GEORESOURCES INC

On August 1, 2012, GeoResources, Inc., a Colorado corporation (the “Company”), completed the previously announced merger with Leopard Sub I, Inc. (“Merger Sub”), a Colorado corporation and wholly-owned subsidiary of Halcón Resources Corporation, a Delaware corporation (“Halcón”), whereby Merger Sub merged with and into the Company with the Company continuing as the surviving corporation (the “Merger”). Immediately following the effective time of the Merger, the Company merged (the “Second Merger”) with and into Leopard Sub II, LLC (“Second Merger Sub”), a Delaware limited liability company and wholly-owned subsidiary of Halcón with Second Merger Sub continuing as the surviving entity and a wholly-owned subsidiary of Halcón. Following the effectiveness of the Second Merger, the Second Merger Sub amended its certificate of formation and changed its name to Halcón Geo Holdings LLC. The Merger and the Second Merger were effected pursuant to that certain Agreement and Plan of Merger, dated as of April 24, 2012 and as amended on June 22, 2012, by and among the Company, Halcón, Merger Sub and Second Merger Sub.

Basic earnings per share is computed by dividing net income attributable to common shares by the basic weighted-average shares of common stock outstanding during the period. The calculation of diluted earnings per share is similar to basic, except the denominator includes the effect of dilutive common stock equivalents. Dilutive common stock equivalents consist of unvested restricted stock unit awards, warrants to purchase common stock, and outstanding stock options. The number of potential common shares outstanding relating to stock options, warrants to purchase common stock, and restricted stock units is computed using the treasury stock method. Net income per share computations reconciling basic and diluted net income for the three and six months ended June 30, 2012 and 2011 consist of the following (in thousands, except per share data):

On July 31, 2012, the stockholders of the GeoResources and Halcón Resources Corporation (“Halcón”) approved the merger of GeoResources into a subsidiary of Halcón. The closing of the transaction occurred on August 1, 2012 and the Company’s stockholders received $20 in cash and 1.932 shares of Halcón’s common stock for each share of the Company’s common stock. The cash consideration aggregated approximately $531.5 million, and Halcón issued approximately 51.3 million shares of common stock to the stockholders of the Company. In addition, Halcón assumed outstanding warrants of the Company providing for the issuance of 1,184,966 shares of Halcón’s common stock upon exercise. Upon the closing of the merger, Halcón paid the outstanding balance under our credit facility with Wells Fargo Bank, N.A. in full. Once the balance was paid, the credit facility was terminated.

On July 16, 2012, a settlement agreement was entered into, subject to the court’s approval, regarding the settlement of the action styled Yost v. GeoResources, Inc. et al., Case No. 1:12-CV-01307-MSK-KMT, pending in the United States District Court for the District of Colorado (the “Federal Action”), which was filed on behalf of a putative class of GeoResources stockholders against GeoResources, the GeoResources board of directors and, in certain instances, Halcón and certain subsidiaries of Halcón as aiders and abettors. Pursuant to such settlement, Halcón and GeoResources agreed to make certain supplemental disclosures regarding the merger and to provide additional disclosures to their stockholders, which disclosures were included in a Form 8-K filed with the U.S. Securities and Exchange Commission on July 18, 2012. Objections to the settlement agreement are scheduled to be submitted on August 15, 2012 to the federal court in Colorado and a hearing on the settlement agreement is expected to be scheduled at a later date.

General and Administrative Expenses. G&A increased $7.5 million or 134% in the first six months of 2012 compared to the same period in 2011 due to increased non-cash equity based compensation, increases in personnel and office facilities, and increases in merger related costs. As our business has expanded, we have also expanded our staff and office space. Included in G&A expense for the six months ended June 30, 2012 and 2011 are non-cash charges related to our stock-based compensation of $2.4 million and $810,000, respectively. The increase in non-cash charges related to stock-based compensation is a result of the issuance of restricted stock units. Also, we incurred professional fees related to the Halcón merger of $4.0 million during the six months ended June 30, 2012.