Financial Results - Mexco Energy Corporation announced its financial results for the year ended March 31, 2024[5]. - The financial report was issued on June 27, 2024, indicating timely communication of results[5]. - The report includes results of operations and financial condition, essential for investor insights[11]. Company Strategy - The company is focused on further development of its properties as part of its growth strategy[1]. Regulatory Compliance - The filing complies with the Securities Exchange Act of 1934, reflecting regulatory adherence[8]. - The report was signed by Tammy McComic, President and Chief Financial Officer, ensuring accountability[12]. Company Information - The company is listed on the NYSE American under the trading symbol MXC[3]. - The company’s IRS Employer Identification Number is 84-0627918, confirming its registration[3]. - The principal executive office is located in Midland, TX, indicating the company's operational base[9]. Additional Information - The news release is filed as Exhibit 99.1, providing detailed financial information[6].

[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Regarding%20Forward-Looking%20Statements) This section outlines the nature of forward-looking statements, their inherent risks, and potential material differences from actual results - Forward-looking statements are identified by words like "could," "should," "expect," "project," "estimate," "believe," "anticipate," "intend," "budget," "plan," "forecast," "predict"[28](index=28&type=chunk) - These statements relate to profitability, planned capital expenditures, estimates of oil and gas production, future project dates, future oil and gas prices, reserves, financial condition, results of operations, and business strategy[28](index=28&type=chunk) - Actual results may differ materially due to various risks and uncertainties, including success in development, capital expenditure ability, declines in production or prices, debt covenants, acquisitions, weather, transportation, and operating costs[28](index=28&type=chunk) [PART I](index=3&type=section&id=PART%20I) [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Mexco Energy Corporation is an independent oil and gas company focused on acquisition, exploration, development, and production in the U.S., primarily in West Texas and Southeastern New Mexico - Mexco Energy Corporation is an independent oil and gas company engaged in the acquisition, exploration, development, and production of crude oil and natural gas properties located in the United States[11](index=11&type=chunk)[34](index=34&type=chunk)[200](index=200&type=chunk) - Primary business strategies for fiscal 2025 include optimizing cash flows through operating efficiencies and cost reductions, divesting non-core assets, and balancing capital spending with cash flows to minimize borrowings and maintain ample liquidity[1](index=1&type=chunk) - The company focuses on acquiring proved reserves that fit well with existing operations or in areas with established production, with an emphasis on producing wells, behind pipe reserves, and high-quality proved undeveloped locations[34](index=34&type=chunk) - The majority of activities are centered in West Texas and Southeastern New Mexico, with the Permian Basin accounting for **85% of discounted future net cash flows** from proved reserves and **87% of gross revenues**[34](index=34&type=chunk)[64](index=64&type=chunk)[200](index=200&type=chunk) - Company A accounted for **59% of total operating revenues** in fiscal 2024 (**53% in fiscal 2023**)[66](index=66&type=chunk) Key Reserve and Valuation Data (March 31, 2024) | Metric | Value | | :-------------------------------- | :------------ | | Total Estimated Proved Reserves | 1.547 MMBOE | | Oil and Natural Gas Liquids Share | 51% | | Natural Gas Share | 49% | | Estimated Present Value (PV-10) | ~$29 million | Oil and Gas Production (Last Five Years) | Year | Oil (Bbls) | Gas (Mcf) | | :--- | :--------- | :-------- | | 2024 | 69,999 | 502,879 | | 2023 | 73,968 | 534,363 | | 2022 | 61,689 | 393,841 | | 2021 | 50,327 | 324,205 | Executive Officers (as of March 31, 2024) | Name | Age | Position | | :---------------- | :-- | :------------------------------------------------- | | Nicholas C. Taylor | 86 | Chairman and Chief Executive Officer | | Tamala L. McComic | 55 | President, Chief Financial Officer, Treasurer, and Assistant Secretary | | Donna Gail Yanko | 79 | Vice President | | Stacy D. Hardin | 59 | Secretary and Assistant Treasurer | [Item 1A. Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks affecting Mexco's business, including the high volatility of oil and gas prices, which impacts profitability, cash flow, and borrowing capacity - Volatility of oil and gas prices significantly affects the company's results, profitability, cash flow for capital expenditures, and ability to borrow money[71](index=71&type=chunk) - The company must replace reserves as they are produced, and its future success depends on finding, developing, or acquiring additional economically recoverable oil and gas reserves[48](index=48&type=chunk)[73](index=73&type=chunk) - Approximately **33% of total estimated net proved reserves** at March 31, 2024, were undeveloped, requiring significant capital expenditures and successful drilling, which are subject to uncertainties[73](index=73&type=chunk)[222](index=222&type=chunk) - Reliance on third-party operators for non-operating interests means the company cannot control operations, potentially impacting production, revenues, and capital expenditures[49](index=49&type=chunk) - Operations are subject to high risks inherent in exploration, development, and production, including blowouts, fires, pollution, and the possibility of non-commercial reservoirs[73](index=73&type=chunk) - Changes in environmental laws (e.g., Inflation Reduction Act of 2022) and tax policies could increase costs and adversely impact the business[41](index=41&type=chunk)[50](index=50&type=chunk)[72](index=72&type=chunk) - The company depends on the continued services of its Chief Executive Officer, Nicholas C. Taylor, and President and Chief Financial Officer, Tamala L. McComic, whose unexpected loss could significantly affect operations[50](index=50&type=chunk) - Nicholas C. Taylor's beneficial ownership of approximately **45% of outstanding common stock** gives him significant influence over shareholder matters and business operations[50](index=50&type=chunk)[104](index=104&type=chunk) [Item 1B. Unresolved Staff Comments](index=15&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that there are no unresolved staff comments - There are no unresolved staff comments[52](index=52&type=chunk)[76](index=76&type=chunk) [Item 1C. Cybersecurity](index=15&type=section&id=Item%201C.