June 24, 2008
Mexco Energy Corporation Reports Record Quarterly Earnings and Profitable Fiscal 2008
MIDLAND, Texas, June 24 /PRNewswire-FirstCall/ -- Mexco Energy Corporation reported results on its Annual Report on Form 10-K to the Securities and Exchange Commission for the fiscal year ended March 31, 2008.
The Company reported net income of $466,480, or $.27 per diluted share, for the quarter ending March 31, 2008, the Company's fourth quarter of fiscal 2008. This resulted in net income of $713,644, or $.40 per diluted share, for fiscal year 2008, a 17% increase over fiscal 2007.
Operating revenues in the fourth quarter were a record high of $1,245,653, resulting in the Company ending fiscal 2008 with operating revenues of $3,899,408, compared to $2,971,717 in fiscal 2007, an increase of 31%. This is partially the result of revenue generated from the $1,850,000 royalty interest acquisition in the Barnett Shale gas field on December 31, 2007, the largest acquisition of a property in the Company's history. Revenues from oil and gas royalty interests, including this acquisition, accounted for approximately 29% of the Company's revenues for fiscal 2008. On June 6, 2008, Mexco purchased additional Barnett Shale royalties for $429,000.
The Company's total estimated proved reserves at March 31, 2008 were 7.857 Bcf of natural gas and 217,000 barrels of oil and natural gas liquids, and its estimated present value of proved reserves was approximately $41 million based on estimated future net revenues discounted at 10% per annum, pricing and other assumptions set forth in "Item 2 - Properties" of the Company's Form 10-K. During fiscal 2008, the Company added proved reserves of 794,000 Mcfe through extensions and discoveries, added 584,000 Mcfe through acquisitions and had upward revisions of previous estimates of 43,000 Mcfe.
For fiscal 2008, gas reserves constituted approximately 86% of the Company's total proved reserves and approximately 65% of the Company's revenues.
Nicholas C. Taylor, President and Chief Executive Officer of Mexco Energy Corporation, said, "These fiscal year end results do not reflect any income from Mexco's Steelhead #1 well in Loving County which is expected to be connected to a gas pipeline and commence regular sales in the second quarter of Mexco's fiscal 2009."
During the year ended March 31, 2008, the Company participated with working interests in 28 gross (.48 net) development wells and 5 gross (.65 net) exploratory wells.
The average sales price received of $8.03 per Mcfe increased 19% from the $6.75 per Mcfe received in fiscal 2007. Oil and gas production volumes increased 5% and 12%, respectively, during fiscal 2008.
The Company owns oil and gas properties in ten states, with the majority of its activity centered in West Texas. The Company continues to focus its efforts to increase oil and natural gas reserves, through exploration and development as well as acquisitions.
In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, Mexco Energy Corporation cautions that statements in this press release which are forward-looking and which provide other than historical information involve risks and uncertainties that may impact the Company's actual results of operations. These risks include, but are not limited to, production variance from expectations, volatility of oil and gas prices, the need to develop and replace reserves, exploration risks, uncertainties about estimates of reserves, competition, government regulation, and mechanical and other inherit risks associated with oil and gas production. A discussion of these and other factors, including risks and uncertainties, is set forth in the Company's Form 10-K for the fiscal year ended March 31, 2008. Mexco Energy Corporation disclaims any intention or obligation to revise any forward-looking statements
Mexco Energy Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS Year ended March 31, 2008 2007 2006 Operating revenues: Oil and gas $3,887,955 $2,969,325 $3,716,564 Other 11,453 2,392 3,079 Total operating revenues 3,899,408 2,971,717 3,719,643 Operating expenses: Production 1,240,305 870,778 843,927 Accretion of asset retirement obligation 26,262 24,057 23,436 Depreciation, depletion, and amortization 779,618 652,826 658,365 General and administrative 821,786 829,180 817,332 Impairment of long-term asset - - 261,617 Total operating expenses 2,867,971 2,376,841 2,604,677 Operating profit 1,031,437 594,876 1,114,966 Other income (expense): Interest income 5,113 4,670 2,837 Interest expense (105,312) (24,046) (98,657) Net other expense (100,199) (19,376) (95,820) Earnings before income taxes and minority interest 931,238 575,500 1,019,146 Income tax expense (benefit): Current - - (19,312) Deferred 217,594 (28,050) 291,452 217,594 (28,050) 272,140 Earnings before minority interest 713,644 603,550 747,006 Minority interest in loss of subsidiary - 4,835 41,799 Net income $713,644 $608,385 $788,805 Net income per common share: Basic: $0.40 $0.35 $0.45 Diluted: $0.40 $0.33 $0.43 Mexco Energy Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS As of March 31, 2008 2007 ASSETS Current assets Cash and cash equivalents $303,617 $72,537 Accounts receivable: Oil and gas sales 758,459 399,659 Trade 102,403 2,987 Related parties 12,659 - Income tax receivable - 59,736 Prepaid costs and expenses 22,062 65,986 Total current assets 1,199,200 600,905 Investment in GazTex, LLC 20,509 20,509 Property and equipment, at cost Oil and gas properties, using the full cost method 23,941,483 20,526,431 Other 61,362 51,412 24,002,845 20,577,843 Less accumulated depreciation, depletion, and amortization 12,019,895 11,240,277 Property and equipment, net 11,982,950 9,337,566 $13,202,659 $9,958,980 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $571,526 $154,074 Long-term debt 2,600,000 700,000 Asset retirement obligation 374,789 350,584 Deferred income tax liabilities 1,196,280 978,686 Stockholders' equity Preferred stock - $1.00 par value; 10,000,000 shares authorized; none outstanding - - Common stock - $0.50 par value; 40,000,000 shares authorized; 1,841,366 and 1,840,366 shares issued; 1,757,366 and 1,780,841 shares outstanding as of March 31, 2008 and 2007, respectively 920,683 920,183 Additional paid-in capital 4,381,269 4,291,892 Retained earnings 3,584,729 2,871,085 Treasury stock, at cost (84,000 and 59,525 shares, respectively) (426,617) (307,524) Total stockholders' equity 8,460,064 7,775,636 $13,202,659 $9,958,980
Mexco Energy Corporation
CONTACT: Tammy L. McComic, Vice President and Chief Financial Officer ofMexco Energy Corporation, +1-432-682-1119, [email protected]