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<TITLE>UNITED STATES SECURITIES AND EXCHANGE COMMISSION </TITLE>
<META NAME="author" CONTENT="Jones &amp; Keller User">
<META NAME="date" CONTENT="08/14/2007">
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Washington, D.C. 20549 </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>FORM 8-K</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>CURRENT REPORT </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Pursuant to Section&nbsp;13 or 15(d)&nbsp;of</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>the Securities Exchange Act of 1934 </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Date of Report (Date of earliest event reported): &nbsp;August 13, 2007</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>GEORESOURCES, INC.</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>(Exact name of registrant as specified in its charter) </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD valign=top width=230.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=14.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=230.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=14.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=230.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=230.4><P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>COLORADO</B></P>
</TD><TD valign=top width=14.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=230.4><P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>0-8041 </B></P>
</TD><TD valign=top width=14.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=230.4><P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>84-0505444</B></P>
</TD></TR>
<TR><TD valign=top width=230.4><P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; font-size:12pt; border-bottom:3pt double #7F0000" align=center><BR></P>
</TD><TD valign=top width=14.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=230.4><P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; font-size:12pt; border-bottom:3pt double #7F0000" align=center><BR></P>
</TD><TD valign=top width=14.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=230.4><P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; font-size:12pt; border-bottom:3pt double #7F0000" align=center><BR></P>
</TD></TR>
<TR><TD valign=top width=230.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><I>(State or other jurisdiction</I></P>
</TD><TD valign=top width=14.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=230.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><I>(Commission </I></P>
</TD><TD valign=top width=14.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=230.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><I>(IRS Employer</I></P>
</TD></TR>
<TR><TD valign=top width=230.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><I>of incorporation)</I></P>
</TD><TD valign=top width=14.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=230.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><I>File Number) </I></P>
</TD><TD valign=top width=14.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=230.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><I>Identification No.)</I></P>
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<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>110 Cypress Station Drive, Suite 220 </B></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>Houston, Texas 77090</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><I>(Address of principal executive offices) (Zip Code)</I> </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(281) 537-9920</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><I>Registrant&#146;s telephone number, including area code</I></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-bottom:0.5pt solid #3F3F3F" valign=top width=532.133><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=532.133><P style="margin:0pt; font-family:Times New Roman; font-size:1pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:1pt">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=532.133><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>(Former Name or Former Address, if Changed Since Last Report)</P>
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</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425) </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12) </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;___Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<A NAME="tocpage"></A><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B><U>TABLE OF CONTENTS</U></B> </P>
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<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=top width=20.867><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=20.8><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=20.8><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=20.8><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=20.8><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=20.8><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=20.8><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=20.8><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=461.533><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=628 colspan=9><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Item 2.02. &nbsp;Results of Operations and Financial Condition</P>
</TD></TR>
<TR><TD valign=top width=628 colspan=9><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Item 9.01. &nbsp;Financial Statements and Exhibits</P>
</TD></TR>
<TR><TD valign=top width=628 colspan=9><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Signature</P>
</TD></TR>
<TR><TD valign=top width=628 colspan=9><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Exhibit Index</P>
</TD></TR>
<TR><TD valign=top width=628 colspan=9><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">EX - 99.2 &#150; GeoResources, Inc. Press Release dated August 13, 2007</P>
</TD><A NAME="101"></A></TR>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-right:18pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<P style="page-break-before:always; margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">ITEM 2.02: RESULTS OF OPERATIONS AND FINANCIAL CONDITION</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">On August 13, 2007, GeoResources, Inc. issued a press release announcing financial results for the second quarter and six months ended June 30, 2007. &nbsp;A copy of the press release is furnished with this report as Exhibit 99.2, and is incorporated herein by reference. </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The information in this report is being furnished, not filed, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any filing under the Securities Act of 1933, as amended. </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">SECTION 9 &#150; FINANCIAL STATEMENTS AND EXHIBITS </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Filed herewith is the following: </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=top width=80.333><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=12.667><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=535><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=80.333><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Exhibit No.</B></P>
</TD><TD valign=top width=12.667><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=535><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Description</B></P>
</TD></TR>
<TR><TD style="border-bottom:9pt double #000000" valign=top width=80.333><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=12.667 rowspan=2><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD style="border-bottom:9pt double #000000" valign=top width=535><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=80.333><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=535><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=80.333><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>99.2</P>
</TD><TD valign=top width=12.667><P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
</TD><TD valign=top width=535><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">GeoResources, Inc. Press Release dated August 13, 2007</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<A NAME="104"></A><BR>
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<P style="page-break-before:always; margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SIGNATURE</B> </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD valign=bottom width=276><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=bottom width=11.467><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=bottom width=275.933><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=276><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=bottom width=11.467><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=275.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">GEORESOURCES, INC.</P>
</TD></TR>
<TR><TD valign=top width=276><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=bottom width=11.467><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=275.933><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=276><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=bottom width=11.467><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=275.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">/s/ Frank A. Lodzinski</P>
</TD></TR>
<TR><TD valign=top width=276><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD width=11.467><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000" valign=top width=275.933><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=276><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=bottom width=11.467><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=275.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">By: Frank A. Lodzinski, President</P>
</TD></TR>
<TR><TD valign=top width=276><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=bottom width=11.467><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=275.933>&nbsp;</TD></TR>
