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 November 13, 2015 - 6:18 PM EST
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Mexco Energy Corporation Reports Results for Second Quarter and Property Developments

MIDLAND, Texas, Nov. 13, 2015 /PRNewswire/ -- Mexco Energy Corporation (NYSE MKT: MXC) today reported net loss of $776,307 for the quarter ending September 30, 2015, the Company's second quarter of fiscal 2016.  This compares to net income of $86,256 for the quarter ending September 30, 2014.

Operating revenues in the second quarter of fiscal 2016 were $728,829, a 28% decrease from $1,006,099 for the second quarter of fiscal 2015.

The average sales price of oil and natural gas respectively for the quarter ending September 30, 2015 was $44.94 per barrel and $2.15 per Mcf compared to $85.16 per barrel and $3.77 per Mcf for the quarter ending September 30, 2014.

Oil and gas production increased 44.2% and 17.8%, respectively, during the second quarter of fiscal 2016 as compared to the second quarter of fiscal 2015.

For the six months ended September 30, 2015, the Company reported a net loss of $1,100,673 compared to net income of $105,310 for the six months ended September 30, 2014.  Operating revenues decreased 29% to $1,431,438 for the six months ended September 30, 2015 from $2,023,932 for the same period of fiscal 2015. 

The average sales price of oil and natural gas respectively for the six months ended September 30, 2015 was $48.16 per barrel and $2.15 per Mcf compared to $88.99 per barrel and $4.03 per Mcf for the six months ended September 30, 2014.  Oil and gas production increased 41% and 15%, respectively, for the six months ended September 30, 2015 as compared to the same period of fiscal 2015. 

Mexco participated in the drilling and completion of two horizontal wells and one salt water disposal well in the Red Hills (Avalon) Field of Lea County, New Mexico.  These wells, operated by Concho Resources, Inc. are producing at the rate of approximately 490 barrels of oil and 1,300,000 cubic feet of natural gas per day.  Mexco's share of the costs through September 30, 2015 for these three wells as well as purchase of additional interests was approximately $89,000 for our approximately .49% working interest (.42% net revenue interest). 

Mexco participated in the drilling and completion of three horizontal development wells and one salt water disposal well in the Avalon Shale portion of the Bone Spring formation in Lea County, New Mexico.  This unit, consisting of 3 currently producing wells, is operated by Concho Resources, Inc.   The most recent of these wells flowed at the rate of 941 barrels of oil and 1,142,000 cubic feet of gas on a twenty-four hour test.  Mexco's share of the costs through September 30, 2015 for these four wells as well as purchase of additional interests was approximately $167,000.  Mexco's working interests in these wells now range from .74% to 1.18% (.63% to .87% net revenue interest). 

Mexco is a working interest owner in two horizontal wells, one producing at approximately 320 barrels of oil and 1,600,000 cubic feet of natural gas per day and the second of which is in process of drilling and completion.  These wells are in the Lower Avalon formation located in Lea County, New Mexico and operated by Concho Resources, Inc.  Mexco has expended $46,200 in the first six months of fiscal 2016 for our approximate .60% working interest (.45% net revenue interest).

These initial rates of production are not necessarily indicative of actual future rates of production.

Mexco recently executed a term lease assignment extension to an independent operator for a period of three years for payment to Mexco of $640,000.  Such assignment covers 320 acres located in the northeast corner of Upton County, Texas south of the Midland County and west of the Reagan County lines.  This acreage covers an undivided one-half interest in a 640 acre tract the other half of which is held by Apache Corporation.  This acreage has potential for development of the horizontal Wolfcamp.  Mexco retains a 1% overriding royalty interest in the assigned acreage. 

Pioneer Natural Resources Company has drilled two wells under a term assignment from Mexco of a leasehold interest from Mexco in 417.33 net acres (837.33 gross acres) also in the Northeast corner of Upton County, Texas.  Mexco retains a 1% royalty which is free of drilling, completion and operation costs.

