Merger-Change in Management, Control and Business Strategy
On April 17, 2007, the Company completed certain merger transactions (“Merger”) among the Company, Southern Bay and PICA. The Merger provided, in substance, for the mergers of the businesses of Southern Bay and PICA, two independent oil and gas entities, into the Company, and further included working interests in oil and gas properties. A total of 10,690,000 shares of the Company’s common stock were issued in connection with the Merger. Prior to the Merger, neither Southern Bay nor PICA nor any of their owners or affiliates had any material relationship with the Company or any of its associates, or any director or officer of the Company, or any affiliate of any such director or officer. The Merger resulted in a change of control of the Company as its board of directors and executive officers consist mostly of persons formerly affiliated with Southern Bay and PICA.
Under generally accepted accounting principles, Southern Bay was deemed to have acquired the Company, PICA and certain oil and gas properties. Southern Bay accounted for the transactions using the purchase method of accounting for business combinations. Accordingly, the historical financial statements presented for the Company are those of Southern Bay, back to its inception in 2004, with the Company, PICA and the property treated as purchased upon closing.
General
We are an independent oil and gas company engaged in the acquisition and development of oil and gas reserves through an active and diversified program which includes purchases of reserves, re-engineering, development and exploration activities, currently focused in Texas, Louisiana, North Dakota, Montana and Colorado. As further discussed herein, future growth in assets, earnings, cash flows and share values are dependent upon our ability to acquire, discover and develop commercial quantities of oil and gas reserves that can be produced at a profit and assemble an oil and gas reserve base with a market value exceeding its acquisition, development and production costs.
We continue to implement our business strategy to acquire, discover and develop oil and gas reserves and achieve continued growth. Management continues to focus on reducing operating and administrative costs on a per unit basis. In addition, we have attempted to mitigate downward price volatility by the increased use of commodity price hedging, and have placed an increased emphasis on development drilling and exploration. The current high oil and gas price environment is unprecedented, and management cannot predict that these historically high prices will be available on an ongoing basis. Following is a brief outline of our current plans.
| (1) | Acquire oil and gas properties with significant producing reserves and development and exploration potential. |
| (2) | Solicit industry or institutional partners, on a promoted basis for selected acquisitions, in order to diversify, reduce average cost and generate operating fees. |
| (3) | Implement re-engineering and development programs within existing fields. |
14
Table of Contents
| (4) | Pursue exploration projects and increase direct participation over time. Solicit industry partners, on a promoted basis, for internally generated projects. |
| (5) | Selectively divest assets to upgrade the property portfolio and to lower corporate wide “per-unit” operating and administrative costs and focus on existing fields and new projects with greater development and exploitation potential. |
| (6) | Continue activities directed toward reducing per-unit operating and general and administrative costs on a long-term sustained basis. |
| (7) | Obtain additional capital through the issuance of equity securities and/or through debt financing. |
While the impact and success of our plans cannot be predicted with accuracy, management’s goal is to replace production and further increase our reserve base at an acquisition or finding cost that will yield attractive rates of return and increase shareholder value.
In addition to our fundamental business strategy, we intend to actively pursue corporate acquisitions or mergers as a means of continued growth, increasing value and creating liquidity for our equity holders. Management believes that opportunities may become available to acquire corporate entities or otherwise effect business combinations. The primary financial considerations in the evaluation of any such potential transaction include, but are not limited to: (1) the ability of small capitalization oil and gas companies to gain recognition and favor in the public markets, (2) share appreciation potential, (3) shareholder liquidity, and (4) capital formation and cost of capital to effect growth.
Oil and Gas Properties
We use the Successful Efforts method of accounting for oil and gas operations. Under this method, costs to acquire oil and gas properties, drill successful exploratory wells, drill and equip development wells and install production facilities are capitalized. Exploration costs, including unsuccessful exploratory wells and geological and geophysical costs are charged to operations as incurred. Depreciation, depletion and amortization (“DD&A”) of the capitalized costs associated with proved oil and gas properties are computed using the unit-of-production method, at the field level, based on proved reserves. Oil and gas properties are periodically assessed for impairment and generally written down to estimated fair value if the sum of estimated future undiscounted pretax cash flows, based on engineering and expected economic circumstances, is less than the carrying value of the asset. The fair value of impaired assets is generally determined using market values, if known, or using reasonable projections of production, prices and costs and discount rates commensurate with the risks involved.
