PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Mexco Energy reported a significant decrease in net income and cash from operations, primarily due to lower commodity prices, despite a slight increase in total assets Consolidated Balance Sheet Highlights (Unaudited) | Account | September 30, 2023 ($) | March 31, 2023 ($) | | :--- | :--- | :--- | | **Total Current Assets** | $3,471,638 | $3,734,039 | | **Property and equipment, net** | $13,789,241 | $13,298,465 | | **Total Assets** | **$18,219,335** | **$17,820,289** | | **Total Current Liabilities** | $226,458 | $258,263 | | **Total Liabilities** | $1,073,872 | $987,802 | | **Total Stockholders' Equity** | **$17,145,463** | **$16,832,487** | Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended Sep 30, 2023 ($) | Three Months Ended Sep 30, 2022 ($) | Six Months Ended Sep 30, 2023 ($) | Six Months Ended Sep 30, 2022 ($) | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $1,406,610 | $2,324,792 | $3,155,029 | $4,774,765 | | **Operating Income** | $318,673 | $1,240,182 | $883,174 | $2,570,237 | | **Net Income** | **$269,433** | **$1,211,716** | **$735,047** | **$2,510,388** | | **Diluted EPS** | **$0.12** | **$0.55** | **$0.34** | **$1.13** | Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Six Months Ended Sep 30, 2023 ($) | Six Months Ended Sep 30, 2022 ($) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $2,430,364 | $3,418,087 | | **Net cash used in investing activities** | ($1,544,299) | ($4,253,453) | | **Net cash (used in) provided by financing activities** | ($536,644) | $30,179 | | **Net increase (decrease) in cash** | $349,421 | ($805,187) | | **Cash and cash equivalents at end of period** | **$2,585,192** | **$565,579** | - In June 2023, the Board authorized a **$1 million** stock repurchase program, with **26,000 shares** repurchased for **$325,256** during the six months ended September 30, 2023[49](index=49&type=chunk)[51](index=51&type=chunk) - On April 10, 2023, the Board declared a special dividend of **$0.10 per share**, totaling **$213,600**, which was paid on May 15, 2023[52](index=52&type=chunk) - Subsequent to the quarter end, in October 2023, the company signed a Letter of Intent for a 3-year term assignment of deep rights in Loving and Ward Counties, Texas, expecting to receive approximately **$980,000**[54](index=54&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Lower oil and gas prices significantly impacted financial performance, leading to sharp revenue and net income declines, while the company continued drilling projects and shareholder returns [Liquidity and Capital Resources](index=15&type=section&id=Liquidity%20and%20Capital%20Resources) Working capital decreased, and operating cash flow declined due to lower net income, with financing activities used for dividends and share repurchases Changes in Cash Flows (Six Months Ended September 30) | Activity | 2023 ($) | 2022 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $2,430,364 | $3,418,087 | ($987,723) | | Net cash used in investing activities | ($1,544,299) | ($4,253,453) | ($2,709,154) | | Net cash (used in) provided by financing activities | ($536,644) | $30,179 | $566,823 | - Working capital was **$3,245,180** at September 30, 2023, a decrease of **$230,596** from March 31, 2023[62](index=62&type=chunk) - Cash used in financing activities for the six months ended September 30, 2023, was **$536,644**, which included **$213,600** for a special dividend and **$325,256** for stock repurchases[67](index=67&type=chunk) [Oil and Natural Gas Property Development](index=17&type=section&id=Oil%20and%20Natural%20Gas%20Property%20Development) The company actively participated in new drilling and completion projects in the Delaware Basin, planning new wells and selling non-core assets - The company plans to participate in drilling and completing **40 horizontal wells** in the Delaware Basin during fiscal year 2024 at an estimated cost of **$1.7 million**[69](index=69&type=chunk) - In the first six months of fiscal 2024, the company participated in drilling multiple horizontal wells in the Delaware Basin, with expenditures including **$787,000** for five wells in the Bone Spring Sand formation and **$133,000** for four wells in the Wolfcamp Sand formation[70](index=70&type=chunk)[73](index=73&type=chunk) - The company expended approximately **$450,000** to complete **21 horizontal wells** in which it had participated during fiscal 2023[76](index=76&type=chunk) - During the first quarter of fiscal 2024, the company sold joint venture leasehold acreage and marginal producing wells for approximately **$280,000** in cash[81](index=81&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) Operating results significantly declined due to sharp decreases in realized oil and natural gas prices, leading to substantial drops in revenue and net income Oil and Gas Sales Comparison (Three Months Ended Sep 30) | Metric | 2023 ($) | 2022 ($) | % Difference | | :--- | :--- | :--- | :--- | | **Oil Revenue** | $1,099,806 | $1,397,875 | (21.3%) | | Average Oil Price (per bbl) | $80.51 | $96.27 | (16.4%) | | **Gas Revenue** | $280,904 | $884,020 | (68.2%) | | Average Gas Price (per mcf) | $2.60 | $7.45 | (65.1%) | - For the quarter ended Sep 30, 2023, net income was **$269,433**, a significant decrease from **$1,211,716** in the prior-year quarter, driven by lower commodity prices and production[85](index=85&type=chunk) Oil and Gas Sales Comparison (Six Months Ended Sep 30) | Metric | 2023 ($) | 2022 ($) | % Difference | | :--- | :--- | :--- | :--- | | **Oil Revenue** | $2,529,484 | $2,957,196 | (14.5%) | | Average Oil Price (per bbl) | $76.21 | $102.88 | (25.9%) | | **Gas Revenue** | $566,316 | $1,740,812 | (67.5%) | | Average Gas Price (per mcf) | $2.27 | $7.01 | (67.6%) | - For the six months ended Sep 30, 2023, net income was **$735,047** compared to **$2,510,388** in the prior-year period, due to a **34%** decrease in oil and gas sales revenue[92](index=92&type=chunk)[93](index=93&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=20&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces significant market risks from volatile crude oil and natural gas prices, directly impacting revenues, and also has concentrated credit risk with a single large purchaser - The company's most significant market risk is the price of crude oil and natural gas, with WTI crude prices ranging from **$62.72 to $89.66 per barrel** and Henry Hub gas prices from **$1.74 to $7.20 per MMBtu** in the last twelve months[100](index=100&type=chunk)[102](index=102&type=chunk) - A sensitivity analysis for the first six months of fiscal 2024 indicates that a **$10 per barrel** change in oil prices would alter operating revenues by **$331,890**, and a **$1 per mcf** change in gas prices would alter revenues by **$249,665**[104](index=104&type=chunk) - The company faces credit risk, with its largest single purchaser representing **$443,055**, or **55%** of total oil and gas receivables at September 30, 2023[99](index=99&type=chunk) [Controls and Procedures](index=20&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that as of September 30, 2023, the company's disclosure controls and procedures were effective[106](index=106&type=chunk) - No changes in internal control over financial reporting occurred during the six months ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[107](index=107&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=21&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any material legal or governmental proceedings currently against it or contemplated - The company is not aware of any legal or governmental proceedings against it, or contemplated to be brought against it, under various environmental protection statutes or other regulations[108](index=108&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2023 Annual Report on Form 10-K - There have been no material changes to the information previously disclosed in Item 1A. "Risk Factors" in the company's 2023 Annual Report on Form 10-K[109](index=109&type=chunk) [Exhibits](index=21&type=section&id=Item%206.%20Exhibits) The report includes required CEO and CFO certifications along with Inline XBRL financial data files - Exhibits filed with this report include CEO and CFO certifications (31.1, 31.2, 32.1) and various Inline XBRL documents for interactive data[111](index=111&type=chunk)

Financial Performance - For the quarter ended June 30, 2023, net income was $465,614, a decrease of 64% from $1,298,672 for the same quarter in 2022[81] - Revenue from oil and gas sales was $1,715,090, representing a 29% decrease from $2,416,113 in the prior year, primarily due to lower oil and gas prices[82] - Oil revenue decreased by 8.3% to $1,429,678, while gas revenue fell by 66.7% to $285,412, with average prices per barrel and per mcf dropping by 33.2% and 69.4%, respectively[82] - The effective tax rate for the quarter ended June 30, 2023, was 21%, compared to 2% for the same quarter in 2022[85] Cash Flow and Working Capital - Cash flow provided by operating activities increased to $1,616,195, up from $1,495,598, reflecting a $120,597 increase year-over-year[64] - As of June 30, 2023, working capital increased to $4,090,753, up from $3,475,776 at March 31, 2023, marking an increase of $614,977[63] - As of June 30, 2023, cash and cash equivalents totaled $3,376,487, following a net cash increase of $1,140,716[68] Capital Expenditures and Investments - The company plans to participate in the drilling and completion of 40 horizontal wells at an estimated cost of approximately $1,700,000 for the fiscal year ending March 31, 2024[69] - The company expended approximately $450,000 for the completion of 21 horizontal wells in fiscal 2023, with $225,000 already spent[72] - The company acquired small royalty interests in 6 wells for $20,000 in June 2023, effective July 1, 2023[75] Oil and Gas Price Impact - In the last twelve months, the WTI crude oil price ranged from a low of $62.72 per bbl to a high of $104.41 per bbl, while the Henry Hub natural gas price ranged from a low of $1.74 per MMBtu to a high of $9.85 per MMBtu[90] - As of June 30, 2023, the WTI crude oil price was $66.62 per bbl and the Henry Hub natural gas price was $2.48 per MMBtu[90] - A $10 increase or decrease in average oil price for the quarter ended June 30, 2023, would have resulted in a change of $195,280 in oil sales[92] - A $1 increase or decrease in average gas price for the quarter ended June 30, 2023, would have resulted in a change of $141,578 in natural gas sales[92] - Declines in oil and natural gas prices can adversely affect the company's financial condition, liquidity, and ability to obtain financing[91] - Improvements in oil and gas prices can positively impact the company's financial condition and results of operations[92] - Price fluctuations can lead to material increases or decreases in reserve quantities without drilling or well performance changes[91] - A noncash write-down of oil and gas properties may be required under full cost accounting rules if prices decline significantly[91] - Changes in oil and gas prices impact estimated future net revenue and the estimated quantity of proved reserves[91] - The company may experience reduced cash flow available for capital expenditures due to lower prices affecting the borrowing base under its credit facility[91]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-31785 MEXCO ENERGY CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Colorado 84-0627918 (Address of principa ...

