EX-99.1 2 v035524_ex99-1.txt FOR IMMEDIATE RELEASE: Mexco Energy Corporation Reports Profitable Third Quarter MIDLAND, TX - 2/14/06 - Mexco Energy Corporation (AMEX: MXC) reported net income for the third quarter of fiscal 2006 of $354,608, or $0.19 per diluted share, as compared to net income of $183,359, or $0.10 per diluted share, for the third quarter of fiscal 2005, a 93% increase. For the nine months ended December 31, 2005, the Company reported net income of $801,249, or $0.43 per diluted share, as compared to $405,120, or $0.22 per diluted share, for the same period of fiscal 2005, a 98% increase. Operating revenues increased $672,946 (31%) to $2,850,914 for the nine month period from $2,177,968 for the same period of fiscal 2005. The average sales price received of $7.97 Mcfe was up 37% from the $5.80 per Mcfe received in the first nine months of fiscal 2005. Oil and gas sales for the third quarter of fiscal 2006 increased $336,558 (43%) to $1,111,524 from $774,966 in the third quarter of fiscal 2005. The average sales price received of $9.56 per Mcfe was up 53% from the $6.23 per Mcfe received in the third quarter of fiscal 2005. Oil production increased 2% and gas production decreased 9% during the third quarter of fiscal 2006 as compared to the third quarter of fiscal 2005. Total operating expenses for the third quarter of fiscal 2006 increased $65,012 to $553,130 from $488,118 in the third quarter of fiscal 2005. Included in operating expenses was a 45% increase in general and administrative expense. The increase in general and administrative expense was primarily attributable to consulting costs directly associated with the Company's Russian Venture. The Company continues to focus a substantial portion of its efforts on the acquisition of royalties in areas with significant development potential. For the nine months ended December 31, 2005 revenues from oil and gas royalty interests accounted for approximately 26% of the Company's revenues, compared to approximately 21% for the nine months ended December 31, 2004. The Company owns oil and gas properties in ten states, with the majority of its activity centered in West Texas. The Company plans to continue to focus its efforts to increase oil and natural gas reserves, through exploration and development as well as acquisition of royalties. 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, 2005. 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 BALANCE SHEETS
December 31 March 31 2005 2005 ------------ ------------ (Unaudited) ASSETS Current assets Cash and cash equivalents $ 81,125 $ 85,209 Accounts receivable: Oil and gas sales 581,347 418,348 Trade 3,021 23,258 Related parties 1,062 2,103 Prepaid costs and expenses 64,080 7,362 ------------ ------------ Total current assets 730,635 536,280 Investment in GazTex, LLC 282,126 282,126 Property and equipment, at cost Oil and gas properties, using the full cost method ($970,831 and $921,719 excluded from amortization as of December 31, 2005 and March 31, 2005 respectively) 18,792,530 18,376,974 Other 39,848 36,855 ------------ ------------ 18,832,378 18,413,829 Less accumulated depreciation, depletion, and amortization 10,335,206 9,929,086 ------------ ------------ Property and equipment, net 8,497,172 8,484,743 ------------ ------------ $ 9,509,933 $ 9,303,149 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $ 103,094 $ 111,675 Income tax payable 295,740 48,127 ------------ ------------ Total current liabilities 398,834 159,802 Long-term debt 1,125,000 1,990,000 Asset retirement obligation 375,714 374,506 Deferred income tax liability 730,933 715,284 Minority interest 25,362 25,362 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; 1,766,566 shares issued 883,283 883,283 Additional paid-in capital 3,841,238 3,826,592 Retained earnings 2,275,144 1,473,895 Treasury stock, at cost (33,525 shares) (145,575) (145,575) ------------ ------------ Total stockholders' equity 6,854,090 6,038,195 ------------ ------------ $ 9,509,933 $ 9,303,149 ============ ============
Mexco Energy Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended December 31 December 31 2005 2004 2005 2004 ---------------------------- ---------------------------- Operating revenue: Oil and gas sales $ 1,111,524 $ 774,966 $ 2,848,159 $ 2,172,413 Other 387 372 2,755 5,555 ------------ ------------ ------------ ------------ Total operating revenues 1,111,911 775,338 2,850,914 2,177,968 Operating expenses: Production 223,169 206,493 648,844 604,458 Accretion of asset retirement obligation 6,566 5,824 18,132 19,077 Depreciation, depletion, and amortization 129,398 141,764 406,120 414,816 General and administrative 193,997 134,037 569,478 465,984 ------------ ------------ ------------ ------------ Total operating expenses 553,130 488,118 1,642,574 1,504,335 ------------ ------------ ------------ ------------ Operating profit 558,781 287,220 1,208,340 673,633 Other income (expense): Interest income 232 107 594 238 Interest expense (25,286) (23,309) (82,159) (61,115) ------------ ------------ ------------ ------------ Net other expense (25,054) (23,202) (81,565) (60,877) ------------ ------------ ------------ ------------ Earnings before income taxes and minority interest 533,727 264,018 1,126,775 612,756 Income tax expense: Current 179,287 (6,910) 321,230 106,522 Deferred 3,019 87,569 15,649 101,114 ------------ ------------ ------------ ------------ 182,306 80,659 336,879 207,636 Income before minority interest 351,421 183,359 789,896 405,120 Minority interest in loss of subsidiary 3,187 -- 11,353 -- ------------ ------------ ------------ ------------ Net income $ 354,608 $ 183,359 $ 801,249 $ 405,120 ============ ============ ============ ============ Net income per common share: Basic: $ 0.20 $ 0.11 $ 0.46 $ 0.23 Diluted: $ 0.19 $ 0.10 $ 0.43 $ 0.22