Mexco Energy (US:MXC)2022-08-15 10:05Financial Performance - For the quarter ended June 30, 2022, net income was $1,298,672, a significant increase from $395,006 for the same quarter in 2021, primarily due to higher oil and gas prices and increased production volumes [73]. - Revenue from oil and gas sales reached $2,416,113 for the quarter ended June 30, 2022, representing a 92% increase from $1,255,565 in the same quarter of 2021 [74]. - Cash flow provided by operating activities was $1,495,598 for the three months ended June 30, 2022, compared to $666,054 for the same period in 2021, marking an increase of $829,544 [55]. Production and Costs - Production costs increased by 57% to $435,028 for the three months ended June 30, 2022, primarily due to higher production taxes and lease operating expenses [74]. - Depreciation, depletion, and amortization expense rose by 46% to $387,128 for the first quarter of fiscal 2023, driven by increased production and a higher amortization base [75]. Market Conditions - The average price per barrel of oil increased by 71.4% to $109.62 in Q2 2022, while the average price per mcf of gas rose by 121.8% to $6.61 [74]. - In the last twelve months, the WTI crude oil price ranged from a low of $58.30 per bbl to a high of $119.68 per bbl, while the Henry Hub natural gas price ranged from $3.32 per MMBtu to $9.44 per MMBtu [82]. - As of June 30, 2022, the WTI crude oil price was $101.74 per bbl and the Henry Hub natural gas price was $5.75 per MMBtu [82]. Future Plans and Investments - The company plans to participate in the drilling and completion of 52 horizontal wells at an estimated aggregate cost of approximately $3,800,000 for the fiscal year ending March 31, 2023 [61]. - The company acquired various royalty interests in 22 wells for a purchase price of $939,000, effective April 1, 2022 [68]. Financial Position - As of June 30, 2022, the company had working capital of $1,769,009, a decrease of $700,767 from $2,469,776 at March 31, 2022 [54]. - The company has no off-balance sheet debt or unrecorded obligations, with total contractual obligations for leases amounting to $121,333 due within one year [73]. Price Sensitivity - A $10 increase or decrease in average oil price for the quarter ended June 30, 2022, would have resulted in a change of $142,240 in oil sales [84]. - A $1 increase or decrease in average gas price for the same quarter would have led to a change of $129,706 in natural gas sales [84]. - Declines in oil and natural gas prices can adversely affect the company's financial condition, liquidity, and operating results [83]. - Improvements in oil and gas prices can positively impact the company's financial condition and capital resources [84]. - Price fluctuations can lead to changes in estimated future net revenue and the quantity of proved reserves [83]. - A noncash write-down of oil and gas properties may be required if prices decline significantly [83]. - Lower prices may reduce the economically producible quantities of crude oil and natural gas [83]. - The company may experience material changes in reserve quantities solely due to price changes, independent of drilling performance [83].