Mexco Energy Corporation Reports Profitable Fiscal 2005
MIDLAND, TX - 07/01/05 - Mexco Energy Corporation (AMEX: MXC) 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.
For additional information, please contact:
Nicholas C. Taylor, CEO
Tammy L. McComic, CFO
432-682-1119
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
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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
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