Mexco Energy (US:MXC)2025-02-07 21:42Financial Performance - For the quarter ended December 31, 2024, net income was $469,133, an increase from $345,610 in the same quarter of 2023, driven by higher operating revenues from increased oil and gas production volumes[94]. - Revenue from oil and gas sales for the third quarter of fiscal 2025 was $1,828,404, a 14% increase from $1,610,595 in the same period of fiscal 2024, attributed to increased production volumes despite lower prices[95]. - Oil revenue for the nine months ended December 31, 2024, was $4,595,585, a 17.3% increase from $3,916,792 in the same period of 2023, with production volumes rising by 21.4%[104]. - Average oil price per barrel decreased by 3.3% to $74.50 for the nine months ended December 31, 2024, compared to $77.06 in the same period of 2023[104]. Cash Flow and Working Capital - Working capital decreased from $3,259,200 at March 31, 2024, to $1,469,195 at December 31, 2024, a decrease of $1,790,005[65]. - Net cash provided by operating activities for the nine months ended December 31, 2024, was $2,941,115, down from $3,374,717 in the same period of 2023, a decrease of $433,602[66]. - The company recorded a decrease in net cash of $1,563,479, leaving cash and cash equivalents of $910,005 as of December 31, 2024[70]. - The company has no off-balance sheet debt or unrecorded obligations as of December 31, 2024[93]. - The company plans to fund future projects through existing cash balances, cash flow from operations, and potential borrowings on the credit facility[88]. Investment Activities - Net cash used in investing activities increased to $3,670,019 for the nine months ended December 31, 2024, compared to $1,365,030 for the same period in 2023, an increase of $2,304,989[68]. - The company plans to participate in the drilling and completion of 28 horizontal wells at an estimated cost of approximately $1,500,000 for the fiscal year ending March 31, 2025[71]. - The company acquired royalty interests in 21 producing wells for $158,000 in April 2024 and additional interests in various wells for a total of $1,476,000 in subsequent months[82][83][84][85][86]. Production and Costs - Initial average production rates for five horizontal wells in the Bone Spring formation were 1,106 barrels of oil, 2,583 barrels of water, and 1,165,000 cubic feet of gas per day, or 1,300 BOE per day[72]. - Production costs for the nine months ended December 31, 2024, were $1,311,066, a 15% increase from $1,143,116 in the same period of 2023, due to higher production taxes and operating expenses[107]. - Depreciation, depletion, and amortization expense increased by 39% to $1,760,409 for the nine months ended December 31, 2024, from $1,268,703 in the same period of 2023[108]. - General and administrative expenses rose by 6% to $1,042,084 for the nine months ended December 31, 2024, compared to $981,664 in the same period of 2023, primarily due to increased contract services[109]. Tax and Interest - The effective tax rate for the nine months ended December 31, 2024, was 16%, down from 27% in the same period of 2023, mainly due to a decrease in state income taxes[110]. - Interest income on corporate funds decreased to $50,891 for the nine months ended December 31, 2024, from $86,995 in the same period of 2023, as funds were used for property acquisitions[106]. Market Risks - The company faces significant market risks from fluctuations in commodity prices, with oil prices ranging from $61.73 to $82.89 per barrel over the last twelve months[116]. - The WTI posted price for crude oil on December 31, 2024, was $67.70, while the Henry Hub spot price for natural gas was $3.40 per MMBtu[91].