Financial Performance - For the quarter ended December 31, 2022, net income was $1,244,785, a 65% increase from $753,302 for the same quarter in 2021[83]. - Net income for the nine months ended December 31, 2022, was $3,755,173, a 102% increase from $1,857,136 for the same period in 2021[89]. - Revenue from oil and gas sales for the nine months ended December 31, 2022, was $7,184,025, a 64% increase from $4,370,720 for the same period in 2021[90]. Revenue Breakdown - Revenue from oil and gas sales was $2,486,017 for Q3 fiscal 2023, a 58% increase from $1,573,984 in Q3 fiscal 2022[84]. - Oil revenue increased by 63.1% to $1,750,539 with production volume rising by 50.7% to 21,308 barrels[85]. - Natural gas revenue increased by 46.8% to $735,478, with production volume up 59.5% to 145,980 mcf[85]. - Oil revenue was $4,707,735 for the nine months ended December 31, 2022, a 47.4% increase from $3,193,315 in 2021, with production volume increasing by 9.1%[91]. - Gas revenue was $2,476,290 for the nine months ended December 31, 2022, a 110.3% increase from $1,177,405 in 2021, with production volume increasing by 43.8%[91]. Expenses - General and administrative expenses increased by 20% to $288,536 for Q3 fiscal 2023 compared to $239,767 in Q3 fiscal 2022[87]. - Production costs for the nine months ended December 31, 2022, were $1,308,143, a 45% increase from $903,643 in 2021[91]. - Depreciation, depletion, and amortization expense was $1,268,016 for the nine months ended December 31, 2022, a 56% increase from $812,398 in 2021[92]. - General and administrative expenses were $876,735 for the nine months ended December 31, 2022, a 19% increase from $739,469 in 2021[93]. - Income tax expense for the nine months ended December 31, 2022, was $115,236, a 108% increase from $55,492 in 2021[95]. Cash Flow and Financial Position - Cash flow from operating activities for the nine months ended December 31, 2022, was $4,350,920, an increase of $1,622,334 from $2,728,586 in the same period of 2021[61]. - As of December 31, 2022, cash and cash equivalents were $631,036, following a net cash decrease of $739,730[65]. Investments and Operations - The company plans to participate in the drilling of 50 horizontal wells at an estimated cost of $4,000,000 for fiscal year 2023[66]. - Mexco's working interest in completed wells in the Midland Basin achieved initial production rates of 560 barrels of oil equivalent per day[68]. - The company acquired royalty interests in 22 wells for $939,000 effective April 1, 2022[77]. Risk Factors - The largest credit risk associated with any single purchaser was $1,255,427, representing 61% of total oil and gas receivables as of December 31, 2022[97].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading Symbol(s) | Name ...

Financial Performance - For the quarter ended June 30, 2022, net income was $1,298,672, a significant increase from $395,006 for the same quarter in 2021, primarily due to higher oil and gas prices and increased production volumes [73]. - Revenue from oil and gas sales reached $2,416,113 for the quarter ended June 30, 2022, representing a 92% increase from $1,255,565 in the same quarter of 2021 [74]. - Cash flow provided by operating activities was $1,495,598 for the three months ended June 30, 2022, compared to $666,054 for the same period in 2021, marking an increase of $829,544 [55]. Production and Costs - Production costs increased by 57% to $435,028 for the three months ended June 30, 2022, primarily due to higher production taxes and lease operating expenses [74]. - Depreciation, depletion, and amortization expense rose by 46% to $387,128 for the first quarter of fiscal 2023, driven by increased production and a higher amortization base [75]. Market Conditions - The average price per barrel of oil increased by 71.4% to $109.62 in Q2 2022, while the average price per mcf of gas rose by 121.8% to $6.61 [74]. - In the last twelve months, the WTI crude oil price ranged from a low of $58.30 per bbl to a high of $119.68 per bbl, while the Henry Hub natural gas price ranged from $3.32 per MMBtu to $9.44 per MMBtu [82]. - As of June 30, 2022, the WTI crude oil price was $101.74 per bbl and the Henry Hub natural gas price was $5.75 per MMBtu [82]. Future Plans and Investments - The company plans to participate in the drilling and completion of 52 horizontal wells at an estimated aggregate cost of approximately $3,800,000 for the fiscal year ending March 31, 2023 [61]. - The company acquired various royalty interests in 22 wells for a purchase price of $939,000, effective April 1, 2022 [68]. Financial Position - As of June 30, 2022, the company had working capital of $1,769,009, a decrease of $700,767 from $2,469,776 at March 31, 2022 [54]. - The company has no off-balance sheet debt or unrecorded obligations, with total contractual obligations for leases amounting to $121,333 due within one year [73]. Price Sensitivity - A $10 increase or decrease in average oil price for the quarter ended June 30, 2022, would have resulted in a change of $142,240 in oil sales [84]. - A $1 increase or decrease in average gas price for the same quarter would have led to a change of $129,706 in natural gas sales [84]. - Declines in oil and natural gas prices can adversely affect the company's financial condition, liquidity, and operating results [83]. - Improvements in oil and gas prices can positively impact the company's financial condition and capital resources [84]. - Price fluctuations can lead to changes in estimated future net revenue and the quantity of proved reserves [83]. - A noncash write-down of oil and gas properties may be required if prices decline significantly [83]. - Lower prices may reduce the economically producible quantities of crude oil and natural gas [83]. - The company may experience material changes in reserve quantities solely due to price changes, independent of drilling performance [83].

