Mexco Energy (MXC) - 2020 Q3 - Quarterly Report

Financial Performance - For the first nine months of fiscal 2020, cash flow from operations was $543,584, a 34% decrease compared to the same period in fiscal 2019, primarily due to a 43% decrease in natural gas prices [58]. - Revenue from oil and gas sales for the third quarter of fiscal 2020 was $766,223, a 20% increase from $640,143 for the same period in fiscal 2019, driven by increased production volumes and oil prices [71]. - For the nine months ended December 31, 2019, revenue from oil and gas sales was $2,083,667, a 0.3% increase from $2,076,742 for the same period in fiscal 2019 [78]. - Production costs for the third quarter of fiscal 2020 were $249,921, an 18% increase from $211,788 for the same period in fiscal 2019 [72]. - General and administrative expenses for the nine months ended December 31, 2019, were $805,701, a 13% increase from $710,194 for the same period in fiscal 2018 [81]. - Interest expense for the nine months ended December 31, 2019, was $25,054, a 37% increase from $18,318 for the same period in fiscal 2018 [82]. - The average price per barrel of oil for the nine months ended December 31, 2019, was $54.73, a 2.3% decrease from $56.04 for the same period in fiscal 2018 [79]. - As of December 31, 2019, the company had working capital of $324,391, a decrease of $71,504 compared to $395,895 at March 31, 2019 [59]. Operational Plans - The company plans to participate in the drilling and completion of approximately 50 horizontal wells at an estimated aggregate cost of $1,500,000 for the fiscal year ending March 31, 2020 [60]. Market Risks - Oil and natural gas prices are highly volatile, significantly impacting the company's financial condition and operations [86]. - Price fluctuations are influenced by global demand, supply levels, production quotas, weather conditions, and political and economic factors in oil-producing countries [88]. - Declines in oil and natural gas prices can adversely affect financial condition, liquidity, and cash flow available for capital expenditures [89]. - A noncash write-down of oil and gas properties may be required under full cost accounting rules if prices decline significantly [89]. - An increase or decrease of $10 per barrel in average oil price could change pretax income or loss by $322,060 for the first nine months of fiscal 2020 [90]. - An increase or decrease of $1 per mcf in average gas price could change pretax income or loss by $221,116 for the first nine months of fiscal 2020 [90]. Credit and Debt - The largest credit risk associated with any single purchaser was $220,707, representing 56% of total oil and gas receivables as of December 31, 2019 [85]. - The company has no off-balance sheet debt or unrecorded obligations as of December 31, 2019 [68]. Infrastructure Developments - A new 42-inch natural gas pipeline began operations in September 2019, capable of transporting 2 Bcf per day to the Gulf Coast, alleviating previous capacity constraints [87].