MIDLAND, Texas, June 29 /PRNewswire-FirstCall/ -- Mexco Energy Corporation (AMEX:MXC) reported an increase in profitability on its Annual Report on Form-10K for the fiscal year ended March 31, 2006.
The Company reported net income of $788,805, or $.43 per diluted share, for fiscal year 2006 as compared to $577,527, or $.32 per diluted share, for fiscal 2005, a 37% increase.
Operating revenues in fiscal 2006 were $3,719,643, an increase of 25% over 2005 operating revenues of $2,969,826. The average sales price received of $7.86 per Mcfe was up 35% from the $5.83 per Mcfe received in fiscal 2005. Oil production decreased 1% and gas production decreased 8% during fiscal 2006 due to normal decline in production.
Total operating expenses were $2,604,677, an increase of 27% from 2005 operating expenses of $2,045,596. Included in the operating expenses was a 24% increase in general and administrative expense partially attributable to costs associated with the contract and consulting services that were directly related to Russian projects. Also included was a writedown of our long-term investment in GazTex, LLC as a result of the impairment of our potential Russian project.
For fiscal 2006, gas reserves constituted approximately 86% of the Company's total proved reserves and approximately 75% of the Company's revenues. Revenues from oil and gas royalty interests accounted for approximately 26% of the Company's revenues for fiscal 2006, compared to approximately 22% for fiscal 2005.
The Company owns oil and gas properties in ten states, with the majority of its activity centered in West Texas. The Company will continue to focus its efforts to increase oil and natural gas reserves, through exploration and development as well as acquisition of royalties.
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, 2006. 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,
2006 2005 2004
Operating revenues:
Oil and gas $3,716,564 $2,963,889 $2,909,953
Other 3,079 5,937 5,402
Total operating revenues 3,719,643 2,969,826 2,915,355 Operating expenses:
Production 843,927 780,233 942,093
Accretion of asset retirement
obligation 23,436 24,735 24,246
Depreciation, depletion, and
amortization 658,365 582,268 633,443
General and administrative 817,332 658,360 529,834
Impairment of long-term
asset 261,617 - -
Total operating expenses 2,604,677 2,045,596 2,129,616
Operating profit 1,114,966 924,230 785,739
Other income (expense):
Interest income 2,837 746 764
Interest expense (98,657) (89,154) (83,530) Net other expense (95,820) (88,408) (82,766) Minority interest in loss of
subsidiary 41,799 14,314 -
Earnings before income taxes
and cumulative effect of
accounting change 1,060,945 850,136 702,973 Income tax expense (benefit):
Current (19,312) 76,597 33,371
Deferred 291,452 196,012 137,489
272,140 272,609 170,860 Income before cumulative effect
of accounting change 788,805 577,527 532,113 Cumulative effect of accounting
change, net of tax - - (102,267)
Net income $788,805 $577,527 $429,846 Net income per common share:
Basic:
Income before cumulative
effect of accounting change $0.45 $0.33 $0.31
Cumulative effect, net of tax $- $- $(0.06)
Net income $0.45 $0.33 $0.25 Diluted:
Income before cumulative effect
of accounting change $0.43 $0.32 $0.30
Cumulative effect, net of tax $- $- $(0.06)
Net income $0.43 $0.32 $0.24 Pro forma amounts assuming,
the new method of accounting
for asset retirement
obligations is applied
retroactively:
Net income $532,113
Basic net income per share $0.31
Diluted net income per share $0.30
Mexco Energy Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
As of March 31,
2006 2005
ASSETS
Current assets
Cash and cash equivalents $52,768 $85,209
Accounts receivable:
Oil and gas sales 429,133 418,348
Trade 336 23,258
Related parties 73 2,103
Prepaid costs and expenses 75,576 7,362
Total current assets 557,886 536,280 Investment in GazTex, LLC 20,509 282,126 Property and equipment, at cost
Oil and gas properties, using the full
cost method ($121,418 and $921,719
excluded from amortization in 2006
and 2005, respectively) 18,947,532 18,376,974
Other 39,848 36,855
18,987,380 18,413,829
Less accumulated depreciation,
depletion, and amortization 10,587,451 9,929,086
Property and equipment, net 8,399,929 8,484,743
$8,978,324 $9,303,149 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable - trade and accrued
expenses $118,125 $111,675
Income tax payable - 48,127
Total current liabilities 118,125 159,802 Long-term debt 600,000 1,990,000
Asset retirement obligation 352,416 374,506
Deferred income tax liability 1,006,736 715,284
Minority interest 2,051 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;
1,776,566 and 1,766,566 shares
issued in 2006 and 2005, respectively 888,283 883,283
Additional paid-in capital 3,893,588 3,826,592
Retained earnings 2,262,700 1,473,895
Treasury stock, at cost (145,575) (145,575) Total stockholders' equity 6,898,996 6,038,195
$8,978,324 $9,303,149
DATASOURCE: Mexco Energy Corporation CONTACT: Nicholas C. Taylor, CEO, or Tammy L. McComic, CFO, both of Mexco Energy Corporation, +1-432-682-1119
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