Part I [Business Overview](index=5&type=section&id=Item%201.%20Business) Mexco Energy Corporation is an independent oil and gas company focused on non-operated interests in the Permian Basin, with 1.616 MMBOE proved reserves - The company is an independent oil and gas entity primarily engaged in acquiring and developing non-operated working and royalty interests in the Permian Basin[14](index=14&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) Proved Reserves and PV-10 Value (as of March 31, 2022) | Metric | Value | | :--- | :--- | | Total Estimated Proved Reserves | 1.616 million BOE | | Oil and NGLs Percentage | 50% | | Natural Gas Percentage | 50% | | Estimated PV-10 Value | ~$31 million | - The Permian Basin is the company's core operational area, contributing **84%** of discounted future net cash flows from proved reserves, with the Delaware Basin accounting for **61%**[26](index=26&type=chunk)[28](index=28&type=chunk) Historical Production Volumes | Year | Oil (Bbls) | Gas (Mcf) | | :--- | :--- | :--- | | 2022 | 61,689 | 393,841 | | 2021 | 50,327 | 324,205 | | 2020 | 44,301 | 294,007 | | 2019 | 35,359 | 295,133 | | 2018 | 34,743 | 318,774 | - A single customer accounted for **68%** of oil and gas revenues in fiscal 2022, indicating significant customer concentration[38](index=38&type=chunk) - The company maintains a lean operational structure with only two full-time and three part-time employees as of March 31, 2022[54](index=54&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from volatile commodity prices, reserve replacement, PUD development, and reliance on third-party operators - Volatility of oil and gas prices is a primary risk, impacting revenues, capital expenditure cash flow, borrowing capacity, and potentially leading to ceiling test writedowns[60](index=60&type=chunk)[61](index=61&type=chunk) - Approximately **37%** of total estimated net proved reserves were undeveloped as of March 31, 2022, requiring significant capital and successful drilling for recovery[70](index=70&type=chunk) - Limited control over non-operated properties, including operational procedures, expenditures, and development timelines, poses a risk to revenues and production[80](index=80&type=chunk) - The Chairman and CEO, Nicholas C. Taylor, beneficially owns approximately **44%** of common stock, granting significant influence over shareholder matters and business strategy[88](index=88&type=chunk) - The company has never paid cash dividends and does not anticipate doing so, as earnings are retained for business growth[91](index=91&type=chunk) [Properties and Reserves](index=18&type=section&id=Item%202.%20Properties) Total proved reserves increased **7.5%** to **1.616 MMBOE** by March 31, 2022, with PV-10 value doubling to **$30.8 million** - Average commodity prices used in fiscal 2022 reserve calculations increased dramatically year-over-year, with oil rising to **$74.52/bbl** and natural gas to **$4.60/mcf**[98](index=98&type=chunk) Proved Reserves and PV-10 Value Comparison (as of March 31) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Total Net Proved Reserves (BOE) | 1,616,180 | 1,503,970 | | PV-10 Value ($) | $30,777,000 | $13,758,300 | | Standardized Measure ($) | $25,920,000 | $12,763,000 | - In fiscal 2022, the company added **307 MBOE** through extensions and discoveries and **21 MBOE** through acquisitions, offset by production and downward revisions of **86 MBOE**[109](index=109&type=chunk) Net Production and Average Sales Price (Fiscal Year Ended March 31) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Oil** | | | | Production (Bbls) | 61,689 | 50,327 | | Average Sales Price/Bbl ($) | $75.95 | $40.31 | | **Gas** | | | | Production (Mcf) | 393,841 | 324,205 | | Average Sales Price/Mcf ($) | $4.67 | $2.30 | | **Total** | | | | Total Production (BOE) | 127,329 | 104,361 | [Legal and Safety Disclosures](index=21&type=section&id=Item%203.%20Legal%20Proceedings) The company is not involved in any material legal or governmental proceedings, and mine safety disclosures are not applicable to its operations - The company is not aware of any material legal or governmental proceedings against it[119](index=119&type=chunk) - Mine safety disclosures are not applicable to the company's operations[121](index=121&type=chunk) Part II [Common Stock Market and Shareholder Matters](index=23&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Mexco's common stock trades on NYSE American under 'MXC' with significant volatility; no cash dividends are anticipated, and a **$250,000** repurchase program is authorized Quarterly Stock Price Range (Fiscal 2022) | Quarter (2021-2022) | High ($) | Low ($) | | :--- | :--- | :--- | | Apr - Jun 2021 | 10.60 | 6.88 | | Jul - Sep 2021 | 11.80 | 7.80 | | Oct - Dec 2021 | 18.00 | 8.35 | | Jan - Mar 2022 | 43.00 | 9.00 | - The company has never declared or paid cash dividends and does not anticipate doing so, with its current bank loan also