Mexco Energy (US:MXC)2023-08-10 21:23Financial Performance - For the quarter ended June 30, 2023, net income was $465,614, a decrease of 64% from $1,298,672 for the same quarter in 2022[81] - Revenue from oil and gas sales was $1,715,090, representing a 29% decrease from $2,416,113 in the prior year, primarily due to lower oil and gas prices[82] - Oil revenue decreased by 8.3% to $1,429,678, while gas revenue fell by 66.7% to $285,412, with average prices per barrel and per mcf dropping by 33.2% and 69.4%, respectively[82] - The effective tax rate for the quarter ended June 30, 2023, was 21%, compared to 2% for the same quarter in 2022[85] Cash Flow and Working Capital - Cash flow provided by operating activities increased to $1,616,195, up from $1,495,598, reflecting a $120,597 increase year-over-year[64] - As of June 30, 2023, working capital increased to $4,090,753, up from $3,475,776 at March 31, 2023, marking an increase of $614,977[63] - As of June 30, 2023, cash and cash equivalents totaled $3,376,487, following a net cash increase of $1,140,716[68] Capital Expenditures and Investments - The company plans to participate in the drilling and completion of 40 horizontal wells at an estimated cost of approximately $1,700,000 for the fiscal year ending March 31, 2024[69] - The company expended approximately $450,000 for the completion of 21 horizontal wells in fiscal 2023, with $225,000 already spent[72] - The company acquired small royalty interests in 6 wells for $20,000 in June 2023, effective July 1, 2023[75] Oil and Gas Price Impact - In the last twelve months, the WTI crude oil price ranged from a low of $62.72 per bbl to a high of $104.41 per bbl, while the Henry Hub natural gas price ranged from a low of $1.74 per MMBtu to a high of $9.85 per MMBtu[90] - As of June 30, 2023, the WTI crude oil price was $66.62 per bbl and the Henry Hub natural gas price was $2.48 per MMBtu[90] - A $10 increase or decrease in average oil price for the quarter ended June 30, 2023, would have resulted in a change of $195,280 in oil sales[92] - A $1 increase or decrease in average gas price for the quarter ended June 30, 2023, would have resulted in a change of $141,578 in natural gas sales[92] - Declines in oil and natural gas prices can adversely affect the company's financial condition, liquidity, and ability to obtain financing[91] - Improvements in oil and gas prices can positively impact the company's financial condition and results of operations[92] - Price fluctuations can lead to material increases or decreases in reserve quantities without drilling or well performance changes[91] - A noncash write-down of oil and gas properties may be required under full cost accounting rules if prices decline significantly[91] - Changes in oil and gas prices impact estimated future net revenue and the estimated quantity of proved reserves[91] - The company may experience reduced cash flow available for capital expenditures due to lower prices affecting the borrowing base under its credit facility[91]