MXC Mexco Energy Corp

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended December 31, 2024

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from        to     

 

Commission File No. 1-31785

 

MEXCO ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

Colorado		84-0627918
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification Number)

 

415 West Wall Street, Suite 475
Midland, Texas		79701
(Address of principal executive offices)		(Zip code)

 

(432) 682-1119

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.50 per share		MXC		NYSE American

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company as defined in Rule 12b-2 of the Exchange Act.

 

	Large Accelerated Filer ☐	Accelerated Filer ☐
	Non-Accelerated Filer ☐	Smaller reporting company ☒
	Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

 

The number of shares outstanding of the registrant’s common stock, par value $.50 per share, as of February 7, 2025 was 2,046,000.

 

 

 

MEXCO ENERGY CORPORATION AND SUBSIDIARIES

 

Table of Contents

 

			Page
PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Consolidated Balance Sheets as of December 31, 2024 (Unaudited) and March 31, 2024	3
		Consolidated Statements of Operations (Unaudited) for the three months and nine months ended December 31, 2024 and December 31, 2023	4
		Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the three and nine months ended December 31, 2024 and December 31, 2023	5
		Consolidated Statements of Cash Flows (Unaudited) for the nine months ended December 31, 2024 and December 31, 2023	6
		Notes to Consolidated Financial Statements (Unaudited)	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
	Item 4.	Controls and Procedures	18
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	19
	Item 1A.	Risk Factors	19
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
	Item 6.	Exhibits	19
SIGNATURES			20
CERTIFICATIONS			19

 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

 

		December 31,				March 31,
		2024				2024
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	910,005			$	2,473,484
Accounts receivable:
Oil and natural gas sales			1,037,754				1,001,709
Trade			48,759				9,186
Prepaid costs and expenses			26,050				56,193
Prepaid drilling			29,085				148,748
Total current assets			2,051,653				3,689,320
Property and equipment, at cost
Oil and gas properties, using the full cost method			51,263,675				48,304,585
Other			121,926				121,926
Accumulated depreciation, depletion and amortization			(35,945,246	)			(34,184,837	)
Property and equipment, net			15,440,355				14,241,674
Investments – cost basis			1,900,000				1,100,000
Operating lease, right-of-use asset			138,577				19,263
Other noncurrent assets			5,373				8,597
Total assets		$	19,535,958			$	19,058,854
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses		$	220,550			$	221,603
Income tax payable			312,036				189,254
Operating lease liability, current			49,872				19,263
Total current liabilities			582,458				430,120
Long-term liabilities
Operating lease liability, long-term			88,705				-
Asset retirement obligations			682,061				688,808
Deferred income tax liabilities			155,975				311,661
Total long-term liabilities			926,741				1,000,469
Total liabilities			1,509,199				1,430,589
Commitments and contingencies			-				-
Stockholders’ equity
Preferred stock - $1.00 par value; 10,000,000 shares authorized; none outstanding			-				-
Common stock - $0.50 par value; 40,000,000 shares authorized; 2,239,283 and 2,226,916 shares issued; 2,046,000 and 2,091,399 shares outstanding as of December 31, 2024 and March 31, 2024, respectively			1,119,641				1,113,458
Additional paid-in capital			8,795,013				8,567,856
Retained earnings			9,990,851				9,122,481
Treasury stock, at cost (193,283 and 135,517 shares, respectively)			(1,878,746	)			(1,175,530	)
Total stockholders’ equity			18,026,759				17,628,265
Total liabilities and stockholders’ equity		$	19,535,958			$	19,058,854

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

		2024				2023				2024				2023
		Three Months Ended								Nine Months Ended
		December 31,								December 31,
		2024				2023				2024				2023
Operating revenue:
Oil sales		$	1,563,663			$	1,387,008			$	4,595,585			$	3,916,492
Natural gas sales			264,741				223,587				616,728				789,903
Other			62,861				45,848				156,014				105,077
Total operating revenues			1,891,265				1,656,443				5,368,327				4,811,472
Operating expenses:
Production			460,241				401,035				1,311,066				1,143,116
Accretion of asset retirement obligation			7,705				7,225				23,229				22,121
Depreciation, depletion, and amortization			636,424				400,337				1,760,409				1,268,703
General and administrative			340,514				335,152				1,042,084				981,664
Total operating expenses			1,444,884				1,143,749				4,136,788				3,415,604
Operating income			446,381				512,694				1,231,539				1,395,868
Other income (expenses):
Interest income			7,315				36,936				50,891				86,995
Interest expense			(2,868	)			(1,075	)			(5,026	)			(3,235	)
Net other income (expense)			4,447				35,861				45,865				83,760
Income before provision for income taxes			450,828				548,555				1,277,404				1,479,628
(Benefit from) provision for income taxes			(18,305	)			202,945				200,034				398,971
Income tax expense (benefit):
Current			257,042				32,959				355,720				79,123
Deferred			(275,347	)			169,986				(155,686	)			319,848
Total income tax (benefit) expense			(18,305	)			202,945				200,034				398,971
Net income		$	469,133			$	345,610			$	1,077,370			$	1,080,657
Income per common share:
Basic:		$	0.23			$	0.16			$	0.52			$	0.51
Diluted:		$	0.22			$	0.16			$	0.51			$	0.50
Weighted average common shares outstanding:
Basic:			2,046,000				2,103,503				2,070,086				2,120,611
Diluted:			2,091,808				2,151,783				2,114,936				2,169,708
Dividends declared per share		$	-			$	-			$	0.10			$	0.10

