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Press release from Marketwire

MGM Energy Corp.: Financial Results for the Three Months Ended March 31, 2011

Wednesday, June 01, 2011

MGM Energy Corp.: Financial Results for the Three Months Ended March 31, 201116:49 EDT Wednesday, June 01, 2011CALGARY, ALBERTA--(Marketwire - June 1, 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 months ended March 31, 2011.The Company reported a net loss for the three months ended March 31, 2011 of $4.3 million ($0.01 per share) as compared to a net loss of $3.1 million ($0.01 per share) for the three months ended March 31, 2010. The net loss for the first quarter of 2011 was principally due to the dry-hole cost of $2.8 million from the Windy Island J-39 well.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.Condensed Interim Balance Sheets (Unaudited)($000s)As at March 31As at December 3120112010ASSETSCurrent assetsCash and cash equivalents$17,480$1,174Accounts receivable and other assets3,5571,64021,0372,814Non-current assetsExploration and evaluation assets212,953233,051Property and equipment, net242272213,195233,323Total Assets$234,232$236,137LIABILITIESCurrent liabilitiesAccounts payable and accrued liabilities$4,602$2,175Due to related parties1091074,7112,282Non-current liabilitiesAsset retirement obligations2,7972,9052,7972,905Total Liabilities7,5085,187SHAREHOLDERS' EQUITYShare capital454,465454,465Contributed surplus7,9097,820Deficit(235,650)(231,335)Total Shareholders' Equity226,724230,950Total Liabilities and Shareholders' Equity$234,232$236,137Note: 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)Three Months Ended March 3120112010Share CapitalBalance, beginning of period$454,465$449,735Tax adjustment on flow-through shares-(258)Balance, end of period$454,465$449,477Contributed SurplusBalance, beginning of period$7,820$6,334Share-based compensation89282Balance, end of period$7,909$6,616DeficitBalance, beginning of period$(231,335)$(211,591)Net loss(4,315)(3,087)Balance, end of period$(235,650)(214,678)Total Shareholders' Equity$226,724$241,415Note: 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)($000s)Three Months Ended March 3120112010Oil and natural gas revenue$-$-ExpensesGeneral and administrative expenses9081,065Stock-based compensation89282Exploration and evaluation expenditures2761,428Dry hole2,804-Accretion of asset retirement obligations1614Depreciation3055Pipeline regulatory and access-74,1232,851Loss before net finance expenses(4,123)(2,851)Finance income(11)(6)Finance expenses203242Net finance expenses192236Net loss and comprehensive loss$(4,315)$(3,087)Net loss per Common Share ($/share)Basic$(0.01)$(0.01)Diluted$(0.01)$(0.01)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)($000s)Three Months Ended March 3120112010Operating activitiesNet loss for the period$(4,315)$(3,087)Adjustments to add non-cash itemsShare-based compensation89282Accretion of asset retirement obligation1614Depreciation3055Change in non-cash working capital(847)(395)Cash flows used in operating activities(5,027)(3,131)Financing activities--Investing activitiesCapital expenditures(26)37Proceeds from divestitures20,000-Change in non-cash working capital1,359(32)Cash flows from investing activities21,3335Increase (decrease) in cash and cash equivalents16,306(3,126)Cash and cash equivalents, beginning of period1,1744,486Cash and cash equivalents, end of period$17,480$1,360Note: 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.FOR FURTHER INFORMATION PLEASE CONTACT: H.W. (Henry) SykesMGM Energy Corp.President(403) 781-7800(403) 781-7801 (FAX)ORR. N. (Rick) MillerMGM Energy Corp.Chief Financial Officer(403) 781-7800(403) 781-7801 (FAX)