Recent Property Acquisition
As more fully discussed in Note B to the consolidated financial statements in Part I of this Form 10-QSB, on October 16, 2007, we acquired the limited partnership interest in an affiliated limited partnership from a non affiliated limited partner for $91.1 million. As a result, we then owned 100% of this limited partnership which held oil and gas property interests in Louisiana, the Gulf Coast, South Texas, the Permian Basin and the Black Warrior Basin. We subsequently dissolved the partnership and integrated the oil and gas properties into our exiting operations. As part of our ongoing property review, we divested certain properties and intend to divest certain additional properties that no longer meet our primary objectives.
In January 2007, we acquired properties located in the Giddings Field of the Austin Chalk trend of Texas. In conjunction with this acquisition, a partnership was formed with a large institutional investor as limited partner. A wholly-owned subsidiary of the Company acquired both a direct 8% working interest and a 2% general partner interest in this partnership. Our share of the acquisition purchase price of $82 million was $6.6 million, and our general partner contribution was $1.6 million. These amounts were funded with additional capital contributions of $5 million from former Southern Bay partners, borrowings under our bank credit agreement of $3 million and working capital of $196,000.
In February 2008, we acquired producing properties located in the Williston Basin of North Dakota and Montana for a purchase price of $7.9 million. The properties will be operated by the Company.
15
Table of Contents
Results of Operations
Three months ended March 31, 2008, compared to three months ended March 31, 2007
The Company recorded net income of $4,224,683 and $789,350 for three months ended March 31, 2008 and 2007, respectively. This $3,435,333 increase in net income resulted primarily from the following factors:
Net amounts contributing to increase (decrease) in net income (in 000s):
| Oil and gas sales |
$ | 18,925 | ||
| Lease operating expenses |
(4,731 | ) | ||
| Production taxes |
(1,621 | ) | ||
| Re-engineering and workovers |
(619 | ) | ||
| General and administrative expenses (“G&A”) |
(956 | ) | ||
| Depletion, depreciation and amortization expense (“DD&A”) |
(2,948 | ) | ||
| Net interest income (expense) |
(1,317 | ) | ||
| Hedge ineffectiveness |
(1,514 | ) | ||
| Other income - net |
808 | |||
| Income before income taxes |
6,027 | |||
| Provision for income taxes |
(2,592 | ) | ||
| Net income |
$ | 3,435 | ||
The following discussion applies to the changes shown above.
Net revenues from oil and gas sales increased $18,925,000, or 535%. Properties acquired in the Merger and from AROC Energy LP accounted for $3,185,000 and $13,133,000 of the increase, respectively. The remaining $2,607,000 increase resulted from production increases due to re-engineering and workovers, as well as to increased commodity prices. Price and production comparisons are set forth in the following table. Properties acquired in the Merger accounted for increased production of approximately 57,000 Mcf of gas and approximately 36,000 barrels of oil during the first quarter of 2008. Properties acquired from AROC Energy LP accounted for increased production of approximately 420,000 Mcf of gas and approximately 108,000 barrels of oil during the first quarter of 2008.
| Percent increase |
Three Months Ended March 31, | ||||||||
| (decrease) | 2008 | 2007 | |||||||
| Gas Production (MMcf) |
321 | % | 809 | 192 | |||||
| Oil Production (MBbls) |
335 | % | 200 | 46 | |||||
| Barrel of oil equivalent (MBOE) |
329 | % | 335 | 78 | |||||
| Average Price Gas Before Hedge Settlements (per Mcf) |
20 | % | $ | 7.75 | $ | 6.48 | |||
| Average Price Oil Before Hedge Settlements (per Bbl) |
60 | % | $ | 91.37 | $ | 57.20 | |||
| Average Realized Price Gas (per Mcf) |
27 | % | $ | 7.73 | $ | 6.10 | |||
| Average Realized Price Oil (per Bbl) |
56 | % | $ | 81.00 | $ | 51.82 | |||
Lease operating expenses increased from approximately $1,060,000 in the first quarter of 2007 to $5,791,000 for the same period in 2008, an increase of $4,731,000 or 446%. Properties acquired in the Merger and from AROC Energy LP accounted for $1,052,000 and $3,702,000 of the increase, respectively. On a unit-of-production basis, barrel of oil equivalent (“BOE”) costs increased by $3.70 or 27% as a result of higher costs due to an unprecedented demand for personnel, materials, services and rigs caused by high commodity prices. Re-engineering and workover costs increased by $619,000 from $78,000 to $697,000, due to increased emphasis on restoring and enhancing existing production capabilities. Production taxes increased by $1,621,000 or 446%, due to increased production volumes and revenues.
