Mexco Energy Corporation Reports Profitable Third Quarter

14 Feb, 2012, 18:24 ET from Mexco Energy Corporation

MIDLAND, Texas, Feb. 14, 2012 /PRNewswire/ -- Mexco Energy Corporation (AMEX: MXC) today reported net income of $50,961 for the quarter ending December 31, 2011, the Company's third quarter of fiscal 2012, a 89% increase from $26,898 for the same quarter of fiscal 2011.  

Operating revenues in the third quarter of fiscal 2012 were $757,560, a slight increase from $756,576 for the third quarter of fiscal 2011.

The average sales price for the quarter ending December 31, 2011 was $6.10 per Mcfe compared to $5.34 per Mcfe for the quarter ending December 31, 2010, an increase of 14%.  Oil production increased 13% and gas production decreased 18% during the third quarter of fiscal 2012 as compared to the third quarter of fiscal 2011.  This decrease in gas production is attributable to natural decline and certain production shut-in for repairs and maintenance.  

For the nine months ended December 31, 2011, the Company reported net income of $234,618, a 128% increase from $102,714 for the same period of fiscal 2011.  Operating revenues increased 4% to $2,482,415 for the nine months ended December 31, 2011 from $2,381,608 for the same period of fiscal 2011.  

The average sales price of oil and natural gas for the nine months ended December 31, 2011 was $6.33 per Mcfe compared to $5.50 per Mcfe for the quarter ending December 31, 2010, an increase of 15%.  Oil production increased 8% and gas production decreased 13% for the nine months ended December 31, 2011 as compared to the same period of fiscal 2011.  

During the first nine months of fiscal 2012, Mexco participated in the drilling of three wells in the Fuhrman-Mascho Field of Andrews County, Texas.  This property, operated by Cone and Petree Oil & Gas Exploration, Inc. now contains the four original wells plus the three new wells for a total of seven wells - four producing oil from the San Andres formation and three producing oil from the Grayburg and San Andres formations at an approximate depth of 5,000 feet.  Mexco owns working interests of approximately 10% (7.2% net revenue interest) in this acreage.  This property contains an additional 9 potential drill sites in the Grayburg and San Andres formations with more dense spacing of approximately 10 acres per well.  

Also during the first nine months of fiscal 2012, Mexco participated in 37 infill wells in the Yeso/Paddock formations of the Dodd-Federal Unit in the Grayburg San Andres Jackson Field of Eddy County, New Mexico.  These wells are proposed to be drilled in the next twelve months to a total depth of approximately 5,000 feet.  The unit, operated by Concho Resources, Inc., currently contains approximately 110 wells producing primarily oil.  Mexco's working interest in this unit is .1848% (.14% net revenue interest).  

Mexco Energy Corporation owns oil and gas properties in twelve states, with the majority of its activity centered in West Texas.  

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, 2011.  Mexco Energy Corporation disclaims any intention or obligation to revise any forward-looking statements.

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

December 31,

March 31,

2011

2011

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$      75,170

$      179,071

Accounts receivable:

Oil and gas sales

383,880

384,215

Trade

23,587

42,432

Related parties

-

-

Prepaid costs and expenses

61,328

64,479

Total current assets

543,965

670,197

Property and equipment, at cost

Oil and gas properties, using the full cost method

30,588,638

30,426,817

Other

78,520

78,520

30,667,158

30,505,337

Less accumulated depreciation, depletion and amortization

15,929,424

15,227,063

Property and equipment, net

14,737,734

15,278,274

$ 15,281,699

$ 15,948,471

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable and accrued expenses

$      181,121

$      199,944

Long-term debt

750,000

1,800,000

Asset retirement obligations

567,592

528,911

Deferred income tax liabilities

862,554

912,663

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;

2,089,116 shares issued;

2,025,949 and 2,029,949 shares outstanding as of December 31, 2011 and March 31, 2011, respectively

1,044,558

1,044,558

Additional paid-in capital

6,654,867

6,453,226

Retained earnings

5,546,452

5,311,834

Treasury stock, at cost - 63,167 and 59,167 shares as of

December 31, 2011 and March 31, 2011, respectively

(325,445)

(302,665)

Total stockholders' equity

12,920,432

12,506,953

$ 15,281,699

$ 15,948,471

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended

Nine Months Ended

December 31,

December 31,

2011

2010

2011

2010

Operating revenue:

Oil and gas

$    753,789

$   752,778

$ 2,469,784

$2,368,778

Other

3,771

3,798

12,631

12,830

Total operating revenues

757,560

756,576

2,482,415

2,381,608

Operating expenses:

Production

233,317

200,785

697,548

822,150

Accretion of asset retirement obligation

9,297

8,489

27,033

25,463

Depreciation, depletion, and amortization

223,181

244,065

702,362

763,251

General and administrative

227,928

235,137

723,489

682,820

Total operating expenses

693,723

688,476

2,150,432

2,293,684

Operating profit

63,837

68,100

331,983

87,924

Other income (expenses):

Interest income

47

10

141

36

Interest expense

(5,854)

(15,151)

(22,735)

(25,347)

Net other expense

(5,807)

(15,141)

(22,594)

(25,311)

Earnings before provision for income taxes

58,030

52,959

309,389

62,613

Income tax expense (benefit):

Current

(4,858)

(59,500)

124,880

(25,502)

Deferred

11,927

85,561

(50,109)

(14,599)

7,069

26,061

74,771

(40,101)

Net income

$      50,961

$     26,898

$    234,618

$   102,714

Earnings per common share:

Basic

$          0.03

$         0.01

$          0.12

$         0.05

Diluted

$          0.03

$         0.01

$          0.12

$         0.05

Weighted average common shares outstanding:

Basic

2,026,011

1,947,370

2,028,626

1,934,953

Diluted

2,031,453

1,961,041

2,037,994

1,951,316

SOURCE Mexco Energy Corporation



RELATED LINKS

http://www.mexcoenergy.com