GeoResources Earnings Cheat Sheet: Revenues Up 15%

GeoResources, Inc. (NASDAQ:GEOI) reported its results for the first quarter. GeoResources, Inc. is an independent oil (NYSE:USO) and gas company, which is engaged in the acquisition and development of oil and gas reserves.

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GeoResources Earnings Cheat Sheet for the First Quarter

Results: Net income for GeoResources, Inc. rose to $6.3 million (26 cents/share) vs. $6.1 million (30 cents/share) in the same quarter a year earlier. A rise of 3.9% from the year earlier quarter.

Revenue: Rose 15.1% to $28.6 million YoY.

Actual vs. Wall St. Expectations: GEOI reported adjusted net income of of 28 cents/share. By that measure, the company fell in line with the mean estimate of 28 cents/share. Estimates ranged from 26 cents per share to 32 cents per share.

Quoting Management: Frank A. Lodzinski, President and CEO of GeoResources commented, “I am pleased with our financial performance and progress, but, of course, disappointed with our reported production. The majority of the oil production decrease from the 4th quarter of 2010 was related to our non-operated properties in the Williston Basin. Both bad weather and service issues adversely impacted continuous production operations and caused delays in new well completions and new production coming online. We also had similar issues with our operated Bakken activities and our conventional production. However, despite the challenging weather and operating conditions experienced in the Williston Basin we are pleased with the progress we made in the quarter and look forward to active and profitable development activities during the remainder of 2011 and beyond. The success of our first three wells in Williams County, North Dakota indicates that we can effectively and economically develop this play. We plan to continue to accelerate our drilling and completion operations in the Bakken throughout 2011 and into 2012 to drive economic production growth.”

Lodzinski further commented, “Although we are still waiting on completion of our first two Eagle Ford wells, we continue to be encouraged by the potential of this play given the technical attributes of our acreage position and positive offset operator activity. We are also excited about the successful drilling of the exploration prospect at Quarantine Bay during the quarter. We believe this well should provide meaningful production in the second half of 2011. Furthermore, this well is the first well drilled below field pays with modern three-D seismic and we believe this discovery has lowered the risk associated with deeper prospects. While we are not immune to the challenges of operating in the Bakken and Eagle Ford plays, we are clearly focused on scaling up our operations and optimizing our drilling, completion, operating activities which we expect will drive strong economics in these plays. We have demonstrated an ability to effectively do this in prior plays we have successfully developed and we plan on doing it again in the Bakken and Eagle Ford. Our focus has been, and will continue to be, on execution and economics that drive shareholder value. Having said this, given our progress to date, we are more encouraged than ever about the profitable long-term growth potential imbedded in our acreage positions and we look forward to unlocking that potential for the benefit of our shareholders.”

Key Stats: The company has now seen net income rise in three-straight quarters. In the fourth quarter of the last fiscal year, net income rose more than twofold and in the third quarter of the last fiscal year, the figure rose more than twofold.

From the fourth quarter of the last fiscal year, the company’s current liabilities rose to $53.8 million from $43 million.

Competitors to Watch: Resolute Energy Corp (NYSE:REN), Brigham Exploration Co. (NASDAQ:BEXP), QEP Resources, Inc. (NYSE:QEP), Continental Resources, Inc. (NYSE:CLR), Oasis Petroleum Inc. (NYSE:OAS), Encore Energy Partners LP (NYSE:ENP), Warren Resources, Inc. (NASDAQ:WRES), Devon Energy Corporation (NYSE:DVN), Double Eagle Petroleum Co. (NASDAQ:DBLE), and Earthstone Energy, Inc. (BSICD)

Stock Performance: Shares of GEOI are unchanged from the previous close of $25.83.


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