MGM Energy Corp.
TSX : MGX

MGM Energy Corp.

April 29, 2009 16:19 ET

MGM Energy Corp.: Financial Results for the Three Months Ended March 31, 2009

CALGARY, ALBERTA--(Marketwire - April 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 months ended March 31, 2009.

The Company reported a net loss for the three months ended March 31, 2009 of $36.7 million ($0.14 per share). The net loss for the period was principally due to the dry-hole costs of $34.2 million from the North Ellice J-17 and Ellice A-25 wells which were previously announced as being unsuccessful.

As previously announced, MGM Energy has completed its 2008/2009 winter drilling program and all equipment has been demobilized from their locations. "Our current estimate of costs for the drilling program indicates that we will have approximately $18 million in working capital at the end of the second quarter of 2009 once all costs related to the program have been incurred. This will be sufficient to cover all of our commitments and operating costs to at least the third quarter of 2010, assuming that we do not complete a drilling program next year. We are in the process of determining our plans for the 2009/10 season and financing options for any drilling that we might undertake. We look forward to announcing our 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)

As at As at
March 31 December 31
2009 2008
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ASSETS
Current assets
Cash and cash equivalents $ 51,855 $ 82,001
Accounts receivable and other current assets 2,532 1,850
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54,387 83,851
Property, plant and equipment 231,534 220,725
Future income taxes - 9,014
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$ 285,921 $ 313,590
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 29,672 $ 12,628
Due to related parties 51 108
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29,723 12,736
Asset retirement obligations 2,527 1,996
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32,250 14,732
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Shareholders' Equity
Share capital 446,322 455,336
Contributed surplus 5,235 4,664
Deficit (197,886) (161,142)
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253,671 298,858
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$ 285,921 $ 313,590
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MGM Energy Corp.
Statements of Loss and Other Comprehensive Loss (Unaudited)
($000s, except as noted)

Three Months Ended March 31
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2009 2008
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Revenue
Interest income $ 189 $ 1,034
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Expenses
General and administrative 1,080 1,565
Stock-based compensation 571 371
Pipeline regulatory and access - 44
Exploration 504 24,927
Lease rental and land costs 250 250
Dry hole 34,240 33,034
Interest and financing charges 120 66
Accretion of asset retirement obligations 41 24
Depreciation 127 62
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36,933 60,343
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Loss before tax (36,744) (59,309)
Future income tax recovery - (13,680)
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Net loss and other comprehensive loss $ (36,744) $ (45,629)
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Net loss per Common Share ($/share)
Basic (0.14) (0.35)
Diluted (0.14) (0.35)

Weighted average Common Shares outstanding (000s)
Basic 263,195 128,945
Diluted 263,195 128,945


Statements of Deficit (Unaudited)

($000s)

Three Month Ended March 31
2009 2008
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Deficit, beginning of period $ (161,142) $ (60,981)
Net loss
(36,744) (45,629)
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Deficit, end of period $ (197,886) $ (106,610)
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MGM Energy Corp.
Statements of Cash Flows (Unaudited)
($000s)

Three Months Ended March 31
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2009 2008
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Operating activities
Net loss and other comprehensive loss $ (36,744) $ (45,629)
Add (deduct):
Stock-based compensation 571 371
Exploration 504 24,927
Dry hole 34,240 33,034
Accretion of asset retirement obligations 41 24
Depreciation 127 62
Future income tax recovery - (13,680)
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(1,261) (891)
Change in non-cash working capital 224 2,760
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(1,037) 1,869
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Financing activities
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- -
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Investing activities
Capital expenditures (45,189) (72,420)
Change in non-cash working capital 16,080 37,598
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(29,109) (34,822)
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Decrease in cash and cash equivalents (30,146) (32,953)
Cash and cash equivalents, beginning of period 82,001 111,301
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Cash and cash equivalents, end of period $ 51,855 $ 78,348
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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)