MGM Energy Corp.
TSX : MGX

MGM Energy Corp.

October 28, 2011 16:53 ET

MGM Energy Corp.: Financial Results for the Three and Nine Months Ended September 30, 2011

CALGARY, ALBERTA--(Marketwire - Oct. 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. ("MGM Energy" or the "Company") (TSX:MGX) announced today its financial results for the three and nine months ended September 30, 2011. The Company reported a net loss for the three month period ended September 30, 2011 of $1.9 million ($7.6 million for the nine month period ended September 30, 2011). MGM Energy's unaudited condensed interim financial statements and accompanying Management's Discussion and Analysis will be filed shortly on the SEDAR website (www.sedar.com).

MGM Energy also announced that it has begun regulatory and operations planning for the drilling of a well in the winter of 2012/13 targeting the shale oil play in the Central Mackenzie Valley. "As we previously announced, MGM Energy holds a significant land position in the emerging Central Mackenzie Valley shale oil play, encompassing parcels acquired in this summer's land sale and our existing exploration license EL454," said Henry Sykes, President of MGM Energy. "We are very excited about the opportunities that this play provides to MGM Energy. We look forward to providing updates on our planned activities."

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.
Interim Balance Sheets (Unaudited)
($000s)
As at
September 30
As at
December 31
2011 2010
ASSETS
Current assets
Cash and cash equivalents $ 13,580 $ 1,174
Accounts receivable and other current assets 196 1,640
13,776 2,814
Non-current assets
Exploration and evaluation assets 212,969 233,051
Property and equipment 190 272
213,159 233,323
Total Assets $ 226,935 $ 236,137
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 129 $ 2,175
Due to related parties 89 107
218 2,282
Non-current liabilities
Asset retirement obligation 2,824 2,905
2,824 2,905
Total Liabilities 3,042 5,187
SHAREHOLDERS' EQUITY
Share capital 454,465 454,465
Contributed surplus 8,324 7,820
Deficit (238,896 ) (231,335 )
Total Shareholders' Equity 223,893 230,950
Total Liabilities and Shareholders' Equity $ 226,935 $ 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.
Interim Statements of Changes in Equity (Unaudited)
($000s)
Nine Months Ended September 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
Options exercised (15 ) -
Share-based compensation 519 1,209
Balance, end of period $ 8,324 $ 7,543
Deficit
Balance, beginning of period $ (231,335 ) $ (211,591 )
Net loss (7,561 ) (17,539 )
Balance, end of period $ (238,896 ) (229,130 )
Total Shareholders' Equity $ 223,893 $ 232,878

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.
Interim Statements of Loss and Comprehensive Loss (Unaudited)
($000s)

Three Months Ended September 30
Nine Months Ended September 30
2011 2010 2011 2010
Oil and natural gas revenue $ - $ - $ - $ -
Expenses
General and administrative expenses 675 766 2,200 2,705
Share-based compensation 198 308 519 1,209
Exploration and evaluation expenditures 898 10,728 1,449 12,733
Dry hole - - 2,804 -
Accretion of asset retirement obligation 14 15 43 44
Depreciation 31 55 90 165
Pipeline and regulatory expenses - - - 11
1,816 11,872 7,105 16,867
Loss before net finance expenses (1,816 ) (11,872 ) (7,105 ) (16,867 )
Finance income (37 ) (8 ) (87 ) (27 )
Finance expenses 170 236 543 699
Net finance expenses 133 228 456 672
Net loss and comprehensive loss $ (1,949 ) $ (12,100 ) $ (7,561 ) $ (17,539 )
Net loss per Common Share ($/share)
Basic $ (0.01 ) $ (0.04 ) $ (0.02 ) $ (0.06 )
Diluted $ (0.01 ) $ (0.04 ) $ (0.02 ) $ (0.06 )

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)

Nine Months Ended September 30
2011 2010
Operating activities
Net loss for the period $ (7,561 ) $ (17,539 )
Adjustments for non-cash items
Share-based compensation 519 1,209
Cash payment for options exercised (15 ) -
Accretion of asset retirement obligation 43 44
Depreciation 90 165
Change in non-cash working capital (574 ) 9,235
Cash flows used in operating activities (7,498 ) (6,886 )
Financing activities
Common shares issued, net of issuance costs - 4,988
Cash flows from financing activities - 4,988
Investing activities
Capital expenditures (50 ) (287 )
Proceeds from divestitures 20,000 -
Change in non-cash working capital (46 ) (10 )
Cash flows from (used in) investing activities 19,904 (297 )
Increase (decrease) in cash and cash equivalents 12,406 (2,195 )
Cash and cash equivalents, beginning of period 1,174 4,486
Cash and cash equivalents, end of period $ 13,580 $ 2,291

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)