<TR><TD valign=top width=276><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=bottom width=11.467><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=275.933><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=276><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Date: August 14, 2007</P>
</TD><TD valign=bottom width=11.467><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=275.933><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>&nbsp;&nbsp;</P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-bottom:0.5pt solid #3F3F3F" valign=top width=638.4><P style="margin:0pt; text-indent:288.75pt; font-family:Times New Roman; font-size:12pt"><BR></P>
</TD></TR>
<TR><TD valign=top width=638.4>&nbsp;</TD><A NAME="105"></A></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
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<P style="page-break-before:always; margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Exhibit&nbsp;Index</B> </P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD valign=bottom width=76.667><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=bottom width=6><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=bottom width=543.333><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD></TR>
<TR><TD style="border-bottom:0.75pt solid #000000" valign=bottom width=76.667><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Exhibit No.</P>
</TD><TD valign=bottom width=6><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD style="border-bottom:0.75pt solid #000000" valign=bottom width=543.333><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Description</P>
</TD></TR>
<TR><TD valign=top width=76.667><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>99.2 </P>
</TD><TD valign=bottom width=6><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
</TD><TD valign=top width=543.333><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">GeoResources, Inc. Press Release dated August 13, 2007</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
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<P style="page-break-before:always; margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>EXHIBIT 99.2</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><img src="f2ndqtr20078k002.gif" alt="[f2ndqtr20078k002.gif]" align=middle height=98.2 width=352.467></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>Contact: &nbsp;Cathy Kruse</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>Telephone: 701-572-2020 ext 113</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>cathyk@geoi.net</P>
<P style="margin-top:12pt; margin-bottom:3pt; padding-left:-9pt; line-height:14pt; font-family:Arial; font-size:12pt"><B>FOR IMMEDIATE RELEASE</B></P>
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<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:16pt" align=center>GeoResources, Inc. Reports Second Quarter and Six-Month Results</P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:16pt" align=center>Provides Operations and Corporate Update</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:16pt" align=center><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt"><B>Houston, Texas &nbsp;August 13, 2007 </B>&#150; GeoResources, Inc., (Nasdaq:GEOI), today announced earnings for the three months and year to date periods ended June 30, 2007. &nbsp;On April 17, 2007, the Company completed its mergers (the &#147;Merger&#148;) with Southern Bay Oil &amp; Gas L.P. and Chandler Energy, LLC. &nbsp;Although GeoResources is the acquirer for legal purposes, under generally accepted accounting principles, Southern Bay, being the largest party to the Merger, is deemed to have acquired the Company and the other net assets contributed by Chandler and its related parties. &nbsp;Accordingly, reported financial information for the periods ended June 30, 2007 represent the combined entities as compared to the prior periods which include only Southern Bay. &nbsp;Therefore, the information is not entirely comparable since Southern Bay&#146;s revenues include those of the merged entities from April 18, 2007 through June 30, 2007.</P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">As a result of the Merger and related significant non-recurring costs, including non-cash charges to income related to equity based compensation, and non-cash charges for net deferred income taxes, the Company reported a net loss of $1,349,431 for the second quarter of 2007 or $0.09 per share, on revenue of $8,284,688, compared to the second quarter of 2006 net income of $1,137,962, or $0.23 per share, on revenue of $4,096,356. &nbsp;The second quarter 2006 included a gain of $314,840 from the sale of certain oil and gas properties. &nbsp;Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) for the second quarter of 2007 were $2,631,580 compared to $1,944,134 for the second quarter of 2006. &nbsp;Adjusted for non-cash and </P>
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<P style="page-break-before:always; margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">non-recurring expenses associated with the Merger, EBITDA was $3,821,839. &nbsp;See the table below.<SUP> </SUP></P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">For the first half of 2007, the net loss was $462,626, or $0.05 per share, on revenue of $12,402,245, versus net income of $2,742,601, or $0.56 per share, on revenue of $8,263,644 in the first half of 2006. &nbsp;EBITDA for the first half of 2007 was $4,607,307 compared to $4,220,917 for the first half of 2006. &nbsp;Adjusted for non-cash and non-recurring expenses associated with the Merger, EBITDA for the first half of 2007 was $5,956,428. &nbsp;See the tables below.<SUP> </SUP></P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">In the second quarter of 2007 natural gas sales increased by 139% to 361 MMcf as compared to 151 MMcf in the second quarter of 2006. &nbsp;Oil sales for the second quarter of 2007 increased 110% to 82 Mbbls from 39 Mbbls in the second quarter of 2006. &nbsp;The average realized price of natural gas was $6.91 per Mcf for the second quarter of 2007, or 2.1% more than the second quarter of the prior year. &nbsp;The average realized price of oil was $55.95 per barrel or 1.1% less that the second quarter in the prior year. &nbsp;&nbsp;</P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">For the six months ended June 30, 2007, natural gas sales totaled 552 MMcf or 68% greater than the 331 MMcf sold during the first half of 2006. &nbsp;Oil sales for the first half of 2007 increased 48% to 127 Mbbls from 86 Mbbls in the first half of 2006. &nbsp;The average realized price of natural gas was $6.63 per Mcf for the first half of 2007 or 8.8 % less than the first half of the prior year. &nbsp;The average realized price of oil was $54.47 per barrel or 1.8% more for the first half of 2007 than the first six months in the prior year. &nbsp;&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">The significant increases in production in the three and six months periods ended June 30, 2007 over the same periods of 2006, is a direct result of the Merger, certain acquisitions made in February 2007 and subsequent drilling, offset by production declines in Gulf Coast wells drilled in 2005 and prior periods. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">The Company also announced that it has successfully completed the Ashorn Unit #1H in Grimes County, Texas. &nbsp;This is the third horizontal development well drilled and completed since the properties were acquired in February 2007. &nbsp;The well has been produced at rates as high as 18 MMcfpd and is currently producing 12 MMcfpd. &nbsp;The Company has also commenced drilling its fourth well, the Tom Haynie #1H, which is expected to be completed in September 2007. &nbsp;Two additional wells are being permitted which will immediately follow the current drilling. &nbsp;Gross production has averaged 33.4 MMcfepd equivalent in July which is a net 4.2 </P>
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<P style="page-break-before:always; margin-top:0pt; margin-bottom:6pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">MMcfepd increase over the December 2006 average daily rate. &nbsp;Based on continued technical review and well performance, management believes the Company will continue to spud a new well approximately every 60 days for the next two or three years. &nbsp;The Company and its affiliated partnership hold a 90% working interest. &nbsp;The Company is the operator of the wells and, as general partner, manages the affairs of the partnership. &nbsp;The Company holds a 7.2% direct working interest and, in addition, has a 2% interest in the affiliated partnership, which can increase to 35%, pending partnership payout plus a specified rate of return. &nbsp;&nbsp;&nbsp;</P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">The Company also completed the Fitzhugh Et. Al. #1 well located in the southeast Texas Hackberry play in Orange County, Texas. &nbsp;The well has been completed for 120 BOPD, 500 Mcfd, and 60 BWPD. &nbsp;The Company will consider drilling offset locations pending well performance and additional technical review. &nbsp;The prospect was defined based on both sub-surface regional mapping and 3-D seismic data. &nbsp;The Company is the operator and has a 10% working interest in the prospect and in 415 surrounding acres. &nbsp;</P>
<A NAME="OLE_LINK1"></A><P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">In Louisiana, the Company recently completed the S.L. 19041 #1 as a Miocene gas producer in Jefferson Parish. &nbsp;The well is currently shut-in waiting on facilities and pipeline hookup. &nbsp;Similar wells in the vicinity have produced at rates up to 1,000 Mcfpd. &nbsp;This 1,800&#146; gas prospect was developed based on 3-D seismic. &nbsp;The Company is the operator and has a 28% working interest, a 2% overriding royalty interest and after payout, an additional reversionary working interest. &nbsp;Pending the performance of this initial discovery, another well could be drilled.</P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">In North Dakota, the SSMU B-102 in the South Starbuck Madison Unit was drilled to a depth of 3,350 feet. &nbsp;The well was completed as an oil well in the Mississippian Madison formation. &nbsp;The well is currently waiting on the installation of a pumping unit. &nbsp;The initial production is expected at 20 BOPD. &nbsp;In addition, the previously reported Donald Boll #1-34, was placed on production in June and is consistently producing approximately 15 BOPD from an interval above 3,380 feet. &nbsp;Based on these results and performance, the Company has scheduled the drilling of an additional well in early 2008. &nbsp;The Company has a 100% working interest in these wells. &nbsp;</P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">The Company is completing the Huff #29-8 well, located in Decatur County, Kansas. &nbsp;This prospect pre-existed the Merger and Kansas in not currently a focus area for the Company. &nbsp;The well is located on the northeast flank of the Lansing Kansas City producing Lester Field and </P>