Mexco Energy Corporation, a Colorado corporation, is an independent oil and gas company located in Midland, Texas engaged in the acquisition, exploration and development of oil and gas properties.  For more information on Mexco Energy Corporation, go to www.mexcoenergy.com.

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 inherent 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, 2015.  Mexco Energy Corporation disclaims any intention or obligation to revise any forward-looking statements.

 

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Unaudited)






September 30,


March 31,






2015


2015

ASSETS







Current assets






Cash and cash equivalents

$          59,828


$        96,084



Accounts receivable:







Oil and gas sales

392,036


384,485




Trade

14,903


64,584



Prepaid costs and expenses

29,541


44,618





Total current assets

496,308


589,771










Property and equipment, at cost






Oil and gas properties, using the full cost method

41,293,845


40,563,443



Other


107,484


106,792



Accumulated depreciation, depletion and amortization

(21,540,455)


(19,838,036)





Property and equipment, net

19,860,874


20,832,199










Other noncurrent assets

41,018


48,980





Total assets

$   20,398,200


$ 21,470,950









LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities






Accounts payable and accrued expenses

$        576,168


$      423,121








Long-term debt

6,250,000


5,950,000


Asset retirement obligations

1,246,526


1,230,216


Deferred income tax liabilities

147,539


660,870





Total liabilities

8,220,233


8,264,207










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; 2,104,266 shares issued and 2,037,266 shares outstanding as of September 30, 2015 and March 31, 2015 











1,052,133


1,052,133



Additional paid-in capital

7,146,928


7,075,031



Retained earnings

4,324,907


5,425,580



Treasury stock, at cost (67,000 shares) 

(346,001)


(346,001)


Total stockholders' equity

12,177,967


13,206,743





Total liabilities and stockholders' equity

$   20,398,200


$ 21,470,950

 


Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)







Three Months Ended


Six Months Ended






September 30


September 30






2015


2014


2015


2014

Operating revenue:









Oil and gas

$   720,874


$   987,942


$1,413,456


$ 1,994,597


Other

7,955


18,157


17,982


29,335



Total operating revenues

728,829


1,006,099


1,431,438


2,023,932













Operating expenses:









Production

284,995


326,571


582,573


637,349


Accretion of asset retirement obligation

8,813


4,710


17,597


9,544


Impairment of oil and gas properties

833,789


-


833,789


-


Depreciation, depletion, and amortization

450,648


322,696


868,630


623,511


General and administrative

244,863


291,994


658,609


642,330



Total operating expenses

1,823,108


945,971


2,961,198


1,912,734













Operating (loss) income

(1,094,279)


60,128


(1,529,760)


111,198













Other income (expenses):









Interest income

3


2


36


4


Interest expense

(43,415)


(15,776)


(84,280)


(31,546)


Gain on derivative instruments

-


51,380


-


17,751



Net other (expense) income

(43,412)


35,606


(84,244)


(13,791)













(Loss) earnings before provision for income taxes

 

(1,137,691)


95,734


 

(1,614,004)


97,407













Income tax (benefit) expense:









Current

-


-


-


-


Deferred

(361,384)


9,478


(513,331)


(7,903)






(361,384)


9,478


(513,331)


(7,903)













Net (loss) income

$(776,307)


$  86,256


$(1,100,673)


$  105,310

























(Loss) income per common share:









Basic

$      (0.38)


$        0.04


$         (0.54)


$        0.05


Diluted

$      (0.38)


$        0.04


$         (0.54)


$        0.05













Weighted average common shares outstanding:









Basic

2,037,266


2,038,266


2,037,266


2,038,266


Diluted

2,037,266


2,053,158


2,037,266


2,054,003

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/mexco-energy-corporation-reports-results-for-second-quarter-and-property-developments-300178715.html

SOURCE Mexco Energy Corporation


Source: PR Newswire (November 13, 2015 - 6:18 PM EST)

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