EX-99.1 2 v123404_ex99-1.htm
EXHIBIT 99.1

August 14, 2008

FOR IMMEDIATE RELEASE

Mexco Energy Corporation Reports Another Quarter of Record Earnings

MIDLAND, TX - 8/14/08 -- Mexco Energy Corporation (AMEX: MXC) today reported net income of $538,789, or .29 per diluted share, for the quarter ending June 30, 2008, the Company’s first quarter of fiscal 2009, compared to net income of $34,806, or .02 per diluted share, for the same quarter of fiscal 2008, an increase of 1,448%.
 
Operating revenues in the first quarter of fiscal 2009 increased $829,003 or 97% to $1,679,320 from $850,317 for the first quarter of fiscal 2008. This was another record high quarter of revenues for the Company, breaking the last record set in the fourth quarter of fiscal 2008.
 
This is partially the result of revenues generated from oil and gas royalty interests which include 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, as well as the additional Barnett Shale royalties purchased on June 6, 2008 for $429,000. For the three month period ending June 30, 2008, revenues from oil and gas royalty interests accounted for approximately 37% of the Company’s revenues, compared to approximately 24% for the same period ending June 30, 2007. These first quarter results do not reflect any income from Mexico's Steelhead #1 well in Loving County. The Company is currently in the process of acquiring a right-of-way and preparing to build a pipeline to enable production and sales of natural gas from this well.
 
Nicholas C. Taylor, President and CEO of Mexco Energy Corporation, said, "We are very pleased with the over fifteen times increase in net income due in large part to the significant increase in revenues from natural gas royalties.”
 
Thomas Graham, Jr., Chairman of the Board of Directors of the Company added, “A nearly fifteen fold increase in the Company’s earnings is remarkable but it is indicative of the Company’s ongoing and expanding asset acquisition program. We look for more of this in the future.”

The average sales price for the quarter ending June 30, 2008 was $11.38 per Mcfe compared to $7.46 per Mcfe for the quarter ending June 30, 2007, an increase of 52%. Oil production decreased 6% and gas production increased 40% during the first quarter of fiscal 2009 as compared to the first quarter of fiscal 2008. 

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 with significant development potential.
 

Mexco Energy Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
   
June 30,
  
March 31,
  
   
2008
  
2008
  
   
(Unaudited)
      
ASSETS
          
Current assets
          
Cash and cash equivalents
  
$
220,713
  
$
303,617
  
Accounts receivable:
              
Oil and gas sales
    
1,271,406
    
758,459
  
Trade
    
255,286
    
102,403
  
Related parties
    
1,834
    
12,659
  
Prepaid costs and expenses
    
48,846
    
22,062
  
Total current assets
    
1,798,085
    
1,199,200
  
Investment in GazTex, LLC
    
-
    
20,509
  
Property and equipment, at cost
              
Oil and gas properties, using the full cost method
    
24,578,655
    
23,941,483
  
Other
    
61,362
    
61,362
  
 
    
24,640,017
    
24,002,845
  
Less accumulated depreciation, depletion and amortization
    
12,258,740
    
12,019,895
  
Property and equipment, net
    
12,381,277
    
11,982,950
  
   
$
14,179,362
  
$
13,202,659
  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
              
Current liabilities
              
Accounts payable and accrued expenses
    
416,254
    
571,526
  
Long-term debt
    
2,275,000
    
2,600,000
  
Asset retirement obligation
    
381,901
    
374,789
  
Deferred income tax liability
    
1,227,413
    
1,196,280
  
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;
              
1,948,866 and 1,841,366 shares issued;
             
1,864,866 and 1,757,366 shares outstanding as of
              
June 30, 2008 and March 31, 2008, respectively
    
974,433
    
920,683
  
Additional paid-in capital
    
5,207,460
    
4,381,269
  
Retained earnings
    
4,123,518
    
3,584,729
  
Treasury stock, at cost (84,000 shares)
    
(426,617
)
  
(426,617
)
Total stockholders’ equity
    
9,878,794
    
8,460,064
  
   
$
14,179,362
  
$
13,202,659
  
 

Mexco Energy Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended June 30,
(Unaudited)

   
2008
  
2007
  
           
Operating revenues:
          
Oil and gas
  
$
1,672,587
  
$
850,144
  
Other
    
6,733
    
173
  
Total operating revenues
    
1,679,320
    
850,317
  
               
Operating expenses:
              
Production
    
334,988
    
333,050
  
Accretion of asset retirement obligation
    
6,938
    
6,611
  
Depreciation, depletion and amortization
    
238,844
    
172,884
  
General and administrative
    
281,661
    
269,624
  
Total operating expenses
    
862,431
    
782,169
  
               
Income from operations
    
816,889
    
68,148
  
               
Other income (expense):
              
Interest income
    
336
    
338
  
Interest expense
    
(33,735
)
  
(15,348
)
Net other expense
    
(33,399
)
  
(15,010
)
               
Income before income taxes
   
783,490
    
53,138
  
               
Income tax expense:
              
Current
    
213,568
    
-
  
Deferred
    
31,133
    
18,332
  
     
244,701
    
18,332
  
               
Net income
  
$
538,789
  
$
34,806
  
               
Earnings per common share:
              
Basic
  
$
0.31
  
$
0.02
  
Diluted
 
$
0.29
    
0.02
  
 
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: Nicholas C. Taylor, President and Chief Executive Officer or Tammy L. McComic, Vice-President and Chief Financial Officer, both of Mexco Energy Corporation, (432) 682-1119.