G&A increased $956,000 due primarily to overall business expansion related to the Merger.
16
Table of Contents
The increase in DD&A expense attributable to the properties acquired in the Merger and from AROC Energy LP was $386,000 and $2,292,000, respectively. The remaining increase of $270,000 was due to property acquisitions by Southern Bay prior to the Merger, partially offset by lower net capitalized costs on other properties.
Interest expense increased by $1,413,000 due to higher debt levels in the first quarter of 2008 compared to the same period of 2007. As of March 31, 2008 and 2007, we had outstanding debt of $86,000,000 and $8,000,000, respectively. During the first quarter of 2008 and 2007, our average outstanding debt was approximately $90,000,000 and $4,000,000, respectively. Interest income increased by $96,000 in the first quarter of 2008 over the same period of 2007, due to larger invested cash balances.
In the first quarter of 2008 loss from hedge ineffectiveness was $1,518,000, compared to $4,000 for the same period in 2007. This resulted from an increase in the liability associated with the mark-to-market valuation of our hedge contracts. Those increases are due to significantly higher oil and natural gas prices and are partially offset by monthly hedge settlement payments.
Other income increased by $808,000 in the first quarter of 2008 from the same period in 2007. This was due to increased partnership management fees of $157,000, increased property operating income of $76,000, increased partnership income of $165,000 as well as nonrecurring income from a gain on property sales in the first quarter of 2008 of $410,000.
Income tax expense for the first quarter of 2008 was $2,596,000 compared to $4,000 for the same period in 2007. As previously stated, the 2007 financial statements, as presented herein, are those of Southern Bay which, as a partnership, was not generally subject to income taxes.
Impact of Property Acquisitions and Development
We estimate that production volumes for the year 2008 will approximate 708,000 Bbls of oil and 2,654,000 Mcf of natural gas, representing an increase of 99% and 61%, respectively, over 2007 net of certain divestitures. These estimates are predicated on the results of operations for the three months ended March 31, 2008, and production estimates of expected divestitures. These projected increases are a direct result of acquisition and development activities. In connection with property acquisitions, we generally implement a capital expenditures program; directly related to existing producing wells and those capable of production; which we refer to as “re-engineering activities,” designed to increase production and forestall natural or mechanical production declines, as well as lower recurring expenses. Thereafter, we conduct detailed field studies designed to isolate development and exploration opportunities, if any. We have identified numerous projects in our existing property portfolio related to proved behind-pipe and undeveloped reserves and expect to define additional development and exploratory potential. Net future cash flows could be favorably affected by additional development potential and also by further price improvement and/or reductions to per-unit operating costs. No assurance can be given, however, that we will be able to successfully and economically develop additional reserves.
Impact of Changing Prices and Costs
Our revenues and the carrying value of our oil and gas properties are subject to significant change due to changes in oil and gas prices. As demonstrated historically, prices are volatile and unpredictable. Oil prices increased appreciably during 2007 and again in recent months in 2008. Average realized oil prices of $81.00 per Bbl, net of hedges, for the three months ended March 31, 2008, were 56% higher than for the comparable period in 2007 and, in recent weeks, prices have reached an all time high. Average natural gas prices, net of hedges, increased 27% in the first quarter of 2008 over the same period of 2007. Such average realized prices for the three months ended March 31, 2008, were affected by certain hedging activities. Should significant price decreases occur or should prices fail to remain at levels which will facilitate repayment of debt and reinvestment of cash flow to replace current production, we could experience difficulty in developing our assets and continuing our growth.
17
Table of Contents
Hedging Activities
In an attempt to reduce our sensitivity to oil and gas price volatility and secure favorable debt financing, we have and will likely continue to enter into hedging transactions which may include fixed price swaps, price collars, puts and other derivatives. Management believes our hedging strategy will result in greater predictability of internally generated funds, which can be dedicated to capital development projects and corporate obligations.