%20Cybersecurity) Mexco maintains a cybersecurity program to protect data confidentiality, integrity, and availability, incorporating a risk-based framework with internal and external controls - Mexco maintains a cybersecurity program to protect data, including internal and external controls, risk assessment, and policy implementation[15](index=15&type=chunk) - The company has implemented a monitoring and detection system, annual cybersecurity awareness training, and performs tabletop exercises to test its incident response plan (IRP)[77](index=77&type=chunk) - The Board, in coordination with the Audit Committee and Chief Financial Officer, is responsible for the oversight of risks from cybersecurity threats[53](index=53&type=chunk) - As of the report date, the company is not aware of any previous cybersecurity threats that have materially affected its business strategy, results of operations, or financial condition[53](index=53&type=chunk) [Item 2. Properties](index=16&type=section&id=Item%202.%20Properties) Mexco's properties primarily consist of oil and gas wells and leasehold acreage in the U.S., with interests in approximately 6,800 gross (25.7 net) producing wells and 579,000 gross (2,709 net) acres as of March 31, 2024 - As of March 31, 2024, Mexco had interests in approximately **6,800 gross (25.7 net) producing oil and gas wells** and owned leasehold mineral, royalty, and other interests in approximately **579,000 gross (2,709 net) acres**[78](index=78&type=chunk)[80](index=80&type=chunk) - During fiscal 2024, the company added proved reserves of **272 MBOE** through extensions and discoveries and **44 MBOE** through acquisitions, while subtracting **163 MBOE** for downward revisions primarily due to decreased crude oil and natural gas prices[5](index=5&type=chunk) - Approximately **33% of total estimated net proved reserves** at March 31, 2024, were undeveloped, requiring significant capital expenditures and successful drilling[73](index=73&type=chunk)[222](index=222&type=chunk) Proved Reserves and PV-10 Value | Metric | March 31, 2024 | March 31, 2023 | | :-------------------------------- | :------------- | :------------- | | Total net proved reserves (BOE) | 1,547,127 | 1,551,725 | | PV-10 Value | $29,078,000 | $39,473,000 | | Standardized measure of discounted future net cash flows | $24,628,000 | $32,815,000 | Prices Used in Calculating Reserves (per SEC rules) | Commodity | March 31, 2024 | March 31, 2023 | | :-------- | :------------- | :------------- | | Natural gas (per Mcf) | $2.75 | $5.68 | | Oil (per Bbl) | $76.88 | $92.02 | Net Oil and Natural Gas Production, Revenue, and Average Prices | Metric | 2024 | 2023 | | :---------------------- | :---------- | :---------- | | Oil Production (Bbls) | 69,999 | 73,968 | | Oil Revenue | $5,348,257 | $6,522,163 | | Average Oil Price (per Bbl) | $76.40 | $88.18 | | Gas Production (Mcf) | 502,879 | 534,363 | | Gas Revenue | $1,114,390 | $2,858,460 | | Average Gas Price (per Mcf) | $2.22 | $5.35 | | Total BOE | 153,812 | 163,029 | Production Costs | Metric | 2024 | 2023 | | :----------------------------------- | :-------- | :-------- | | Production expenses | $1,029,279 | $1,039,893 | | Production expenses per BOE | $6.69 | $6.38 | | Production and ad valorem taxes | $497,193 | $679,826 | | Production and ad valorem taxes per BOE | $3.23 | $4.17 | [Item 3. Legal Proceedings](index=20&type=section&id=Item%203.%20Legal%20Proceedings) The company may be involved in various incidental legal proceedings and claims but believes that any resulting liability will not materially adversely affect its consolidated financial position, liquidity, capital resources, or future results of operations - The company believes that the amount of liability, if any, ultimately incurred with respect to incidental legal proceedings and claims will not have a material adverse effect on its consolidated financial position, liquidity, capital resources, or future results of operations[81](index=81&type=chunk) [Item 4. Safety Disclosures](index=20&type=section&id=Item%204.%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[81](index=81&type=chunk) [PART II](index=21&type=section&id=PART%20II) [Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=21&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Mexco's common stock trades on the NYSE American under the symbol "MXC," with 2,226,916 shares issued and 827 shareholders of record as of March 31, 2024 - Mexco's common stock trades on the NYSE American under the symbol "**MXC**"[82](index=82&type=chunk) - As of March 31, 2024, the company had **2,226,916 shares issued** and **827 shareholders of record**[82](index=82&type=chunk) - The company declared a special dividend of **$0.10 per common share** on April 10, 2023, and a regular annual dividend of **$0.10 per common share** on April 30, 2024, both requiring written permission from WTNB[82](index=82&type=chunk)[150](index=150&type=chunk)[229](index=229&type=chunk) - In April 2024, the Board authorized a new **$1,000,000 common stock repurchase program**, replacing the previous one, and subsequently repurchased **13,766 shares for $188,637**[21](index=21&type=chunk)[187](index=187&type=chunk)[229](index=229&type=chunk) - Stock