MEXCO ENERGY CORPORATION ANNOUNCES SALE OF ACREAGE AND FURTHER DEVELOPMENTS
December 20 2017 - 02:35PM
Mexco Energy Corporation (NYSE MKT:MXC) today announced the sale of
certain oil and gas properties in Ward and Midland Counties, Texas.
Mexco is to be paid approximately $1.9 million
in cash from the sale of joint venture leasehold marginal producing
working interests in several thousand acres located primarily in
Ward, and to a minor extent, in Midland Counties, Texas.
Of these proceeds, approximately $1.518 million
is to be applied to Mexco’s bank debt reducing its indebtedness to
$950,000. Mexco’s debt to equity ratio will then be
approximately 12%. Approximately 10% of the purchase price is
being held in suspense pending payment of closing costs and
resolution of title issues as to a small portion of the sale
assets.
The President and Chief Financial Officer of the
Company commented, “This sale indicates the substantial value of a
number of Mexco’s remaining non-core oil and gas properties, which
are held in the Permian Basin of West Texas. The potential
market value of these non-core assets are neither reflected in
Mexco’s oil and gas reserve estimates nor its book value.”
The Company currently expects to participate in
the drilling and completion of fractional interests in
approximately 31 horizontal wells, at an estimated aggregate cost
of approximately $1.2 million for the fiscal year ended March 31,
2018, of which approximately $750,000 has been expended to
date. The operators of these wells, in which Mexco has
varying percentage interests, include McElvain Energy, Inc., Concho
Resources, Inc., Marathon Oil Corporation, Mewbourne Oil Company,
XTO Energy, Inc., and others. Production from several of
these wells is expected to be delayed until the next quarter of the
year due to delays in the availability of fracking crews.
During Mexco’s fiscal year beginning April 1, 2017, to
date approximately 80 wells have been drilled by other operators on
Mexco’s fractional royalty interests.
Mexco Energy Corporation, a Colorado
corporation, is an independent oil and gas company located in
Midland, Texas engaged in the acquisition, exploration and
development of oil and gas properties. For more information
on Mexco Energy Corporation, go to www.mexcoenergy.com.
In accordance with the Safe Harbor provisions of
the Private Securities Litigation Reform Act of 1995, Mexco Energy
Corporation cautions that statements in this press release which
are forward-looking and which provide other than historical
information involve risks and uncertainties that may impact the
Company's actual results of operations. These risks include, but
are not limited to, production variance from expectations,
volatility of oil and gas prices, the need to develop and replace
reserves, exploration risks, uncertainties about estimates of
reserves, competition, government regulation, and mechanical and
other inherit risks associated with oil and gas production. A
discussion of these and other factors, including risks and
uncertainties, is set forth in the Company's Form 10-K for the
fiscal year ended March 31, 2017. Mexco Energy Corporation
disclaims any intention or obligation to revise any forward-looking
statements.
For additional information, please contact:
Nicholas C. Taylor
Chairman and Chief Executive Officer
Tammy L. McComic
President and Chief Financial Officer
Mexco Energy Corporation
(432) 682-1119
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