We do not engage in speculative trading activities and do not hedge all available or anticipated quantities. Our strategy with regard to hedging includes the following factors:
| (1) | Secure and maintain favorable debt financing terms; |
| (2) | Minimize price volatility and generate internal funds available for capital development projects and additional acquisitions; |
| (3) | “Lock-in” growth in revenues, cash flows and profits for financial reporting purposes; and |
| (4) | Allow certain quantities to float, particularly in months with high price potential. |
We believe that speculation and trading activities are inappropriate for us, but further believe appropriate management of realized prices is an integral part of managing our business strategy.
Administrative and Operating Costs
We continue to focus on cost-containment efforts regarding lower per-unit administrative and operating costs. However, we must continue to attract and retain competent management, technical and administrative personnel in pursuing our business strategy and fulfill our contractual obligations.
Liquidity and Capital Resources
We expect to finance our future acquisition, development and exploration activities through working capital, cash flow from operating activities, our bank credit facility, sale of non-strategic assets, various means of corporate and project finance and possibly through the issuance of additional debt and equity securities. In addition, we intend to continue to subsidize our drilling activities through the sale of participations to industry partners on a promoted basis, whereby we will earn working interests in reserves and production greater than our proportionate capital cost. Financing activities in 2008 have resulted in a net reduction of debt of $10 million. At December 31, 2007, outstanding debt was $96 million. During 2007, we borrowed $3,000,000, assumed $1,800,000 in the Merger and repaid the entire balance outstanding of $9.8 million in late June 2007. In October 2007, we borrowed $96 million to finance a major acquisition as discussed above in Note B.
We intend to continue to divest certain oil and gas properties, but at present we cannot predict the timing of any remaining divestitures or estimated proceeds there from with certainty. In addition, we have developed a $61.5 million capital expenditure budget for the two-year period that commenced on October 1, 2007. At present, we believe that proceeds from divestitures and net cash flows from operating activities are sufficient to continue to fund projected capital expenditures and also reduce our debt balances, but, we could incur additional debt in connection with further acquisition and development activities or corporate acquisitions or mergers, if any.
Credit Facility
At March 31, 2007, we had a $9.5 million borrowing base, with available borrowing capacity of $1.5 million, in accordance with our revolving Credit Agreement with our bank. We currently have a borrowing base of $95 million and, as a result of the AROC Energy LP acquisition, have an outstanding principal balance of $86 million. Our remaining borrowing capacity currently is $9 million.
Cash Flows from Operating Activities
For the three months ended March 31, 2008, our net cash provided by operating activities was $7.2 million, up by $3.7 million from the same period in 2007, due primarily to increases in production resulting from acquisition and development activities, partially offset by increased general and administrative expenses. We expect recent acquisitions and development activities to significantly increase cash provided by operating activities throughout the remainder of 2008, assuming commodity prices do not decrease substantially.
18
Table of Contents
Cash Flows from Investing Activities
Cash applied to oil and gas capital expenditures for the three months ended March 31, 2008 and 2007, was $13.0 million and $6.9 million, respectively. In 2008, we also realized cash of $8.5 million from the sale of properties. In 2007, we invested $1.6 million in an oil and gas limited partnership for which we are the general partner. Capital expenditures for 2008 were financed with equity and operating cash flow. We expect to spend approximately $62 million in capital expenditures in 2008 and 2009.
During the remainder of 2008, we also expect to incur certain capital expenditures related to our existing portfolio of properties for re-engineering facilities (surface and down-hole), restoring shut-in wells to production and for recompletions. In addition, we expect to drill certain development wells in existing fields. We also expect to make additional capital expenditures during 2008 to maintain leases and complete the interpretation of 3-D seismic data associated with certain exploratory and development projects. We will continue our practice of soliciting partners, on a promoted basis, for higher risk projects.
