MEXCO ENERGY CORP - FORM 8-K - EX-99.1 - August 6, 2014

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EXHIBIT 99.1

August 6, 2014

FOR IMMEDIATE RELEASE

Mexco Energy Corporation Reports Profitable First Quarter and Property Developments

MIDLAND, TX – 08/06/14 -- Mexco Energy Corporation (NYSE MARKET: MXC) today reported net income of $19,054 for the quarter ending June 30, 2014, the Company’s first quarter of fiscal 2014. This is an 18% increase compared to net income $16,131 for the quarter ending June 30, 2013.
 
Operating revenues in the first quarter of fiscal 2015 were $1,017,834, a 2% increase from $996,525 for the first quarter of fiscal 2014.
 
The average sales price for the quarter ending June 30, 2014 was $7.83 per Mcfe compared to $7.23 per Mcfe for the quarter ending June 30, 2013, an increase of 8%. Oil and gas production decreased .3% and 8%, respectively, during the first quarter of fiscal 2015 as compared to the first quarter of fiscal 2014.

Mexco also announced it has participated in the drilling, completion and installation of submersible pumps of three wells in Reagan County, Texas in the “B” bench of the Wolfcamp formation.  After the testing results of these wells become available, Mexco will make a further announcement.  These three wells are the first of seven wells to be drilled to a vertical depth of 8,000 feet and a horizontal distance of approximately 7,150 feet with a 50 stage zipper fracture treatment.  Mexco’s interest in these wells is 1.45% working interest (1.25% net revenue interest).  Mexco has expended approximately $400,000 on these wells to date.

Mexco participated in the drilling of six horizontal wells in the Wolfcamp formation of the Lin field of Reagan County, Texas.  All six of these wells have been completed and are currently producing. The unit, operated by EOG Resources, Inc., contains approximately 500 acres.  Mexco’s working interest in these wells is .8086% (.6064% net revenue interest).  Mexco’s share of the costs to drill, complete and fracture these wells was approximately $350,000.  EOG has drilled and is in the process of completing a seventh well in this unit involving an approximately 8,000 foot vertical and 9,000 foot horizontal depth.

Mexco participated in a horizontal well located in Lea County, New Mexico flowing at the rate of 1,699 barrels of oil equivalent which is 1,255 barrels of oil and 2,543,000 of natural gas per day with flowing tubing pressure of 575 pounds per square inch on 64/64 inch choke.  This well is located in Draper Mills Field.  Mexco’s working interest in this well is approximately .56% (.42% net revenue interest).  This is the first of six wells scheduled to be drilled and operated by Concho Resources Inc.

In the next twelve months Mexco currently is scheduled to participate as a non-operator owner of various working interests in the drilling and completion of 22 horizontal wells involving an aggregate expenditure of approximately $1.2 million.  Of these 22 horizontal wells, four are located in Reagan and two in Winkler Counties, Texas, and fifteen in Lea and one in Eddy Counties, New Mexico.  Approximately one half of such $1.2 million expenditure will be in Reagan County, Texas.
 
 
 
 
 
Mexco believes that these horizontal wells with multi stage fracturing will have material positive effect on its income, net profits and oil and gas reserves.

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 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, 2014.  Mexco Energy Corporation disclaims any intention or obligation to revise any forward-looking statements.

For additional information, please contact:  Nicholas C. Taylor, Chairman and Chief Executive Officer or Tammy L. McComic, President and Chief Financial Officer, both of Mexco Energy Corporation, (432) 682-1119.

 
 
 
 
Mexco Energy Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
   
June 30,
    
March 31,
  
   
2014
    
2014
  
ASSETS
            
Current assets
            
Cash and cash equivalents
   $ 152,498     $ 156,082  
Accounts receivable:
                
Oil and gas sales
     596,567       628,098  
Trade
     12,921       18,144  
Prepaid costs and expenses
     61,016       28,804  
Total current assets
     823,002       831,128  
                 
Property and equipment, at cost
                
Oil and gas properties, using the full cost method
     35,757,834       35,460,741  
Other
     94,356       94,356  
Accumulated depreciation, depletion and amortization
     (18,775,989 )     (18,475,174 )
Property and equipment, net
     17,076,201       17,079,923  
                 
Other noncurrent assets
     949       7,239  
Total assets
   $ 17,900,152     $ 17,918,290  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
Current liabilities
                
Accounts payable and accrued expenses
   $ 325,087     $ 257,431  
Income tax payable
     -       6,500  
Derivative instruments
     59,121       44,981  
Total current liabilities
     384,208       308,912  
                 
Long-term debt
     2,300,000       2,425,000  
Asset retirement obligations
     932,194       926,577  
Deferred income tax liabilities
     841,068       858,449  
Total liabilities
     4,457,470       4,518,938  
                 
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 2,038,266 shares outstanding as of June 30, 2014 and March 31, 2014
     1,052,133       1,052,133  
Additional paid-in capital
     6,945,921       6,921,645  
Retained earnings
     5,785,620       5,766,566  
Treasury stock, at cost (66,000 shares)
     (340,992 )     (340,992 )
Total stockholders' equity
     13,442,682       13,399,352  
Total liabilities and stockholders’ equity
   $ 17,900,152     $ 17,918,290  

 
 
 
 
Mexco Energy Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended June 30,
(Unaudited)
 
   
2014
    
2013
  
             
Operating revenues:
            
Oil and gas
   $ 1,006,656     $ 984,269  
Other
     11,178       12,256  
Total operating revenues
     1,017,834       996,525  
                 
Operating expenses:
                
Production
     310,778       308,636  
Accretion of asset retirement obligations
     4,835       10,917  
Depreciation, depletion and amortization
     300,815       295,033  
General and administrative
     350,337       311,470  
Total operating expenses
     966,765       926,056  
                 
Operating income
     51,069       70,469  
                 
Other income (expense):
                
Interest income
     2       2  
Interest expense
     (15,770 )     (20,130 )
Loss on derivative instruments
     (33,628 )     (27,392 )
Net other expense
     (49,396 )     (47,520 )
                 
Earnings before provision for income taxes
     1,673       22,949  
                 
Income tax (benefit) expense:
                
Current
     -       -  
Deferred
     (17,381 )     6,818  
      (17,381 )     6,818  
                 
Net income
   $ 19,054     $ 16,131  
                 
                 
Income per common share:
                
Basic
   $ 0.01     $ 0.01  
Diluted
   $ 0.01     $ 0.01  
                 
Weighted average common shares outstanding:
                
Basic
     2,038,266       2,036,866  
Diluted
     2,054,847       2,038,491  








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