MGM Energy Corp.
TSX : MGX

MGM Energy Corp.

March 07, 2008 19:26 ET

MGM Energy Corp.: Financial and Operating Results for the Twelve Months Ended December 31, 2007

CALGARY, ALBERTA--(Marketwire - March 7, 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. ("MGM Energy" or the "Company") (TSX:MGX) announced today
its financial and operating results for the twelve months ended December 31,
2007.

The Company reported a net loss for the twelve months ended December 31, 2007
of $62.3 million ($0.79 per share). The net loss for the year was principally
due to the dry-hole costs of $34.2 million related to the Kumak and Unipkat
wells drilled in the winter of 2006/07 and which were reflected on the
September 30, 2007 financial statements plus the following significant items
recorded in the fourth quarter of 2007: (i) dry-hole costs of $10.9 million
related to costs incurred in 2007 related to the Atik P-19 and Aput C-43
wells which were previously announced as being unsuccessful (ii) seismic
costs of $8.2 million incurred during the fourth quarter that related to the
2007/08 winter capital program that under the "successful-efforts" method of
accounting is charged as an expense when incurred and (iii) dry-hole costs of
$21.3 million recorded in the fourth quarter related to three wells that were
drilled in 2004 and 2005 in the Central Mackenzie Valley. This charge is the
result of the regular review of the Company's assets and relates only to
suspended wells in the Central Mackenzie Valley for which no resource
estimates had been assigned. This dry-hole cost is not related to the results
of the Company's current drilling and seismic program, nor does it impact any
wells or properties to which MGM Energy has previously assigned resources.

"We are disappointed by the results of the Atik P-19 and Aput C-43 wells that
we announced previously" said Henry Sykes, President of MGM Energy Corp. "The
remainder of our drilling and seismic programs are still on track to be
completed prior to mid-April and at this point are within the previously
announced budgets. We look forward to providing further updates as the
programs are completed."

MGM Energy's net loss for the three months ended December 31, 2007 was $31.3
million ($0.24 per share).

MGM Energy's full audited 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)

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. 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 December 31 2007 2006
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ASSETS
Current assets
Cash and cash equivalents $ 111,301 $ -
Accounts receivable 730 1,360
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112,031 1,360
Property, plant and equipment 237,320 70,268
Future income taxes 13,302 -
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$ 362,653 $ 71,628
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 15,799 $ 6,774
Due to related parties 81 -
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15,880 6,774
Asset retirement obligations 1,172 439
Future income taxes - 3,895
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17,052 11,108
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Contingencies and Commitments

Shareholders' Equity
Share capital 404,275 -
Contributed surplus 2,307 -
Net investment by Paramount Resources Ltd. - 60,520
Deficit (60,981) -
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345,601 60,520
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$ 362,653 $ 71,628
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MGM Energy Corp.
Statements of Loss (Unaudited)
($000s, 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. 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.

Years Ended December 31 2007 2006
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Revenue
Interest income $ 3,116 $ -
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Expenses
General and administrative 6,281 638
Stock-based compensation 2,561 (123)
Pipeline regulatory and access 598 -
Exploration 11,191 399
Lease rental 1,051 198
Dry hole 66,423 3,355
Interest and financing charges 236 -
Accretion of asset retirement obligations 199 30
Depreciation 132 -
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88,672 4,497
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Loss before tax (85,556) (4,497)
Future income tax recovery (23,225) (1,720)
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Net loss and other comprehensive loss $ (62,331) $ (2,777)
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Net loss per Common Share ($/share)
Basic (0.79)
Diluted (0.79)

Weighted average Common Shares outstanding (000s)
Basic 79,088
Diluted 79,088


Statements of Deficit
($000s)

Years Ended December 31 2007 2006
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Deficit, beginning of period $ - $ -
Net income (loss)
(62,331) (2,777)
Allocation to net investment by Paramount Resources Ltd.
1,350 2,777


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Deficit, end of period $ (60,981) $ -
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MGM Energy Corp.
Statements of Cash Flows (Unaudited)
($000s)

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. 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.

Years Ended December 31 2007 2006
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Operating activities
Net loss and other comprehensive loss $ (62,331) $ (2,777)
Add (deduct):
Stock-based compensation -- non cash portion 2,561 (385)
Exploration 11,191 399
Dry hole 66,423 3,355
Accretion of asset retirement obligations 199 30
Asset retirement obligation expenditures (405) -
Depreciation 132 -
Future income tax recovery (23,225) (1,720)
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(5,455) (1,098)
Change in non-cash working capital 1,555 (621)
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(3,900) (1,719)
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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 355,106 -
Net investment by Paramount Resources Ltd. for period
prior to spin-out. 3,195 5,901
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346,464 5,901
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Investing activities
Capital expenditures (243,858) (8,970)
Reorganization costs (1,000) -
Change in non-cash working capital 13,595 4,788
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(231,263) (4,182)
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Increase in cash and cash equivalents 111,301 -
Cash and cash equivalents, beginning of year - -
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Cash and cash equivalents, end of year $ 111,301 $ -
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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)