MGM Energy Corp.
TSX : MGX

MGM Energy Corp.

April 29, 2008 16:00 ET

MGM Energy Corp.: Financial and Operating Results for the Three Months Ended March 31, 2008

CALGARY, ALBERTA--(Marketwire - April 29, 2008) -

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 ended March 31, 2008.

The Company reported a net loss for the three months ended March 31, 2008 of $45.6 million ($0.35 per share). The net loss for the period was principally due to the dry-hole costs of $33.0 million the Atik P-19 and Aput C-43 wells which were previously announced as being unsuccessful and seismic costs of $24.9 million incurred during the first quarter that related to the 2007- 2008 winter capital program that under the "successful-efforts" method of accounting is charged as an expense when incurred.

As previously announced, MGM Energy has successfully completed its 2007/2008 winter drilling and seismic programs and all equipment has been demobilized from their location. "We are in the process of analyzing the result of this winter's activities and will incorporate the results into our planning for future drilling programs. We are also in the process of determining our plans for the 2008/2009 season and look forward to announcing those plans, likely by the end of the second quarter", said Henry Sykes, President of MGM Energy.

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)

For the period prior to January 12, 2007, the results of operations and cash
flows of MGM Energy Corp. have been prepared on a carve-out basis from
Paramount Resources Ltd.

As at As at
March 31 December 31
2008 2007
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ASSETS
Current assets
Cash and cash equivalents $ 78,348 $ 111,301
Accounts receivable 1,677 730
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80,025 112,031
Property, plant and equipment 251,976 237,320
Future income taxes - 13,302
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$ 332,001 $ 362,653
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 57,033 $ 15,799
Due to related parties 150 81
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57,183 15,880
Asset retirement obligations 1,457 1,172
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58,640 17,052
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Contingencies and Commitments

Shareholders' Equity
Share capital 377,293 404,275
Contributed surplus 2,678 2,307
Deficit (106,610) (60,981)
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273,361 345,601
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$ 332,001 $ 362,653
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MGM Energy Corp.
Statements of Loss and Comprehensive Loss
(Unaudited)
($000s)

For the period prior to January 12, 2007, the results of operations and cash
flows of MGM Energy Corp. have been prepared on a carve-out basis from
Paramount Resources Ltd.

Three Months Ended March 31
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2008 2007
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Revenue
Interest income $ 1,034 $ 253
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Expenses
General and administrative 1,565 1,365
Stock-based compensation 371 782
Pipeline regulatory and access 44 78
Exploration 24,927 432
Lease rental 250 4
Dry hole 33,034 36,397
Interest and financing charges 66 20
Accretion of asset retirement obligations 24 25
Depreciation 62 -
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60,343 39,103
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Loss before tax (59,309) (38,850)
Future income tax recovery (13,680) (11,507)
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Net loss and comprehensive loss $ (45,629) $ (27,343)
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Net loss per Common Share ($/share)
Basic (0.35) (1.57)
Diluted (0.35) (1.57)

Weighted average Common Shares outstanding (000s)
Basic 128,945 17,393
Diluted 128,945 17,393


Statements of Deficit (Unaudited)
($000s)

Three Month Ended March 31
2008 2007
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Deficit, beginning of period $ (60,981) $ -
Net income (loss) (45,629) (27,343)
Allocation to net investment by Paramount
Resources Ltd. - 1,350
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Deficit, end of period $ (106,610) $ (25,993)
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MGM Energy Corp.
Statements of Cash Flows (Unaudited)
($000s)

For the period prior to January 12, 2007, the results of operations and cash
flows of MGM Energy Corp. have been prepared on a carve-out basis from
Paramount Resources Ltd.

Three Month Ended March 31
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2008 2007
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Operating activities
Net loss $ (45,629) $ (27,343)
Add (deduct):
Stock-based compensation - non cash portion 371 782
Exploration 24,927 432
Dry hole 33,034 36,397
Accretion of asset retirement obligations 24 25
Asset retirement obligation expenditures - (400)
Depreciation 62 -
Future income tax recovery (13,680) (11,507)
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Funds flow used in operations (891) (1,614)
Change in non-cash working capital 2,760 639
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1,869 (975)
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Financing activities
Repayment of note to Paramount Resources Ltd.
resulting from spin-out transaction - (12,000)
Proceeds on settlement of note - 163
Common shares issued, net of issuance costs - 78,545
Net investment by Paramount Resources Ltd. for
period prior to spin-out. - 3,195
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- 69,903
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Investing activities
Capital expenditures (72,420) (32,296)
Reorganization costs - (1,000)
Change in non-cash working capital 37,598 27,449
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(34,822) (5,847)
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Increase in cash and cash equivalents (32,953) 63,081
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Cash and cash equivalents, beginning of period 111,301 -
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Cash and cash equivalents, end of period $ 78,348 $ 63,081
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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.
    R. N. (Rick) Miller
    Chief Financial Officer
    (403) 781-7800
    (403) 781-7801 (FAX)