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<P style="page-break-before:always; margin:0pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">was drilled to a total depth of 3,660 feet. &nbsp;The offset well has produced over 50,000 barrels. &nbsp;Based on preliminary evaluation data including drill stem tests, log analysis and seismic data, the Company believes this discovery well may be located on a separate structure from the producing field and could initially produce 50 &#150; 100 BOPD. &nbsp;Pending well performance, additional wells could be drilled. </P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">Frank A. Lodzinski, Chief Executive Officer of GeoResources, said, &#147;The Merger has taken a great deal of our time and energy since we entered into agreements in 2006. &nbsp;The significant costs of the Merger as well as subsequent corporate restructuring are virtually complete. &nbsp;We have implemented our business strategy and capital development program and have committed approximately $22 million to drilling and development in the next 18 months. &nbsp;Our continued drilling success demonstrates the depth and capability of our internal geological, engineering and operating staff. &nbsp;We expect to continue to expand our inventory of drilling opportunities and to transfer our horizontal drilling expertise to fields and prospects in our Northern Region. &nbsp;Our drilling success supports and enhances our business model, being a combination of acquisitions, exploitation and exploration. &nbsp;We believe this diversified approach will allow the Company to grow profitably. &nbsp;From a corporate perspective, we have made significant progress in integrating the technical, administrative and reporting systems of the three businesses merged in April 2007. &nbsp;In addition, we are positioned to share technical expertise Company-wide.&#148; </P>
<P style="margin:0pt; line-height:20pt; font-family:Times New Roman; font-size:12pt"><B><I>Corporate Matters</I></B></P>
<P style="margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">In mid-July the Company completed the sale of 100,000 shares of its common stock at $7.19 per share to three purchasers, two of whom are Directors of the Company resulting in gross proceeds to the Company of $719,000. &nbsp;Additionally, the Company acquired working interests in oil and gas properties valued at approximately $1.0 million from certain officers and employees of the Company. &nbsp;The consideration was approximately $856,000 in cash and 30,406 shares of the Company&#146;s common stock, also priced at $7.19 per share. &nbsp;The share price used in both transactions was determined by members of the Board of Directors in consultation with the Chief Executive Officer, all of whom had no personal interest in the transactions. &nbsp;In the opinion of management, the working interests, which represented incremental interests in existing fields owned and controlled by the Company, were acquired at or below estimated market prices. &nbsp;</P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>4</P>
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<P style="margin:0pt; padding-right:18pt; font-family:Times New Roman; font-size:12pt" align=right><BR></P>
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<P style="page-break-before:always; margin:0pt; text-indent:36pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">The Company also announced it recently filed a Registration Statement with the Securities and Exchange Commission on Form S-3 pursuant to Registration Rights Agreements associated with the above transactions and the Company&#146;s recently completed mergers covering the public offer and resale of 10,820,406 shares of common stock acquired by purchasers of common stock in those transactions.</P>
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<P style="margin-top:0pt; margin-bottom:6pt; line-height:20pt; font-family:Times New Roman; font-size:12pt">The following tables reconcile our EBITDA to our net income (loss) for the periods indicated:</P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=bottom width=296.667>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>Quarter Ended</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>Quarter Ended</P>
</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>June 30, 2007</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>June 30, 2006</P>
</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman"><U>EBITDA (1)</U></P>
</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman">Net income (loss)</P>
</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:2.5pt; font-family:Times New Roman">$</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:45.8pt; font-family:Times New Roman">(1,349,431)</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:46.3pt; font-family:Times New Roman">$1,137,962</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman">Add back</P>
</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; text-indent:18pt; font-family:Times New Roman">Interest expense</P>
</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:60pt; font-family:Times New Roman">199,174</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:63.8pt; font-family:Times New Roman">22,749</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; text-indent:18pt; font-family:Times New Roman">Income tax (2)</P>
</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:52.5pt; font-family:Times New Roman">1,849,497</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:82.1pt; font-family:Times New Roman">-- </P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; text-indent:18pt; font-family:Times New Roman">Depreciation, depletion and amortization</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:52.5pt; font-family:Times New Roman">1,932,340</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:58.8pt; font-family:Times New Roman">783,423</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman">EBITDA</P>
</TD><TD style="border-bottom:2pt double #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:2.5pt; font-family:Times New Roman">$</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:52.5pt; font-family:Times New Roman">2,631,580</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:10.3pt; font-family:Times New Roman">$</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:51.3pt; font-family:Times New Roman">1,944,134</P>
</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>Six Months Ended</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>Six Months Ended</P>
</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>June 30, 2007</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>June 30, 2006</P>
</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman">Net Income (loss)</P>
</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:2.5pt; font-family:Times New Roman">$</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:53.3pt; font-family:Times New Roman">(462,626)</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:46.3pt; font-family:Times New Roman">$2,742,601</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman">Add back:</P>
</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; text-indent:18pt; font-family:Times New Roman">Interest expense</P>
</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:60pt; font-family:Times New Roman">355,326</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:63.8pt; font-family:Times New Roman">38,116</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; text-indent:18pt; font-family:Times New Roman">Income tax (2)</P>
</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:52.5pt; font-family:Times New Roman">1,853,699</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:84.6pt; font-family:Times New Roman">--</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; text-indent:18pt; font-family:Times New Roman">Depreciation, depletion and amortization</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:52.5pt; font-family:Times New Roman">2,860,908</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:51.3pt; font-family:Times New Roman">1,440,200</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman">EBITDA</P>
</TD><TD style="border-bottom:2pt double #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:2.5pt; font-family:Times New Roman">$</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:52.5pt; font-family:Times New Roman">4,607,307</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:10.3pt; font-family:Times New Roman">$</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:51.3pt; font-family:Times New Roman">4,220,917</P>
</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
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<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">(1) EBITDA is defined as earnings before interest, income taxes, depreciation, depletion and amortization, EBITDA 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. </P>
<P style="margin-top:0pt; margin-bottom:4.5pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">(2) Non cash income tax expense recognized in the quarter and year to date periods, pursuant to generally accepted accounting principles. Certain parties to the Merger were previously non-taxable entities. Accordingly, deferred tax benefits and liabilities were calculated with the net effect charged to expense in the second quarter. &nbsp;</P>
