FOR IMMEDIATE RELEASE:
Mexco Energy Corporation Reports First Quarter Financials
MIDLAND, TX - 8/16/06 - Mexco Energy Corporation (AMEX: MXC) reported net income
for the first quarter of fiscal 2007 of $227,290, or $0.12 per diluted share, as
compared to net income of $160,918, or $0.09 per diluted share, for the first
quarter of fiscal 2006, a 41% increase.
Oil and gas sales decreased from $802,720 for the first quarter of fiscal 2006
to $777,412 for the same period of fiscal 2007. The average sales prices
received of $7.11 per Mcfe was up from $6.62 per Mcfe received in the first
quarter of fiscal 2006. Oil production increased 9% and gas production decreased
15% during the first quarter of fiscal 2007 as compared to the first quarter of
2006.
Total operating expenses for the first quarter of fiscal 2007 increased $116,323
to $632,635 from $516,312 in the first quarter of fiscal 2006. Included in
operating expenses was a 34% increase in general and administrative expense. The
increase in general and administrative expense was primarily attributable to
consulting costs associated with the Company's Russian activities, an increase
in Director's fees and the effects of applying FAS 123(R) for employee stock
option compensation. There will be no further expenses related to the Russian
venture in the foreseeable future.
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 areas with significant
development potential.
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, 2006. 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
June 30, March 31,
2006 2006
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(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 77,057 $ 52,768
Accounts receivable:
Oil and gas sales 391,294 429,133
Trade 9,556 336
Related parties 327 73
Prepaid costs and expenses 49,011 75,576
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Total current assets 527,245 557,886
Investment in GazTex, LLC 20,509 20,509
Property and equipment, at cost
Oil and gas properties, using the full cost method
($121,418 excluded from amortization
as of June 30 and March 31, 2006) 18,990,325 18,947,532
Other 40,984 39,848
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19,031,309 18,987,380
Less accumulated depreciation,
depletion, and amortization 10,737,980 10,587,451
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Property and equipment, net 8,293,329 8,399,929
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$ 8,841,083 $ 8,978,324
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable - trade and accrued expenses $ 95,158 $ 118,125
Income tax payable -- --
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Total current liabilities 95,158 118,125
Long-term debt 400,000 600,000
Asset retirement obligation 317,015 352,416
Deferred income tax liability 879,076 1,006,736
Minority interest 2,051 2,051
Commitments and contingencies
Stockholders' equity
Preferred stock - $1.00 par value;
10,000,000 shares authorized; none outstanding -- --
Common stock - $0.50 par value;
40,000,000 shares authorized;
1,776,566 shares issued 888,283 888,283
Additional paid-in capital 3,915,085 3,893,588
Retained earnings 2,489,990 2,262,700
Treasury stock, at cost (33,525 shares) (145,575) (145,575)
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Total stockholders' equity 7,147,783 6,898,996
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$ 8,841,083 $ 8,978,324
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Mexco Energy Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended June 30,
(Unaudited)
2006 2005
------------ ------------
Operating revenues:
Oil and gas $ 777,412 $ 802,720
Other 167 372
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Total operating revenues 777,579 803,092
Operating expenses:
Production 215,629 176,445
Accretion of asset retirement obligation 4,984 5,785
Depreciation, depletion and amortization 150,529 138,679
General and administrative 261,493 195,403
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Total operating expenses 632,635 516,312
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Operating profit 144,944 286,780
Other income (expense):
Interest income 292 167
Interest expense (10,099) (29,982)
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Net other expense (9,807) (29,815)
Minority interest in loss of subsidiary 4,738 3,824
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Earnings before income taxes 139,875 260,789
Income tax expense (benefit):
Current 40,245 74,442
Deferred (127,660) 25,429
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(87,415) 99,871
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Net income $ 227,290 $ 160,918
============ ============
Net income per common share:
Basic: $ 0.13 $ 0.09
Diluted: $ 0.12 $ 0.09