MIDLAND, Texas, Aug. 14 /PRNewswire-FirstCall/ -- Mexco Energy Corporation 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 Mexco'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.
