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GeoResources, Inc. Reports First Quarter Financial Results Reports Earnings of $6.1 Million and Adjusted EBITDAX of $17.9 Million

HOUSTON, May 10, 2010 (BUSINESS WIRE) -- GeoResources, Inc., (NASDAQ:GEOI), today announced its financial and operating results for the quarter ended March 31, 2010. The following tables summarize the results of operations compared to the first quarter of 2009.

Three Months Ended March 31, (In thousands, except earnings per share) ------------------------------------------ 2010 2009 ------------------ ----------------------- Total revenue $ 26,576 $ 14,565 Net income $ 6,074 $ 477 Earnings per share (diluted) $ 0.30 $ .03 Adjusted EBITDAX (1) $ 17,916 $ 6,570 (1) See additional detail below.

P T ercent hree Months Ended Increase March 31, (Decrease) -------------- 2010 2009 --------- --------- --------- Gas Production (MMcf) 92 % 1,279 665 Oil Production (MBbls) 41 % 249 177 Barrel of oil equivalent (MBOE) 60 % 462 288 Average Price Gas before Hedge Settlements (per Mcf) 26 % $ 4.83 $ 3.83 Average Price Oil before Hedge Settlements (per Bbl) 101 % $ 74.21 $ 36.89 Average Price Gas after Hedge Settlements (per Mcf) 36 % $ 5.61 $ 4.12 Average Price Oil after Hedge Settlements (per Bbl) 31 % $ 70.62 $ 54.00 Adjusted EBITDAX (see definition below) increased 173% to approximately $17.9 million for the first quarter of 2010 compared to $6.6 million for the first quarter of 2009.