2008-2009 Capital Budget
Based solely on our existing portfolio of properties and projects, we presently expect to incur the following capital expenditures during 2008 and 2009:
| ($ Millions) | |||
| Southern District: |
|||
| Austin Chalk drilling and development (1) (2) |
$ | 7.2 | |
| Other development drilling (2) |
2.8 | ||
| Waterflood expansion |
1.3 | ||
| Exploratory drilling (3) |
7.8 | ||
| Re-engineering (4) |
3.2 | ||
| Acreage, seismic and other (5) |
3.5 | ||
| Northern District: |
|||
| Horizontal development drilling (2) (6) |
11.8 | ||
| Other development drilling |
1.7 | ||
| Waterflood and associated drilling |
9.7 | ||
| Bakken Shale drilling (7) |
9.0 | ||
| Re-engineering (4) |
1.0 | ||
| Acreage, seismic and other (5) |
2.5 | ||
| Total (8) |
$ | 61.5 | |
19
Table of Contents
Notes:
| 1) | Continuation of ongoing horizontal drilling and development program with an affiliated institutional partnership. The program includes ten scheduled wells with one drilling rig with certain other recompletion and frac expenditures intended to further increase production in producing wells. |
| 2) | Includes both proved undeveloped and non-proved reserve potential. |
| 3) | Principally South Louisiana and Gulf Coast Texas. |
| 4) | Includes activities related to existing fields intended to enhance production and lower operating expenses. These expenditures include flowlines, facilities, compression, down-hole lift methods, recompletions and side-track drilling. We currently have 70 such projects including multiple wells within ten fields budgeted for 2008. |
| 5) | Initial funds allocated for further expansion of acreage and prospect inventory. |
| 6) | Includes eight horizontal development wells within existing fields where we have interests ranging from 66%—100%. |
| 7) | Includes ten wells where our working interest is 10.5% and one well with a 5.25 % interest. Also includes three wells where our working interest is less than 1% but where, in the opinion of management, such participation should provide valuable technical data related to the drilling operations and reservoir characteristics. Also includes one Bakken Shale test in Montana where we presently hold a 50% working interest. |
| 8) | In summary, our current scheduled drilling activities include diversified opportunities intended to develop reserves and increase production. The current budget includes: i) 29 wells which have assigned proved undeveloped reserves and the potential for the development of non-proved reserves; ii) 10 wells which do not have proved reserves assigned but have the potential of developing a resource gas play in Colorado; iii) two potentially high impact exploratory wells at Quarantine Bay, Plaquemines Parish, Louisiana; iv) 15 Bakken Shale wells; and v) one well intended to test an emerging shale play in our Northern Region. |
The budget, as well as the timing of expenditures, is subject to change as we re-evaluate alternative projects in connection with our recent major acquisition and further expand our portfolio. We expect that the majority of expenditures will occur during 2008, but certain projects may extend into 2009, specifically including acreage acquisition, projected waterflood and horizontal drilling projects. This budget may be accelerated pending drilling and service rig availability and adequate staffing to effectively manage activities and control costs. In addition, certain expenditures may be deferred in favor of new opportunities.
We believe projected expenditures will result in increased production, cash flows and reserve value and will further expose us to potential upside from exploration. We further believe any deferral of certain projects will not result in any material losses. Should we be unable to acquire new properties, capital expenditures associated with existing properties could be increased.
Cash Flows from Financing Activities
In the first three months of 2008, financing activities used cash of $10.0 million in the reduction of our long-term debt.
| Item 3. | Controls and Procedures |
Our principal executive officer, Frank A. Lodzinski, and our principal financial officer, Howard E. Ehler, have implemented or caused to be implemented, our disclosure controls and procedures to ensure that material information relating to the Company is communicated adequately to our chief executive officer and our chief financial officer through the end of the reporting period addressed by this report. As of the end of the reporting period reflected herein, our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures, and based on such evaluation our chief executive officer and chief financial officer have concluded that the our disclosure controls and procedures, as of the end of the period covered by this report, are effective in alerting them on a timely basis to material information relating to the Company that is required to be included in our reports filed or submitted under the Securities Exchange Act of 1934.