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<BR>
<P style="page-break-before:always; margin-top:0pt; margin-bottom:6pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Non recurring costs:</B></P>
<P style="margin-top:0pt; margin-bottom:6pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B></B>During the three and six months ended June 30, 2007, the Company recognized certain significant costs which it believes are largely non-recurring. &nbsp;Accordingly, the table below provides an estimate of EBITDA as adjusted for those costs. &nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:4pt; font-family:Times New Roman; font-size:8pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=bottom width=296.667>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>Quarter Ended</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>Six Months Ended</P>
</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>June 30, 2007</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman" align=center>June 30, 2007</P>
</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman">EBITDA (see above)</P>
</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:2.5pt; font-family:Times New Roman">$</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:52.5pt; font-family:Times New Roman">2,631,580</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:2.9pt; font-family:Times New Roman">$</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:52.9pt; font-family:Times New Roman">4,607,307</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman">Add back</P>
</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; text-indent:18pt; font-family:Times New Roman">Non-cash equity based compensation (1)</P>
</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:60pt; font-family:Times New Roman">419,531</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:60.4pt; font-family:Times New Roman">523,598</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; text-indent:18pt; font-family:Times New Roman">Professional fees</P>
</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:60pt; font-family:Times New Roman">437,677</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:60.4pt; font-family:Times New Roman">467,472</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; text-indent:18pt; font-family:Times New Roman">Shareholder services</P>
</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:60pt; font-family:Times New Roman">186,937</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:60.4pt; font-family:Times New Roman">186,937</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; text-indent:18pt; font-family:Times New Roman">Western Star Drilling (2)</P>
</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:65pt; font-family:Times New Roman">96,114</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:65.4pt; font-family:Times New Roman">96,114</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; text-indent:18pt; font-family:Times New Roman">Other</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:65pt; font-family:Times New Roman">50,000</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:5pt; text-indent:65.4pt; font-family:Times New Roman">75,000</P>
</TD></TR>
<TR><TD valign=bottom width=296.667><P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman">Adjusted EBITDA</P>
</TD><TD style="border-bottom:2pt double #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:2.5pt; font-family:Times New Roman">$</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:52.5pt; font-family:Times New Roman">3,821,839</P>
</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=bottom width=144><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:2.9pt; font-family:Times New Roman">$</P>
<P style="margin-top:0pt; margin-bottom:5pt; text-indent:52.9pt; font-family:Times New Roman">5,956,428</P>
</TD></TR>
<TR><TD valign=bottom width=296.667>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD><TD valign=bottom width=23.467>&nbsp;</TD><TD valign=bottom width=144>&nbsp;</TD></TR>
</TABLE>
<P style="margin-top:0pt; margin-bottom:-10pt; padding-left:36pt; text-indent:-18pt; line-height:10pt; font-family:Times New Roman; font-size:8pt">(1)</P>
<P style="margin:0pt; padding-left:36pt; line-height:14pt; font-family:Times New Roman; font-size:8pt">Represents non-cash required charge to expense resulting from acceleration of certain vesting requirements associated with Southern Bay&#146;s equity incentive plan which was eliminated pursuant to the Merger, and stock bonuses issued to employees of GeoResources. &nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-10pt; padding-left:36pt; text-indent:-18pt; line-height:10pt; font-family:Times New Roman; font-size:8pt">(2)</P>
<P style="margin:0pt; padding-left:36pt; line-height:14pt; font-family:Times New Roman; font-size:8pt">Costs associated with sold operations.</P>
<P style="margin-top:0pt; margin-bottom:7pt; font-family:Times New Roman Bold; font-size:14pt"><BR></P>
<P style="margin-top:12pt; margin-bottom:3pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>About GeoResources, Inc.</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">On April 17, 2007, the Company completed its mergers with Southern Bay Oil &amp; Gas L.P. and Chandler Energy, LLC. &nbsp;The management of Southern Bay and Chandler became the principal management of the combined entity. &nbsp;Corporate headquarters have been relocated to Houston, Texas. &nbsp;The Company conducts its exploration development and production operations through wholly owned subsidiaries. &nbsp;Activities in the Southern Region are conducted through Southern Bay Energy, LLC, located in Houston, Texas and Northern Region operations are conducted through G3 Energy LLC, located in Denver, Colorado. &nbsp;The Company also maintains a regional office in Williston, North Dakota. &nbsp;For more information, visit our websites at www.geoi.net and www.southernbayenergy.com. &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:6pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B><I>Forward-Looking Statements</I></B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>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 &quot;may,&quot; &quot;will,&quot; &quot;expect,&quot; &quot;anticipate,&quot; &quot;estimate&quot; or &quot;continue,&quot; or comparable words. &nbsp;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. &nbsp;Readers are encouraged to read the SEC reports of the Company, particularly its Form 10-KSB for the Fiscal Year Ended December 31, 2006, for meaningful cautionary language disclosure.</I></B></P>
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<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD valign=bottom width=625.2 colspan=6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B>GEORESOURCES, INC. and SUBSIDIARIES </B></P>
</TD></TR>
<TR><TD valign=bottom width=625.2 colspan=6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B>CONSOLIDATED BALANCE SHEETS</B></P>
</TD></TR>
<TR><TD valign=bottom width=625.2 colspan=6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>(unaudited)</P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B>&nbsp;June 30, </B></P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B>&nbsp;December 31, </B></P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B>&nbsp;2007 </B></P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B>&nbsp;2006 </B></P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B>ASSETS</B></P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Current assets:</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Cash</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14,558,545 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,216,822 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Accounts receivable:</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;Oil and gas revenues</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14,764,216 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,201,902 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;Joint interest billings and other</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,866,720 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,294,237 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Accounts receivable from affiliated partnerships</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,095,231 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,742,174 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Notes receivable-current portion</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;860,000 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Prepaid expenses and other</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;590,792 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;352,515 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;Total current assets</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;39,735,504 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17,807,650 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Oil and gas properties, successful efforts method:</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Proved properties</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;81,731,445 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34,204,118 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Unproved properties</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,893,389 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,643,041 </P>
</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Office and other equipment</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;950,707 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;292,297 </P>
</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Land</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;96,462 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;96,462 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;86,672,003 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36,235,918 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Less accumulated depreciation, depletion and amortization</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7,868,002)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5,007,095)</P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net property and equipment</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;78,804,001 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31,228,823 </P>
