MEXCO ENERGY CORPORATION 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 95,734 97,407
(1,137,691) (1,614,004)
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
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SOURCE Mexco Energy Corporation
