Properties being amortized 30,685,572 27,842,549
Properties not subject to amortization 224,297 202,257
Drilling rig and equipment 1,923,035 1,607,094
Other 861,078 849,834
33,693,982 30,501,734
Less accumulated depreciation, depletion,
amortization and impairment (20,058,541) (19,001,585)
Net property, plant and equipment 13,635,441 11,500,149
LEONARDITE ASSETS HELD FOR SALE 590,225 281,015
TOTAL ASSETS $16,741,342 $14,699,720
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,649,972 $1,152,532
Accrued expenses 320,692 293,505
Income taxes payable 60,551 64,000
Current portions of capital lease obligations 13,298 41,549
Current maturities of long-term debt -- 523,941
Total current liabilities 2,044,513 2,075,527
CAPITAL LEASE OBLIGATIONS, less current portions -- 13,298
LONG-TERM DEBT, less current maturities -- 177,638
ASSET RETIREMENT OBLIGATIONS 2,521,840 2,324,690
DEFERRED INCOME TAXES:
Related to continuing operations 768,000 521,000
Related to discontinued operations 268,000 232,000
Total liabilities 5,602,353 5,344,153
CONTINGENCIES (NOTE J)
STOCKHOLDERS' EQUITY:
Common stock, par value $.01 per share;
authorized 10,000,000 shares; issued and
outstanding, 3,782,769 and 3,765,269 shares,
respectively 37,828 37,653
Additional paid-in capital 432,791 391,881
Retained earnings 10,668,370 8,926,033
Total stockholders' equity 11,138,989 9,355,567
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $16,741,342 $14,699,720
GEORESOURCES, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
2006 2005 2004
OPERATING REVENUES:
Oil and gas $7,235,423 $5,824,049 $4,452,114
Drilling 1,642,083 1,359,872 1,077,367
8,877,506 7,183,921 5,529,481
OPERATING COSTS AND EXPENSES:
Oil and gas production 2,798,329 2,303,238 1,922,479
Drilling costs 1,485,101 1,258,258 1,009,051
Depreciation, depletion and
amortization 992,423 742,685 743,246
Selling, general and
administrative 794,168 635,724 560,391
6,070,021 4,939,905 4,235,167
Operating income 2,807,485 2,244,016 1,294,314
OTHER INCOME (EXPENSE):
Interest expense (25,445) (87,592) (91,363)
Interest income 67,665 18,649 10,697
Professional fees related to
proposed merger (407,933) -- --
Other, net 20,818 17,178 20,027
(344,895) (51,765) (60,639)
Income before
income taxes 2,462,590 2,192,251 1,233,675
INCOME TAX EXPENSE 523,043 263,087 114,287
Income from continuing
operations 1,939,547 1,929,164 1,119,388
DISCONTINUED OPERATIONS:
Loss from leonardite
operations (299,498) (216,920) (10,542)
Income tax (expense)
benefit 102,288 118,486 (3,000)
Gain on involuntary
conversion of leonardite
facility, net of tax
of $149,000 -- 348,743 --
(197,210) 250,309 (13,542)
Net Income $1,742,337 $2,179,473 $1,105,846
EARNINGS PER SHARE:
Income from
continuing operations $.51 $.51 $.30
Income (loss) from
discontinued operations (.05) .07 --
Net Income, basic $.46 $.58 $.30
Income from
continuing operations $.50 $.50 $.30
Income (loss) from
discontinued operations (.05) .07 --
Net income, diluted $.45 $.57 $.30
Weighted average number of
shares outstanding 3,776,720 3,744,488 3,723,977
Dilutive potential shares -
Stock options 62,028 81,942 --
Adjusted weighted
average shares 3,838,748 3,826,430 3,723,977
Source: GeoResources, Inc.
CONTACT: Cathy Kruse of GeoResources, Inc.,
+1-701-572-2020, ext. 113
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