MGM Energy Corp.
TSX : MGX

MGM Energy Corp.

April 29, 2010 16:15 ET

MGM Energy Corp.: Financial Results for the Three Months Ended March 31, 2010 and Completion of Private Placement of Shares

CALGARY, ALBERTA--(Marketwire - April 29, 2010) -

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. ("MGM Energy" or the "Company") (TSX:MGX) announced today its financial results for the three months ended March 31, 2010.

The Company reported a net loss for the three months ended March 31, 2010 of $3.1 million ($0.01 per share) as compared to a net loss of $36.7 million ($0.14 per share) for the three months ended March 31, 2009. The net loss for the first quarter of 2010 was principally due to the acquisition of seismic in the Great Bear River area of the Central Mackenzie Valley and general and administrative expenses.

The Company also announced that it has completed its previously announced non-brokered private placement of 25,000,000 common shares at $0.20 per share, for gross proceeds of $5,000,000. The proceeds of the offering will be utilized for general corporate purposes.

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 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)    
($000s)    
   
   
   
   
  As at
March 31
  As at
December 31
 
As at March 31 2010   2009  
             
ASSETS            
Current assets            
  Cash and cash equivalents $ 1,360   $ 4,486  
  Restricted cash   10,000     10,000  
  Accounts receivable and other current assets   1,669     1,650  
    13,029     16,136  
Property, plant and equipment   233,036     233,127  
Future income taxes   -     258  
  $ 246,065   $ 249,521  
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Current liabilities            
  Accounts payable and accrued liabilities $ 2,148   $ 2,601  
  Due to related parties   116     70  
    2,264     2,671  
Asset retirement obligations   2,203     2,159  
    4,467     4,830  
             
             
             
Shareholders' Equity            
  Share capital   449,477     449,735  
  Contributed surplus   6,702     6,420  
  Deficit   (214,581 )   (211,464 )
    241,698     244,691  
  $ 246,065   $ 249,521  
             
                 
MGM Energy Corp.    
Statements of Loss (Unaudited)    
($000s, except as noted)    
     
     
  Three Months Ended March 31  
  2010   2009  
             
Revenue            
  Interest income $ 6   $ 189  
             
             
Expenses            
  General and administrative   1,065     1,080  
  Stock-based compensation   282     571  
  Exploration   1,377     504  
  Pipeline regulatory and access   7     -  
  Lease rental and land costs   51     250  
  Dry hole   -     34,240  
  Interest and financing charges   242     120  
  Accretion of asset retirement obligations   44     41  
  Depreciation   55     127  
    3,123     36,933  
             
Loss before tax   (3,117 )   (36,744 )
  Future income tax recovery   -     -  
Net loss and other comprehensive loss $ (3,117 ) $ (36,744 )
             
Net loss per Common Share ($/share)            
  Basic $ (0.01 ) $ (0.14 )
  Diluted $ (0.01 ) $ (0.14 )
             
Weighted average Common Shares outstanding (000s)            
  Basic   289,495     263,195  
  Diluted   289,495     263,195  
             
Statements of Deficit (Unaudited)        
($000s)        
  Three Months Ended March 31  
  2010   2009  
             
Deficit, beginning of period $ (211,464 ) $ (161,142 )
Net loss   (3,117 )   (36,744 )
Deficit, end of period $ (214,581 ) $ (197,886 )
             
MGM Energy Corp.    
Statements of Cash Flows (Unaudited)    
($000s)    
     
  Three Months Ended March 31  
  2010   2009  
             
Operating activities            
Net loss and other comprehensive loss $ (3,117 ) $ (36,744 )
Add:            
  Stock-based compensation   282     571  
  Exploration   1,377     504  
  Dry hole   -     34,240  
  Accretion of asset retirement obligations   44     41  
  Depreciation   55     127  
    (1,359 )   (1,261 )
Change in non-cash working capital   (395 )   224  
    (1,754 )   (1,037 )
             
Financing activities            
             
             
Investing activities            
Capital expenditures   (1,340 )   (45,189 )
Change in non-cash working capital   (32 )   16,080  
    (1,372 )   (29,109 )
             
Decrease in cash and cash equivalents   (3,126 )   (30,146 )
Cash and cash equivalents, beginning of period   4,486     82,001  
Cash and cash equivalents, end of period $ 1,360   $ 51,855  
             

Contact Information

  • MGM Energy Corp.
    H. W. (Henry) 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)