20
Table of Contents
| Item 1. | Legal Proceedings |
We are not a party to, nor are any of our properties subject to, any material pending legal proceedings. We know of no material legal proceedings contemplated or threatened against the Company.
| Item 6. | Exhibits |
(a) Exhibits.
| 3.1 | Amended and Restated Articles of Incorporation and amendments thereto. (1) | |
| 3.2 | Bylaws, as amended March 2, 2004, incorporated by reference to Exhibit 3.2 of Registrant’s Form 10-KSB for the year ended December 31, 2003. | |
| 10.15 | Agreement and Plan of Merger dated September 14, 2006, among GeoResources, Inc., Southern Bay Energy Acquisition, LLC, Chandler Acquisition, LLC, Southern Bay Oil & Gas, L.P., Chandler Energy, LLC and PICA Energy, LLC (including Amendment No. 1 dated February 16, 2007). Incorporated by reference as Annex A to the Registrant’s Definitive Proxy Statement dated February 23, 2007 and filed with the Commission on February 23, 2007. | |
| 10.19 | June 7, 2001 Lease Agreement by and between AROC, Inc. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090. (3) | |
| 10.20 | First Amendment to June 7, 2001 Lease Agreement by and between AROC, Inc. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, dated November 10, 2003. (3) | |
| 10.21 | Assignment and Assumption by Southern Bay Energy, L.L.C. of June 7, 2001 Lease Agreement by and between AROC, Inc. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, dated April 19, 2005. (3) | |
| 10.22 | Unconditional Guaranty of June 7, 2001 Lease Agreement by and between Southern Bay Energy, L.L.C. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, dated April 19, 2005. (3) | |
| 10.23 | Second Amendment to June 7, 2001 Lease Agreement by and between Southern Bay Energy, L.L.C. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, dated April 19, 2005. (3) | |
| 10.24 | Third Amendment to June 7, 2001 Lease Agreement by and between Southern Bay Energy, L.L.C. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, dated April 9, 2007. (3) | |
| 10.25 | December 22, 2004 Credit Agreement by and between Southern Bay Oil & Gas, L.P. as borrower and Wachovia Bank, National Association. (3) | |
| 10.26 | January 31, 2000 Office Building Lease by and between 475-17th Street, CO. and Collis P. Chandler III for 475 17th Street Building, Suite 860, 475 17th Street, Denver, Colorado 80202. (3) | |
| 10.27 | First Amendment to January 31, 2000 Office Building Lease by and between 475-17th Street, CO. and Collis P. Chandler III for 475 17th Street, Suite 860, Denver, Colorado 80202, dated September 28, 2001. (3) | |
| 10.28 | Second Amendment to January 31, 2000 Office Building Lease by and between 475-17th Street, CO. and Collis P. Chandler III for 475 17th Street, Suite 860, Denver, Colorado 80202, dated October 23, 2002. (3) | |
| 10.29 | Third Amendment to January 31, 2000 Office Building Lease by and between 475-17th Street, CO. and Collis P. Chandler III for 475 17th Street, Suite 860, Denver, Colorado 80202, dated June 28, 2004. (3) | |
21
Table of Contents
| 10.30 | Credit Agreement dated September 26, 2007 between the Registrant and Wachovia Bank National Association. (2) | |
| 10.32 | Limited Partner Interest Purchase and Sale Agreement dated October 16, 2007 between the Registrant and TIFD III-X, LLC (2) | |
| 10.33 | Amended and Restated Credit Agreement dated October 16, 2007 between the Registrant and Wachovia Bank National Association (2) | |
| 14.1 | Code of Business Conduct and Ethics adopted March 2, 2004, incorporated by reference to Exhibit 14.1 of Registrant’s Form 10-KSB for fiscal year ended December 31, 2003. | |
| 21.1 | Subsidiaries of the Registrant. (3) | |
| 31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act. (1) | |
| 31.2 | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act. (1) | |
| 32.1 | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act. (1) | |
| 32.2 | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act. (1) | |
| (1) | Filed herewith |
| (2) | Filed with the Registrant’s Form 10-QSB for the quarter ended September 30, 2007. |
| (3) | Filed with the Registrant’s Form 10-QSB for the quarter ended June 30, 2007. |
22
Table of Contents
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| GEORESOURCES, INC. | ||
| May 13, 2008 | ||
| /s/ Frank A. Lodzinski | ||
| Frank A. Lodzinski | ||
| Chief Executive Officer (Principal Executive Officer) | ||
| /s/ Howard E. Ehler | ||
| Howard E. Ehler | ||
| Chief Financial Officer (Principal Accounting Officer) | ||
23
Table of Contents
EXHIBIT INDEX
(b) Exhibits.