</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Other assets:</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Equity in oil and gas limited partnerships</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,362,637 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,517,430 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Notes receivable and other</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,374,089 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;113,123 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:3pt double #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;123,276,231 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:3pt double #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;50,667,026 </P>
</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center><B>LIABILITIES AND STOCKHOLDERS' EQUITY</B></P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Current liabilities:</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Accounts payable</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,134,643 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,225,291 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Accounts payable to affiliated partnerships</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,458,010 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,201,141 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Revenues and royalties payable</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,200,746 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,347,702 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Drilling advances</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;788,331 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,120,770 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Accrued expenses payable</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,432,302 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;915,445 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Commodity hedges</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;995,045 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,685,938 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33,009,077 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19,496,287 </P>
</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Long-term debt</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,000,000 </P>
</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Deferred income taxes</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,344,203 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32,535 </P>
</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Asset retirement obligations</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,173,454 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,478,205 </P>
</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Stockholders' equity:</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Common stock, par value $.01 per share; authorized</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;100,000,000 shares; issued and outstanding: 14,572,977</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;shares in 2007 and 4,858,000 shares in 2006</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;145,730 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;48,580 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Additional paid-in capital</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;78,622,213 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,848,643 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Accumulated other comprehensive income</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(991,899)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,679,388)</P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Retained earnings</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,973,453 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,442,164 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;81,749,497 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23,659,999 </P>
</TD></TR>
<TR><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=352.8>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;123,276,231 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=112.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;50,667,026 </P>
</TD></TR>
<TR><TD valign=bottom width=368.533 colspan=2>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=112.6>&nbsp;</TD></TR>
</TABLE>
<BR>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>7</P>
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<P style="margin:0pt; padding-right:18pt; font-family:Times New Roman; font-size:12pt" align=right><BR></P>
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<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:1pt" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=697.867 colspan=9><P style="margin:0pt; font-family:Times; font-size:9pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times; font-size:9pt" align=center><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times; font-size:9pt" align=center><B>GEORESOURCES, INC. and SUBSIDIARIES </B></P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=697.867 colspan=9><P style="margin:0pt; line-height:11pt; font-family:Times New Roman Bold; font-size:9pt" align=center><B>CONSOLIDATED STATEMENTS OF OPERATIONS</B></P>
</TD></TR>
<TR><TD valign=bottom width=18.667><P style="margin:0pt; font-family:Arial"><B>&nbsp;</B></P>
</TD><TD valign=bottom width=697.867 colspan=9><P style="margin:0pt; line-height:11pt; font-family:Times New Roman Bold; font-size:9pt" align=center><B>(unaudited)</B></P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=198.333 colspan=3><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;Three Months Ended June 30, </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=202 colspan=3><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;Six Months Ended June 30, </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;2007 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;2006 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;2007 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>&nbsp;2006 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=284.733 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Revenue:</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Oil and gas revenues </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,060,314 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;3,254,445 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;10,597,808 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;7,025,470 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Partnership management fees </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;256,184 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;92,354 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;411,820 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;183,538 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Property operating income &nbsp;</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;444,532 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;204,227 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;682,290 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;398,470 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Gain (loss) on sale of property and equipment </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15,218)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;314,840 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15,218)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;314,840 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Partnership income (loss) </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;153,601 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;71,944 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;213,347 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;80,299 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Interest and other </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;385,275 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;158,546 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;512,198 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;261,027 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,284,688 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,096,356 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,402,245 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,263,644 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=284.733 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Expenses: </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Lease operating expense &nbsp;</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,254,861 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;910,701 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,315,270 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,874,777 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Severance taxes </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;533,799 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;160,541 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;802,741 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;482,049 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Re-engineering and workovers </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;415,340 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;130,664 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;433,072 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;178,474 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Exploration </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;431,521 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;431,521 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;General