Attached files
| file | filename |
|---|---|
| EX-99.2 - GEORESOURCES INC | props.htm |
| 8-K - GEORESOURCES INC | form8k.htm |
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 $69.1 Million.
Houston, Texas, March 9, 2011 – GeoResources, Inc., (NASDAQ:GEOI), today announced its financial and operating results for the twelve and three month periods ended December 31, 2010. The following tables summarize the results of operations compared to similar periods in 2009.
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Twelve Months Ended December 31,
(In thousands, except Earnings per share)
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||||||||
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2010
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2009
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|||||||
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Total revenue
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$ | 107,017 | $ | 80,998 | ||||
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Net income
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$ | 23,331 | $ | 9,775 | ||||
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Earnings per share (diluted)
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$ | 1.16 | $ | 0.59 | ||||
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EBITDAX (1)
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$ | 69,119 | $ | 48,159 | ||||
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Three Months Ended December 31,
(In thousands, except Earnings per share)
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||||||||
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2010
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2009
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|||||||
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Total revenue
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$ | 27,106 | $ | 23,583 | ||||
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Net income
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$ | 5,178 | $ | 2,371 | ||||
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Earnings per share (diluted)
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$ | 0.26 | $ | 0.14 | ||||
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EBITDAX (1)
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$ | 15,891 | $ | 14,080 | ||||
_________
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(1)
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See additional detail below.
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Percent Increase (Decrease)
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Twelve Months Ended December 31,
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|||||
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2010
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2009
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|||||
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Oil Production (MBbls)
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25%
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1,060
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851
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|||
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Gas Production (MMcf)
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(3%)
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4,789
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4,944
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|||
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Barrel of oil equivalent (MBOE)
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11%
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1,858
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1,675
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|||
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Average Price Oil before Hedge Settlements (per Bbl)
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28%
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$ 72.05
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$ 56.37
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|||
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Average Price Oil after Hedge Settlements (per Bbl)
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15%
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$ 70.33
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$ 61.09
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|||
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Average Price Gas before Hedge Settlements (per Mcf)
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24%
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$ 4.07
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$ 3.28
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|||
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Average Price Gas after Hedge Settlements (per Mcf)
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34%
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$ 5.30
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$ 3.97
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|||
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Percent Increase (Decrease)
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Three Months Ended December 31,
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|||||
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2010
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2009
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|||||
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Oil Production (MBbls)
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12%
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280
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250
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|||
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Gas Production (MMcf)
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(25%)
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1,132
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1,514
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|||
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Barrel of oil equivalent (MBOE)
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(7%)
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469
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503
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|||
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Average Price Oil before Hedge Settlements (per Bbl)
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7%
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$ 72. 83
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$ 68.19
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|||
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Average Price Oil after Hedge Settlements (per Bbl)
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6%
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$ 69.82
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$ 65.57
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|||
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Average Price Gas before Hedge Settlements (per Mcf)
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(8%)
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$ 3.48
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$ 3.77
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Average Price Gas after Hedge Settlements (per Mcf)
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24%
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$ 5.00
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$ 4.02
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|||
The following tables reconcile reported net income to EBITDAX for the periods indicated (in thousands):
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Twelve Months Ended December 31,
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2010
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2009
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EBITDAX (1)
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||||||||
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Net income
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$ | 23,331 | $ | 9,775 | ||||
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Add back:
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||||||||
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Interest expense
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4,712 | 4,984 | ||||||
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Income taxes:
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||||||||
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Current
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8,861 | 412 | ||||||
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Deferred
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3,062 | 4,655 | ||||||
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Depreciation, depletion and amortization
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24,686 | 22,409 | ||||||
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Hedge and derivative contracts
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(893 | ) | 299 | |||||
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Non-cash compensation
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1,071 | 1,424 | ||||||
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Exploration and impairments
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4,289 | 4,201 | ||||||
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EBITDAX(1)
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$ | 69,119 | $ | 48,159 | ||||
2
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Three Months Ended December 31,
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2010
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2009
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Net income (loss)
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$ | 5,178 | $ | 2,371 | ||||
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Add back:
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||||||||
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Interest expense
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763 | 1,435 | ||||||
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Income taxes :
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Current
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(1,838 | ) | 588 | |||||
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Deferred
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4,478 | (637 | ) | |||||
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Depreciation, depletion and amortization
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6,169 | 6,906 | ||||||
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Hedge and derivative contracts
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83 | (28 | ) | |||||
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Non-cash compensation
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278 | 360 | ||||||
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Exploration and impairments
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780 | 3,085 | ||||||
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EBITDAX (1)
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$ | 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.
3
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.
