MIDLAND, Texas, Feb. 18 /PRNewswire-FirstCall/ -- Mexco Energy Corporation (AMEX:MXC) today reported net income of $221,114 for the quarter ending December 31, 2007, the Company's third quarter of fiscal 2008, compared to net income of $67,080 for the same quarter of fiscal 2007, an increase of 230 percent. Earnings per share for the third quarter of fiscal 2008 were $.12 per diluted share compared to $.04 per diluted share in fiscal 2007.
Nicholas C. Taylor, President and CEO of Mexco Energy Corporation, said, "In all respects our third quarter ending December 31, 2007 showed improvement in oil and gas prices and volumes resulting in a tripling of earnings over the comparable quarter last year." Operating revenues increased $291,882 or 44% to $955,080 in the third quarter of fiscal 2008 from $663,198 for the same period of fiscal 2007. The average sales price received of $8.23 per Mcfe was up 37% from the $6.00 per Mcfe received in the third quarter of fiscal 2008. Oil production increased 7% and gas production increased 4% during the third quarter of fiscal 2008 as compared to the third quarter of fiscal 2007.
The Company continues to focus a substantial portion of its efforts on the acquisition of royalties in areas with significant development potential. For the three month period ending December 31, 2007 revenues from oil and gas royalty interests accounted for approximately 21% of the Company's revenues, compared to approximately 24% for the three month period ending December 31, 2006.
Taylor continued, "On the last day of the quarter we completed the largest acquisition of gas properties in the Company's history. This $1,850,000 purchase is producing income free of capital and operating expenses, amounting to an approximate 22% royalty in three wells in the Newark East (Barnett Shale) Field. These wells are operated by Chesapeake Energy Corporation in one of the largest gas fields in Texas." 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 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, 2007. Mexco Energy Corporation disclaims any intention or obligation to revise any forward-looking statements.
Mexco Energy Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS December 31, March 31,
2007 2007
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $219,954 $72,537
Accounts receivable:
Oil and gas sales 468,199 399,659
Trade 310,709 2,987
Income tax receivable 60,654 59,736
Prepaid costs and expenses 38,046 65,986
Total current assets 1,097,562 600,905 Investment in GazTex, LLC 20,509 20,509 Property and equipment, at cost
Oil and gas properties,
using the full cost method 23,622,834 20,526,431
Other 51,412 51,412
23,674,246 20,577,843 Less accumulated depreciation,
depletion and amortization 11,771,801 11,240,277
Property and equipment, net 11,902,445 9,337,566
$13,020,516 $9,958,980 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and
accrued expenses $518,294 $154,074 Long-term debt 3,075,000 700,000
Asset retirement obligation 359,021 350,584
Deferred income tax liability 1,093,988 978,686 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;
1,841,366 and 1,840,366 shares issued;
1,757,366 and 1,780,841 shares
outstanding as of
December 31 and March
31, 2007, respectively 920,683 920,183
Additional paid-in capital 4,361,898 4,291,892
Retained earnings 3,118,249 2,871,085
Treasury stock, at cost
(84,000 and 59,525 shares,
respectively) (426,617) (307,524)
Total stockholders' equity 7,974,213 7,775,636
$13,020,516 $9,958,980 Mexco Energy Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) Three Months Ended December 31,
2007 2006
Operating revenue:
Oil and gas sales $952,211 $663,031
Other 2,869 167
Total operating revenues 955,080 663,198 Operating expenses:
Production 241,019 218,774
Accretion of asset retirement obligation 6,368 5,592
Depreciation, depletion, and amortization 174,842 152,135
General and administrative 187,648 176,791
Total operating expenses 609,877 553,292 Operating profit 345,203 109,906 Other income (expense):
Interest income 1,170 336
Interest expense (22,791) (2,359) Net other expense (21,621) (2,023) Earnings before income taxes and
minority interest 323,582 107,883 Income tax expense (benefit):
Current - (30,531)
Deferred 102,468 71,334
102,468 40,803 Earnings before minority interest 221,114 67,080 Minority interest in loss of subsidiary - - Net income $221,114 $67,080 Net income per common share:
Basic: $0.13 $0.04
Diluted: $0.12 $0.04
DATASOURCE: Mexco Energy Corporation CONTACT: Nicholas C. Taylor, President and Chief Executive Officer, or Tammy L. McComic, Vice-President and Chief Financial Officer, both of Mexco Energy Corporation, +1-432-682-1119
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