and administrative expense &nbsp;</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,456,542 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;725,712 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,247,259 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,253,135 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Depreciation, depletion, and amortization </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,932,340 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;783,423 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,860,908 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,440,200 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Hedge ineffectiveness </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7,434)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(206,917)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,404)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(177,229)</P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Interest &nbsp;</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;199,174 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,749 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;355,326 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;38,116 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expense </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,784,622 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,958,394 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,011,172 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,521,043 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=284.733 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Income before income taxes </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;500,066 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,137,962 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,391,073 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,742,601 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=284.733 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Income taxes:</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Current </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;94,169 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>-</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;96,031 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>-</P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;Deferred </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,755,328 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>-</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,757,668 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt" align=center>-</P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,849,497 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,853,699 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=284.733 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Net income (loss)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;(1,349,431)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;1,137,962 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(462,626)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;2,742,601 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=284.733 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Net income (loss) per share (basic and diluted)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.09)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.23 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.05)</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.56 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=284.733 colspan=2><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">Weighted average shares outstanding</P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=93.067><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14,572,977 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=89.533><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,858,000 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=96.6><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,106,159 </P>
</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=89.667><P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,858,000 </P>
</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=18.667>&nbsp;</TD><TD valign=bottom width=266.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=93.067>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
<TR><TD valign=bottom width=393.533 colspan=4>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.533>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=96.6>&nbsp;</TD><TD valign=bottom width=15.733>&nbsp;</TD><TD valign=bottom width=89.667>&nbsp;</TD></TR>
</TABLE>
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[{"type": "8-K", "sequence": "1", "filename": "f2ndqtr20078k.htm", "description": "2ND QUARTER EARNINGS PR", "secsgml_size_bytes": 125636}]
{"company-data": {"conformed-name": "GEORESOURCES INC", "cik": "0000041023", "assigned-sic": "1311", "irs-number": "840505444", "state-of-incorporation": "CO", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-08041", "film-number": "071055100"}, "business-address": {"street1": "1407 W DAKOTA PKWY", "city": "WILLISTON", "state": "ND", "zip": "58801", "phone": "7015722020"}, "mail-address": {"street1": "P O BOX 1505", "city": "WILLISTON", "state": "ND", "zip": "58802-1505"}, "former-company": {"former-conformed-name": "GEORESOURCES EXPLORATION INC", "date-changed": "19710422"}}
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):  August 13, 2007
GEORESOURCES, INC.
(Exact name of registrant as specified in its charter)
COLORADO
0-8041
84-0505444
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)
110 Cypress Station Drive, Suite 220
Houston, Texas 77090
(Address of principal executive offices) (Zip Code)
(281) 537-9920
Registrant's telephone number, including area code
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
___Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
___Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
___Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
___Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 2.02.  Results of Operations and Financial Condition
Item 9.01.  Financial Statements and Exhibits
Signature
Exhibit Index
EX - 99.2 – GeoResources, Inc. Press Release dated August 13, 2007
ITEM 2.02: RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On August 13, 2007, GeoResources, Inc. issued a press release announcing financial results for the second quarter and six months ended June 30, 2007.  A copy of the press release is furnished with this report as Exhibit 99.2, and is incorporated herein by reference.
The information in this report is being furnished, not filed, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any filing under the Securities Act of 1933, as amended.
SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
Filed herewith is the following:
Exhibit No.
Description
99.2
GeoResources, Inc. Press Release dated August 13, 2007
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GEORESOURCES, INC.
/s/ Frank A. Lodzinski
By: Frank A. Lodzinski, President
Date: August 14, 2007
Exhibit Index
Exhibit No.
Description
99.2
GeoResources, Inc. Press Release dated August 13, 2007
EXHIBIT 99.2
Contact:  Cathy Kruse
Telephone: 701-572-2020 ext 113
cathyk@geoi.net
FOR IMMEDIATE RELEASE
GeoResources, Inc. Reports Second Quarter and Six-Month Results
Provides Operations and Corporate Update
Houston, Texas  August 13, 2007
– GeoResources, Inc., (Nasdaq:GEOI), today announced earnings for the three months and year to date periods ended June 30, 2007.  On April 17, 2007, the Company completed its mergers (the "Merger") with Southern Bay Oil & Gas L.P. and Chandler Energy, LLC.  Although GeoResources is the acquirer for legal purposes, under generally accepted accounting principles, Southern Bay, being the largest party to the Merger, is deemed to have acquired the Company and the other net assets contributed by Chandler and its related parties.  Accordingly, reported financial information for the periods ended June 30, 2007 represent the combined entities as compared to the prior periods which include only Southern Bay.  Therefore, the information is not entirely comparable since Southern Bay's revenues include those of the merged entities from April 18, 2007 through June 30, 2007.
As a result of the Merger and related significant non-recurring costs, including non-cash charges to income related to equity based compensation, and non-cash charges for net deferred income taxes, the Company reported a net loss of $1,349,431 for the second quarter of 2007 or $0.09 per share, on revenue of $8,284,688, compared to the second quarter of 2006 net income of $1,137,962, or $0.23 per share, on revenue of $4,096,356.  The second quarter 2006 included a gain of $314,840 from the sale of certain oil and gas properties.  Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) for the second quarter of 2007 were $2,631,580 compared to $1,944,134 for the second quarter of 2006.  Adjusted for non-cash and
non-recurring expenses associated with the Merger, EBITDA was $3,821,839.  See the table below.
For the first half of 2007, the net loss was $462,626, or $0.05 per share, on revenue of $12,402,245, versus net income of $2,742,601, or $0.56 per share, on revenue of $8,263,644 in the first half of 2006.  EBITDA for the first half of 2007 was $4,607,307 compared to $4,220,917 for the first half of 2006.  Adjusted for non-cash and non-recurring expenses associated with the Merger, EBITDA for the first half of 2007 was $5,956,428.  See the tables below.
In the second quarter of 2007 natural gas sales increased by 139% to 361 MMcf as compared to 151 MMcf in the second quarter of 2006.  Oil sales for the second quarter of 2007 increased 110% to 82 Mbbls from 39 Mbbls in the second quarter of 2006.  The average realized price of natural gas was $6.91 per Mcf for the second quarter of 2007, or 2.1% more than the second quarter of the prior year.  The average realized price of oil was $55.95 per barrel or 1.1% less that the second quarter in the prior year.
