Mexco Energy Corporation Reports Profitable Fiscal 2005
MIDLAND, Texas, July 1 /PRNewswire-FirstCall/ — Mexco Energy Corporation announced today that it had filed its Annual Report on Form-10K for the fiscal year ended March 31, 2005 on June 29, 2005.
The Company reported an increase in its profitability for the year ending March 31, 2005. Earnings for the fiscal year 2005 were $0.32 per diluted share, an increase of 33% over $0.24 per diluted share after the cumulative effect of an accounting change, net of tax, in fiscal 2004.
Operating revenues in fiscal 2005 were $2,969,826, an increase of two percent over 2004 operating revenues of $2,915,355. Total operating expenses were $2,045,596, a decrease of four percent from 2004 operating expenses of $2,129,616. Included in the operating expenses was a 24 percent increase in general and administrative expense. The increase in general and administrative expense was primarily attributable to costs associated with the Company’s Russian venture. Organization costs directly related to forming OBTX, LLC were $46,514. There was also an increase in contract and consulting services directly related to Russian projects that the Company decided to not pursue totaling approximately $83,000.
The Company continues to focus its efforts on the acquisition of royalties in areas with significant development potential. For the 2005 fiscal year, the Company acquired various royalty interests in Texas for approximately $1.1 million. As of March 31, 2005, gas reserves constituted approximately 89% of the Company’s total proved reserves and approximately 75% of the Company’s revenues for fiscal 2005. Revenues from oil and gas royalty interests accounted for approximately 22% of the Company’s revenues for fiscal 2005, compared to approximately 17% for fiscal 2004.
The Company owns oil and gas properties in ten states, with the majority of its activity centered in West Texas. The Company plans to continue to focus its efforts to increase natural gas reserves, not only through the acquisition of royalties, but through exploration and development as well.
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. Please see the Company’s Form 10-K for the fiscal year ended March 31, 2005 for a more complete discussion of such risk factors.
CONSOLIDATED STATEMENTS OF OPERATIONS Year ended March 31, 2005 2004 2003 Operating revenues: Oil and gas $ 2,963,889 $ 2,909,953 $ 2,681,759 Other 5,937 5,402 267,354 Total operating revenues 2,969,826 2,915,355 2,949,113 Operating expenses: Production 780,233 942,093 848,513 Accretion of asset retirement obligation 24,735 24,246 — Depreciation, depletion, and amortization 582,268 633,443 641,827 General and administrative 658,360 529,834 532,496 Total operating expenses 2,045,596 2,129,616 2,022,836 Operating profit 924,230 785,739 926,277 Other income (expense): Interest income 746 764 981 Interest expense (89,154) (83,530) (96,337) Net other expense (88,408) (82,766) (95,356) Minority interest in loss of subsidiary 14,314 — — Earnings before income taxes and cumulative effect of accounting change 850,136 702,973 830,921 Income tax expense: Current 76,597 33,371 (13,026) Deferred 196,012 137,489 171,139 272,609 170,860 158,113 Income before cumulative effect of accounting change 577,527 532,113 672,808 Cumulative effect of accounting change, net of tax — (102,267) — Net income $ 577,527 $ 429,846 $ 672,808 Net income per common share: Basic: Income before cumulative effect of accounting change $ 0.33 $ 0.31 $ 0.39 Cumulative effect, net of tax $ — $ (0.06) $ — Net income $ 0.33 $ 0.25 $ 0.39 Diluted: Income before cumulative effect of accounting change $ 0.32 $ 0.30 $ 0.39 Cumulative effect, net of tax $ — $ (0.06) $ — Net income $ 0.32 $ 0.24 $ 0.39 Pro forma amounts assuming, the new method of accounting for asset retirement obligations is applied retroactively: Net income $ 532,113 $ 651,669 Basic net income per share $ 0.31 $ 0.37 Diluted net income per share $ 0.30 $ 0.37 CONSOLIDATED BALANCE SHEETS As of March 31, 2005 2004 ASSETS Current assets Cash and cash equivalents $ 85,209 $ 92,795 Accounts receivable: Oil and gas sales 418,348 396,902 Trade 23,258 3,101 Related parties 2,103 — Prepaid costs and expenses 7,362 32,382 Total current assets 536,280 525,180 Investment in GazTex, LLC 282,126 — Property and equipment, at cost Oil and gas properties, using the full cost method ($921,719 and $858,602 excluded from amortization in 2005 and 2004, respectively) 18,376,974 16,959,560 Other 36,855 34,542 18,413,829 16,994,102 Less accumulated depreciation, depletion, and amortization 9,929,086 9,346,818 Property and equipment, net 8,484,743 7,647,284 $ 9,303,149 $ 8,172,464 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable – trade $ 111,675 $ 97,308 Income tax payable 48,127 — Current portion of long-term debt — 443,378 Total current liabilities 159,802 540,686 Long-term debt 1,990,000 1,256,622 Asset retirement obligation 374,506 420,665 Deferred income tax liability 715,284 519,272 Minority interest 25,362 — Commitments and contingencies — — 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; 1,766,566 shares issued 883,283 883,283 Additional paid-in capital 3,826,592 3,784,493 Retained earnings 1,473,895 896,368 Treasury stock, at cost (145,575) (128,925) Total stockholders’ equity 6,038,195 5,435,219 $ 9,303,149 $ 8,172,464
Mexco Energy Corporation
CONTACT: Nicholas C. Taylor, CEO, or Tammy L. McComic, CFO, both ofMexco Energy Corporation, +1-432-682-1119