| 3.1 | Amended and Restated Articles of Incorporation and amendments thereto. (1) | |
| 3.2 | Bylaws, as amended March 2, 2004, incorporated by reference to Exhibit 3.2 of Registrant’s Form 10-KSB for the year ended December 31, 2003. | |
| 10.15 | Agreement and Plan of Merger dated September 14, 2006, among GeoResources, Inc., Southern Bay Energy Acquisition, LLC, Chandler Acquisition, LLC, Southern Bay Oil & Gas, L.P., Chandler Energy, LLC and PICA Energy, LLC (including Amendment No. 1 dated February 16, 2007). Incorporated by reference as Annex A to the Registrant’s Definitive Proxy Statement dated February 23, 2007 and filed with the Commission on February 23, 2007. | |
| 10.19 | June 7, 2001 Lease Agreement by and between AROC, Inc. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090. (3) | |
| 10.20 | First Amendment to June 7, 2001 Lease Agreement by and between AROC, Inc. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, dated November 10, 2003. (3) | |
| 10.21 | Assignment and Assumption by Southern Bay Energy, L.L.C. of June 7, 2001 Lease Agreement by and between AROC, Inc. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, dated April 19, 2005. (3) | |
| 10.22 | Unconditional Guaranty of June 7, 2001 Lease Agreement by and between Southern Bay Energy, L.L.C. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, dated April 19, 2005. (3) | |
| 10.23 | Second Amendment to June 7, 2001 Lease Agreement by and between Southern Bay Energy, L.L.C. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, dated April 19, 2005. (3) | |
| 10.24 | Third Amendment to June 7, 2001 Lease Agreement by and between Southern Bay Energy, L.L.C. and BGK Texas Property Management, Inc. for 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, dated April 9, 2007. (3) | |
| 10.25 | December 22, 2004 Credit Agreement by and between Southern Bay Oil & Gas, L.P. as borrower and Wachovia Bank, National Association. (3) | |
| 10.26 | January 31, 2000 Office Building Lease by and between 475-17th Street, CO. and Collis P. Chandler III for 475 17th Street Building, Suite 860, 475 17th Street, Denver, Colorado 80202. (3) | |
| 10.27 | First Amendment to January 31, 2000 Office Building Lease by and between 475-17th Street, CO. and Collis P. Chandler III for 475 17th Street, Suite 860, Denver, Colorado 80202, dated September 28, 2001. (3) | |
| 10.28 | Second Amendment to January 31, 2000 Office Building Lease by and between 475-17th Street, CO. and Collis P. Chandler III for 475 17th Street, Suite 860, Denver, Colorado 80202, dated October 23, 2002. (3) | |
| 10.29 | Third Amendment to January 31, 2000 Office Building Lease by and between 475-17th Street, CO. and Collis P. Chandler III for 475 17th Street, Suite 860, Denver, Colorado 80202, dated June 28, 2004. (3) | |
| 10.30 | Credit Agreement dated September 26, 2007 between the Registrant and Wachovia Bank National Association. (2) | |
24
Table of Contents
| 10.31 | Limited Partner Interest Purchase and Sale Agreement dated October 16, 2007 between the Registrant and TIFD III-X, LLC (2) | |
| 10.32 | Amended and Restated Credit Agreement dated October 16, 2007 between the Registrant and Wachovia Bank National Association (2) | |
| 10.33 | Amended and Restated Credit Agreement dated October 16, 2007 between the Registrant and Wachovia Bank National Association (2) | |
| 14.1 | Code of Business Conduct and Ethics adopted March 2, 2004, incorporated by reference to Exhibit 14.1 of Registrant’s Form 10-KSB for fiscal year ended December 31, 2003. | |
| 21.1 | Subsidiaries of the Registrant. (3) | |
| 31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act. (1) | |
| 31.2 | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act. (1) | |
| 32.1 | Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act. (1) | |
| 32.2 | Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act. (1) | |
| (1) | Filed herewith. |
| (2) | Filed with the Registrant’s Form 10-QSB for the quarter ended September 30, 2007. |
| (3) | Filed with the Registrant’s Form 10-QSB for the quarter ended June 30, 2007. |
25