Mexco Energy Corporation Reports Profitable Fiscal 2011

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Jun 30, 2011, 02:05 ET

MIDLAND, Texas, June 30, 2011 /PRNewswire/ -- 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, 2011.

The Company reported net income of $155,696, or $.08 per diluted share, for fiscal year 2011 as compared to $400,839, or $.21 per diluted share, for fiscal 2010, a decrease of 61%.

Operating revenues in fiscal 2011 were $3,161,858, a decrease of 3% when compared to 2010 operating revenues of $3,245,756. This is the result of a 14% decrease in combined natural gas and oil production partially offset by a 14% increase in combined price of natural gas and oil. The average sales price received was $5.60 per Mcfe compared to $4.92 per Mcfe received in fiscal 2010. Production volumes of natural gas and oil decreased 16% and 6%, respectively, during fiscal 2011. Revenues from oil and gas royalty interests accounted for approximately 38% of the Company's revenues for fiscal 2011.

The Company's estimated present value of proved reserves at March 31, 2011 was approximately $22.7 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 25% as compared to the same at March 31, 2010. The Company's total estimated proved reserves at March 31, 2011 were 8.757 billion cubic feet of natural gas, an increase of 4% over the prior fiscal year, and 290,000 barrels of oil and natural gas liquids, an increase of 21% over the prior fiscal year. For fiscal 2011, natural gas constituted approximately 83% of the Company's total proved reserves and approximately 58% of the Company's revenues.

Nicholas C. Taylor, President and Chief Executive Officer, stated, "Fiscal 2011 was a productive year for acquisitions including a royalty interest in over 5,000 acres in the Haynesville area of Desoto Parish, Louisiana, a royalty company with interests in over 300 wells and most significantly, an approximately 10.8% working interest (7.77% net revenue interest) in an oil property in the Fuhrman-Mascho Field in Andrews County, Texas with a new well producing approximately 90 barrels of oil per day with space for at least 11 more infill wells." Acquisitions by Mexco in fiscal 2011 totaled $3.1 million with debt currently at $950,000.

The Company owns oil and gas properties in twelve 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, 2011. 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,

			2011	2010	2009
Operating revenues:
	Oil and gas		$ 3,145,247	$ 3,220,763	$ 4,876,627
	Other		16,611	24,993	49,366
		Total operating revenues	3,161,858	3,245,756	4,925,993

Operating expenses:
	Production		1,025,932	1,054,224	1,195,584
	Accretion of asset retirement obligation		34,129	31,625	28,578
	Depreciation, depletion and amortization		1,047,906	1,113,141	1,046,120
	General and administrative		877,790	870,558	876,756
		Total operating expenses	2,985,757	3,069,548	3,147,038

Operating profit			176,101	176,208	1,778,955

Other income (expenses):
	Interest income		360	478	1,838
	Interest expense		(36,361)	(33,082)	(81,961)

		Net other expense	(36,001)	(32,604)	(80,123)

Earnings before provision for income taxes			140,100	143,604	1,698,832

Income tax expense (benefit):
	Current		(25,502)	25,502	539,048
	Deferred		9,906	(282,737)	(10,786)
			(15,596)	(257,235)	528,262

Net income			$ 155,696	$ 400,839	$ 1,170,570


Earnings per common share:
	Basic:		$ 0.08	$ 0.21	$ 0.63
	Diluted:		$ 0.08	$ 0.21	$ 0.61

Weighted average common shares outstanding:
	Basic:		1,947,605	1,888,070	1,846,394
	Diluted:		1,962,656	1,929,588	1,934,235


Mexco Energy Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS

					March 31,	March 31,
					2011	2010
ASSETS
	Current assets
		Cash and cash equivalents			$ 179,071	$ 160,439
		Accounts receivable:
			Oil and gas sales		384,215	538,444
			Trade		42,432	63,455
			Related parties		-	55
		Prepaid costs and expenses			64,479	17,161
				Total current assets	670,197	779,554


	Property and equipment, at cost
		Oil and gas properties, using the full cost method			30,426,817	27,353,016
		Other			78,520	76,161
					30,505,337	27,429,177

		Less accumulated depreciation, depletion and amortization			15,227,063	14,179,156
				Property and equipment, net	15,278,274	13,250,021
					$ 15,948,471	$ 14,029,575

LIABILITIES AND STOCKHOLDERS' EQUITY

	Current liabilities
		Accounts payable and accrued expenses			$ 199,944	$ 301,160

	Long-term debt				1,800,000	700,000
	Asset retirement obligations				528,911	486,305
	Deferred income tax liabilities				912,663	902,757

	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 and 2,003,866 shares issued; 2,029,949 and 1,919,866 shares outstanding as of
			March 31, 2011 and 2010, respectively		1,044,558	1,001,933
		Additional paid-in capital			6,453,226	5,907,899
		Retained earnings			5,311,834	5,156,138
		Treasury stock, at cost (59,167 and 84,000 shares, respectively)			(302,665)	(426,617)
	Total stockholders' equity				12,506,953	11,639,353
					$ 15,948,471	$ 14,029,575