repurchases are subject to a **1% excise tax** under the Inflation Reduction Act of 2022 for repurchases exceeding **$1,000,000 annually**, effective after December 31, 2022[21](index=21&type=chunk)[187](index=187&type=chunk) Common Stock High and Low Sales Price (NYSE American) | Period | High ($) | Low ($) | | :---------------------- | :------- | :------ | | April - June 2023 | 13.84 | 10.49 | | July - September 2023 | 13.63 | 10.49 | | October - December 2023 | 13.50 | 10.49 | | January - March 2024 | 10.49 | 10.49 | Issuer Repurchases of Common Stock | Fiscal Year | Shares Repurchased | Aggregate Cost ($) | Average Price Per Share ($) | | :---------- | :----------------- | :----------------- | :-------------------------- | | 2024 | 50,101 | 585,035 | 11.68 | | 2023 | 18,416 | 244,494 | 13.28 | [Item 6. Reserved](index=22&type=section&id=Item%206.%20Reserved) This item is reserved - This item is reserved[85](index=85&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Mexco's net income decreased by 71% in fiscal 2024 to $1,344,952, primarily due to a 31% decrease in oil and natural gas sales revenue, driven by lower commodity prices and production volumes - Net income decreased by **71% to $1,344,952** for the year ended March 31, 2024, compared to **$4,662,702 in fiscal 2023**, primarily due to decreased operating revenues from lower oil and natural gas prices and production[89](index=89&type=chunk)[174](index=174&type=chunk) - Total operating revenues decreased by **31% to $6,604,884** in fiscal 2024 from **$9,557,289 in fiscal 2023**[174](index=174&type=chunk) - Production costs decreased by **11% to $1,526,472** in fiscal 2024, primarily due to a decrease in production taxes resulting from lower oil and gas revenues[18](index=18&type=chunk) - Depreciation, depletion, and amortization (DD&A) expense increased by **6% to $1,969,742** in fiscal 2024, mainly due to an increase in the full cost pool amortization and a decrease in oil and gas reserves, partially offset by decreased production[18](index=18&type=chunk) - General and administrative expenses increased by **11% to $1,243,548** in fiscal 2024, driven by higher employee stock option compensation, salaries, contract services, and accounting fees[18](index=18&type=chunk) - The company participated in the drilling and completion of **52 wells** (51 horizontal, 1 vertical) in fiscal 2024, expending approximately **$2,000,000**[117](index=117&type=chunk) - The company acquired various royalty and mineral interests in Texas, Colorado, and Louisiana during fiscal 2024, totaling over **$1.7 million**[22](index=22&type=chunk) - The company uses the full cost method of accounting for oil and gas operations, capitalizing all acquisition, exploration, and development costs, and performs quarterly ceiling tests for impairment[120](index=120&type=chunk)[147](index=147&type=chunk)[178](index=178&type=chunk) Cash Flow Summary | Activity | 2024 | 2023 | Change | | :------------------------ | :------------ | :------------ | :------------ | | Net cash provided by operating activities | $4,433,935 | $6,515,895 | $(2,081,960) | | Net cash used in investing activities | $(3,416,499) | $(5,441,075) | $(2,024,576) | | Net cash used in financing activities | $(779,723) | $(209,815) | $569,908 | | Net increase in cash and cash equivalents | $237,713 | $865,005 | $(627,292) | | Cash and cash equivalents at end of year | $2,473,484 | $2,235,771 | $237,713 | Oil and Natural Gas Sales Performance | Metric | 2024 | 2023 | % Difference | | :---------------------- | :---------- | :---------- | :----------- | | Oil Revenue | $5,348,257 | $6,522,163 | (18.0)% | | Oil Volume (bbls) | 69,999 | 73,968 | (5.4)% | | Average Oil Price (per bbl) | $76.40 | $88.18 | (13.4)% | | Gas Revenue | $1,114,390 | $2,858,460 | (61.0)% | | Gas Volume (mcf) | 502,879 | 534,363 | (5.9)% | | Average Gas Price (per mcf) | $2.22 | $5.35 | (58.5)% | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Mexco's primary market risks are fluctuations in commodity prices (oil and natural gas) and interest rates, with significant impacts on financial condition and operating results - The primary sources of market risk for Mexco include fluctuations in commodity prices (crude oil and natural gas) and interest rates[122](index=122&type=chunk) - The company's largest credit risk associated with any single oil and gas purchaser was **$480,836**, or **48% of total oil and gas receivables**, at March 31, 2024, but no significant credit losses have been experienced historically[122](index=122&type=chunk) - NYMEX West Texas Intermediate (WTI) crude oil prices ranged from **$63.10/bbl to $89.66/bbl**, and Henry Hub natural gas prices ranged from **$1.25/MMBtu to $3.34/MMBtu** during the last twelve months[118](index=118&type=chunk)[122](index=122&type=chunk) Impact of Commodity Price Changes on Pretax Income (Fiscal 2024) | Commodity | Price Change | Impact on Pretax Income ($) | | :-------- | :----------- | :---------------------- | | Oil | +$10/bbl | +$699,990 | | Oil | -$10/bbl | -$699,990 | | Gas | +$1/mcf | +$502,879 | | Gas | -$1/mcf | -$502,879 | [Item 8. Financial Statements and Supplementary Data](index=31&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item incorporates by reference the consolidated financial statements and notes from pages F2 through F21 of the report - The information required by this item appears on pages **F2 through F21** of this report and is incorporated herein by reference[94](index=94&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures](index=31&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) This section states that there are no changes in or disagreements with accountants on accounting and financial disclosures - There are no changes in or disagreements with accountants on accounting and financial disclosures[95](index=95&type=chunk) [Item 9A. Controls and Procedures](index=31&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, assessed the effectiveness of internal control over financial reporting as of March 31, 2024, using the COSO 2013 framework and concluded it was effective - The chief executive officer and chief financial officer concluded that the company's internal control over financial reporting was **effective** as of March 31, 2024, based on the COSO 2013 "Internal Control - Integrated Framework"[123](index=123&type=chunk) - Disclosure controls and procedures were reviewed and evaluated, and concluded to be **effective** as of March 31, 2024[123](index=123&type=chunk) - No changes in the company's internal control over financial reporting occurred during the year ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[9](index=9&type=chunk) [Item 9B. Other Information](index=32&type=section&id=Item%209B.