MGM Energy Corp.
TSX : MGX

MGM Energy Corp.

July 28, 2011 17:23 ET

MGM Energy Corp: Financial Results for the Three and Six Months Ended June 30, 2011

CALGARY, ALBERTA--(Marketwire - July 28, 2011) -

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 results for the three and six months ended June 30, 2011. The Company reported a net loss for the three month period ended June 30, 2011 of $1.3 million ($5.6 million for the six month period ended June 30, 2011). 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).

The Company also announced that it has posted an updated presentation on its website regarding the recent land acquired in the Central Mackenzie Valley. As announced on July 4, 2011, MGM Energy acquired a 50% interest in three parcels of land in the Central Mackenzie Valley. The presentation posted on the website provides additional information regarding MGM Energy's preliminary assessment of the liquids rich shale play in the Central Mackenzie Valley. As previously announced, MGM Energy intends to provide an update on its plans respecting these new land parcels by the end of September 2011.

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 and exploration and drilling plans and the timing thereof. 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)
($000s)
As at
June 30
As at
December 31
2011 2010
ASSETS
Current assets
Cash and cash equivalents $ 15,198 $ 1,174
Accounts receivable and other current assets 510 1,640
15,708 2,814
Non-current assets
Exploration and evaluation assets 212,954 233,051
Property and equipment 213 272
213,167 233,323
Total Assets $ 228,875 $ 236,137
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 307 $ 2,175
Due to related parties 99 107
406 2,282
Non-current liabilities
Asset retirement obligations 2,810 2,905
2,810 2,905
Total Liabilities 3,216 5,187
SHAREHOLDERS' EQUITY
Share capital 454,465 454,465
Contributed surplus 8,141 7,820
Deficit (236,947 ) (231,335 )
Total Shareholders' Equity 225,659 230,950
Total Liabilities and Shareholders' Equity $ 228,875 $ 236,137

Note: MGM Energy adopted International Financial Reporting Standards ("IFRS") effective for fiscal years beginning on or after January 1, 2011 and the Company has applied IFRS as of January 1, 2010 for comparative purposes. Certain prior period amounts have been adjusted to reflect the changes in the Company's accounting policies.

MGM Energy Corp.
Condensed Interim Statements of Changes in Equity (Unaudited)
($000s)
Six Months Ended June 30
2011 2010
Share Capital
Balance, beginning of period $ 454,465 $ 449,735
Issue of Common Shares - 4,988
Tax adjustment on flow-through shares - (258 )
Balance, end of period $ 454,465 $ 454,465
Contributed Surplus
Balance, beginning of period $ 7,820 $ 6,334
Share-based compensation 321 901
Balance, end of period $ 8,141 $ 7,235
Deficit
Balance, beginning of period $ (231,335 ) $ (211,591 )
Net loss (5,612 ) (5,439 )
Balance, end of period $ (236,947 ) (217,030 )
Total Shareholders' Equity $ 225,659 $ 244,670

Note: MGM Energy adopted International Financial Reporting Standards ("IFRS") effective for fiscal years beginning on or after January 1, 2011 and the Company has applied IFRS as of January 1, 2010 for comparative purposes. Certain prior period amounts have been adjusted to reflect the changes in the Company's accounting policies.



MGM Energy Corp.
Condensed Interim Statements of Loss and Comprehensive Loss (Unaudited)
($000s)

Three Months Ended June 30
Six Months Ended June 30
2011 2010 2011 2010
Oil and natural gas revenue $ - $ - $ - $ -
Expenses
General and administrative expenses 617 874 1,525 1,939
Share-based compensation 232 619 321 901
Exploration and evaluation expenditures 275 577 551 2,005
Dry hole - - 2,804 -
Accretion of asset retirement obligation 13 15 29 29
Depreciation 29 55 59 110
Pipeline and regulatory expenses - 4 - 11
1,166 2,144 5,289 4,995
Loss before net finance expenses (1,166 ) (2,144 ) (5,289 ) (4,995 )
Finance income (39 ) (13 ) (50 ) (19 )
Finance expenses 170 221 373 463
Net finance expenses 131 208 323 444
Net loss and comprehensive loss $ (1,297 ) $ (2,352 ) $ (5,612 ) $ (5,439 )
Net loss per Common Share ($/share)
Basic $ (0.00 ) $ (0.01 ) $ (0.02 ) $ (0.02 )
Diluted $ (0.00 ) $ (0.01 ) $ (0.02 ) $ (0.02 )

Note: MGM Energy adopted International Financial Reporting Standards ("IFRS") effective for fiscal years beginning on or after January 1, 2011 and the Company has applied IFRS as of January 1, 2010 for comparative purposes. Certain prior period amounts have been adjusted to reflect the changes in the Company's accounting policies.


MGM Energy Corp.
Condensed Interim Statements of Cash Flows (Unaudited)
($000s)

Six Months Ended June 30
2011 2010
Operating activities
Net loss for the period $ (5,612 ) $ (5,439 )
Adjustments to add non-cash items
Share-based compensation 321 901
Accretion of asset retirement obligation 29 29
Depreciation 59 110
Change in non-cash working capital (796 ) (809 )
Cash flows used in operating activities (5,999 ) (5,208 )
Financing activities
Common shares issued, net of issuance costs - 4,988
Cash flows from financing activities - 4,988
Investing activities
Capital expenditures (27 ) 31
Proceeds from divestitures 20,000 -
Change in non-cash working capital 50 (32 )
Cash flows used in (from) investing activities 20,023 (1 )
Increase (decrease) in cash and cash equivalents 14,024 (221 )
Cash and cash equivalents, beginning of period 1,174 4,486
Cash and cash equivalents, end of period $ 15,198 $ 4,265

Note: MGM Energy adopted International Financial Reporting Standards ("IFRS") effective for fiscal years beginning on or after January 1, 2011 and the Company has applied IFRS as of January 1, 2010 for comparative purposes. Certain prior period amounts have been adjusted to reflect the changes in the Company's accounting policies.

Contact Information

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

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