Mexco Energy (US:MXC)2025-08-12 20:23Financial Performance - For the quarter ended June 30, 2025, net income was $241,951, a decrease of 17% from $291,039 for the same quarter in 2024[79] - Revenue from oil and gas sales increased by 4% to $1,754,734 for the quarter ended June 30, 2025, compared to $1,688,056 for the same quarter in 2024[80] - Oil revenue decreased by 7.6% to $1,395,937, while gas revenue increased by 101.9% to $358,797, reflecting a 16.4% increase in oil volume and a 24.6% increase in gas volume[80] - Cash flow from operating activities was $1,363,277 for the three months ended June 30, 2025, an increase of 26.4% from $1,078,614 for the same period in 2024[62] Capital Expenditures and Investments - The company plans to participate in the drilling and completion of 35 horizontal wells at an estimated cost of approximately $1,100,000 for the fiscal year ending March 31, 2026[67] - The company expects to expend approximately $150,000 for the completion of 17 horizontal wells participated in during fiscal 2025[71] - As of June 30, 2025, cash and cash equivalents increased to $2,546,722, with working capital rising to $2,922,683, an increase of $453,019 from March 31, 2025[66] - The company acquired royalty interests in 2 wells for a purchase price of $40,000, effective April 1, 2025[74] Expenses and Costs - Depreciation, depletion, and amortization expense increased by 25% to $675,270 for the first quarter of fiscal 2026, primarily due to increased production volumes[83] - General and administrative expenses rose by 7% to $394,437 for the three months ended June 30, 2025, attributed to higher engineering and accounting fees[84] Market Conditions and Risks - As of June 30, 2025, the largest credit risk associated with a single purchaser was $380,192, representing 44% of total oil and gas receivables[88] - The NYMEX West Texas Intermediate (WTI) crude oil price ranged from $53.11 per barrel in May 2025 to $79.86 per barrel in July 2024, with a current price of $61.09 per barrel[92] - The Henry Hub spot price for natural gas fluctuated between $1.21 per MMBtu in November 2024 and $9.86 per MMBtu in January 2025, currently at $3.26 per MMBtu[92] - A $10 increase or decrease in average oil price for the quarter ended June 30, 2025, would result in a change of $220,100 in oil sales[94] - A $1 increase or decrease in average gas price for the same quarter would lead to a change of $169,905 in natural gas sales[94] - Declines in oil and natural gas prices could materially adversely affect financial condition, liquidity, and operating results[93] - Improvements in oil and gas prices can positively impact financial condition and capital resources[94] - Temporary pipeline capacity constraints in the Permian Basin have adversely affected natural gas prices[90] - Price fluctuations are influenced by global demand, supply levels, production quotas, weather conditions, and political/economic factors[91] - The company has not experienced significant credit losses despite the credit risk associated with oil and gas production[88]