%20Other%20Information) This item states that there is no other information to disclose - None[19](index=19&type=chunk)[154](index=154&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection](index=32&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspection) This item is not applicable - Not applicable[154](index=154&type=chunk) [PART III](index=32&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=32&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This item incorporates by reference information regarding directors, executive officers, and corporate governance from the company's Proxy Statement for the 2024 Annual Meeting of Stockholders - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the Proxy Statement for the 2024 Annual Meeting of Stockholders[154](index=154&type=chunk) [Item 11. Executive Compensation](index=32&type=section&id=Item%2011.%20Executive%20Compensation) This item incorporates by reference information regarding executive compensation from the company's Proxy Statement - Information regarding executive compensation is incorporated by reference from the Proxy Statement[125](index=125&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=32&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This item incorporates by reference information regarding security ownership and related stockholder matters from the company's Proxy Statement - Information regarding security ownership of certain beneficial owners and management and related stockholder matters is incorporated by reference from the Proxy Statement[97](index=97&type=chunk)[155](index=155&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=32&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This item incorporates by reference information regarding certain relationships, related transactions, and director independence from the company's Proxy Statement - Information regarding certain relationships and related transactions, and director independence is incorporated by reference from the Proxy Statement[126](index=126&type=chunk) [Item 14. Principal Accounting Fees and Services](index=32&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) This item incorporates by reference information regarding principal accounting fees and services from the company's Proxy Statement - Information regarding principal accounting fees and services is incorporated by reference from the Proxy Statement[156](index=156&type=chunk) [PART IV](index=33&type=section&id=PART%20IV) [Item 15. Exhibits and Financial Statement Schedules](index=33&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements and schedules filed as part of the 10-K, noting that all schedules have been omitted as not applicable or already included - A list of the consolidated financial statements filed as part of this Form 10-K is set forth on **F-1** of this report[157](index=157&type=chunk) - All financial statement schedules have been omitted because they are not applicable, not required, or the information is set forth in the consolidated financial statements or related notes[157](index=157&type=chunk) - An index to exhibits is provided on page **F22** of this report[157](index=157&type=chunk)[225](index=225&type=chunk) [Item 16. 10-K Summary](index=33&type=section&id=Item%2016.%2010-K%20Summary) This item states that there is no 10-K summary - None[157](index=157&type=chunk) [Signatures](index=34&type=section&id=Signatures) This section contains the official signatures of the company's Chairman, CEO, President, and CFO, certifying the report's submission - The report was signed on **June 27, 2024**, by Nicholas C. Taylor (Chairman of the Board and Chief Executive Officer) and Tamala L. McComic (President and Chief Financial Officer)[10](index=10&type=chunk)[127](index=127&type=chunk) [Glossary of Abbreviations and Terms](index=35&type=section&id=Glossary%20of%20Abbreviations%20and%20Terms) This section defines key abbreviations and terms used throughout the Form 10-K report, particularly those common in the oil and gas industry - This section provides definitions for abbreviations and terms commonly used in the oil and gas industry and throughout the Form 10-K report[25](index=25&type=chunk)[32](index=32&type=chunk)[128](index=128&type=chunk) - Key terms defined include **BOE** (Barrels of oil equivalent), **Mcf** (One thousand cubic feet of natural gas), **MMBOE** (One million barrels of oil equivalent), **PV-10** (Discounted future net cash flows before income tax), **Proved reserves**, and **Working interest**[25](index=25&type=chunk)[132](index=132&type=chunk)[137](index=137&type=chunk)[158](index=158&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) [Financial Statements and Supplementary Data](index=38&type=section&id=Financial%20Statements%20and%20Supplementary%20Data%20%28Detailed%29) [Report of Independent Registered Public Accounting Firm](index=39&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Weaver and Tidwell, L.L.P. audited Mexco Energy Corporation's consolidated financial statements for the periods ended March 31, 2024 and 2023, and issued an unqualified opinion - Weaver and Tidwell, L.L.P. (PCAOB ID 410) issued an **unqualified opinion** on the consolidated financial statements for the periods ended March 31, 2024 and 2023[140](index=140&type=chunk)[142](index=142&type=chunk)[170](index=170&type=chunk) - The estimation of proved reserves impacting the recognition and valuation of depletion expense and impairment of oil and gas properties was identified as a **critical audit matter** due to high subjectivity and complex auditor judgment[140](index=140&type=chunk)[171](index=171&type=chunk) [Consolidated Balance Sheets](index=41&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show total assets increased to $19,058,854 as of March 31, 2024, from $17,820,289 in 2023, primarily driven by an increase in oil and gas properties, net - Oil and gas properties, using the full cost method, increased to **$48,304,585 in 2024** from **$45,391,634 in 2023**[173](index=173&type=chunk) - A deferred income tax liability of **$311,661** was recognized in 2024, compared to none in 2023[173](index=173&type=chunk) Consolidated Balance Sheet Highlights | Metric | March 31, 2024 | March 31, 2023 | | :--------------------------- | :------------- | :------------- | | Total Current Assets | $3,689,320 | $3,734,039 | | Property and Equipment, Net | $14,241,674 | $13,298,465 | | Investment – Cost Basis | $1,100,000 | $700,000 | | Total Assets | $19,058,854 | $17,820,289 | | Total Current Liabilities | $430,120 | $258,263 | | Total Long-Term Liabilities | $1,000,469 | $729,539 | | Total Liabilities | $1,430,589 | $987,802 | | Total Stockholders' Equity | $17,628,265 | $16,832,487 | [Consolidated Statements of Operations](index=42&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a significant decrease in net income by 71% to $1,344,952 in fiscal 2024 from $4,662,702 in fiscal 2023, primarily driven by a 31% decrease in total operating revenues - Oil sales decreased by **18%** and natural gas sales decreased by **61%** in 2024, contributing to the overall revenue decline[174](index=174&type=chunk) - Interest income increased significantly to **$135,476 in 2024** from **$8,009 in 2023**[174](index=174&type=chunk) Consolidated Statements of Operations Highlights | Metric | 2024 | 2023 | Change (%) | | :--------------------------- | :---------- | :---------- | :--------- | | Total Operating Revenues | $6,604,884 | $9,557,289 | (31)% | | Total Operating Expenses | $4,769,630 | $4,724,989 | 1% | | Operating Income | $1,835,254 | $4,832,300 | (62)% | | Net Other Income (Expenses) | $130,242 | $(5,088) | N/A | | Income Before Income Taxes | $1,965,496 | $4,827,212 | (59)% | | Total Income Tax Expense | $620,544 | $164,510 | 277% | | Net Income | $1,344,952 | $4,662,702 | (71)% | | Basic EPS | $0.64 | $2.17 | (70)% | | Diluted EPS | $0.62 | $2.11 | (71)% | [Consolidated Statements of Changes in Stockholders' Equity](index=43&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) The consolidated statements of changes in stockholders' equity show an increase in total stockholders' equity to $17,628,265 as of March 31, 2024, from $16,832,487 in 2023 - Common stock shares issued increased by **5,500 in 2024** and **5,000 in 2023**[175](index=175&type=chunk) - Shares held in treasury increased by **50,101 in 2024** and **18,416 in 2023** due to stock repurchases[175](index=175&type=chunk) Changes in Stockholders' Equity | Metric | March 31, 2024 | March 31, 2023 | | :--------------------------- | :------------- | :------------- | | Total Stockholders' Equity (Beginning) | $16,832,487 | $12,224,616 | | Net Income | $1,344,952 | $4,662,702 | | Stock-based Compensation | $229,799 | $142,783 | | Dividends Paid | $(213,600) | $0 | | Acquisition of Treasury Stock | $(585,035) | $(244,494) | | Total Stockholders' Equity (End) | $17,628,265 | $16,832,487 | [Consolidated Statements of Cash Flows](index=44&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows indicate a net increase in cash and cash equivalents of $237,713 in fiscal 2024, resulting in an ending balance of $2,473,484 - Cash flow from operating activities decreased by **$2,081,960** in fiscal 2024, primarily due to a decrease in net income[86](index=86&type=chunk)[145](index=145&type=chunk) - Net cash used in investing activities decreased by **$2,024,576**, with additions to oil and gas properties decreasing to **$(3,349,326) in 2024**[86](index=86&type=chunk)[145](index=145&type=chunk) - Net cash used in financing activities increased by **$569,908**, driven by dividend payments of **$(213,600)** and increased acquisition of treasury stock of **$(585,035) in 2024**[86](index=86&type=chunk)[145](index=145&type=chunk) Consolidated Statements of Cash Flows Summary | Activity | 2024 | 2023 | | :------------------------ | :------------ | :------------ | | Net cash provided by operating activities | $4,433,935 | $6,515,895 | | Net cash used in investing activities | $(3,416,499) | $(5,441,075) | | Net cash used in financing activities | $(779,723) | $(209,815) | | Net increase in cash and cash equivalents | $237,713 | $865,005 | | Cash and cash equivalents at end of year | $2,473,484 | $2,235,771 | [Notes to Consolidated Financial Statements](index=45&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information on Mexco's accounting policies, including the full cost method for oil and gas properties, revenue recognition, and asset retirement obligations [1. Nature of Operations](index=45&type=section&id=1.