FOR IMMEDIATE RELEASE:
Mexco Energy Corporation Reports Profitable Second Quarter
MIDLAND, TX - 11/14/05 - Mexco Energy Corporation (AMEX: MXC) reported net
income for the second quarter of fiscal 2006 of $285,723, or $0.15 per diluted
share, as compared to net income of $119,060, or $0.07 per diluted share, for
the second quarter of fiscal 2005, a 140% increase.
For the six months ended September 30, 2005, the Company reported net income of
$446,641, or $0.24 per diluted share, as compared to $221,761, or $0.12 per
diluted share, for the same period of fiscal 2005, a 101% increase. Operating
revenues increased $336,375 (24%) to $1,739,004 for the six month period from
$1,402,629 for the same period of fiscal 2005. The average sales price received
of $7.20 Mcfe was up 29% from the $5.58 per Mcfe received in the first six
months of fiscal 2005.
Oil and gas sales for the second quarter of fiscal 2006 increased $211,463 (29%)
to $933,915 from $722,452 in the second quarter of fiscal 2005. The average
sales price received of $7.78 per Mcfe was up 31% from the $5.93 per Mcfe
received in the second quarter of fiscal 2005. Oil production increased 2% and
gas production decreased 2% during the second quarter of fiscal 2006 as compared
to the second quarter of fiscal 2005.
Total operating expenses for the second quarter of fiscal 2006 increased $72,667
to $573,133 from $500,466 in the second quarter of fiscal 2005. Included in
operating expenses was a 7% 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 its efforts on the acquisition of royalties in
areas with significant development potential. For the six months ended September
30, 2005 revenues from oil and gas royalty interests accounted for approximately
25% of the Company's revenues, compared to approximately 19% for the six months
ended September 30, 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. 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.
For additional information, please contact:
Nicholas C. Taylor, CEO
Tammy L. McComic, CFO
432-682-1119
MEXCO ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30 March 31
2005 2005
------------ ------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 31,986 $ 85,209
Accounts receivable:
Oil and gas sales 547,047 418,348
Trade 18,634 23,258
Related parties 2,763 2,103
Prepaid costs and expenses 57,677 7,362
------------ ------------
Total current assets 658,107 536,280
Investment in GazTex, LLC 282,126 282,126
Property and equipment, at cost
Oil and gas properties, using the full cost method
($965,601 and $921,719 excluded from amortization
as of September 30, 2005 and March 31, 2005 respectively) 18,707,113 18,376,974
Other 36,855 36,855
------------ ------------
18,743,968 18,413,829
Less accumulated depreciation,
depletion, and amortization 10,205,808 9,929,086
------------ ------------
Property and equipment, net 8,538,160 8,484,743
------------ ------------
$ 9,478,393 $ 9,303,149
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 128,740 $ 111,675
Income tax payable 131,387 48,127
------------ ------------
Total current liabilities 260,127 159,802
Long-term debt 1,600,000 1,990,000
Asset retirement obligation 370,407 374,506
Deferred income tax liability 727,913 715,284
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 3,836,340 3,826,592
Retained earnings 1,920,536 1,473,895
Treasury stock, at cost (33,525 shares) (145,575) (145,575)
------------ ------------
Total stockholders' equity 6,494,584 6,038,195
------------ ------------
$ 9,478,393 $ 9,303,149
============ ============
MEXCO ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
September 30 September 30
2005 2004 2005 2004
-------------------------- --------------------------
Operating revenue:
Oil and gas sales $ 933,915 $ 722,452 $ 1,736,635 $ 1,397,447
Other 1,996 3,174 2,369 5,182
----------- ----------- ----------- -----------
Total operating revenues 935,911 725,626 1,739,004 1,402,629
Operating expenses:
Production 249,231 206,226 425,676 397,964
Accretion of asset retirement obligation 5,780 6,432 11,566 13,253
Depreciation, depletion, and amortization 138,043 120,280 276,722 273,052
General and administrative 180,079 167,528 375,482 331,947
----------- ----------- ----------- -----------
Total operating expenses 573,133 500,466 1,089,446 1,016,216
----------- ----------- ----------- -----------
Operating profit 362,778 225,160 649,558 386,413
Other income (expense):
Interest income 196 77 363 130
Interest expense (26,891) (20,963) (56,874) (37,806)
----------- ----------- ----------- -----------
Net other expense (26,695) (20,886) (56,511) (37,676)
----------- ----------- ----------- -----------
Earnings before income taxes and minority
interest 336,083 204,274 593,047 348,737
Income tax expense:
Current 67,501 70,006 141,943 113,431
Deferred (12,799) 15,208 12,630 13,545
----------- ----------- ----------- -----------
54,702 85,214 154,573 126,976
Income before minority interest 281,381 119,060 438,474 221,761
Minority interest in loss of subsidiary 4,342 -- 8,167 --
----------- ----------- ----------- -----------
Net income $ 285,723 $ 119,060 $ 446,641 $ 221,761
=========== =========== =========== ===========
Net income per common share:
Basic: $ 0.16 $ 0.07 $ 0.26 $ 0.13
Diluted: $ 0.15 $ 0.07 $ 0.24 $ 0.12