FOR IMMEDIATE RELEASE:
Mexco Energy Corporation Reports Profitable Third Quarter
MIDLAND, TX - 2/14/06 - 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.
For additional information, please contact:
Nicholas C. Taylor, CEO
Tammy L. McComic, CFO
432-682-1119
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
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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