EX-99.1 2 v080194_ex99-1.htm
FOR IMMEDIATE RELEASE:
 

Mexco Energy Corporation Reports Profitable Fiscal 2007

MIDLAND, TX - 07/6/07 - 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, 2007.

The Company’s total estimated proved reserves at March 31, 2007 were approximately 6.905 Bcf of natural gas and 220,000 barrels of oil and natural gas liquids, and its estimated present value of proved reserves was approximately $26 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 2007, the Company added proved reserves of 226,000 Mcfe through extensions and discoveries, added 397,000 Mcfe through acquisitions and had upward revisions of previous estimates of 248,000 Mcfe. This represents an approximate 20% increase in oil reserves and a 3% increase in gas reserves as compared to fiscal 2006.

During the year ended March 31, 2007, the Company participated with working interests in 47 gross wells (.22 net wells) compared to 12 gross wells (.05 net wells) for the previous year. All of such wells were commercially productive excepting re-entry of a well in Roosevelt County, New Mexico.

For fiscal 2007, gas reserves constituted approximately 84% of the Company’s total proved reserves and approximately 66% of the Company’s revenues.

The Company reported net income of $608,385, or $.33 per diluted share, for fiscal year 2007 as compared to $788,805, or $.43 per diluted share, for fiscal 2006, a 23% decrease.

Operating revenues in fiscal 2007 were $2,971,717, a decrease of 20% over 2006 operating revenues of $3,719,643. The average sales price received of $6.75 per Mcfe decreased 14% from the $7.86 per Mcfe received in fiscal 2006. Oil production decreased 2% and gas production decreased 8% during fiscal 2007 due to normal decline in production. Revenues from oil and gas royalty interests accounted for approximately 24% of the Company’s revenues for fiscal 2007 and 2006.

Total operating expenses were $2,376,841, a decrease of 9% from 2006 operating expenses of $2,604,677 resulting from an impairment of a long term asset in fiscal 2006 amounting to approximately $262,000.

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 exploration and development as well as acquisitions.

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, 2007. Mexco Energy Corporation disclaims any intention or obligation to revise any forward-looking statements

For additional information, please contact:

Nicholas C. Taylor, CEO
Tammy L. McComic, CFO
432-682-1119
 

Mexco Energy Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended March 31,
  
   
2007
  
2006
  
2005
  
Operating revenues:
                    
Oil and gas
  
$
2,969,325
  
$
3,716,564
  
$
2,963,889
  
Other
    
2,392
    
3,079
    
5,937
  
Total operating revenues
    
2,971,717
    
3,719,643
    
2,969,826
  
 
                    
Operating expenses:
                    
Production
    
870,778
    
843,927
    
780,233
  
Accretion of asset retirement obligation
    
24,057
    
23,436
    
24,735
  
Depreciation, depletion, and amortization
    
652,826
    
658,365
    
582,268
  
General and administrative
    
829,180
    
817,332
    
658,360
  
Impairment of long-term asset
    
-
    
261,617
    
-
  
Total operating expenses
    
2,376,841
    
2,604,677
    
2,045,596
  
Operating profit
    
594,876
    
1,114,966
    
924,230
  
                     
Other income (expense):
                    
Interest income
    
4,670
    
2,837
    
746
  
Interest expense
    
(24,046
)
  
(98,657
)
  
(89,154
)
                     
Net other expense
    
(19,376
)
  
(95,820
)
  
(88,408
)
                     
Earnings before income taxes and minority interest
    
575,500
    
1,019,146
    
835,822
  
 
    
 
    
 
      
Income tax expense (benefit):
                    
Current
    
-
    
(19,312
)
  
76,597
  
Deferred
    
(28,050
)
  
291,452
    
196,012
  
     
(28,050
)
  
272,140
    
272,609
  
                     
Income before minority interest
    
603,550
    
747,006
    
563,213
  
                     
Minority interest in loss of subsidiary
    
4,835
    
41,799
    
14,314
  
                     
Net income
  
$
608,385
  
$
788,805
  
$
577,527
  
                     
Net income per common share:
                    
                     
Basic:
 
$
0.35
  
$
0.45
  
$
0.33
  
Diluted:
  
$
0.33
  
$
0.43
  
$
0.32
  


 
Mexco Energy Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
As of March 31,
 
   
2007
  
2006
  
ASSETS
          
Current assets
              
Cash and cash equivalents
  
$
72,537
  
$
52,768
  
Accounts receivable:
              
Oil and gas sales
    
399,659
    
429,133
  
Trade
    
2,987
    
336
  
Related parties
    
-
    
73
  
Income tax receivable
    
59,736
    
59,736
  
Prepaid costs and expenses
    
65,986
    
15,840
  
Total current assets
    
600,905
    
557,886
  
               
Investment in GazTex, LLC
    
20,509
    
20,509
  
 
              
Property and equipment, at cost
              
Oil and gas properties, using the full cost
              
method ($0 and $121,418 excluded
              
from amortization in 2007 and 2006, respectively)
    
20,526,431
    
18,947,532
  
Other
    
51,412
    
39,848
  
   
20,577,843
    
18,987,380
  
Less accumulated depreciation, depletion, and amortization
    
11,240,277
    
10,587,451
  
Property and equipment, net
    
9,337,566
    
8,399,929
  
 
  
$
 9,958,980  
$
8,978,324
  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
              
Current liabilities
              
Accounts payable and accrued expenses
  
$
154,074
  
$
118,125
  
               
               
Long-term debt
    
700,000
    
600,000
  
Asset retirement obligation
    
350,584
    
352,416
  
Deferred income tax liabilities
    
978,686
    
1,006,736
  
Minority interest
    
-
    
2,051
  
               
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;
              
1,840,366 and 1,776,566 shares issued in 2007
             
and 2006, respectively
    
920,183
    
888,283
  
Additional paid-in capital
    
4,291,892
    
3,893,588
  
Retained earnings
    
2,871,085
    
2,262,700
  
Treasury stock, at cost (59,525 and 33,525 shares, respectively)
    
(307,524
)
  
(145,575
)
Total stockholders’ equity
    
7,775,636
    
6,898,996
  
   
$
9,958,980
  
$
8,978,324