Mexco Energy (US:MXC)2024-02-09 11:04Financial Performance - For the quarter ended December 31, 2023, net income was $345,610, a decrease of 72.3% compared to $1,244,785 for the same quarter in 2022[90]. - For the nine months ended December 31, 2023, net income was $1,080,657, down 71.2% from $3,755,173 for the same period in 2022[96]. - Total revenue from oil and gas sales for the nine months was $4,706,395, a 35% decrease from $7,184,025 in the same period of fiscal 2023[97]. - Revenue from oil and gas sales for the third quarter of fiscal 2024 was $1,610,595, reflecting a 35% decrease from $2,486,017 in the same period of fiscal 2023[91]. Cash Flow and Working Capital - Working capital increased to $4,297,176 as of December 31, 2023, up from $3,475,776 at March 31, 2023, representing an increase of $821,400[62]. - Net cash provided by operating activities for the nine months ended December 31, 2023, was $3,374,717, a decrease of $976,203 compared to $4,350,920 for the same period in 2022[63]. - Cash used in investing activities decreased to $1,365,030 for the nine months ended December 31, 2023, down from $4,969,269 in the prior year[63]. - Cash used in financing activities increased to $666,520 for the nine months ended December 31, 2023, compared to $121,381 for the same period in 2022[67]. Production and Operations - Initial average production rates for two horizontal wells in the Wolfcamp Sand formation were 1,066 barrels of oil, 4,393 barrels of water, and 2,483,000 cubic feet of gas per day, or 1,480 BOE per day[70]. - The company plans to participate in the drilling of 48 horizontal wells and 1 vertical well at an estimated cost of approximately $2,200,000 for the fiscal year ending March 31, 2024[69]. - Oil revenue decreased by 20.8% to $1,387,008, with production volume down 17.2% to 17,636 bbls and average price per bbl down 4.3% to $78.65[92]. - Gas revenue saw a significant decline of 69.6% to $223,587, with volume down 15.9% to 122,794 mcf and average price per mcf down 63.9% to $1.82[92]. - Production costs for the third quarter of fiscal 2024 were $401,035, a 16% decrease from $478,670 in the same period of fiscal 2023[92]. Expenses - General and administrative expenses increased by 16% to $335,153, primarily due to higher accounting fees and employee stock option compensation[94]. Market Conditions - The WTI posted price for crude oil was $67.63 and the Henry Hub posted price for natural gas was $2.58 as of December 31, 2023[89]. - The company faces significant market risks due to fluctuations in commodity prices, with the WTI crude oil price ranging from $62.72 to $89.66 per bbl over the last twelve months[107]. - The effective tax rate for combined state and federal taxes was 27% for the nine months ended December 31, 2023, compared to 3% for the same period in 2022[102]. Assets and Liabilities - The company has no off-balance sheet debt or unrecorded obligations as of December 31, 2023[89]. - The company retained an overriding royalty interest of 5% proportionately reduced on leasehold interests in certain deep rights in Texas, totaling approximately $980,000[85]. - The company acquired royalty interests in 8 wells for $364,000 in December 2023, effective November 1, 2023[81].