MIDLAND, Texas, Feb. 14 /PRNewswire-FirstCall/ -- Mexco Energy Corporation (AMEX:MXC) reported net income for the third quarter of fiscal 2006 of $354,608, or $0.19 per diluted share, as compared to net income of $183,359, or $0.10 per diluted share, for the third quarter of fiscal 2005, a 93% increase.
For the nine months ended December 31, 2005, the Company reported net income of $801,249, or $0.43 per diluted share, as compared to $405,120, or $0.22 per diluted share, for the same period of fiscal 2005, a 98% increase. Operating revenues increased $672,946 (31%) to $2,850,914 for the nine month period from $2,177,968 for the same period of fiscal 2005. The average sales price received of $7.97 Mcfe was up 37% from the $5.80 per Mcfe received in the first nine months of fiscal 2005.
Oil and gas sales for the third quarter of fiscal 2006 increased $336,558 (43%) to $1,111,524 from $774,966 in the third quarter of fiscal 2005. The average sales price received of $9.56 per Mcfe was up 53% from the $6.23 per Mcfe received in the third quarter of fiscal 2005. Oil production increased 2% and gas production decreased 9% during the third quarter of fiscal 2006 as compared to the third quarter of fiscal 2005.
Total operating expenses for the third quarter of fiscal 2006 increased $65,012 to $553,130 from $488,118 in the third quarter of fiscal 2005. Included in operating expenses was a 45% increase in general and administrative expense. The increase in general and administrative expense was primarily attributable to consulting costs directly associated with the Company's Russian Venture.
The Company continues to focus a substantial portion of its efforts on the acquisition of royalties in areas with significant development potential. For the nine months ended December 31, 2005 revenues from oil and gas royalty interests accounted for approximately 26% of the Company's revenues, compared to approximately 21% for the nine months ended December 31, 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 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, 2005. 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
2005 2005
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $81,125 $85,209
Accounts receivable:
Oil and gas sales 581,347 418,348
Trade 3,021 23,258
Related parties 1,062 2,103
Prepaid costs and expenses 64,080 7,362
Total current assets 730,635 536,280 Investment in GazTex, LLC 282,126 282,126 Property and equipment, at cost
Oil and gas properties, using the full
cost method ($970,831 and $921,719
excluded from amortization as of
December 31, 2005 and March 31, 2005
respectively) 18,792,530 18,376,974
Other 39,848 36,855
18,832,378 18,413,829
Less accumulated depreciation, depletion,
and amortization 10,335,206 9,929,086
Property and equipment, net 8,497,172 8,484,743
$9,509,933 $9,303,149 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $103,094 $111,675
Income tax payable 295,740 48,127
Total current liabilities 398,834 159,802
Long-term debt 1,125,000 1,990,000
Asset retirement obligation 375,714 374,506
Deferred income tax liability 730,933 715,284
Minority interest 25,362 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 3,841,238 3,826,592
Retained earnings 2,275,144 1,473,895
Treasury stock, at cost (33,525 shares) (145,575) (145,575)
Total stockholders' equity 6,854,090 6,038,195
$9,509,933 $9,303,149 Mexco Energy Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) Three Months Ended Nine Months Ended
December 31 December 31
2005 2004 2005 2004
Operating revenue:
Oil and gas sales $1,111,524 $774,966 $2,848,159 $2,172,413
Other 387 372 2,755 5,555
Total operating
revenues 1,111,911 775,338 2,850,914 2,177,968 Operating expenses:
Production 223,169 206,493 648,844 604,458
Accretion of asset
retirement obligation 6,566 5,824 18,132 19,077
Depreciation,
depletion, and
amortization 129,398 141,764 406,120 414,816
General and
administrative 193,997 134,037 569,478 465,984
Total operating
expenses 553,130 488,118 1,642,574 1,504,335 Operating profit 558,781 287,220 1,208,340 673,633 Other income (expense):
Interest income 232 107 594 238
Interest expense (25,286) (23,309) (82,159) (61,115) Net other expense (25,054) (23,202) (81,565) (60,877) Earnings before income
taxes and minority
interest 533,727 264,018 1,126,775 612,756 Income tax expense:
Current 179,287 (6,910) 321,230 106,522
Deferred 3,019 87,569 15,649 101,114
182,306 80,659 336,879 207,636 Income before minority
interest 351,421 183,359 789,896 405,120 Minority interest in
loss of subsidiary 3,187 -- 11,353 -- Net income $354,608 $183,359 $801,249 $405,120 Net income per common
share: Basic: $0.20 $0.11 $0.46 $0.23
Diluted: $0.19 $0.10 $0.43 $0.22
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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