prohibiting such payments without permission[126](index=126&type=chunk) - A **$250,000** share repurchase program is authorized, but no shares were repurchased in fiscal years 2022 or 2021[129](index=129&type=chunk)[130](index=130&type=chunk) [Management's Discussion and Analysis (MD&A)](index=24&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2022 net income surged to **$2.86 million** on **135%** revenue growth, driven by higher commodity prices and production, enabling debt repayment [Liquidity and Capital Resources](index=24&type=section&id=MD%26A_Liquidity_and_Capital_Resources) Liquidity significantly improved in fiscal 2022, with operating cash flow reaching **$3.7 million**, enabling **$1.6 million** in property additions and full debt repayment Cash Flow Summary (Years Ended March 31) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities ($) | $3,744,407 | $710,047 | | Net Cash Used in Investing Activities ($) | ($1,710,024) | ($1,387,624) | | Net Cash (Used in) Provided by Financing Activities ($) | ($721,430) | $701,009 | - During fiscal 2022, the company participated in drilling **40** horizontal wells at a cost of approximately **$1.3 million**, primarily in the Delaware Basin[141](index=141&type=chunk) - The company acquired overriding royalty interests in **53** producing wells in the Eagle Ford area for **$567,000**[159](index=159&type=chunk) - Subsequent to fiscal year-end, the company acquired additional royalty interests for **$939,000** and committed to further drilling projects in the Permian Basin[154](index=154&type=chunk)[155](index=155&type=chunk)[160](index=160&type=chunk) [Results of Operations](index=27&type=section&id=MD%26A_Results_of_Operations) Net income for fiscal 2022 surged **1731%** to **$2.86 million**, driven by **135%** revenue growth to **$6.5 million** from higher commodity prices and production - Net income for fiscal 2022 was **$2,855,066**, an increase of **1731%** compared to **$155,932** in fiscal 2021[164](index=164&type=chunk) Revenue and Price Analysis (FY 2022 vs FY 2021) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | **Oil Revenue** | $4,685,094 | $2,028,792 | +130.9% | | Average Oil Price/bbl ($) | $75.95 | $40.31 | +88.4% | | **Gas Revenue** | $1,840,170 | $744,987 | +147.0% | | Average Gas Price/mcf ($) | $4.67 | $2.30 | +103.0% | - Operating expenses increased at a slower pace than revenues, with production costs up **47%**, DD&A up **48%**, and G&A expenses up **26%** year-over-year[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) [Critical Accounting Policies](index=28&type=section&id=MD%26A_Critical_Accounting_Policies) Critical accounting policies include the full cost method for oil and gas properties and the quarterly ceiling test, where proved reserve estimates are key judgments - The company uses the full cost method of accounting, capitalizing all costs associated with property acquisition, exploration, and development[174](index=174&type=chunk) - A quarterly ceiling test ensures capitalized costs do not exceed the after-tax present value of future net cash flows from proved reserves; no write-downs were recorded in fiscal 2022 or 2021[67](index=67&type=chunk)[177](index=177&type=chunk) - Estimates of proved reserves, prepared by an independent engineering firm, are critical and inherently uncertain, serving as a key input for DD&A calculation and the ceiling test[179](index=179&type=chunk) [Market Risk Disclosures](index=31&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is commodity price volatility; a **$10/bbl** oil price change impacts pretax income by **$617,000**, and a **$1/mcf** gas price change by **$394,000** - The primary market risk stems from fluctuating commodity prices; a hypothetical **$10/bbl** change in oil price would have altered fiscal 2022 pretax income by **$616,890**[194](index=194&type=chunk)[200](index=200&type=chunk) - A hypothetical **$1/mcf** change in the average natural gas price for fiscal 2022 would have altered pretax income by **$393,841**[200](index=200&type=chunk) - Credit risk is concentrated, with one purchaser accounting for **60%** of total oil and gas receivables at March 31, 2022, though significant credit losses have not been experienced[195](index=195&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of March 31, 2022, with no material changes reported - Management, including the CEO and CFO, assessed and concluded the company's internal control over financial reporting was effective as of March 31, 2022, based on the COSO 2013 framework[203](index=203&type=chunk)[205](index=205&type=chunk) - The company's disclosure controls and procedures were also evaluated and found to be effective as of March 31, 2022[206](index=206&type=chunk) Part III [Directors, Compensation, and Related Party Transactions](index=33&type=section&id=Items%2010-14) Information on directors, executive compensation, security ownership, and related party transactions is incorporated