4
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GEORESOURCES, INC and SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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(In thousands, except share and per share amounts)
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December 31,
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2010
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2009
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ASSETS
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Current assets:
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Cash
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$ | 9,370 | $ | 12,660 | ||||||
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Accounts receivable
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Oil and gas revenues
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17,017 | 14,860 | ||||||||
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Joint interest billings and other
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16,631 | 13,734 | ||||||||
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Affiliated partnerships
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969 | 933 | ||||||||
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Notes receivable
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120 | 120 | ||||||||
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Derivative financial instruments
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4,282 | 764 | ||||||||
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Income taxes receivable
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222 | 2,077 | ||||||||
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Prepaid expenses and other
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2,645 | 2,297 | ||||||||
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Total current assets
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51,256 | 47,445 | ||||||||
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Oil and gas properties, successful efforts method:
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Proved properties
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341,582 | 285,363 | ||||||||
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Unproved properties
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32,403 | 10,281 | ||||||||
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Office and other equipment
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1,140 | 828 | ||||||||
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Land
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146 | 96 | ||||||||
| 375,271 | 296,568 | |||||||||
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Less accumulated depreciation, depletion and amortization
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(72,380 | ) | (48,182 | ) | ||||||
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Net property and equipment
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302,891 | 248,386 | ||||||||
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Equity in oil and gas limited partnerships
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2,272 | 3,532 | ||||||||
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Derivative financial instruments
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851 | 1,360 | ||||||||
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Deferred financing costs and other
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2,420 | 3,574 | ||||||||
| $ | 359,690 | $ | 304,297 | |||||||
5
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GEORESOURCES, INC and SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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(In thousands, except share and per share amounts)
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December 31,
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2010
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2009
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LIABILITIES AND EQUITY
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Current liabilities:
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Accounts payable
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$ | 14,616 | $ | 6,452 | ||||
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Accounts payable to affiliated partnerships
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2,931 | 8,361 | ||||||
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Revenue and royalties payable
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12,450 | 13,928 | ||||||
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Drilling advances
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4,203 | 390 | ||||||
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Accrued expenses
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1,331 | 1,574 | ||||||
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Derivative financial instruments
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7,433 | 4,794 | ||||||
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Total current liabilities
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42,964 | 35,499 | ||||||
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Long-term debt
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87,000 | 69,000 | ||||||
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Deferred income taxes
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19,289 | 15,778 | ||||||
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Asset retirement obligations
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7,052 | 6,110 | ||||||
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Derivative financial instruments
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1,650 | 3,233 | ||||||
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Equity:
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Common stock, par value $0.01 per share; authorized 100,000,000
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shares; issued and outstanding: 19,726,566 shares in 2010
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and 19,705,362 in 2009
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197 | 197 | ||||||
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Additional paid-in capital
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148,172 | 146,966 | ||||||
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Accumulated other comprehensive income (loss)
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(3,000 | ) | (3,288 | ) | ||||
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Retained earnings
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54,133 | 30,802 | ||||||
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Total GeoResources, Inc. stockholders' equity
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199,502 | 174,677 | ||||||
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Noncontrolling interest
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2,233 | - | ||||||
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Total equity
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201,735 | 174,677 | ||||||
| $ | 359,690 | $ | 304,297 | |||||
6
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GEORESOURCES, INC. and SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF INCOME
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(In thousands, except share and per share amounts)
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Year Ended December 31,
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2010
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2009
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2008
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Revenue:
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Oil and gas revenues
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$ | 99,913 | $ | 71,618 | $ | 85,263 | ||||||
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Partnership management fees
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550 | 1,007 | 1,725 | |||||||||
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Property operating income
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1,865 | 1,710 | 1,430 | |||||||||
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Gain on sale of property and equipment
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953 | 1,355 | 4,362 | |||||||||
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Partnership income
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2,240 | 4,318 | 1,061 | |||||||||
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Interest and other
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1,496 | 990 | 765 | |||||||||
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Total revenue
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107,017 | 80,998 | 94,606 | |||||||||
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Expenses:
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||||||||||||
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Lease operating expense
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20,944 | 18,763 | 22,914 | |||||||||
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Production taxes
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6,589 | 4,193 | 7,517 | |||||||||
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Re-engineering and workovers
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1,962 | 2,807 | 3,518 | |||||||||
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Exploration expense
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849 | 1,406 | 2,592 | |||||||||
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Impairment of oil and gas properties
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3,440 | 2,795 | 8,339 | |||||||||
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General and administrative expense
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9,474 | 8,500 | 7,168 | |||||||||
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Depreciation, depletion and amortization
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24,686 | 22,409 | 16,007 | |||||||||
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Hedge ineffectiveness
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(891 | ) | 137 | (123 | ) | |||||||
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(Gain) / loss on derivative contracts
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(2 | ) | 162 | 563 | ||||||||
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Interest
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4,712 | 4,984 | 4,820 | |||||||||
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Total expense
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71,763 | 66,156 | 73,315 | |||||||||
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Income before income taxes
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35,254 | 14,842 | 21,291 | |||||||||
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Income taxes:
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||||||||||||
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Current
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8,861 | 412 | 866 | |||||||||
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Deferred
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3,062 | 4,655 | 6,903 | |||||||||
| 11,923 | 5,067 | 7,769 | ||||||||||
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Net income
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$ | 23,331 | $ | 9,775 | $ | 13,522 | ||||||
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Less: Net income attributable to noncontrolling interest
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- | - | - | |||||||||
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Net income attributable to GeoResources, Inc.
