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Press release from Marketwire

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

Monday, March 11, 2013

MGM Energy Corp. Announces 2012 Financial Results and Provides Operation Update17:25 EDT Monday, March 11, 2013CALGARY, ALBERTA--(Marketwire - March 11, 2013) - MGM Energy Corp. (TSX:MGX) ("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($000s)As at December 3120122011ASSETSCurrent assetsCash and cash equivalents$ 19,869$ 12,064Accounts receivable and other current assets55255220,42112,616Non-current assetsExploration and evaluation assets63,97163,929Property and equipment, net13616364,10764,092$ 84,528$ 76,708LIABILITIESCurrent liabilitiesAccounts payable and accrued liabilities$ 5,352$ 1,782Due to related parties93865,4451,868Non-current liabilitiesAsset retirement obligations4,0183,9774,0183,977Total Liabilities9,4635,845SHAREHOLDERS' EQUITYShare capital466,132454,465Contributed surplus9,2018,592Deficit(400,268)(392,194)Total Shareholders' Equity75,06570,863Total Liabilities and Shareholders' Equity$ 84,528$ 76,708MGM Energy Corp.Statements of Loss and Comprehensive Loss($000s, except as noted)Years Ended December 3120122011Oil and natural gas revenue$ -$ -ExpensesGeneral and administrative3,3933,526Share-based compensation548763Exploration and evaluation3,4052,530Dry hole-3,189Accretion of asset retirement obligation4157Impairment of petroleum and natural gas properties-150,000Depreciation931217,480160,186Loss before net finance expense(7,480)(160,186)Finance income(78)(120)Finance expense672793Net finance expense594673Net 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($000s)Years Ended December 3120122011Operating activitiesNet loss$ (8,074)$ (160,859)Adjustments to add (deduct) non-cash itemsStock-based compensation548763Non-cash general and administrative expense6134Increase in asset retirement obligation-385Accretion of asset retirement obligations4157Impairment of petroleum and natural gas properties-150,000Depreciation93121Change in non-cash working capital(68)669Cash flows used in operating activities(7,399)(8,830)Financing activitiesCash payment for options exercised-(25)Common shares issued, net of issuance costs11,667-Cash flows from financing activities11,667(25)Investing activitiesCapital expenditures(109)(260)Proceeds from divestitures-20,000Change in non-cash working capital3,6465Cash flows from investing activities3,53717,945Increase in cash and cash equivalents7,80510,890Cash and cash equivalents, beginning of year12,0641,174Cash and cash equivalents, end of year$ 19,869$ 12,064FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: MGM Energy Corp.H.W. (Henry) SykesPresident(403) 781-7800(403) 781-7801 (FAX)MGM Energy Corp.R. N. (Rick) MillerChief Financial Officer(403) 781-7800(403) 781-7801 (FAX)