MGM Energy Corp. Announces Financial Results for the Three Months Ended March 31, 2013, Provides an Operations Update and Reports on the Results for the Election of its Directors
CALGARY, ALBERTA--(Marketwired - April 25, 2013) - MGM Energy Corp. (MGX.TO) ("MGM Energy" or the "Company") announced today its financial results for the three months ended March 31, 2013.
The Company reported a net loss for the three months ended March 31, 2013 of $0.6 million ($0.00 per share) as compared to a net loss of $1.6 million ($0.01 per share) for the three months ended March 31, 2012. MGM Energy's full unaudited financial statements and accompanying Management's Discussion and Analysis will be filed shortly on the SEDAR website (www.sedar.com).
MGM Energy also provided an update on the analysis of the results of the East MacKay I-78 well recently drilled in the Canol shale oil play. The analysis of the fluid that flowed from the well is ongoing, but results to date indicate that the oil is light sweet crude oil, approximately 40 degrees API. The preliminary review of the logs confirms that they are consistent with the logs of the East MacKay I-77 well, located 1.5 km to the south and drilled in 2000 targeting deeper conventional targets. The initial review of the cores indicates that the reservoir rock has a high silica content, making it a good candidate for hydraulic fracturing. MGM Energy will be analyzing the core samples taken from the I-78 well and calibrating the results with the logs from the well to update the Company's estimate of original oil in place over MGM Energy's lands in the Canol shale oil play. It is expected that this work will be completed within the next six months. In addition to the analysis of the well results, the Company has completed an analysis of samples from the three groundwater monitoring wells drilled adjacent to the I-78 well which confirms that there was no contamination of the groundwater as a result of the drilling, fracturing and flowing operations.
"We continue to be very encouraged by the results of the East MacKay I-78 well" said Henry Sykes, President of MGM Energy. "The results of the well, including flow rates, certainly meet our expectations for a vertical well with small fracs and a limited testing period."
MGM Energy also announced the director election results from its 2013 annual meeting of shareholders held on April 25, 2013. The results of the director election are as follows:
DIRECTOR | FOR | WITHHELD |
Nominees | ||
Michael N. Chernoff | 191,149,820 | 282,127 |
Daryl H. Gilbert | 191,001,666 | 430,281 |
Robert B. Hodgins | 191,022,313 | 409,634 |
Robert B. Peterson | 191,031,657 | 400,290 |
Clayton H. Riddell | 190,999,319 | 432,628 |
James H. T. Riddell | 191,399,861 | 32,086 |
Robert B. Rooney | 191,053,316 | 378,631 |
Henry W. Sykes | 191,272,360 | 159,587 |
MGM Energy also announced that its shareholders approved a special resolution providing authority to effect a consolidation of the Company's shares on a 20:1 basis. The Board of Directors has determined that it will not proceed with the share consolidation at this time, although it retains the authority to do so up until the next Annual General Meeting.
MGM Energy is a Canadian oil and natural gas exploration and development company active in Northern Canada. MGM Energy's common shares are listed on the Toronto Stock Exchange under the symbol "MGX".
Certain statements or information included in this press release constitute forward-looking statements under applicable securities legislation. Such forward-looking statements or information are based on a number of assumptions which may prove to be incorrect. Although MGM Energy believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because MGM Energy can give no assurance that such expectations will prove to be correct. Forward-looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by MGM Energy and described in the forward-looking statements or information. The forward-looking statements or information contained in this document are made as of the date hereof and MGM Energy undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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Condensed Interim Balance Sheets (Unaudited) | |||||
($000s) | |||||
As at | As at | ||||
2013 | 2012 | ||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ 4,418 | $ 19,869 | |||
Restricted cash | 12,000 | - | |||
Accounts receivable and other current assets | 12,922 | 552 | |||
29,340 | 20,421 | ||||
Non-current assets | |||||
Exploration and evaluation assets | 64,559 | 63,971 | |||
Property and equipment, net | - | 136 | |||
64,559 | 64,107 | ||||
Total Assets | $ 93,899 | $ 84,528 | |||
LIABILITIES | |||||
Current liabilities | |||||
Accounts payable and accrued liabilities | $ 14,628 | $ 5,352 | |||
Due to related parties | 98 | 93 | |||
14,726 | 5,445 | ||||
Non-current liabilities | |||||
Asset retirement obligation | 4,547 | 4,018 | |||
4,547 | 4,018 | ||||
Total Liabilities | 19,273 | 9,463 | |||
SHAREHOLDERS' EQUITY | |||||
Share capital | 466,132 | 466,132 | |||
Contributed surplus | 9,392 | 9,201 | |||
Deficit | (400,898 | ) | (400,268 | ) | |
Total Shareholders' Equity | 74,626 | 75,065 | |||
Total Liabilities and Shareholders' Equity | $ 93,899 | $ 84,528 | |||
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Condensed Interim Statements of Loss and Comprehensive Loss (Unaudited) | |||||
($000s) | |||||
Three Months Ended March 31 | |||||
2013 | 2012 | ||||
Oil and natural gas revenue | $ - | $ - | |||
Rental income | 531 | - | |||
$ 531 | $ - | ||||
Expenses | |||||
General and administrative | 529 | 696 | |||
Share-based compensation | 211 | 153 | |||
Exploration and evaluation | 270 | 620 | |||
Accretion of asset retirement obligation | 10 | 10 | |||
Depreciation | 15 | 6 | |||
1,035 | 1,485 | ||||
Loss before net finance expenses | (504 | ) | (1,485 | ) | |
Finance income | (37 | ) | (27 | ) | |
Finance expenses | 163 | 178 | |||
Net finance expenses | 126 | 151 | |||
Net loss and comprehensive loss | $ (630 | ) | $ (1,636 | ) | |
Net loss per Common Share ($/share) | |||||
Basic | $ (0.00 | ) | $ (0.01 | ) | |
Diluted | $ (0.00 | ) | $ (0.01 | ) | |
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Condensed Interim Statements of Cash Flows (Unaudited) | |||||
($000s) | |||||
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2013 | 2012 | ||||
Operating activities | |||||
Net loss for the period | $ (630 | ) | $ (1,636 | ) | |
Adjustments to add (deduct) non-cash items | |||||
Share-based compensation | 211 | 153 | |||
Accretion of asset retirement obligation | 10 | 10 | |||
Depreciation | 15 | 6 | |||
Non-cash exploration and evaluation expenses | (51 | ) | |||
Change in non-cash working capital | (3,133 | ) | (1,181 | ) | |
Change in restricted cash balance | (12,000 | ) | - | ||
Cash flows used in operating activities | (15,578 | ) | (2,648 | ) | |
Financing activities | |||||
Cash payment for options exercised | (20 | ) | - | ||
Cash flows used in financing activities | (20 | ) | - | ||
Investing activities | |||||
Capital expenditures | 103 | (278 | ) | ||
Change in non-cash working capital | 44 | (1 | ) | ||
Cash flows provided by (used in) investing activities | 147 | (279 | ) | ||
Decrease in cash and cash equivalents | (15,451 | ) | (2,927 | ) | |
Cash and cash equivalents, beginning of period | 19,869 | 12,064 | |||
Cash and cash equivalents, end of period | $ 4,418 | $ 9,137 | |||
