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Press release from Marketwire

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

Friday, October 28, 2011

MGM Energy Corp.: Financial Results for the Three and Nine Months Ended September 30, 201116:53 EDT Friday, October 28, 2011CALGARY, 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 30As at December 3120112010ASSETSCurrent assetsCash and cash equivalents$13,580$1,174Accounts receivable and other current assets1961,64013,7762,814Non-current assetsExploration and evaluation assets212,969233,051Property and equipment190272213,159233,323Total Assets$226,935$236,137LIABILITIESCurrent liabilitiesAccounts payable and accrued liabilities$129$2,175Due to related parties891072182,282Non-current liabilitiesAsset retirement obligation2,8242,9052,8242,905Total Liabilities3,0425,187SHAREHOLDERS' EQUITYShare capital454,465454,465Contributed surplus8,3247,820Deficit(238,896)(231,335)Total Shareholders' Equity223,893230,950Total Liabilities and Shareholders' Equity$226,935$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.Interim Statements of Changes in Equity (Unaudited)($000s)Nine Months Ended September 3020112010Share CapitalBalance, beginning of period$454,465$449,735Issue of common shares-4,988Tax adjustment on flow-through shares-(258)Balance, end of period$454,465$454,465Contributed SurplusBalance, beginning of period$7,820$6,334Options exercised(15)-Share-based compensation5191,209Balance, end of period$8,324$7,543DeficitBalance, beginning of period$(231,335)$(211,591)Net loss(7,561)(17,539)Balance, end of period$(238,896)(229,130)Total Shareholders' Equity$223,893$232,878Note: 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)($000s)Three Months Ended September 30Nine Months Ended September 302011201020112010Oil and natural gas revenue$-$-$-$-ExpensesGeneral and administrative expenses6757662,2002,705Share-based compensation1983085191,209Exploration and evaluation expenditures89810,7281,44912,733Dry hole--2,804-Accretion of asset retirement obligation14154344Depreciation315590165Pipeline and regulatory expenses---111,81611,8727,10516,867Loss before net finance expenses(1,816)(11,872)(7,105)(16,867)Finance income(37)(8)(87)(27)Finance expenses170236543699Net finance expenses133228456672Net loss and comprehensive loss$(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)($000s)Nine Months Ended September 3020112010Operating activitiesNet loss for the period$(7,561)$(17,539)Adjustments for non-cash itemsShare-based compensation5191,209Cash payment for options exercised(15)-Accretion of asset retirement obligation4344Depreciation90165Change in non-cash working capital(574)9,235Cash flows used in operating activities(7,498)(6,886)Financing activitiesCommon shares issued, net of issuance costs-4,988Cash flows from financing activities-4,988Investing activitiesCapital expenditures(50)(287)Proceeds from divestitures20,000-Change in non-cash working capital(46)(10)Cash flows from (used in) investing activities19,904(297)Increase (decrease) in cash and cash equivalents12,406(2,195)Cash and cash equivalents, beginning of period1,1744,486Cash and cash equivalents, end of period$13,580$2,291Note: 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)