by reference from the separately filed 2022 Proxy Statement - Detailed information for Items 10 through 14 is incorporated by reference from the definitive Proxy Statement to be filed within 120 days of the fiscal year-end[209](index=209&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) Financial Statements and Notes [Consolidated Financial Statements](index=41&type=section&id=Consolidated%20Financial%20Statements) Audited consolidated financial statements for fiscal 2022 show significant improvement, with total assets at **$13.3 million**, liabilities reduced to **$1.1 million**, and net income surging to **$2.86 million** Consolidated Balance Sheet Highlights (as of March 31) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Total Current Assets ($) | $2,733,539 | $757,494 | | Property and Equipment, Net ($) | $10,132,902 | $9,768,943 | | Total Assets ($) | $13,284,520 | $10,830,687 | | Total Current Liabilities ($) | $263,763 | $138,534 | | Long-Term Debt ($) | $0 | $1,154,949 | | Total Liabilities ($) | $1,059,904 | $2,007,280 | | Total Stockholders' Equity ($) | $12,224,616 | $8,823,407 | Consolidated Statement of Operations Highlights (Years Ended March 31) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Total Operating Revenues ($) | $6,587,780 | $2,799,004 | | Operating Income ($) | $2,881,238 | $158,701 | | Net Income ($) | $2,855,066 | $155,932 | | Diluted EPS ($) | $1.32 | $0.08 | [Note 5: Long-Term Debt](index=49&type=section&id=Note%205.%20Long-Term%20Debt) In fiscal 2022, the company fully repaid its **$1.18 million** outstanding debt, resulting in a zero balance by March 31, 2022, with a **$1.5 million** credit facility available Credit Facility Activity (Years Ended March 31) | Activity | Principal Amount ($) | | :--- | :--- | | Balance at March 31, 2021 | $1,180,000 | | Borrowings (FY 2022) | $275,000 | | Repayments (FY 2022) | $1,455,000 | | **Balance at March 31, 2022** | **$0** | - The credit facility has a borrowing base of **$1,500,000**, which was fully available as of March 31, 2022[326](index=326&type=chunk)[327](index=327&type=chunk) [Note 16: Oil and Gas Reserve Data (Unaudited)](index=56&type=section&id=Note%2016.%20Oil%20and%20Gas%20Reserve%20Data%20%28Unaudited%29) Unaudited proved oil and gas reserves increased to **1.616 MMBOE**, with PUDs at **37%**; the standardized measure rose to **$25.9 million** due to higher prices Changes in Proved Reserves (BOE) | Description | Oil (Bbls) | Gas (Mcf) | | :--- | :--- | :--- | | As of March 31, 2021 | 738,000 | 4,595,000 | | Revisions/Purchases/Discoveries (Net) | 133,000 | 641,000 | | Production | (62,000) | (394,000) | | **As of March 31, 2022** | **809,000** | **4,842,000** | - At March 31, 2022, Proved Undeveloped Reserves (PUDs) were estimated at **590 MBOE**, representing **37%** of total proved reserves[370](index=370&type=chunk) Standardized Measure of Discounted Future Net Cash Flows | Metric | March 31, 2022 | March 31, 2021 | | :--- | :--- | :--- | | Standardized Measure ($) | $25,920,000 | $12,763,000 | - The increase in the standardized measure was primarily driven by a **$16.8 million** positive change from higher prices and adjusted production costs[381](index=381&type=chunk)

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Financial statements reflect significant improvement in financial health, with increased assets and equity, and a turnaround to net income driven by higher oil and gas revenues [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Balance sheets show total assets increased to **$12.07 million** and liabilities decreased to **$1.04 million**, boosting equity to **$11.04 million** Consolidated Balance Sheet Highlights (Unaudited) | Account | Dec 31, 2021 | Mar 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $880,190 | $57,813 | | Total current assets | $1,652,037 | $757,494 | | Property and equipment, net | $10,012,520 | $9,768,943 | | Total assets | $12,073,396 | $10,830,687 | | **Liabilities & Equity** | | | | Total current liabilities | $208,359 | $138,534 | | Long-term debt | $0 | $1,154,949 | | Total liabilities | $1,035,210 | $2,007,280 | | Total stockholders' equity | $11,038,186 | $8,823,407 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Statements of operations show a significant turnaround to **$1.86 million** net income for nine months, driven by doubled operating revenues Operating Results (Unaudited) | Metric | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | Nine Months Ended Dec 31, 2021 | Nine Months Ended Dec 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $1,595,344 | $699,894 | $4,413,023 | $1,706,392 | | Operating income (loss) | $756,379 | $26,073 | $1,880,391 | ($272,113) | | Net income (loss) | $753,302 | $80,497 | $1,857,136 | ($261,143) | | Basic EPS | $0.36 | $0.04 | $0.89 | ($0.13) | | Diluted EPS | $0.35 | $0.04 | $0.87 | ($0.13) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash flows show operating