EX-99.1 2 v118087_ex99-1.htm
EXHIBIT 99.1

June 24, 2008

FOR IMMEDIATE RELEASE

MEXCO ENERGY CORPORATION REPORTS RECORD QUARTERLY EARNINGS AND PROFITABLE FISCAL 2008

MIDLAND, TX - 06/24/08 - 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, 2008.

The Company reported net income of $466,480, or $.27 per diluted share, for the quarter ending March 31, 2008, the Company’s fourth quarter of fiscal 2008. This resulted in net income of $713,644, or $.40 per diluted share, for fiscal year 2008, a 17% increase over fiscal 2007.

Operating revenues in the fourth quarter were a record high of $1,245,653, resulting in the Company ending fiscal 2008 with operating revenues of $3,899,408, compared to $2,971,717 in fiscal 2007, an increase of 31%. This is partially the result of revenue generated from the $1,850,000 royalty interest acquisition in the Barnett Shale gas field on December 31, 2007, the largest acquisition of a property in the Company’s history. Revenues from oil and gas royalty interests, including this acquisition, accounted for approximately 29% of the Company’s revenues for fiscal 2008. On June 6, 2008, Mexco purchased additional Barnett Shale royalties for $429,000.

The Company’s total estimated proved reserves at March 31, 2008 were 7.857 Bcf of natural gas and 217,000 barrels of oil and natural gas liquids, and its estimated present value of proved reserves was approximately $41 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 2008, the Company added proved reserves of 794,000 Mcfe through extensions and discoveries, added 584,000 Mcfe through acquisitions and had upward revisions of previous estimates of 43,000 Mcfe.

For fiscal 2008, gas reserves constituted approximately 86% of the Company’s total proved reserves and approximately 65% of the Company’s revenues.

Nicholas C. Taylor, President and Chief Executive Officer of Mexco Energy Corporation, said, “These fiscal year end results do not reflect any income from Mexco’s Steelhead #1 well in Loving County which is expected to be connected to a gas pipeline and commence regular sales in the second quarter of Mexco’s fiscal 2009.”

During the year ended March 31, 2008, the Company participated with working interests in 28 gross (.48 net) development wells and 5 gross (.65 net) exploratory wells.

The average sales price received of $8.03 per Mcfe increased 19% from the $6.75 per Mcfe received in fiscal 2007. Oil and gas production volumes increased 5% and 12%, respectively, during fiscal 2008.

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, 2008. Mexco Energy Corporation disclaims any intention or obligation to revise any forward-looking statements

For additional information, please contact:
Tammy L. McComic, Vice President and Chief Financial Officer
mexco@sbcglobal.net, 432-682-1119

 
 
 

Mexco Energy Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended March 31,
 
   
2008
 
2007
 
2006
  
Operating revenues:
                    
Oil and gas
  
$
3,887,955
  
$
2,969,325
  
$
3,716,564
  
Other
    
11,453
    
2,392
    
3,079
  
Total operating revenues
    
3,899,408
    
2,971,717
    
3,719,643
  
                     
Operating expenses:
                    
Production
    
1,240,305
    
870,778
    
843,927
  
Accretion of asset retirement obligation
    
26,262
    
24,057
    
23,436
  
Depreciation, depletion, and amortization
    
779,618
    
652,826
    
658,365
  
General and administrative
    
821,786
    
829,180
    
817,332
  
Impairment of long-term asset
    
-
    
-
    
261,617
  
Total operating expenses
    
2,867,971
    
2,376,841
    
2,604,677
  
                     
Operating profit
    
1,031,437
    
594,876
    
1,114,966
  
                     
Other income (expense):
                    
Interest income
    
5,113
    
4,670
    
2,837
  
Interest expense
    
(105,312
)
  
(24,046
)
  
(98,657
)
                     
Net other expense
    
(100,199
)
  
(19,376
)
  
(95,820
)
                     
Earnings before income taxes and
                    
minority interest
    
931,238
    
575,500
    
1,019,146
  
                     
Income tax expense (benefit):
                    
Current
    
-
    
-
    
(19,312
)
Deferred
    
217,594
    
(28,050
)
  
291,452
  
     
217,594
    
(28,050
)
  
272,140
  
                     
Earnings before minority interest
    
713,644
    
603,550
    
747,006
  
                     
Minority interest in loss of subsidiary
    
-
    
4,835
    
41,799
  
                     
Net income
  
$
713,644
  
$
608,385
  
$
788,805
  
                     
                     
Net income per common share:
                    
                     
Basic:
  
$
0.40
  
$
0.35
  
$
0.45
  
Diluted:
  
$
0.40
  
$
0.33
  
$
0.43
  

 
 
 
 
 
Mexco Energy Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
As of March 31,

   
2008
 
2007
  
ASSETS
          
Current assets
          
Cash and cash equivalents
  
$
303,617
  
$
72,537
  
Accounts receivable:
              
Oil and gas sales
    
758,459
    
399,659
  
Trade
    
102,403
    
2,987
  
Related parties
    
12,659
    
-
  
Income tax receivable
    
-
    
59,736
  
Prepaid costs and expenses
    
22,062
    
65,986
  
Total current assets
    
1,199,200
    
600,905
  
               
Investment in GazTex, LLC
    
20,509
    
20,509
  
               
Property and equipment, at cost
              
Oil and gas properties, using the full cost method
    
23,941,483
    
20,526,431
  
Other
    
61,362
    
51,412
  
     
24,002,845
    
20,577,843
  
               
Less accumulated depreciation, depletion, and amortization
    
12,019,895
    
11,240,277
  
Property and equipment, net
    
11,982,950
    
9,337,566
  
   
$
13,202,659
  
$
9,958,980
  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
              
Current liabilities
              
Accounts payable and accrued expenses
  
$
571,526
  
$
154,074
  
               
Long-term debt
    
2,600,000
    
700,000
  
Asset retirement obligation
    
374,789
    
350,584
  
Deferred income tax liabilities
    
1,196,280
    
978,686
  
               
               
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;
              
1,841,366 and 1,840,366 shares issued;
              
1,757,366 and 1,780,841 shares outstanding as of
              
March 31, 2008 and 2007, respectively
    
920,683
    
920,183
  
Additional paid-in capital
    
4,381,269
    
4,291,892
  
Retained earnings
    
3,584,729
    
2,871,085
  
Treasury stock, at cost (84,000 and 59,525 shares, respectively)
    
(426,617
)
  
(307,524
)
Total stockholders’ equity
    
8,460,064
    
7,775,636
  
   
$
13,202,659
  
$
9,958,980