MGM Energy Corp.
TSX : MGX

MGM Energy Corp.

October 29, 2009 17:38 ET

MGM Energy Corp.: Financial Results for the Three and Nine Months Ended September 30, 2009

CALGARY, ALBERTA--(Marketwire - Oct. 29, 2009) -

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 and nine months ended September 30, 2009.

The Company reported a net loss for the three month period ended September 30, 2009 of $4.5 million ($47.6 million for the nine month period ended September 30, 2009). The net loss during the three month period was primarily due to additional dry-hole costs on the Company's North Ellice J-17 and Ellice A-25 wells drilled during the 2008/09 winter season. As at September 30, 2009, the Company had positive working capital of $13.3 million, including restricted cash of $10 million.

As previously announced, MGM Energy will not undertake a drilling program this winter. The Company will be focusing its efforts on better understanding the geological potential of existing discoveries and lands and monitoring the regulatory process. With the Joint Review Panel report due in December 2009 and the National Energy Board providing a timetable for the completion of their report by Q3 2010, the Company is encouraged that the regulatory process is nearing conclusion.

"We have noted recent articles in the media regarding the status of the fiscal discussions on the Mackenzie Valley Pipeline with the Government of Canada" said Henry Sykes, President of MGM Energy "We have had no communication with Government of Canada which would confirm the stories. On the contrary, we are continuing to work with all parties, including the Government of Canada, on the pipeline project."

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 Calgary-based Canadian oil and gas exploration and development company with operations in Northern Canada. MGM Energy's common shares are listed on 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 As at
September 30 December 31
2009 2008
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ASSETS
Current assets
Cash and cash equivalents $ 4,236 $ 82,001
Restricted cash 10,000 -
Accounts receivable and other
current assets 1,404 1,850
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15,640 83,851
Property, plant and equipment 232,807 220,725
Future income taxes 258 9,014
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$ 248,705 $ 313,590
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $ 2,320 $ 12,628
Due to related parties 17 108
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2,337 12,736
Asset retirement obligations 2,686 1,996
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5,023 14,732
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Shareholders' Equity
Share capital 446,322 455,336
Contributed surplus 6,092 4,664
Deficit (208,732) (161,142)
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243,682 298,858
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$ 248,705 $ 313,590
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MGM Energy Corp.
Statements of Loss and Other Comprehensive Loss (Unaudited)
($000s, except as noted)

Three Months Ended Nine Months Ended
September 30 September 30
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2009 2008 2009 2008
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Revenue
Interest income $ 7 $ 668 $ 227 $ 2,137
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Expenses
General and administrative 1,011 956 3,357 3,672
Stock-based compensation 374 705 1,428 1,711
Pipeline regulatory and
access - - - 55
Exploration 571 (235) 1,579 28,058
Lease rental and land costs 233 63 1,286 3,273
Dry hole 2,378 - 39,467 32,432
Interest and financing
charges 154 75 542 214
Accretion of asset
retirement obligations 58 36 148 91
Gain on settlement of
asset retirement obligation (114) - (114) -

Depreciation 127 99 382 226
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4,792 1,699 48,075 69,732
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Loss before tax (4,785) (1,031) (47,848) (67,595)
Future income tax expense
(recovery) (258) 12 (258) (16,604)
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Net loss and other comprehensive
loss $(4,527) $(1,043) $(47,590) $(50,991)
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Net loss per Common Share ($/share)
Basic (0.02) (0.00) (0.18) (0.31)
Diluted (0.02) (0.00) (0.18) (0.31)

Weighted average Common Shares
outstanding (000s)
Basic 263,195 241,306 263,195 166,672
Diluted 263,195 241,306 263,195 166,672


Statements of Deficit (Unaudited)
($000s)

Three Months Ended Nine Months Ended
September 30 September 30
2009 2008 2009 2008
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Deficit, beginning of period $(204,205) $(110,929) $(161,142) $ (60,981)
Net loss (4,527) (1,043) (47,590) (50,991)
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Deficit, end of period $(208,732) $(111,972) $(208,732) $(111,972)
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MGM Energy Corp.
Statements of Cash Flows (Unaudited)
($000s)

Three Months Ended Nine Months Ended
September 30 September 30
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2009 2008 2009 2008
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Operating activities
Net loss and other comprehensive
loss $(4,527) $(1,043) $(47,590) $(50,991)
Add (deduct):
Stock-based compensation 374 705 1,428 1,711
Exploration 571 (235) 1,579 28,058
Dry hole 2,378 - 39,467 32,432
Accretion of asset
retirement obligations 58 36 148 91
Depreciation 127 99 382 226
Non-cash general and
administrative expense (35) - (35) -
Gain on settlement of
asset retirement
obligations (114) - (114) -
Future income tax
expense (recovery) (258) 12 (258) (16,604)
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(1,426) (426) (4,993) (5,077)
Change in non-cash working
capital 751 742 (3,514) 1,003
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(675) 316 (8,507) (4,074)
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Financing activities
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Common shares issued, net of
issuance costs - 77,237 - 77,237
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Investing activities
Restricted cash contributions - - (10,000) -
Capital expenditures (3,686) (5,147) (52,820) (80,474)
Change in non-cash working
capital (5,702) (2,374) (6,438) (10,079)
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(9,388) (7,521) (69,258) (90,553)
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Increase (decrease) in cash and
cash equivalents (10,063) 70,032 (77,765) (17,390)
Cash and cash equivalents,
beginning of period 14,299 23,879 82,001 111,301
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Cash and cash equivalents, end
of period $ 4,236 $93,911 $ 4,236 $93,911
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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)