For the six months ended June 30, 2007, natural gas sales totaled 552 MMcf or 68% greater than the 331 MMcf sold during the first half of 2006.  Oil sales for the first half of 2007 increased 48% to 127 Mbbls from 86 Mbbls in the first half of 2006.  The average realized price of natural gas was $6.63 per Mcf for the first half of 2007 or 8.8 % less than the first half of the prior year.  The average realized price of oil was $54.47 per barrel or 1.8% more for the first half of 2007 than the first six months in the prior year.
The significant increases in production in the three and six months periods ended June 30, 2007 over the same periods of 2006, is a direct result of the Merger, certain acquisitions made in February 2007 and subsequent drilling, offset by production declines in Gulf Coast wells drilled in 2005 and prior periods.
The Company also announced that it has successfully completed the Ashorn Unit #1H in Grimes County, Texas.  This is the third horizontal development well drilled and completed since the properties were acquired in February 2007.  The well has been produced at rates as high as 18 MMcfpd and is currently producing 12 MMcfpd.  The Company has also commenced drilling its fourth well, the Tom Haynie #1H, which is expected to be completed in September 2007.  Two additional wells are being permitted which will immediately follow the current drilling.  Gross production has averaged 33.4 MMcfepd equivalent in July which is a net 4.2
2
MMcfepd increase over the December 2006 average daily rate.  Based on continued technical review and well performance, management believes the Company will continue to spud a new well approximately every 60 days for the next two or three years.  The Company and its affiliated partnership hold a 90% working interest.  The Company is the operator of the wells and, as general partner, manages the affairs of the partnership.  The Company holds a 7.2% direct working interest and, in addition, has a 2% interest in the affiliated partnership, which can increase to 35%, pending partnership payout plus a specified rate of return.
The Company also completed the Fitzhugh Et. Al. #1 well located in the southeast Texas Hackberry play in Orange County, Texas.  The well has been completed for 120 BOPD, 500 Mcfd, and 60 BWPD.  The Company will consider drilling offset locations pending well performance and additional technical review.  The prospect was defined based on both sub-surface regional mapping and 3-D seismic data.  The Company is the operator and has a 10% working interest in the prospect and in 415 surrounding acres.
In Louisiana, the Company recently completed the S.L. 19041 #1 as a Miocene gas producer in Jefferson Parish.  The well is currently shut-in waiting on facilities and pipeline hookup.  Similar wells in the vicinity have produced at rates up to 1,000 Mcfpd.  This 1,800' gas prospect was developed based on 3-D seismic.  The Company is the operator and has a 28% working interest, a 2% overriding royalty interest and after payout, an additional reversionary working interest.  Pending the performance of this initial discovery, another well could be drilled.
In North Dakota, the SSMU B-102 in the South Starbuck Madison Unit was drilled to a depth of 3,350 feet.  The well was completed as an oil well in the Mississippian Madison formation.  The well is currently waiting on the installation of a pumping unit.  The initial production is expected at 20 BOPD.  In addition, the previously reported Donald Boll #1-34, was placed on production in June and is consistently producing approximately 15 BOPD from an interval above 3,380 feet.  Based on these results and performance, the Company has scheduled the drilling of an additional well in early 2008.  The Company has a 100% working interest in these wells.
The Company is completing the Huff #29-8 well, located in Decatur County, Kansas.  This prospect pre-existed the Merger and Kansas in not currently a focus area for the Company.  The well is located on the northeast flank of the Lansing Kansas City producing Lester Field and
3
was drilled to a total depth of 3,660 feet.  The offset well has produced over 50,000 barrels.  Based on preliminary evaluation data including drill stem tests, log analysis and seismic data, the Company believes this discovery well may be located on a separate structure from the producing field and could initially produce 50 – 100 BOPD.  Pending well performance, additional wells could be drilled.
Frank A. Lodzinski, Chief Executive Officer of GeoResources, said, "The Merger has taken a great deal of our time and energy since we entered into agreements in 2006.  The significant costs of the Merger as well as subsequent corporate restructuring are virtually complete.  We have implemented our business strategy and capital development program and have committed approximately $22 million to drilling and development in the next 18 months.  Our continued drilling success demonstrates the depth and capability of our internal geological, engineering and operating staff.  We expect to continue to expand our inventory of drilling opportunities and to transfer our horizontal drilling expertise to fields and prospects in our Northern Region.  Our drilling success supports and enhances our business model, being a combination of acquisitions, exploitation and exploration.  We believe this diversified approach will allow the Company to grow profitably.  From a corporate perspective, we have made significant progress in integrating the technical, administrative and reporting systems of the three businesses merged in April 2007.  In addition, we are positioned to share technical expertise Company-wide."
Corporate Matters
In mid-July the Company completed the sale of 100,000 shares of its common stock at $7.19 per share to three purchasers, two of whom are Directors of the Company resulting in gross proceeds to the Company of $719,000.  Additionally, the Company acquired working interests in oil and gas properties valued at approximately $1.0 million from certain officers and employees of the Company.  The consideration was approximately $856,000 in cash and 30,406 shares of the Company's common stock, also priced at $7.19 per share.  The share price used in both transactions was determined by members of the Board of Directors in consultation with the Chief Executive Officer, all of whom had no personal interest in the transactions.  In the opinion of management, the working interests, which represented incremental interests in existing fields owned and controlled by the Company, were acquired at or below estimated market prices.
4
The Company also announced it recently filed a Registration Statement with the Securities and Exchange Commission on Form S-3 pursuant to Registration Rights Agreements associated with the above transactions and the Company's recently completed mergers covering the public offer and resale of 10,820,406 shares of common stock acquired by purchasers of common stock in those transactions.
The following tables reconcile our EBITDA to our net income (loss) for the periods indicated:
Quarter Ended
Quarter Ended
June 30, 2007
June 30, 2006
EBITDA (1)
Net income (loss)
$
(1,349,431)
$1,137,962
Add back
Interest expense
199,174
22,749
Income tax (2)
1,849,497
--
Depreciation, depletion and amortization
1,932,340
783,423
EBITDA
$
2,631,580
$
1,944,134
Six Months Ended
Six Months Ended
June 30, 2007
June 30, 2006
Net Income (loss)
$
(462,626)
$2,742,601
Add back:
Interest expense
355,326
38,116
Income tax (2)
1,853,699
--
Depreciation, depletion and amortization
2,860,908
1,440,200
EBITDA
$
4,607,307
$
4,220,917
(1) EBITDA is defined as earnings before interest, income taxes, depreciation, depletion and amortization, EBITDA 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.
