Mexco Energy Corporation Reports Earnings and Profitable Fiscal 2009

MIDLAND, Texas, June 30 /PRNewswire-FirstCall/ -- Mexco Energy Corporation (Amex: MXC) reported results on its Annual Report on Form 10-K to the Securities and Exchange Commission for the fiscal year ended March 31, 2009.

The Company reported net income of $1,170,570, or $.61 per diluted share, for fiscal year 2009 as compared to $713,644, or $.40 per diluted share, for fiscal 2008, a 64% increase.

Operating revenues in fiscal 2009 were $4,925,993, an increase of 26% over 2008 operating revenues of $3,899,408. This is partially the result of several royalty acquisitions in the Barnett Shale gas field. Revenues from oil and gas royalty interests, including these acquisitions, accounted for approximately 42% of the Company's revenues for fiscal 2009.

Gas production volumes increased 43% during fiscal 2009 with an average sales price received of $7.57 per Mcfe, a decrease of 6% from the $8.03 per Mcfe received in fiscal 2008. Oil production volumes decreased 3%.

The Company's total estimated proved reserves at March 31, 2009 were 9.477 Bcf of natural gas and 207,000 barrels of oil and natural gas liquids, and its estimated present value of proved reserves was approximately $14.3 million based on estimated future net revenues discounted at 10% per annum, pricing and other assumptions set forth in "Item 2 - Properties" of the Company's Form 10-K. During fiscal 2009, the Company added total proved reserves of 2.2 Bcfe of which 60% was through extensions and discoveries and 40% through acquisitions. This represents an approximate 21% increase in gas reserves and 5% decrease in oil reserves as compared to fiscal 2008. For fiscal 2009, gas reserves constituted approximately 88% of the Company's total proved reserves and approximately 71% of the Company's revenues.

"The Company continued to move ahead in fiscal year 2009 under its capable management, as evidenced by its significant recorded increases in both gas production as well gas reserves in the past year," said Thomas Graham, Jr., Chairman of the Board of Mexco Energy Corporation.

Nicholas C. Taylor, President and Chief Executive Officer, added, "We achieved record gross revenues with after tax profit of 24% of gross income despite low prices for oil and gas in the second half of our fiscal year. Also, we promoted Tammy McComic to Executive Vice President and Chief Financial Officer and Stacy Hardin to Assistant Treasurer in recognition of their outstanding performances."

During the year ended March 31, 2009, the Company participated with working interests in 14 gross wells (.83 net wells) compared to 33 gross wells (1.13 net wells) for the previous year. All of such wells were commercially productive.

The Company owns oil and gas properties in ten states, with the majority of its activity centered in West Texas. The Company continues to focus its efforts to increase oil and natural gas reserves, through acquisitions, exploration and development.

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, 2009. Mexco Energy Corporation disclaims any intention or obligation to revise any forward-looking statements



                       Mexco Energy Corporation and Subsidiaries
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                   Year ended March 31,

                                           2009         2008       2007
    Operating revenues:
      Oil and gas                      $4,876,627   $3,887,955 $2,969,325
      Other                                49,366       11,453      2,392
        Total operating revenues        4,925,993    3,899,408  2,971,717

    Operating expenses:
      Production                        1,195,584    1,240,305    870,778
      Accretion of asset retirement
       obligation                          28,578       26,262     24,057
      Depreciation, depletion, and
       amortization                     1,046,120      779,618    652,826
      General and administrative          876,756      821,786    829,180
        Total operating expenses        3,147,038    2,867,971  2,376,841

    Operating profit                    1,778,955    1,031,437    594,876

    Other income (expense):
      Interest income                       1,838        5,113      4,670
      Interest expense                    (81,961)    (105,312)   (24,046)

        Net other expense                 (80,123)    (100,199)   (19,376)

    Earnings before income taxes and
     minority interest                  1,698,832      931,238    575,500

    Income tax expense (benefit):
      Current                             539,048            -          -
      Deferred                            (10,786)     217,594    (28,050)
                                          528,262      217,594    (28,050)

    Earnings before minority interest   1,170,570      713,644    603,550

    Minority interest in loss of
     subsidiary                                 -            -      4,835

    Net income                         $1,170,570     $713,644   $608,385

    Earnings per common share:
      Basic:                                $0.63        $0.40      $0.35
      Diluted:                              $0.61        $0.40      $0.33

    Weighted average common shares
     outstanding:
      Basic:                            1,846,394    1,767,777  1,761,344
      Diluted:                          1,934,235    1,773,049  1,819,969



                       Mexco Energy Corporation and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                                  As of March 31,

                                                 2009              2008
    ASSETS
      Current assets
        Cash and cash equivalents              $223,583          $303,617
        Accounts receivable:
          Oil and gas sales                     351,040           758,459
          Trade                                 164,834           102,403
          Related parties                         1,687            12,659
        Prepaid costs and expenses               36,610            22,062
            Total current assets                777,754         1,199,200

      Investment in GazTex, LLC                       -            20,509

      Property and equipment, at cost
        Oil and gas properties, using the
         full cost method                    26,735,778        23,941,483
        Other                                    61,362            61,362
                                             26,797,140        24,002,845

      Less accumulated depreciation,
       depletion, and amortization           13,066,014        12,019,895
            Property and equipment, net      13,731,126        11,982,950
                                            $14,508,880       $13,202,659

    LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities
        Accounts payable and accrued expenses  $555,765          $571,526

      Long-term debt                          1,400,000         2,600,000
      Asset retirement obligation               440,011           374,789
      Deferred income tax liabilities         1,185,494         1,196,280


      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;
         1,962,616 and 1,841,366 shares issued;
         1,878,616 and 1,757,366 shares
         outstanding as of March 31, 2009 and
         2008, respectively                     981,308           920,683
        Additional paid-in capital            5,617,620         4,381,269
        Retained earnings                     4,755,299         3,584,729
        Treasury stock, at cost (84,000
         shares)                               (426,617)         (426,617)
      Total stockholders' equity             10,927,610         8,460,064
                                            $14,508,880       $13,202,659


SOURCE Mexco Energy Corporation



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