GeoResources Inc. (GEOI, Financial) filed Quarterly Report for the period ended 2009-06-30.
GEORESOURCES is a natural resources company engaged principally in the following two business segments: 1) oil and gas exploration development and production; and 2) mining of leonardite (oxidized lignite coal) and manufacturing of leonardite based products which are sold primarily as oil and gas drilling mud additives. In addition to originating its own prospects they occasionally participate in exploratory and development prospects originated by other individuals and companies. GeoResources Inc. has a market cap of $168.3 million; its shares were traded at around $10.36 with a P/E ratio of 9.7 and P/S ratio of 1.8. GeoResources Inc. had an annual average earning growth of 35.4% over the past 5 years.
Loss on Derivative Contracts. In December 2008, we split a $50 million notional value interest rate swap that was previously accounted for as a cash flow hedge. The swap was split into a $10 million notional amount swap and a $40 million notional amount swap. We continued hedge accounting for the $40 million swap and accounted for the $10 million swap as a trading security. In the second quarter of 2009, we recognized cash settlement losses on the $10 million swap of $83,000. These losses were offset by mark-to-market gains of $77,000.
Other Income. Other income increased by $1,001,000 in the second quarter of 2009 compared to the same period in 2008 due to an increase in partnership income of $1,026,000, partially offset by $124,000 lower partnership management fees. Partnership income in the second quarter of 2009 included our share of partnership severance tax refunds of $1,318,000, related to tax exempt well status obtained for certain wells with a high drilling cost. Additionally, property operating income increased by $99,000.
Interest Income and Expense. Interest expense decreased by $920,000 due to lower average debt levels in the first half of 2009 compared to the same period in 2008. During the first six months of 2009, our average outstanding debt was approximately of $51,000,000 compared to $88,000,000 for the same period in 2008. Interest income decreased by $310,000 in the first six months of 2009 compared to the same period of 2008, due to on average lower invested cash balances cash balances and lower interest rates.
Loss on Derivative Contracts. In December 2008, we split a $50 million notional value interest rate swap that was previously accounted for as a cash flow hedge. The swap was split into a $10 million notional amount swap and a $40 million notional amount swap. We continued hedge accounting for the $40 million swap and accounted for the $10 million swap as a trading security. For the first six months of 2009, we recognized cash settlement losses on the $10 million swap of $177,000. These losses were offset by mark-to-market gains of $119,000.
Cash applied to oil and gas capital expenditures for the six months ended June 30, 2009 and 2008, was $70.2 million and $33.3 million, respectively. In 2009, we also realized cash of $2.0 million from the sale of properties compared to $20.4 million during the same period during 2008. Capital expenditures for 2009 were financed with debt of $58 million and working capital of $12.2 million. We expect to spend approximately $60 to $64 million in capital expenditures during the remainder of 2009 thru 2010.
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GEORESOURCES is a natural resources company engaged principally in the following two business segments: 1) oil and gas exploration development and production; and 2) mining of leonardite (oxidized lignite coal) and manufacturing of leonardite based products which are sold primarily as oil and gas drilling mud additives. In addition to originating its own prospects they occasionally participate in exploratory and development prospects originated by other individuals and companies. GeoResources Inc. has a market cap of $168.3 million; its shares were traded at around $10.36 with a P/E ratio of 9.7 and P/S ratio of 1.8. GeoResources Inc. had an annual average earning growth of 35.4% over the past 5 years.
Highlight of Business Operations:
Interest Income and Expense. Interest expense decreased by $170,000 due to lower average debt levels in the second quarter of 2009 compared to the same period in 2008. During the second quarter of 2009, our average outstanding debt was approximately of $63,000,000 compared to $86,000,000 for the same period in 2008. Interest income decreased by $193,000 in the second quarter of 2009 over the same period of 2008, due to on average lower invested cash balances and lower interest rates.Loss on Derivative Contracts. In December 2008, we split a $50 million notional value interest rate swap that was previously accounted for as a cash flow hedge. The swap was split into a $10 million notional amount swap and a $40 million notional amount swap. We continued hedge accounting for the $40 million swap and accounted for the $10 million swap as a trading security. In the second quarter of 2009, we recognized cash settlement losses on the $10 million swap of $83,000. These losses were offset by mark-to-market gains of $77,000.
Other Income. Other income increased by $1,001,000 in the second quarter of 2009 compared to the same period in 2008 due to an increase in partnership income of $1,026,000, partially offset by $124,000 lower partnership management fees. Partnership income in the second quarter of 2009 included our share of partnership severance tax refunds of $1,318,000, related to tax exempt well status obtained for certain wells with a high drilling cost. Additionally, property operating income increased by $99,000.
Interest Income and Expense. Interest expense decreased by $920,000 due to lower average debt levels in the first half of 2009 compared to the same period in 2008. During the first six months of 2009, our average outstanding debt was approximately of $51,000,000 compared to $88,000,000 for the same period in 2008. Interest income decreased by $310,000 in the first six months of 2009 compared to the same period of 2008, due to on average lower invested cash balances cash balances and lower interest rates.
Loss on Derivative Contracts. In December 2008, we split a $50 million notional value interest rate swap that was previously accounted for as a cash flow hedge. The swap was split into a $10 million notional amount swap and a $40 million notional amount swap. We continued hedge accounting for the $40 million swap and accounted for the $10 million swap as a trading security. For the first six months of 2009, we recognized cash settlement losses on the $10 million swap of $177,000. These losses were offset by mark-to-market gains of $119,000.
Cash applied to oil and gas capital expenditures for the six months ended June 30, 2009 and 2008, was $70.2 million and $33.3 million, respectively. In 2009, we also realized cash of $2.0 million from the sale of properties compared to $20.4 million during the same period during 2008. Capital expenditures for 2009 were financed with debt of $58 million and working capital of $12.2 million. We expect to spend approximately $60 to $64 million in capital expenditures during the remainder of 2009 thru 2010.
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