%20Nature%20of%20Operations) This note describes Mexco Energy Corporation's core business as an independent oil and gas company focused on acquisition, exploration, development, and production in the U.S., with all interests operated by third parties - Mexco Energy Corporation and its wholly owned subsidiaries are engaged in the acquisition, exploration, development, and production of crude oil, natural gas, condensate, and natural gas liquids (NGLs) in the United States[200](index=200&type=chunk) - All of the company's oil and gas interests are operated by others[200](index=200&type=chunk) [2. Summary of Significant Accounting Policies](index=45&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines Mexco's key accounting policies, including the full cost method for oil and gas properties, revenue recognition, asset retirement obligations, and investments in LLCs - The company uses the **full cost method of accounting** for oil and gas properties, capitalizing all costs associated with acquisition, exploration, and development activities[147](index=147&type=chunk)[178](index=178&type=chunk) - A quarterly "**ceiling test**" is performed to determine impairment, where net capitalized costs of oil and gas properties cannot exceed the after-tax present value of future net cash flows from proved reserves[178](index=178&type=chunk) - Revenues from royalty and non-operated working interest properties are recorded under the **cash receipts approach**, with accruals for earned but not received revenue[178](index=178&type=chunk) - The fair value of a liability for an **Asset Retirement Obligation (ARO)** is recorded when incurred, and the capitalized cost is depreciated using the units of production method[178](index=178&type=chunk) - The company accounts for investments of less than **3% in limited liability companies at cost**[202](index=202&type=chunk) - ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," is effective for annual periods beginning after December 15, 2024, and the company is evaluating its impact[179](index=179&type=chunk) [3. Long-Term Debt](index=47&type=section&id=3.%20Long-Term%20Debt) This note details the company's credit facility with West Texas National Bank, including its $2.5 million limit, maturity date, and covenants, particularly the restriction on cash dividends - The company has a loan agreement with West Texas National Bank (WTNB) providing a credit facility of **$2,500,000**, with a maturity date extended to **March 28, 2026**[203](index=203&type=chunk) - There was **no balance outstanding** on the credit facility as of March 31, 2024[150](index=150&type=chunk)[204](index=204&type=chunk) - The agreement contains customary covenants, including limitations on change in control, disposition of assets, mergers, and financial covenants such as Senior Debt/EBITDA ratios and minimum interest coverage ratios[150](index=150&type=chunk) - The agreement prohibits the company from paying cash dividends on its common stock without prior written permission from WTNB[150](index=150&type=chunk) [4. Asset Retirement Obligations](index=48&type=section&id=4.%20Asset%20Retirement%20Obligations) This note provides a rollforward of the company's asset retirement obligations, detailing changes in carrying amount, liabilities incurred, settled, and accretion expense Rollforward of Asset Retirement Obligations | Metric | 2024 | 2023 | | :-------------------------------------- | :---------- | :---------- | | Carrying amount, beginning of year | $730,276 | $735,512 | | Liabilities incurred | $7,617 | $23,492 | | Liabilities settled | $(48,954) | $(59,260) | | Accretion expense | $29,869 | $30,532 | | Carrying amount, end of year | $718,808 | $730,276 | | Less: Current portion | $30,000 | $20,000 | | Non-Current asset retirement obligation | $688,808 | $710,276 | [5. Income Taxes](index=49&type=section&id=5.%20Income%20Taxes) This note presents the breakdown of income tax expense, effective tax rates, and the impact of the Inflation Reduction Act of 2022, along with statutory depletion and net operating loss carryforwards - The Inflation Reduction Act of 2022 (IRA 2022) imposes a **15% corporate alternative minimum tax** and a **1% excise tax on stock repurchases**, but did not impact the company's current year tax provision or consolidated financial statements[182](index=182&type=chunk) - As of March 31, 2024, the company has a statutory depletion carryforward of approximately **$5,400,000** (does not expire) and a net operating loss carryforward of approximately **$720,000** (begins expiring in 2040)[207](index=207&type=chunk) Income Tax Expense | Expense Category | 2024 | 2023 | | :----------------------- | :---------- | :---------- | | Current Federal | $189,254 | $0 | | Current State | $119,629 | $164,510 | | Total Current Income Tax Expense | $308,883 | $164,510 | | Deferred Federal | $311,661 | $0 | | Total Deferred Income Tax Expense | $311,661 | $0 | | Total Income Tax Expense | $620,544 | $164,510 | Effective Income Tax Rate | Year | Effective Income Tax Rate | | :--- | :------------------------ | | 2024 | 31.6% | | 2023 | 3.4% | [6. Major Customers](index=50&type=section&id=6.%20Major%20Customers) This note identifies a major customer accounting for 59% of fiscal 2024 operating revenues and 48% of receivables, while noting management's belief in a ready market for production - In fiscal 2024, one purchaser accounted for **59% of total operating revenues** and **48% of total oil and natural gas accounts receivable**[153](index=153&type=chunk) - Management believes the loss of any one purchaser would not have an adverse effect on the company's ability to sell its oil and gas production, as a ready market exists[153](index=153&type=chunk) [7. Oil and Natural Gas Costs](index=50&type=section&id=7.%20Oil%20and%20Natural%20Gas%20Costs) This note details capitalized costs for oil and gas properties, including acquisition, exploration, and development, and provides depreciation, depletion, and amortization expense per BOE - Depreciation, depletion, and amortization (DD&A) amounted to **$12.81 per BOE** of production for fiscal 2024, compared to **$14.56 per BOE** for fiscal 2023[185](index=185&type=chunk) Capitalized Costs for Oil and Gas Properties | Cost Category | 2024 | 2023 | | :----------------------------- | :---------- | :---------- | | Property acquisition costs (Proved) | $1,826,266 | $1,053,442 | | Exploration | $153,039 | $0 | | Development | $1,363,529 | $4,282,499 | | Capitalized Asset Retirement Obligations | $7,617 | $23,492 | | **Total Costs** | **$3,350,451** | **$5,359,433** | [8. Income Per Common Share](index=51&type=section&id=8.