GeoResources Inc. (GEOI, Financial) filed Quarterly Report for the period ended 2009-09-30.
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 $180.9 million; its shares were traded at around $11.14 with a P/E ratio of 13.9 and P/S ratio of 2. 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 third quarter of 2009, we recognized cash settlement losses on the $10 million swap of $117,000. These losses were offset by mark-to-market gains of $34,000.
General and Administrative Expenses. G&A increased by $643,000 during the first nine months of 2009 compared to the same period in 2008. Additional non-cash charges of $602,000 related to stock-based compensation were the primary cause of the increase. The remaining $41,000 increase resulted from the overall expansion of the business and salary increases which were offset by our ongoing cost reduction efforts. The total non-cash charges related to stock-based compensation included in G&A expense for the nine months ended September 30, 2009 and 2008 are $1,064,000 and $462,000, respectively.
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 nine months of 2009, we recognized cash settlement losses on the $10 million swap of $294,000. These losses were offset by mark-to-market gains of $153,000.
Other Income. Other income increased by $2,501,000 during the first nine months of 2009 compared to the same period in 2008 due to an increase in partnership income of $2,813,000 and an increase in property operating income of $260,000, partially offset by a $572,000 decrease in partnership management fees. Partnership income in the first nine months 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. Partnership income also included our share of the gain on the sale of the Giddings Field producing properties and the Giddings Field proved undeveloped properties and acreage, our share of these gains was approximately $1,276,000.
Cash applied to oil and gas capital expenditures for the nine months ended September 30, 2009 and 2008, was $81.6 million and $43.0 million, respectively. In 2009, we also realized cash of $2.7 million from the sale of properties compared to $21.0 million during the same period during 2008. Capital expenditures for 2009 were financed with debt of $64 million and working capital of $17.6 million. We expect to spend approximately $50 to $55 million in capital expenditures during the remainder of 2009 thru 2010.
Read the The complete Report
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 $180.9 million; its shares were traded at around $11.14 with a P/E ratio of 13.9 and P/S ratio of 2. Georesources Inc. had an annual average earning growth of 35.4% over the past 5 years.
Highlight of Business Operations:
General and Administrative Expenses. G&A increased $263,000 during the quarter ended September 30, 2009 compared to the same period in 2008. Additional non-cash charges of $239,000 related to stock-based compensation were the primary cause of the increase. The remaining $24,000 increase resulted from the overall expansion of the business and salary increases which were offset by our ongoing cost reduction efforts. The total non-cash charges related to stock-based compensation included in G&A expense for the three months ended September 30, 2009 and 2008 are $403,000 and $164,000, respectively.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 third quarter of 2009, we recognized cash settlement losses on the $10 million swap of $117,000. These losses were offset by mark-to-market gains of $34,000.
General and Administrative Expenses. G&A increased by $643,000 during the first nine months of 2009 compared to the same period in 2008. Additional non-cash charges of $602,000 related to stock-based compensation were the primary cause of the increase. The remaining $41,000 increase resulted from the overall expansion of the business and salary increases which were offset by our ongoing cost reduction efforts. The total non-cash charges related to stock-based compensation included in G&A expense for the nine months ended September 30, 2009 and 2008 are $1,064,000 and $462,000, respectively.
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 nine months of 2009, we recognized cash settlement losses on the $10 million swap of $294,000. These losses were offset by mark-to-market gains of $153,000.
Other Income. Other income increased by $2,501,000 during the first nine months of 2009 compared to the same period in 2008 due to an increase in partnership income of $2,813,000 and an increase in property operating income of $260,000, partially offset by a $572,000 decrease in partnership management fees. Partnership income in the first nine months 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. Partnership income also included our share of the gain on the sale of the Giddings Field producing properties and the Giddings Field proved undeveloped properties and acreage, our share of these gains was approximately $1,276,000.
Cash applied to oil and gas capital expenditures for the nine months ended September 30, 2009 and 2008, was $81.6 million and $43.0 million, respectively. In 2009, we also realized cash of $2.7 million from the sale of properties compared to $21.0 million during the same period during 2008. Capital expenditures for 2009 were financed with debt of $64 million and working capital of $17.6 million. We expect to spend approximately $50 to $55 million in capital expenditures during the remainder of 2009 thru 2010.
Read the The complete Report
