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Mexco Energy (MXC) - 2020 Q4 - Annual Report
MXCMexco Energy (MXC)2020-06-26 19:58

Oil and Gas Production - As of March 31, 2020, oil constituted approximately 55% of the company's total proved reserves and approximately 84% of its revenues for fiscal 2020[22]. - The company's oil production for fiscal 2020 was 44,301 barrels, an increase from 35,359 barrels in 2019, representing a growth of approximately 25.5%[31]. - Approximately 27% of the company's revenues for fiscal 2020 came from oil and gas royalty interests[22]. Basin Contributions - The Delaware Basin properties accounted for approximately 40% of the company's discounted future net cash flows from proved reserves and 54% of its gross revenues for fiscal 2020[24]. - The Midland Basin properties accounted for approximately 41% of the company's discounted future net cash flows from proved reserves and 22% of its gross revenues for fiscal 2020[26]. - The Permian Basin accounts for 92% of the company's discounted future net cash flows from proved reserves and 78% of its gross revenues[23]. Financial Performance and Risks - Major customers accounted for 52% of revenues in fiscal 2020, up from 42% in 2019, indicating a significant reliance on key customers[36]. - The company had an outstanding loan balance of 795,000underitscreditagreementasofMarch31,2020,withinterestratestiedtotheprimerate[191].−AsofMarch31,2019,thelargestcreditriskassociatedwithasinglepurchaserwas795,000 under its credit agreement as of March 31, 2020, with interest rates tied to the prime rate[191]. - As of March 31, 2019, the largest credit risk associated with a single purchaser was 170,418, representing 63% of total oil and gas receivables[192]. - The company has not experienced any significant credit losses related to its receivables[192]. Price Volatility - The NYMEX West Texas Intermediate (WTI) crude oil price on March 31, 2020, was 16.75perbarrel,withaveragesof16.75 per barrel, with averages of 14.68 and 24.67perbarrelforAprilandMay2020,respectively[197].−TheHenryHubSpotMarketPricefornaturalgasonMarch31,2020,was24.67 per barrel for April and May 2020, respectively[197]. - The Henry Hub Spot Market Price for natural gas on March 31, 2020, was 1.71 per MMBtu, averaging 1.74and1.74 and 1.75 per MMBtu for April and May 2020, respectively[197]. - A 5increaseordecreaseinaverageoilpriceforfiscal2020wouldhavechangedoilrevenueby5 increase or decrease in average oil price for fiscal 2020 would have changed oil revenue by 221,505[199]. - A 1increaseordecreaseinaveragegaspriceforfiscal2020wouldhavechangednaturalgasrevenueby1 increase or decrease in average gas price for fiscal 2020 would have changed natural gas revenue by 294,007[199]. - Oil and natural gas prices are expected to remain volatile due to various factors affecting supply and demand[195]. - Temporary pipeline capacity constraints in the Permian Basin have adversely affected natural gas prices[196]. - Declines in oil and natural gas prices can materially adversely affect the company's financial condition and liquidity[198]. - Improvements in oil and gas prices can have a favorable impact on the company's financial condition and results of operations[199]. Capital Expenditures - The company did not incur any material capital expenditures for remediation or pollution control activities for the year ended March 31, 2020[40]. Drilling Activities - The company has 13 drilled but uncompleted wells in the Delaware Basin with an aggregate drilling cost of approximately 200,000andanticipatedcompletioncostsofapproximately200,000 and anticipated completion costs of approximately 300,000[25].