%20Income%20Per%20Common%20Share) This note provides the calculation of basic and diluted income per common share, including the impact of dilutive stock options and those excluded due to anti-dilutive effects - **93,000 shares** relating to stock options were excluded from the computation of diluted net income for fiscal 2024 because their inclusion would be anti-dilutive (weighted average exercise price of **$13.12**)[186](index=186&type=chunk) Income Per Common Share Calculation | Metric | 2024 | 2023 | | :-------------------------------------- | :---------- | :---------- | | Net Income | $1,344,952 | $4,662,702 | | Weighted avg. common shares outstanding – basic | 2,114,360 | 2,146,491 | | Effect of the assumed exercise of dilutive stock options | 46,650 | 62,172 | | Weighted avg. common shares outstanding – diluted | 2,161,010 | 2,208,663 | | Basic Income per common share | $0.64 | $2.17 | | Diluted Income per common share | $0.62 | $2.11 | [9. Stockholders' Equity](index=51&type=section&id=9.%20Stockholders%27%20Equity) This note details the Board's authorization of a new $1 million stock repurchase program in April 2024 and the shares repurchased during fiscal 2024 - The Board of Directors authorized a new **$1,000,000 common stock repurchase program** in April 2024, replacing the previously authorized program[187](index=187&type=chunk)[229](index=229&type=chunk) - During fiscal 2024, the company repurchased **50,101 shares** for the treasury account at an aggregate cost of **$585,035** (average price of **$11.68 per share**)[187](index=187&type=chunk) [10. Stock-based Compensation](index=52&type=section&id=10.%20Stock-based%20Compensation) This note describes the 2019 Employee Incentive Stock Plan, detailing stock option grants, compensation expense, and a summary of stock option activity and valuation assumptions - The 2019 Employee Incentive Stock Plan provides for the award of stock options up to **200,000 shares**[213](index=213&type=chunk) - The company granted **32,000 stock options in fiscal 2024** and **31,000 in fiscal 2023**[213](index=213&type=chunk) - Compensation expense related to vesting stock options was **$229,799 in fiscal 2024** and **$142,783 in fiscal 2023**[213](index=213&type=chunk) Stock Option Activity Summary | Metric | 2024 | 2023 | | :-------------------------------------- | :---------- | :---------- | | Outstanding at April 1 | 139,250 | 114,250 | | Granted | 32,000 | 31,000 | | Exercised | (5,500) | (5,000) | | Forfeited or Expired | - | (1,000) | | Outstanding at March 31 | 165,750 | 139,250 | | Weighted Average Exercise Price (Outstanding) | $9.36 | $8.36 | | Weighted Average Remaining Contract Life (Years) | 6.62 | 7.04 | | Intrinsic Value (Outstanding) | $103,275 | $419,853 | Stock Option Valuation Assumptions (Binomial Model) | Assumption | 2024 | 2023 | | :------------------ | :------- | :------- | | Grant-date fair value | $8.73 | $12.44 | | Volatility factor | 56.52% | 57.3% | | Risk-free interest rate | 3.44% | 3.15% | | Expected term (years) | 6.25 | 6.25 | [11. Related Party Transactions](index=53&type=section&id=11.%20Related%20Party%20Transactions) This note outlines related party transactions, primarily involving shared office and administrative expenses reimbursed by the principal stockholder - Related party transactions primarily involve shared office expenditures and administrative/operating expenses paid on behalf of the principal stockholder[215](index=215&type=chunk) - Total amounts billed to and reimbursed by the principal stockholder for shared office and administrative/operating expenses were **$23,379 in 2024** and **$47,055 in 2023**[215](index=215&type=chunk) [12. Leases](index=54&type=section&id=12.%20Leases) This note details the company's operating lease for office space in Midland, Texas, including its expiration date and future minimum lease payments - The company leases approximately **4,160 rentable square feet of office space** in Midland, Texas, with the current amended lease expiring on **July 31, 2024**[216](index=216&type=chunk) - Future minimum lease payments as of March 31, 2024, under non-cancellable operating leases total **$19,413**, due in fiscal year ended March 31, 2025[193](index=193&type=chunk)[217](index=217&type=chunk) Operating Lease Assets and Liabilities (March 31, 2024) | Metric | Amount ($) | | :-------------------------------------- | :--------- | | Operating lease right-of-use asset | 19,263 | | Operating lease liability, current | 19,263 | | Operating lease liability, long term | - | | Total lease liabilities | 19,263 | [13. Oil and Gas Reserve Data (Unaudited)](index=54&type=section&id=13.%20Oil%20and%20Gas%20Reserve%20Data%20%28Unaudited%29) This note presents unaudited estimates of proved oil and gas reserves, including prices used, changes in reserves, proved undeveloped reserves, and the standardized measure of discounted future net cash flows - Estimates of the company's proved oil and gas reserves were prepared by Russell K. Hall and Associates, Inc. in accordance with SEC guidelines[218](index=218&type=chunk) - The company's total estimated proved reserves at March 31, 2024, were approximately **1.547 MBOE**, with **51% oil and natural gas liquids** and **49% natural gas**[220](index=220&type=chunk) - At March 31, 2024, estimated Proved Undeveloped Reserves (PUDs) were **508 MBOE**, accounting for **33% of total proved reserves**, primarily consisting of projected **64 new wells**[222](index=222&type=chunk) Prices Utilized in Reserve Estimates (before adjustments) | Commodity | 2024 | 2023 | % Change | | :------------------ | :------ | :------ | :------- | | Oil per Bbl | $73.96 | $87.45 | (15)% | | Natural gas per MMBtu | $2.45 | $5.96 | (59)% | Changes in Proved Reserves (Oil Bbls and Natural Gas Mcf) | Metric | Oil (Bbls) | Natural Gas (Mcf) | | :----------------------------------- | :--------- | :---------------- | | As