Mexco Energy Corporation Reports Profitable Fiscal 2010

Jul 01, 2010, 18:02 ET from Mexco Energy Corporation

MIDLAND, Texas, July 1 /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, 2010.

The Company reported net income of $400,839, or $.21 per diluted share, for fiscal year 2010 as compared to $1,170,570, or $.61 per diluted share, for fiscal 2009, a decrease of 66%.  

Operating revenues in fiscal 2010 were $3,245,756, a decrease of 34% over 2009 operating revenues of $4,925,993.  This is the result of a 35% decrease in combined price of natural gas and oil.  The average sales price received was $4.92 per Mcfe compared to $7.57 per Mcfe received in fiscal 2009.  Production volumes of natural gas and oil increased 1% and 6%, respectively, during fiscal 2010.  Revenues from oil and gas royalty interests accounted for approximately 39% of the Company's revenues for fiscal 2010.  

The Company's estimated present value of proved reserves at March 31, 2010 was approximately $18.1 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, an increase of 27% as compared to the same at March 31, 2009.  The Company's total estimated proved reserves at March 31, 2010 were 8.406 billion cubic feet of natural gas, a decrease of 11% over the prior fiscal year, and 240,000 barrels of oil and natural gas liquids, an increase of 16% over the prior fiscal year.  For fiscal 2010, natural gas constituted approximately 85% of the Company's total proved reserves and approximately 63% of the Company's revenues.  

Nicholas C. Taylor, President and Chief Executive Officer, stated, "Decreased pricing resulted in a difficult year; however, we were able to significantly reduce our debt from $1.4 million to $700,000 during the year ended March 31, 2010, and on July 1, 2010 to $300,000."  Also, during the year ended March 31, 2010, the Company participated with working interests in 23 gross wells (.26 net wells) compared to 14 gross wells (.83 net wells) for the previous year.  All but two 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, 2010.  Mexco Energy Corporation disclaims any intention or obligation to revise any forward-looking statements

Mexco Energy Corporation and Subsidiary

CONSOLIDATED STATEMENTS OF OPERATIONS

Year ended March 31,

2010

2009

2008

Operating revenues:

Oil and gas

$       3,220,763

$       4,876,627

$         3,887,955

Other

24,993

49,366

11,453

Total operating revenues

3,245,756

4,925,993

3,899,408

Operating expenses:

Production

1,054,224

1,195,584

1,240,305

Accretion of asset retirement obligation

31,625

28,578

26,262

Depreciation, depletion and amortization

1,113,141

1,046,120

779,618

General and administrative

870,558

876,756

821,786

Total operating expenses

3,069,548

3,147,038

2,867,971

Operating profit

176,208

1,778,955

1,031,437

Other income (expenses):

Interest income

478

1,838

5,113

Interest expense

(33,082)

(81,961)

(105,312)

Net other expense

(32,604)

(80,123)

(100,199)

Earnings before provision for income taxes

143,604

1,698,832

931,238

Income tax expense (benefit):

Current

25,502

539,048

-

Deferred

(282,737)

(10,786)

217,594

(257,235)

528,262

217,594

Net income

$          400,839

$       1,170,570

$            713,644

Earnings per common share:

Basic:

$                0.21

$                0.63

$                  0.40

Diluted:

$                0.21

$                0.61

$                  0.40

Weighted average common shares outstanding:

Basic:

1,888,070

1,846,394

1,767,777

Diluted:

1,929,588

1,934,235

1,773,049

Mexco Energy Corporation and Subsidiary

CONSOLIDATED BALANCE SHEETS

March 31,

March 31,

2010

2009

ASSETS

Current assets

Cash and cash equivalents

$      160,439

$      223,583

Accounts receivable:

Oil and gas sales

538,444

351,040

Trade

63,455

164,834

Related parties

55

1,687

Prepaid costs and expenses

17,161

36,610

Total current assets

779,554

777,754

Property and equipment, at cost

Oil and gas properties, using the full cost method

27,353,016

26,735,778

Other

76,161

61,362

27,429,177

26,797,140

Less accumulated depreciation, depletion and amortization

14,179,156

13,066,014

Property and equipment, net

13,250,021

13,731,126

$ 14,029,575

$ 14,508,880

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable and accrued expenses

$      301,160

$      555,765

Long-term debt

700,000

1,400,000

Asset retirement obligations

486,305

440,011

Deferred income tax liabilities

902,757

1,185,494

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;

2,003,866 and 1,962,616 shares issued;

1,919,866 and 1,878,616 shares outstanding as of

March 31, 2010 and 2009, respectively

1,001,933

981,308

Additional paid-in capital

5,907,899

5,617,620

Retained earnings

5,156,138

4,755,299

Treasury stock, at cost (84,000 shares)

(426,617)

(426,617)

Total stockholders' equity

11,639,353

10,927,610

$ 14,029,575

$ 14,508,880

SOURCE Mexco Energy Corporation