Mexco Energy Corporation Reports Results for First Quarter and Property Developments

Aug 10, 2015, 19:01 ET from Mexco Energy Corporation

MIDLAND, Texas, Aug. 10, 2015 /PRNewswire/ -- Mexco Energy Corporation (NYSE MKT: MXC) today reported net loss of $324,366 for the quarter ending June 30, 2015, the Company's first quarter of fiscal 2016.  This compares to net income of $19,054 for the quarter ending June 30, 2014.

Operating revenues in the first quarter of fiscal 2016 were $702,609, a 31% decrease from $1,017,834 for the first quarter of fiscal 2015.

The average sales price of oil and natural gas respectively for the quarter ending June 30, 2015 was $51.97 per barrel and $2.15 per Mcf compared to $93.30 per barrel and $4.29 per Mcf for the quarter ending June 30, 2014.

Oil and gas production increased 37.5% and 11.3%, respectively, during the first quarter of fiscal 2016 as compared to the first quarter of fiscal 2015.

Mexco participated in the drilling and completion of a horizontal well operated by XTO Energy, Inc., a subsidiary of Exxon Mobil Corporation in the Third Bone Spring formation in Lea County, New Mexico which flowed in a twenty-four hour test at the rate of 541 barrels of oil and 466,000 cubic feet of gas.  Mexco owns a 2.78% working interest (1.95% net revenue interest).

Mexco also is participating in a currently drilling horizontal well located in Lea County, New Mexico in the Third Bone Springs formation.  This well also is operated by XTO and Mexco's interest is 2.78% (1.95% net revenue interest).

Mexco participated in a horizontal well operated by Concho Resources, Inc. located in Lea County, New Mexico and flowing at the rate of 663 barrels of oil and 634,000 cubic feet of natural gas per day.  This well is located in Red Hills (Avalon) Field.  Mexco's working interest in this well is approximately .59% (.29% net revenue interest).  A second well currently is being drilled by Concho as operator in the Berry (Third Bone Spring) Field.  Mexco owns a .15% working interest (.11% approximate net revenue interest) in this well.

These initial rates of production are not necessarily indicative of actual future rates of production.

Mexco recently executed a term lease assignment to an independent operator for a period of six months for payment to Mexco of $112,000.  Such assignment covers 320 acres located in the northeast corner of Upton County, Texas south of the Midland County and west of the Reagan County lines.  This acreage covers an undivided one-half interest in a 640 acre tract the other half of which is held by Apache Corporation.  Also the assignee has been granted the option to extend the term assignment for an additional three years at a price of $2,000 per acre for a total of $640,000.  This acreage has potential for development of the horizontal Wolfcamp.  Mexco retains a 1% overriding royalty interest in the assigned acreage. 

Pioneer Natural Resources Company has advised Mexco that it plans to begin drilling operations under a term assignment from Mexco of a leasehold interest from Mexco in 417.33 net acres (837.33 gross acres) also in the Northeast corner of Upton County, Texas.  Mexco retains a 1% royalty which is free of drilling, completion and operation costs.

Mexco Energy Corporation, a Colorado corporation, is an independent oil and gas company located in Midland, Texas engaged in the acquisition, exploration and development of oil and gas properties.  For more information on Mexco Energy Corporation, go to www.mexcoenergy.com.

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 inherent 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, 2015.  Mexco Energy Corporation disclaims any intention or obligation to revise any forward-looking statements.

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Unaudited)














June 30,


March 31,






2015


2015

ASSETS







Current assets






Cash and cash equivalents

$      156,545


$      96,084



Accounts receivable:







Oil and gas sales

418,126


384,485




Trade                                                                   

52,997


64,584



Prepaid costs and expenses

36,423


44,618





Total current assets

664,091


589,771










Property and equipment, at cost






Oil and gas properties, using the full cost method

41,213,956


40,563,443



Other


106,792


106,792



Accumulated depreciation, depletion and amortization

(20,256,018)


(19,838,036)





Property and equipment, net

21,064,730


20,832,199










Other noncurrent assets

47,135


48,980





Total assets

$ 21,775,956


$  21,470,950









LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities






Accounts payable and accrued expenses

$      952,334


$      423,121







Long-term debt

6,150,000


5,950,000


Asset retirement obligations

1,241,073


1,230,216


Deferred income tax liabilities

508,923


660,870





Total liabilities

8,852,330


8,264,207







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; 2,104,266 shares issued and 2,037,266 shares outstanding as of June 30, 2015 and March 31, 2015






1,052,133


1,052,133



Additional paid-in capital

7,116,280


7,075,031



Retained earnings

5,101,214


5,425,580



Treasury stock, at cost (67,000 shares)

(346,001)


(346,001)


Total stockholders' equity

12,923,626


13,206,743





Total liabilities and stockholders' equity

$ 21,775,956


$ 21,470,950

 

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended June 30,

(Unaudited)






2015


2014

Operating revenues:





Oil and gas

$         692,582


$   1,006,656


Other



10,027


11,178



Total operating revenues

702,609


1,017,834









Operating expenses:





Production

297,578


310,778


Accretion of asset retirement obligations

8,784


4,835


Depreciation, depletion and amortization

417,982


300,815


General and administrative

413,746


350,337



Total operating expenses

1,138,090


966,765









Operating (loss) income

(435,481)


51,069









Other income (expense):





Interest income

33


2


Interest expense

(40,865)


(15,770)


Loss on derivative instruments

-


(33,628)



Net other expense

(40,832)


(49,396)









(Loss) earnings before provision for income taxes

(476,313)


1,673









Income tax benefit:





Current 


-


-


Deferred


(151,947)


(17,381)






(151,947)


(17,381)










Net (loss) income

$      (324,366)


$       19,054


















(Loss) income per common share:






Basic

$            (0.16)


$          0.01



Diluted

$            (0.16)


$          0.01










Weighted average common shares outstanding:






Basic

2,037,266


2,038,266



Diluted

2,037,266


2,054,847









 

SOURCE Mexco Energy Corporation



RELATED LINKS

http://www.mexcoenergy.com