of March 31, 2023 | 727,000 | 4,949,000 | | Revision of previous estimates (2024) | (86,000) | (463,000) | | Purchase of minerals in place (2024) | 24,000 | 121,000 | | Extensions and discoveries (2024) | 199,000 | 437,000 | | Sales of minerals in place (2024) | (3,000) | (4,000) | | Production (2024) | (70,000) | (503,000) | | As of March 31, 2024 | 791,000 | 4,537,000 | Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves | Metric | 2024 | 2023 | | :-------------------------------------- | :------------ | :------------ | | Future cash inflows | $73,290,000 | $94,972,000 | | Future production costs and taxes | $(21,634,000) | $(23,800,000) | | Future development costs | $(5,481,000) | $(4,280,000) | | Future income taxes | $(7,067,000) | $(11,284,000) | | Future net cash flows | $39,108,000 | $55,608,000 | | Annual 10% discount | $(14,480,000) | $(22,793,000) | | Standardized measure, end of year | $24,628,000 | $32,815,000 | [14. Subsequent Events](index=57&type=section&id=14.%20Subsequent%20Events) This note details significant events occurring after the fiscal year-end, including dividend declarations, share repurchases, royalty interest acquisitions, stock option exercises, and investments in drilling activities - On April 30, 2024, the Board of Directors declared a regular annual dividend of **$0.10 per common share**, paid on June 4, 2024[229](index=229&type=chunk) - In April 2024, the Board authorized a new **$1,000,000 share repurchase program** and subsequently repurchased **13,766 shares for $188,637**[229](index=229&type=chunk) - In April 2024, the company acquired small royalty (mineral) interests in **21 wells** in Reeves County, Texas, for **$158,000**[229](index=229&type=chunk) - In April 2024, stock options covering **12,367 shares** were exercised, generating proceeds of **$77,641**[229](index=229&type=chunk) - In April 2024, Mexco expended approximately **$207,800** to participate in the drilling of **nine horizontal wells** in the Delaware Basin, Lea County, New Mexico[229](index=229&type=chunk) - In May 2024, the company funded another **$200,000** toward its **$2,000,000 equity investment** in a limited liability company[229](index=229&type=chunk)

MIDLAND, TX, April 30, 2024 (GLOBE NEWSWIRE) -- Mexco Energy Corporation (NYSE:MXC) announced today that its Board of Directors declared a regular annual cash dividend of $0.10 per common share. The dividend is payable June 4, 2024 to the stockholders of record at the close of business on May 21, 2024. The Company's Board of Directors also authorized the use of up to $1,000,000 to repurchase shares of the Company's common stock, par value $0.50, for the treasury account. This authorization replaces the prev ...

Financial Performance - For the quarter ended December 31, 2023, net income was $345,610, a decrease of 72.3% compared to $1,244,785 for the same quarter in 2022[90]. - For the nine months ended December 31, 2023, net income was $1,080,657, down 71.2% from $3,755,173 for the same period in 2022[96]. - Total revenue from oil and gas sales for the nine months was $4,706,395, a 35% decrease from $7,184,025 in the same period of fiscal 2023[97]. - Revenue from oil and gas sales for the third quarter of fiscal 2024 was $1,610,595, reflecting a 35% decrease from $2,486,017 in the same period of fiscal 2023[91]. Cash Flow and Working Capital - Working capital increased to $4,297,176 as of December 31, 2023, up from $3,475,776 at March 31, 2023, representing an increase of $821,400[62]. - Net cash provided by operating activities for the nine months ended December 31, 2023, was $3,374,717, a decrease of $976,203 compared to $4,350,920 for the same period in 2022[63]. - Cash used in investing activities decreased to $1,365,030 for the nine months ended December 31, 2023, down from $4,969,269 in the prior year[63]. - Cash used in financing activities increased to $666,520 for the nine months ended December 31, 2023, compared to $121,381 for the same period in 2022[67]. Production and Operations - Initial average production rates for two horizontal wells in the Wolfcamp Sand formation were 1,066 barrels of oil, 4,393 barrels of water, and 2,483,000 cubic feet of gas per day, or 1,480 BOE per day[70]. - The company plans to participate in the drilling of 48 horizontal wells and 1 vertical well at an estimated cost of approximately $2,200,000 for the fiscal year ending March 31, 2024[69]. - Oil revenue decreased by 20.8% to $1,387,008, with production volume down 17.2% to 17,636 bbls and average price per bbl down 4.3% to $78.65[92]. - Gas revenue saw a significant decline of 69.6% to $223,587, with volume down 15.9% to 122,794 mcf and average price per mcf down 63.9% to $1.82[92]. - Production costs for the third quarter of fiscal 2024 were $401,035, a 16% decrease from $478,670 in the same period of fiscal 2023[92]. Expenses - General and administrative expenses increased by 16% to $335,153, primarily due to higher accounting fees and employee stock option compensation[94]. Market Conditions - The WTI posted price for crude oil was $67.63 and the Henry Hub posted price for natural gas was $2.58 as of December 31, 2023[89]. - The company faces significant market risks due to fluctuations in commodity prices, with the WTI crude oil price ranging from $62.72 to $89.66 per bbl over the last twelve months[107]. - The effective tax rate for combined state and federal taxes was 27% for the nine months ended December 31, 2023, compared to 3% for the same period in 2022[102]. Assets and Liabilities - The company has no off-balance sheet debt or unrecorded obligations as of December 31, 2023[89]. - The company retained an overriding royalty interest of 5% proportionately reduced on leasehold interests in certain deep rights in Texas, totaling approximately $980,000[85]. - The company acquired royalty interests in 8 wells for $364,000 in December 2023, effective November 1, 2023[81].

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].