The following table reconciles reported net income to Adjusted EBITDAX for the periods indicated (in thousands): Three Months Ended March 31, ---------------------------------- 2010 2009 ----------------- ---------------- Net income (loss) $ 6,074 $ 477 Add back: Interest expense 1,273 819 Income taxes : Current 953 (734 ) Deferred 2,824 1,094 Depreciation, depletion and amortization 6,351 4,468 Hedge and derivative contracts (242 ) 101 Non-cash compensation 219 265 Exploration and impairments 464 80 ------ ----- Adjusted EBITDAX (1) $ 17,916 $ 6,570 ==== ====== ==== ===== (1) As used herein, adjusted EBITDAX is calculated as earnings before interest, income taxes, depreciation, depletion and amortization, and exploration expense and further excludes non-cash compensation, impairments and hedge ineffectiveness and income or loss on derivative contracts. Adjusted 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 "Our results for the first quarter clearly reflects our year over year growth. Comparatively, we benefited from increased production and from improved oil and gas prices. In addition, on unit-of-production basis we lowered our overall operating expenses, including production related taxes and general and administrative expenses, by 32%. This was a result of our re-engineering and development drilling activities. Our increased production was a direct result of our successful drilling programs in the Bakken Shale and Austin Chalk and from the strategic acquisitions we have made in these core areas. As recently announced, we have further increased our acreage position in the Bakken Shale Trend of the Williston Basin and expect our drilling programs to continue to contribute to our long term 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 for the year ended December 31, 2009 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) GEORESOURCES, INC and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) March 31, December 31, ---------------- ---------------- 2010 2009 ---------------- ---------------- ASSETS (unaudited) Current assets: Cash $ 18,010 $ 12,660 Accounts receivable: Oil and gas revenues 15,845 14,860 Joint interest billings and other 4,098 13,734 Affiliated partnerships 1,402 933 Notes receivable 120 120 Derivative financial instruments 5,409 764 Income taxes receivable 1,239 2,077 Prepaid expenses and other 1,990 2,297 Total current assets 48,113 47,445 ------- ------- Oil and gas properties, successful efforts method: Proved properties 294,451 285,363 Unproved properties 13,510 10,281 Office and other equipment 850 828 Land 96 96 ------- ------- 308,907 296,568 Less accumulated depreciation, depletion and amortization (54,534 ) (48,182 ) ------- - ------- - Net property and equipment 254,373 248,386 ------- ------- Equity in oil and gas limited partnerships 3,011 3,532 Derivative financial instruments 2,713 1,360 Deferred financing costs and other 3,293 3,574 ------- ------- $ 311,503 $ 304,297 ===== ======= ===== ======= GEORESOURCES, INC and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) March 31, December 31, --------------- ----------------- 2010 2009 --------------- ----------------- (unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 5,725 $ 6,452 Accounts payable to affiliated partnerships 3,828 8,361 Revenue and royalties payable 11,826 13,928 Drilling advances 77 390 Accrued expenses 1,499 1,574 Derivative financial instruments 4,473 4,794 ------- ------- Total current liabilities 27,428 35,499 ------- ------- Long-term debt 69,000 69,000 Deferred income taxes 21,298 15,778 Asset retirement obligations 6,229 6,110 Derivative financial instruments 2,497 3,233 Stockholders' equity: Common stock, par value $0.01 per share; authorized 100,000,000 shares; issued and outstanding: 19,712,862 in 2010 and 197 197 19,705,362 in 2009 Additional paid-in capital 147,249 146,966 Accumulated other comprehensive income 729 (3,288 ) Retained earnings 36,876 30,802 Total stockholders' equity 185,051 174,677 ------- ------- $ 311,503 $ 304,297 ====== ======= ====== ======= GEORESOURCES, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share amounts) (unaudited) Three Months Ended March 31, --------------------------------------- 2010 2009 ------------------- ------------------- Revenue: Oil and gas revenues $ 24,729 $ 12,300 Partnership management fees 159 298 Property operating income 391 458 Gain on sale of property and equipment 145 1,399 Partnership income 854 5 Interest and other 298 105 ---------- ---------- Total revenue 26,576 14,565 Expenses: Lease operating expense 5,024 4,390 Severance taxes 1,783 794 Re-engineering and workovers 253 981 Exploration expense 464 80 General and administrative expense 1,819 2,095 Depreciation, depletion and amortization 6,351 4,468 Hedge ineffectiveness (255 ) 49 Loss on derivative contracts 13 52 Interest 1,273 819 ---------- ---------- Total expense 16,725 13,728 Income before income taxes 9,851 837 Income tax expense (benefit): Current 953 (734 ) Deferred 2,824 1,094 ---------- ---------- 3,777 360 Net income $ 6,074 $ 477 ===== ========== ===== ========== Net income per share (basic) $ 0.31 $ 0.03 ===== ========== ===== ========== Net income per share (diluted) $ 0.30 $ 0.03 ===== ========== ===== ========== Weighted average shares outstanding: Basic 19,710,362 16,241,717 ========== ========== Diluted 20,004,083 16,241,717 ========== ========== GEORESOURCES, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) Three Months Ended March 31, ------------------------------------ Cash flows from operating activities: 2010 2009 ------------------ ----------------- Net income $ 6,074 $ 477 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 6,351 4,468 Gain on sale of property and equipment (145 ) (1,399 ) Accretion of asset retirement obligations 98 61 Unrealized gain on derivative contracts (87 ) (42 ) Amortization of loss on canceled hedge contract - 122 Hedge ineffectiveness loss (255 ) 49 Partnership income (854 ) (5 ) Partnership distributions 1,375 122 Deferred income taxes 2,824 1,094 Non-cash compensation 219 265 Changes in assets and liabilities: Decrease in accounts receivable 9,020 1,660 Decrease (increase) in prepaid expense and other 587 (1,360 ) Decrease in accounts payable and accrued expense (7,750 ) (9,378 ) ------- ---- ------ ---- Net cash (used in) provided by operating activities 17,457 (3,866 ) Cash flows from investing activities: Proceeds from sale of property and equipment 503 2,015 Additions to property and equipment (12,674 ) (5,057 ) ------- ---- ------ ---- Net cash used in investing activities (12,171 ) (3,042 ) Cash flows from financing activities: Proceeds from stock options exercised 64 - ------- ------ Net cash provided by financing activities 64 - Net increase (decrease) in cash and cash equivalents 5,350 (6,908 ) ------- ------ ---- Cash and cash equivalents at beginning of period 12,660 13,967 Cash and cash equivalents at end of period $ 18,010 $ 7,059 ==== ======= ==== ====== Supplementary information: Interest paid $ 997 $ 694 Income taxes paid $ 115 $ 25 SOURCE: GeoResources, Inc.

CONTACT: GeoResources, Inc. Cathy Kruse, 701-572-2020 ext 113 cathy@georesourcesinc.com Copyright Business Wire 2010 -0- KEYWORD: United States

North America

North Dakota

Texas INDUSTRY KEYWORD: Energy

Oil/Gas

Utilities

Other Energy SUBJECT CODE: Earnings

Product/Service