MGM Energy Corp. Announces 2012 Financial Results and Provides Operation Update

CALGARY, ALBERTA--(Marketwire - March 11, 2013) - MGM Energy Corp. (MGX.TO) ("MGM Energy" or the "Company") announced today its financial results for the year ended December 31, 2012.

The Company reported a net loss for the year ended December 31, 2012 of $8.1 million ($0.03 per share) as compared to a net loss of $160.9 million ($0.51 per share) for the year ended December 31, 2011. The loss for the year ended December 31, 2012 was reduced significantly from the loss in the prior year as there was a writedown in the book value of the Company's northern Canadian petroleum and natural gas properties of $150 million for the year ended December 31, 2011. 

MGM Energy also announced that it had completed fraccing operations at the East MacKay I-78 well and that the testing phase of the well is continuing. An update will be provided following the completion of the testing phase, which is expected before the end of March.

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 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    
($000s)    
     
         
As at December 31 2012   2011  
         
ASSETS        
Current assets        
  Cash and cash equivalents $ 19,869   $ 12,064  
  Accounts receivable and other current assets 552   552  
  20,421   12,616  
Non-current assets        
  Exploration and evaluation assets 63,971   63,929  
  Property and equipment, net 136   163  
  64,107   64,092  
         
  $ 84,528   $ 76,708  
         
LIABILITIES        
Current liabilities        
  Accounts payable and accrued liabilities $ 5,352   $ 1,782  
  Due to related parties 93   86  
  5,445   1,868  
         
Non-current liabilities        
  Asset retirement obligations 4,018   3,977  
  4,018   3,977  
         
Total Liabilities 9,463   5,845  
         
SHAREHOLDERS' EQUITY        
  Share capital 466,132   454,465  
  Contributed surplus 9,201   8,592  
  Deficit (400,268 ) (392,194 )
Total Shareholders' Equity 75,065   70,863  
Total Liabilities and Shareholders' Equity $ 84,528   $ 76,708  
         


MGM Energy Corp.
   
Statements of Loss and Comprehensive Loss    
($000s, except as noted)    
     
     
Years Ended December 31 2012   2011  
         
         
Oil and natural gas revenue $ -   $ -  
         
         
Expenses        
  General and administrative 3,393   3,526  
  Share-based compensation 548   763  
  Exploration and evaluation 3,405   2,530  
  Dry hole -   3,189  
  Accretion of asset retirement obligation 41   57  
  Impairment of petroleum and natural gas properties -   150,000  
  Depreciation 93   121  
  7,480   160,186  
Loss before net finance expense (7,480 ) (160,186 )
         
  Finance income (78 ) (120 )
  Finance expense 672   793  
Net finance expense 594   673  
         
Net loss and comprehensive loss $ (8,074 ) $ (160,859 )
         
Net loss per common share ($/share)        
  Basic $ (0.03 ) $ (0.51 )
  Diluted $ (0.03 ) $ (0.51 )
         
         

MGM Energy Corp.
   
Statements of Cash Flows    
($000s)    
     
Years Ended December 31 2012   2011  
         
Operating activities        
Net loss $ (8,074 ) $ (160,859 )
Adjustments to add (deduct) non-cash items        
  Stock-based compensation 548   763  
  Non-cash general and administrative expense 61   34  
  Increase in asset retirement obligation -   385  
  Accretion of asset retirement obligations 41   57  
  Impairment of petroleum and natural gas properties -   150,000  
  Depreciation 93   121  
Change in non-cash working capital (68 ) 669  
Cash flows used in operating activities (7,399 ) (8,830 )
         
Financing activities        
Cash payment for options exercised -   (25 )
Common shares issued, net of issuance costs 11,667   -  
Cash flows from financing activities 11,667   (25 )
         
Investing activities        
Capital expenditures (109 ) (260 )
Proceeds from divestitures -   20,000  
Change in non-cash working capital 3,646   5  
Cash flows from investing activities 3,537   17,945  
         
Increase in cash and cash equivalents 7,805   10,890  
Cash and cash equivalents, beginning of year 12,064   1,174  
Cash and cash equivalents, end of year $ 19,869   $ 12,064  
         
Contact:
MGM Energy Corp.
H.W. (Henry) Sykes
President
(403) 781-7801
(403) 781-7800

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

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