Mexco Energy (MXC) - 2025 Q4 - Annual Report

Reserves and Production - As of March 31, 2025, total estimated proved reserves were approximately 1.401 million barrels of oil equivalent (MMBOE), with 48% being oil and 52% natural gas, and a present value of approximately $23 million[16] - Oil contributed approximately 84% of total oil and natural gas sales and 48% of total proved reserves volumes for fiscal 2025[36] - The Delaware Basin properties accounted for approximately 67% of discounted future net cash flows from proved reserves and 65% of gross revenues for fiscal 2025[39] - The Midland Basin properties accounted for approximately 12% of discounted future net cash flows from proved reserves and 14% of gross revenues for fiscal 2025[40] - Oil and gas production for fiscal 2025 was 83,564 barrels of oil and 570,012 Mcf of gas, representing increases of 19% and 13% respectively compared to fiscal 2024[43] Revenue and Sales - Revenues from oil and gas royalty interests accounted for approximately 31% of total operating revenues for fiscal 2025[36] - The company made sales to Company A that accounted for 58% of operating revenues for the year ended March 31, 2025[48] Financial Performance and Risks - As of March 31, 2025, the largest credit risk associated with any single purchaser was $478,863, representing 43% of total oil and gas receivables[217] - The company has not experienced significant credit losses on oil and gas accounts, indicating a low credit risk[49] - If the average oil price had increased or decreased by ten dollars per barrel for fiscal 2025, pretax income would have changed by $835,640[224] - If the average gas price had increased or decreased by one dollar per mcf for fiscal 2025, pretax income would have changed by $570,012[224] Market Conditions - The NYMEX West Texas Intermediate (WTI) crude oil price ranged from a low of $61.73 per barrel to a high of $82.89 per barrel in the last twelve months[221] - The Henry Hub Spot Market Price for natural gas ranged from a low of $1.21 per MMBtu to a high of $9.86 per MMBtu in the last twelve months[221] - On March 31, 2025, the WTI posted price for crude oil was $67.46 per barrel and the Henry Hub spot price for natural gas was $4.11 per MMBtu[222] Strategic Plans - The company plans to optimize cash flows through operating efficiencies and cost reductions, divest non-core assets, and balance capital spending with cash flows to minimize borrowings for fiscal 2026[34] - The company has made significant acquisitions, including a royalty interest purchase for $500,000 covering 4 producing gas units in Texas[20] - The company owns partial interests in approximately 7,500 producing wells across multiple states in the U.S.[42] Industry Environment - The competitive landscape includes major oil and gas companies and independent producers, which may place the company at a competitive disadvantage due to resource limitations[44] - The oil and gas industry is subject to extensive regulation, which may impose new costs and affect operations[50] - The company did not incur any material capital expenditures for remediation or pollution control activities for the year ended March 31, 2025[52]