GeoResources, Inc. Reports Dramatic Increase in Earnings For First Nine Months of 2000
WILLISTON, N.D., Nov 15, 2000 /PRNewswire via COMTEX/ -- GeoResources, Inc. (Nasdaq: GEOI chart, msgs), a natural resources exploration and production company, today announced net income for the first nine months of the year increased significantly to $1,165,000 or $.29 per share compared to $241,000 or $.06 per share for the comparable period in 1999. For the third quarter 2000, the Company reported net income of $484,000 or $.12 per share compared to $271,000 or $.07 per share for the third quarter of 1999. Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) for the quarter were $757,000, a 50% increase over the third quarter of 1999. For the nine-month period EBITDA increased 125% to $1,908,000 versus $846,000 for the first nine months of 1999.
As a result of higher commodity prices, GeoResources achieved the highest quarterly and year-to-date revenue in its 30-year history as a public company. Operating revenue for the third quarter increased 40% to $1,410,000 from $1,004,000 in 1999. Year-to-date revenue for 2000 increased 76% to $3,854,000 from $2,192,000 for the nine months ended September 30, 1999.
During the quarter, GeoResources initiated recompletion of a gas field in Stark County, N.D. that was originally discovered in the 1980's by a major oil company. This project involves the re-entry of 12,000 foot Ordovician wells to re-establish gas production. The Company has recompleted one well in the Ordovician zone and is currently installing surface handling equipment. Initial production is expected to begin at the end of November at a modest rate of approximately 100 thousand cubic feet (Mcf) per day, however, we are still in the early stages of discovering how to promote production from this geologically complex zone. The Company has 20,000 acres in the area and plans to re-enter at least three wells to test the natural gas potential. If successful, the prospect has several other drilling locations that could provide an inventory of development projects over the next several years. GeoResources is the operator and owns between 25% and 100% working interest in the acreage. In addition to these potential gas wells, the Company is participating in a 12,500 foot Red River in-fill development well in the North Sioux Pass Field of Richland County, Mont. GeoResources owns an 8% working interest in this non-operated well.
Company President, J. P. Vickers, said, "We have used this period of increased cash flow to retire a significant portion of our debt. Through the third quarter 2000 we prepaid $798,000 of our long-term debt, further strengthening our balance sheet. The entire domestic industry is facing a shortage of infrastructure that is restricting our drilling activity. However, with our strong balance sheet and cash flow, we are selectively proceeding with projects. We believe the opportunities we are developing in our Stark County gas prospect could add natural gas production and reserves to our portfolio and thereby give us a more balanced production profile."
GeoResources, Inc. is a Williston, N.D. based diversified natural resources exploration and production company. It operates in the Williston Basin of North Dakota and Montana.
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-K for the Fiscal Year Ended December 31, 1999, for meaningful cautionary language disclosure.
GEORESOURCES, INC., AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
OPERATING REVENUES:
Oil and gas sales $1,247,542 $796,768 $3,372,872 $1,730,371
Leonardite sales 162,350 207,639 480,995 461,660
1,409,892 1,004,407 3,853,867 2,192,031
OPERATING COSTS AND EXPENSES:
Oil and gas production 437,549 315,960 1,257,716 793,329
Cost of leonardite sold 138,259 138,810 418,522 380,297
Depreciation and
depletion 185,640 166,932 504,004 454,857
Selling, general and
administrative 88,820 54,771 304,062 204,830
850,268 676,473 2,484,304 1,833,313
Operating income 559,624 327,934 1,369,563 358,718
OTHER INCOME (EXPENSE):
Interest expense (37,955) (41,829) (122,343) (124,233)
Interest income 6,502 3,459 19,138 11,028
Other income, net 5,325 6,305 15,175 20,971
(26,128) (32,065) (88,030) (92,234)
Income before
income taxes 533,496 295,869 1,281,533 266,484
Income tax expense 49,000 25,000 117,000 25,000
Net income $484,496 $270,869 $1,164,533 $241,484
EARNINGS PER SHARE:
Net income, basic
and diluted $.12 $.07 $.29 $.06
Source: s, Inc.
Contact:
Cathy Kruse of GeoResources, Inc., 701-572-2020, geoi@dia.net
URL: georesources.net
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