MGM Energy Corp.

MGM Energy Corp.

April 25, 2013 19:26 ET

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. (TSX:MGX) ("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 (

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:

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.

MGM Energy Corp.
Condensed Interim Balance Sheets (Unaudited)
As at
March 31
As at
December 31
2013 2012
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
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
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

MGM Energy Corp.
Condensed Interim Statements of Loss and Comprehensive Loss (Unaudited)
Three Months Ended March 31
2013 2012
Oil and natural gas revenue $ - $ -
Rental income 531 -
$ 531 $ -
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 )

MGM Energy Corp.
Condensed Interim Statements of Cash Flows (Unaudited)

Three Months Ended March 31
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

Contact Information

  • MGM Energy Corp.
    H.W. (Henry) Sykes
    (403) 781-7800
    (403) 781-7801 (FAX)

    MGM Energy Corp.
    R. N. (Rick) Miller
    Chief Financial Officer
    (403) 781-7800
    (403) 781-7801 (FAX)