activities provided **$2.73 million**, leading to an **$822k** increase in cash and equivalents by period end Cash Flow Summary (Unaudited) | Cash Flow Activity | Nine Months Ended Dec 31, 2021 | Nine Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,728,586 | $372,863 | | Net cash used in investing activities | ($1,021,849) | ($818,597) | | Net cash (used in) provided by financing activities | ($884,360) | $452,369 | | **Net increase in cash and cash equivalents** | **$822,377** | **$6,635** | | **Cash and cash equivalents at end of period** | **$880,190** | **$41,016** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail oil and gas operations, accounting policies, zero long-term debt, no derivatives, and recent mineral interest acquisitions - The company's oil and gas interests are centered in West Texas and Southeastern New Mexico, with all interests operated by other parties[17](index=17&type=chunk) - As of December 31, 2021, the company had no derivative contracts. It previously used crude oil put options which expired in 2020[24](index=24&type=chunk) - The company had no balance outstanding on its line of credit as of December 31, 2021, having made net repayments of **$1,180,000** during the first nine months of the fiscal year[41](index=41&type=chunk) - In January 2022, the company invested an additional **$25,000** in a limited liability company focused on mineral interests in Ohio. In February 2022, it agreed to purchase overriding royalty interests in Texas for **$567,000**[53](index=53&type=chunk)[54](index=54&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses significant financial improvement from higher oil/gas prices and production, debt repayment, and future drilling plans [Liquidity and Capital Resources](index=16&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity improved with working capital at **$1.44 million** and operating cash flow at **$2.73 million**, supporting debt repayment Cash Flow Changes (Nine Months Ended Dec 31) | Activity | 2021 | 2020 | % Difference | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $2,728,586 | $372,863 | 632% | | Net cash used in investing activities | ($1,021,849) | ($818,597) | 25% | | Net cash (used in) provided by financing activities | ($884,360) | $452,369 | (295)% | - Working capital increased by **$824,718** to **$1,443,678** at December 31, 2021, compared to March 31, 2021[62](index=62&type=chunk) [Oil and Natural Gas Property Development](index=17&type=section&id=Oil%20and%20Natural%20Gas%20Property%20Development) The company plans to participate in 43 horizontal wells in the Delaware Basin for **$1.2 million** in fiscal 2022 - The company plans to participate in **43** horizontal wells in the Delaware Basin during fiscal 2022 at an estimated cost of approximately **$1,200,000**[68](index=68&type=chunk) - The company participated in multiple drilling and completion projects in the Delaware Basin, including wells in the Wolfcamp, Bone Spring, and Lower Wolfcamp Shale formations[69](index=69&type=chunk)[72](index=72&type=chunk)[75](index=75&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) Operating results show a dramatic improvement with **159%** revenue growth to **$4.37 million** and **$1.86 million** net income Q3 FY2022 vs Q3 FY2021 Sales Performance | Metric | 2021 | 2020 | % Difference | | :--- | :--- | :--- | :--- | | **Oil** | | | | | Revenue | $1,073,078 | $520,261 | 106.3% | | Volume (bbls) | 14,142 | 13,004 | 8.8% | | Average Price (per bbl) | $75.88 | $40.01 | 89.7% | | **Gas** | | | | | Revenue | $500,906 | $171,982 | 191.3% | | Volume (mcf) | 91,534 | 82,688 | 10.7% | | Average Price (per mcf) | $5.47 | $2.08 | 163.0% | Nine Months Ended Dec 31 Sales Performance | Metric | 2021 | 2020 | % Difference | | :--- | :--- | :--- | :--- | | **Oil** | | | | | Revenue | $3,193,315 | $1,307,588 | 144.2% | | Volume (bbls) | 45,857 | 37,681 | 21.7% | | Average Price (per bbl) | $69.64 | $34.70 | 100.7% | | **Gas** | | | | | Revenue | $1,177,405 | $378,798 | 210.8% | | Volume (mcf) | 274,204 | 251,094 | 9.2% | | Average Price (per mcf) | $4.29 | $1.51 | 184.1% | - General and administrative expenses for the nine months increased **25%** to **$794,961** from **$634,526**, primarily due to higher bonuses, director's fees, and stock option compensation expense[95](index=95&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=20&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include commodity price volatility, with a **$10/bbl** oil price change impacting pretax income by **$458k** - The most significant market risk is energy price volatility. WTI crude prices ranged from **$43.60** to **$80.63** per barrel in the last twelve months[100](index=100&type=chunk)[101](index=101&type=chunk) - A **$10/bbl** change in oil price would alter nine-month pretax income by **$458,570**[102](index=102&type=chunk) - A **$1/mcf** change in gas price would alter nine-month pretax income by **$274,204**[102](index=102&type=chunk) - The company has significant credit risk concentration, with one purchaser representing **71%** (**$530,696**) of total oil and gas receivables as of December 31, 2021[99](index=99&type=chunk) [Controls and Procedures](index=20&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of December 31, 2021, with no material changes to internal controls - Management concluded that as of December 31, 2021, the company's disclosure controls and procedures were effective[103](index=103&type=chunk) - No material changes to internal control over financial reporting occurred during the nine months ended December 31, 2021[104](index=104&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=21&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any material legal or governmental proceedings against its operations or financial condition - The company is not aware of any material legal or governmental proceedings against it[106](index=106&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the 2021 Annual Report on Form 10-K - No material changes have been made to the risk factors disclosed in the 2021 Annual Report on Form 10-K[107](index=107&type=chunk) [Exhibits](index=21&type=section&id=Item%206.%20Exhibits) Exhibits include CEO and CFO certifications and Inline XBRL data files as required by regulations - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1) and Inline XBRL documents[108](index=108&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-31785 MEXCO ENERGY CORPORATION (Exact name of registrant as specified in its charter) Colorado 84-0627918 (State or other jurisdiction of ( ...

Financial Performance - For the quarter ended June 30, 2021, net income was $395,006 compared to a net loss of $299,670 for the same quarter in 2020, primarily due to increased operating revenues from higher oil and gas prices and production [75]. - Revenue from oil and gas sales was $1,255,565 for the quarter ended June 30, 2021, a 245% increase from $364,179 for the same quarter in 2020 [76]. - Cash flow provided by operating activities was $666,054 for the three months ended June 30, 2021, a 902% increase from $66,472 for the same period in 2020 [59]. Oil and Gas Revenue - Oil revenue was $987,103 for the quarter ended June 30, 2021, a 249.6% increase from $282,370 in the same quarter of 2020, with an average price per barrel of $63.94, up 161.2% from $24.48 [76]. - Gas revenue was $268,462 for the quarter ended June 30, 2021, a 228.2% increase from $81,809 in the same quarter of 2020, with an average price per mcf of $2.98, up 189.3% from $1.03 [76]. Costs and Expenses - Production costs were $276,987 for the three months ended June 30, 2021, a 61% increase from $171,666 for the same period in 2020 [76]. - General and administrative expenses were $308,167 for the three months ended June 30, 2021, a 24% increase from $248,878 for the same period in 2020 [78]. Working Capital and Debt - As of June 30, 2021, the company had working capital of $626,850, an increase of $7,890 from $618,960 at March 31, 2021 [57]. - The company has no off-balance sheet debt or unrecorded obligations as of June 30, 2021 [74]. - As of June 30, 2021, the outstanding loan balance under the credit agreement was $800,000, with a potential annual pretax income change of $8,000 for each 1% change in interest rates [81]. Credit Risk - The largest credit risk associated with a single purchaser was $495,512, representing 74% of total oil and gas receivables, with no significant credit losses reported [82]. - The company has not experienced significant credit losses despite the high concentration of credit risk [82]. Market Conditions - The NYMEX West Texas Intermediate (WTI) crude oil price ranged from $31.75 per barrel in October 2020 to $70.03 per barrel in June 2021, while the Henry Hub natural gas price ranged from $1.33 per MMBtu to $23.86 per MMBtu during the same period [86]. - On June 30, 2021, the WTI crude oil price was $69.45 per barrel, and the Henry Hub natural gas price was $3.79 per MMBtu [86]. - A $10 increase or decrease in average oil price for the quarter ended June 30, 2021, would have resulted in a $154,380 change in pretax income [88]. - A $1 increase or decrease in average gas price for the same quarter would have led to a $90,063 change in pretax income [88]. - Declines in oil and natural gas prices could materially adversely affect the company's financial condition, liquidity, and ability to obtain financing [87]. - Improvements in oil and gas prices can positively impact the company's financial condition and capital resources [88]. - The volatility in oil and natural gas prices is expected to continue, influenced by global demand, supply levels, and geopolitical factors [85]. Future Plans - The company plans to participate in the drilling and completion of 36 horizontal wells at an estimated aggregate cost of approximately $1,250,000 for the fiscal year ending March 31, 2022 [64].