This excerpt taken from the GEOI 8-K filed Jul 24, 2009.
NOTE B: Basis of Presentation
Historical financial statements of financial position, results of operations and cash flows required by generally accepted accounting principles in the United States of America are not presented, since GeoResources acquired only producing properties from SBE Partners. As a result, the general and administrative expenses, interest expense, income tax provision and depreciation, depletion and amortization expense of SBE Partners are not relevant to the acquisition of the properties by GeoResources. Accordingly, the statements of revenues and direct operating expenses are presented in lieu of the financial statements required under Rule 3-05 of Securities and Exchange Commission Regulation S-X.
The accompanying statements of revenues and direct operating expenses exclude depletion and amortization, allocated general and administrative expense, income taxes, interest expense and other income and expense, since these properties represent only a portion of the business, and the expenses incurred and are not necessarily indicative of the expenses to be incurred by GeoResources.