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$ | 23,331 | $ | 9,775 | $ | 13,522 | ||||||
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Net income per share (basic)
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$ | 1.18 | $ | 0.59 | $ | 0.87 | ||||||
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Net income per share (diluted)
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$ | 1.16 | $ | 0.59 | $ | 0.86 | ||||||
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Weighted average shares outstanding:
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||||||||||||
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Basic
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19,720,652 | 16,532,003 | 15,598,244 | |||||||||
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Diluted
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20,142,297 | 16,559,431 | 15,751,185 | |||||||||
7
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GEORESOURCES, INC. and SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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(In thousands)
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Year Ended December 31,
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Cash flows from operating activities:
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2010
|
2009
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2008
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|||||||||
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Net income
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$ | 23,331 | $ | 9,775 | $ | 13,522 | ||||||
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Adjustments to reconcile net income to net cash provided
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||||||||||||
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by operating activities:
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||||||||||||
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Depreciation, depletion and amortization
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24,686 | 22,409 | 16,007 | |||||||||
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Exploratory dry holes and unproved property impairments
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- | - | 2,241 | |||||||||
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Impairment of proved properties
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3,440 | 2,795 | 8,339 | |||||||||
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Gain on sale of property and equipment
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(953 | ) | (1,355 | ) | (4,362 | ) | ||||||
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Accretion of asset retirement obligations
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405 | 368 | 391 | |||||||||
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Unrealized (gain) loss on derivative contracts
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(325 | ) | (238 | ) | 563 | |||||||
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Amortization of loss on cancelled hedges
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- | 482 | - | |||||||||
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Hedge ineffectiveness (gain) loss
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(891 | ) | 137 | (123 | ) | |||||||
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Partnership income
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(2,240 | ) | (4,318 | ) | (1,061 | ) | ||||||
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Partnership distributions
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3,500 | 2,406 | 653 | |||||||||
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Deferred income taxes
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3,062 | 4,655 | 6,903 | |||||||||
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Non-cash compensation
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1,071 | 1,424 | 661 | |||||||||
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Changes in assets and liabilities:
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||||||||||||
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Decrease (increase) in accounts receivable
|
(599 | ) | (7,923 | ) | 3,958 | |||||||
|
Decrease in notes receivable
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100 | 275 | 480 | |||||||||
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Decrease (increase) in prepaid expense and other
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707 | (1,116 | ) | (1,990 | ) | |||||||
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Increase (decrease) in accounts payable and accrued expense
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4,237 | (5,732 | ) | (3,844 | ) | |||||||
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Net cash provided by operating activities
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59,531 | 24,044 | 42,338 | |||||||||
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Cash flows from investing activities:
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||||||||||||
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Proceeds from sale of property and equipment
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1,018 | 1,991 | 26,789 | |||||||||
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Additions to property and equipment, net of cost recoveries
|
||||||||||||
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of $40,230 in 2010 and none in 2009 and 2008
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(81,974 | ) | (89,396 | ) | (51,824 | ) | ||||||
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Investment in oil and gas limited partnership
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- | - | (978 | ) | ||||||||
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Cancellation of hedge contracts
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- | - | (2,975 | ) | ||||||||
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Net cash used in investing activities
|
(80,956 | ) | (87,405 | ) | (28,988 | ) | ||||||
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Cash flows from financing activities:
|
||||||||||||
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Issuance of common stock
|
135 | 33,054 | 32,187 | |||||||||
|
Issuance of long-term debt
|
38,000 | 64,000 | - | |||||||||
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Reduction of long-term debt
|
(20,000 | ) | (35,000 | ) | (56,000 | ) | ||||||
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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 | |||||||||
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Cash and cash equivalents at end of period
|
$ | 9,370 | $ | 12,660 | $ | 13,967 | ||||||
|
Supplementary information:
|
||||||||||||
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Interest paid
|
$ | 3,958 | $ | 4,064 | $ | 5,073 | ||||||
|
Income taxes paid
|
$ | 8,629 | $ | 664 | $ | 3,970 | ||||||
|
Stock issue for services
|
$ | 2 | $ | 59 | $ | 35 | ||||||
8