(2) Non cash income tax expense recognized in the quarter and year to date periods, pursuant to generally accepted accounting principles. Certain parties to the Merger were previously non-taxable entities. Accordingly, deferred tax benefits and liabilities were calculated with the net effect charged to expense in the second quarter.
5
Non recurring costs:
During the three and six months ended June 30, 2007, the Company recognized certain significant costs which it believes are largely non-recurring.  Accordingly, the table below provides an estimate of EBITDA as adjusted for those costs.
Quarter Ended
Six Months Ended
June 30, 2007
June 30, 2007
EBITDA (see above)
$
2,631,580
$
4,607,307
Add back
Non-cash equity based compensation (1)
419,531
523,598
Professional fees
437,677
467,472
Shareholder services
186,937
186,937
Western Star Drilling (2)
96,114
96,114
Other
50,000
75,000
Adjusted EBITDA
$
3,821,839
$
5,956,428
(1)
Represents non-cash required charge to expense resulting from acceleration of certain vesting requirements associated with Southern Bay's equity incentive plan which was eliminated pursuant to the Merger, and stock bonuses issued to employees of GeoResources.
(2)
Costs associated with sold operations.
About GeoResources, Inc.
On April 17, 2007, the Company completed its mergers with Southern Bay Oil & Gas L.P. and Chandler Energy, LLC.  The management of Southern Bay and Chandler became the principal management of the combined entity.  Corporate headquarters have been relocated to Houston, Texas.  The Company conducts its exploration development and production operations through wholly owned subsidiaries.  Activities in the Southern Region are conducted through Southern Bay Energy, LLC, located in Houston, Texas and Northern Region operations are conducted through G3 Energy LLC, located in Denver, Colorado.  The Company also maintains a regional office in Williston, North Dakota.  For more information, visit our websites at www.geoi.net and www.southernbayenergy.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 the SEC reports of the Company, particularly its Form 10-KSB for the Fiscal Year Ended December 31, 2006, for meaningful cautionary language disclosure.
6
GEORESOURCES, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30,
December 31,
2007
2006
ASSETS
Current assets:
Cash
$        14,558,545
$          6,216,822
Accounts receivable:
Oil and gas revenues
14,764,216
7,201,902
Joint interest billings and other
4,866,720
2,294,237
Accounts receivable from affiliated partnerships
4,095,231
1,742,174
Notes receivable-current portion
860,000
-
Prepaid expenses and other
590,792
352,515
Total current assets
39,735,504
17,807,650
Oil and gas properties, successful efforts method:
Proved properties
81,731,445
34,204,118
Unproved properties
3,893,389
1,643,041
Office and other equipment
950,707
292,297
Land
96,462
96,462
86,672,003
36,235,918
Less accumulated depreciation, depletion and amortization
(7,868,002)
(5,007,095)
Net property and equipment
78,804,001
31,228,823
Other assets:
Equity in oil and gas limited partnerships
3,362,637
1,517,430
Notes receivable and other
1,374,089
113,123
$      123,276,231
$        50,667,026
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$          7,134,643
$          5,225,291
Accounts payable to affiliated partnerships
6,458,010
2,201,141
Revenues and royalties payable
16,200,746
7,347,702
Drilling advances
788,331
2,120,770
Accrued expenses payable
1,432,302
915,445
Commodity hedges
995,045
1,685,938
Total current liabilities
33,009,077
19,496,287
Long-term debt
-
5,000,000
Deferred income taxes
3,344,203
32,535
Asset retirement obligations
5,173,454
2,478,205
Stockholders' equity:
Common stock, par value $.01 per share; authorized
100,000,000 shares; issued and outstanding: 14,572,977
shares in 2007 and 4,858,000 shares in 2006
145,730
48,580
Additional paid-in capital
78,622,213
16,848,643
Accumulated other comprehensive income
(991,899)
(1,679,388)
Retained earnings
3,973,453
8,442,164
Total stockholders' equity
81,749,497
23,659,999
$      123,276,231
$        50,667,026
7
GEORESOURCES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2007
2006
2007
2006
Revenue:
Oil and gas revenues
$      7,060,314
$    3,254,445
$     10,597,808
$    7,025,470
Partnership management fees
256,184
92,354
411,820
183,538
Property operating income
444,532
204,227
682,290
398,470
Gain (loss) on sale of property and equipment
(15,218)
314,840
(15,218)
314,840
Partnership income (loss)
153,601
71,944
213,347
80,299
Interest and other
385,275
158,546
512,198
261,027
Total revenue
8,284,688
4,096,356
12,402,245
8,263,644
Expenses:
Lease operating expense
2,254,861
910,701
3,315,270
1,874,777
Severance taxes
533,799
160,541
802,741
482,049
Re-engineering and workovers
415,340
130,664
433,072
178,474
Exploration
-
431,521
-
431,521
General and administrative expense
2,456,542
725,712
3,247,259
1,253,135
Depreciation, depletion, and amortization
1,932,340
783,423
2,860,908
1,440,200
Hedge ineffectiveness
(7,434)
(206,917)
(3,404)
(177,229)
Interest
199,174
22,749
355,326
38,116
Total expense
7,784,622
2,958,394
11,011,172
5,521,043
Income before income taxes
500,066
1,137,962
1,391,073
2,742,601
Income taxes:
Current
94,169
-
96,031
-
Deferred
1,755,328
-
1,757,668
-
1,849,497
-
1,853,699
-
Net income (loss)
$    (1,349,431)
$    1,137,962
$        (462,626)
$    2,742,601
Net income (loss) per share (basic and diluted)
$             (0.09)
$             0.23
$              (0.05)
$             0.56
Weighted average shares outstanding
14,572,977
4,858,000
10,106,159
4,858,000
8