MGM Energy Corp.
TSX : MGX

MGM Energy Corp.

November 01, 2007 16:30 ET

MGM Energy Corp.: Financial and Operating Results for the Three and Nine Months Ended September 30, 2007

CALGARY, ALBERTA--(Marketwire - Nov. 1, 2007) -

THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO ANY UNITED STATES NEWSWIRE SERVICES OR OTHERWISE FOR DISTRIBUTION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS.

MGM Energy Corp. (TSX:MGX) ("MGM Energy" or the "Company") announced today its financial and operating results for the three months and nine months ended September 30, 2007.

The Company reported a net loss for the three months ended September 30, 2007 of $1.8 million ($0.02 per share).

"Our third quarter of 2007 continued to be very busy, preparing for our 2007/08 winter capital program" said Henry Sykes, President of MGM Energy Corp. "We closed our equity issue in August, raising gross proceeds of $111.5 million, ensuring we have sufficient cash to fund our winter program. We finalized our three drilling locations and seismic plans for the upcoming winter, and we began transporting equipment and supplies to the staging areas in the Northwest Territories in anticipation of beginning our drilling program before the end of this year."

MGM Energy's net loss for the nine months ended September 30, 2007 was $31.0 million ($0.50 per share) which principally resulted from the cost of the two previously announced dry holes at Kumak I-25 and Unipkat M-45 in the Mackenzie Delta.

MGM Energy's full interim unaudited financial statements and accompanying Management's Discussion and Analysis will be filed shortly on the SEDAR website (www.sedar.com).

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. Forward-looking statements or information in this press release include but are not limited to business strategy and objectives, exploration and drilling plans and the timing thereof, as well as the anticipated timing for seeking regulatory approvals. 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.



MGM Energy Corp.
Balance Sheets (Unaudited)
($ thousands)


For periods prior to January 12, 2007, the financial statements of MGM
Energy Corp., including the results of operations and cash flows, have been
prepared on a carve-out basis from Paramount Resources Ltd. as is described
in Note 2. These financial statements may not be indicative of the results
that would have been attained if MGM Energy Corp. had operated as a
stand-alone entity for these periods.


As at As at
September 30 December 31
2007 2006
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ASSETS
Current assets
Cash and cash equivalents $ 123,573 $ -
Accounts receivable 1,032 1,360
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124,605 1,360
Property, plant and equipment 262,199 70,268
Future income taxes 2,574 -
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$ 389,378 $ 71,628
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 9,038 $ 6,774
Due to related parties 656 -
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9,694 6,774
Asset retirement obligations 3,155 439
Future income taxes - 3,895
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12,849 11,108
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Shareholders' Equity
Share capital 404,275 -
Contributed surplus 1,925 -
Net investment by Paramount Resources Ltd. - 60,520
Deficit (29,671) -
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376,529 60,520
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$ 389,378 $ 71,628
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MGM Energy Corp.
Statements of Income (Loss) (Unaudited)
($ thousands, except as noted)


For periods prior to January 12, 2007, the financial statements of MGM
Energy Corp., including the results of operations and cash flows, have been
prepared on a carve-out basis from Paramount Resources Ltd. as is described
in Note 2. These financial statements may not be indicative of the results
that would have been attained if MGM Energy Corp. had operated as a
stand-alone entity for these periods.


Three Months Ended Nine Months Ended
September 30 September 30
2007 2006 2007 2006
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Revenue
Interest income $ 1,091 $ - $ 1,771 $ -
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Expenses
General and administrative 1,522 220 4,353 349
Stock-based compensation 750 (115) 2,180 (5)
Pipeline regulatory and access 166 - 426 -
Exploration 2,154 1 2,970 146
Lease rental 789 - 789 -
Dry hole (2,156) - 34,241 -
Interest and financing charges 40 - 136 -
Accretion of asset retirement
obligations 64 6 134 20
Depreciation 33 - 60 -
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3,362 112 45,289 510
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Loss before tax (2,271) (112) (43,518) (510)
Future income tax recovery (442) (3) (12,497) (649)
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Net income (loss) and other
comprehensive income (loss) $ (1,829) $ (109) $ (31,021) $ 139
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Net loss per Common Share ($/share)
Basic (0.02) (0.50)
Diluted (0.02) (0.50)

Weighted average Common Shares
outstanding (thousands)
Basic 114,532 62,516
Diluted 114,532 62,516


Statements of Deficit (Unaudited)
($ thousands)

Three Months Ended Nine Months Ended
September 30 September 30
2007 2006 2007 2006
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Deficit, beginning of period $ (27,842) $ - $ - $ -
Net income (loss)
(1,829) (109) (31,021) 139

Allocation to net investment by
Paramount Resources Ltd.
- 109 1,350 (139)
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Deficit, end of period $ (29,671) $ - $ (29,671) $ -
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MGM Energy Corp.
Statements of Cash Flows (Unaudited)
($ thousands)


For periods prior to January 12, 2007, the financial statements of MGM
Energy Corp., including the results of operations and cash flows, have been
prepared on a carve-out basis from Paramount Resources Ltd. as is described
in Note 2. These financial statements may not be indicative of the results
that would have been attained if MGM Energy Corp. had operated as a
stand-alone entity for these periods.


Three Months Ended Nine Months Ended
September 30 September 30
2007 2006 2007 2006
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Operating activities
Net income (loss) and other
comprehensive income (loss) $ (1,829) $ (109) $ (31,021) $ 139
Add (deduct):
Stock-based compensation - non cash
portion 750 (115) 2,180 (114)
Exploration 2,154 1 2,970 146
Dry hole (2,156) - 34,241 -
Accretion of asset retirement
obligations 64 6 134 20
Asset retirement obligation
expenditures (2) - (402) -
Depreciation 33 - 60 -
Future income tax recovery (442) (3) (12,497) (649)
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Funds flow from operations (1,428) (220) (4,335) (458)
Change in non-cash working capital 278 346 546 (88)
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(1,150) 126 (3,789) (546)
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Financing activities
Repayment of note - - (12,000) -
Proceeds on settlement of note - - 163 -
Common shares issued, net of
issuance costs 106,400 - 355,106 -
Net investment by Paramount
Resources Ltd. - 275 3,195 2,822
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106,400 275 346,464 2,822
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Investing activities
Capital expenditures (18,935) (1,092) (226,218) (1,949)
Reorganization costs - - (1,000) -
Change in non-cash working capital 3,086 691 8,116 (327)
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(15,849) (401) (219,102) (2,276)
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Increase (decrease) in cash and
cash equivalents 89,401 - 123,573 -
Cash and cash equivalents,
beginning of period 34,172 - - -
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Cash and cash equivalents, end of
period $ 123,573 $ - $ 123,573 $ -
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Contact Information

  • MGM Energy Corp.
    Henry W. Sykes
    President
    (403) 781-7800
    (403) 781-7801 (FAX)
    or
    MGM Energy Corp.
    Rick Miller
    Chief Financial Officer
    (403) 781-7800
    (403) 781-7801 (FAX)