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

 

		Common Stock Par Value				Additional Paid-In Capital				Retained Earnings				Treasury Stock				Total Stockholders’ Equity
Balance at April 1, 2024		$	1,113,458			$	8,567,856			$	9,122,481			$	(1,175,530	)		$	17,628,265
Net income			-				-				291,039				-				291,039
Dividends paid			-				-				(209,000	)			-				(209,000	)
Issuance of stock through options exercised			6,183				71,458				-				-				77,641
Purchase of stock			-				-				-				(188,637	)			(188,637	)
Stock based compensation			-				52,439				-				-				52,439
Balance at June 30, 2024		$	1,119,641			$	8,691,753			$	9,204,520			$	(1,364,167	)		$	17,651,747
Net income			-				-				317,198				-				317,198
Purchase of stock			-				-				-				(514,579	)			(514,579	)
Stock based compensation			-				51,630				-				-				51,630
Balance at September 30, 2024		$	1,119,641			$	8,743,383			$	9,521,718			$	(1,878,746	)		$	17,505,996
Net income			-				-				469,133				-				469,133
Stock based compensation			-				51,630				-				-				51,630
Balance at December 31, 2024		$	1,119,641			$	8,795,013			$	9,990,851			$	(1,878,746	)		$	18,026,759

 

		Common Stock Par Value				Additional Paid-In Capital				Retained Earnings				Treasury Stock				Total Stockholders’ Equity
Balance at April 1, 2023		$	1,110,708			$	8,321,145			$	7,991,129			$	(590,495	)		$	16,832,487
Net income			-				-				465,614				-				465,614
Dividends paid			-				-				(213,600	)			-				(213,600	)
Issuance of stock through options exercised			250				2,712				-				-				2,962
Stock based compensation			-				54,975				-				-				54,675
Balance at June 30, 2023		$	1,110,958			$	8,378,832			$	8,243,143			$	(590,495	)		$	17,142,438
Net income			-				-				269,433				-				269,433
Prurchase of stock			-				-				-				(325,256	)			(325,256	)
Stock based compensation			-				58,848				-				-				58,848
Balance at September 30, 2023		$	1,110,958			$	8,437,680			$	8,412,576			$	(915,751	)		$	17,145,463
Balance		$	1,110,958			$	8,437,680			$	8,412,576			$	(915,751	)		$	17,145,463
Net income			-				-				345,610				-				345,610
Stock based compensation			-				58,847				-				-				58,847
Purchase of stock			-				-				-				(129,876	)			(129,876	)
Balance at December 31, 2023		$	1,110,958			$	8,496,527			$	8,858,186			$	(1,045,627	)		$	17,420,044
Balance		$	1,110,958			$	8,496,527			$	8,858,186			$	(1,045,627	)		$	17,420,044
SHARE ACTIVITY
Common stock shares, issued:
Balance at April 1, 2024							2,226,916
Issued							12,367
Balance at December 31, 2024							2,239,283
Common stock shares, held in treasury:
Balance at April 1, 2024							(135,517	)
Acquisitions							(57,766	)
Balance at Dec. 31, 2024							(193,283	)
Common stock shares, outstanding at December 31, 2024							2,046,000

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended December 31,

(Unaudited)

 

		2024				2023
Cash flows from operating activities:
Net income		$	1,077,370			$	1,080,657
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax (benefit) expense			(155,686	)			319,848
Stock-based compensation			155,699				172,670
Depreciation, depletion and amortization			1,760,409				1,268,703
Accretion of asset retirement obligations			23,229				22,121
Amortization of debt issuance costs			3,224				3,235
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable			(75,618	)			454,133
(Increase) decrease in right-of-use asset			(119,314	)			42,076
Decrease in prepaid expenses			30,143				36,023
Increase in accounts payable and accrued expenses			15,651				32,042
Settlement of asset retirement obligations			(16,088	)			(14,715	)
Increase in income taxes payable			122,782				-
Decrease (increase) in operating lease liability			119,314				(42,076	)
Net cash provided by operating activities			2,941,115				3,374,717
Cash flows from investing activities:
Additions to oil and gas properties			(3,072,589	)			(1,471,543	)
Investment in limited liability companies at cost			(800,000	)			(200,000	)
Proceeds from sale of oil and gas properties and equipment			202,570				306,513
Net cash used in investing activities			(3,670,019	)			(1,365,030	)
Cash flows from financing activities:
Proceeds from exercise of stock options			77,641				2,962
Debt issuance costs			-				(750	)
Proceeds from long-term debt			650,000				-
Reduction of long-term debt			(650,000	)			-
Dividends paid			(209,000	)			(213,600	)
Acquisition of treasury stock			(703,216	)			(455,132	)
Net cash used in financing activities			(834,575	)			(666,520	)
Net (decrease) increase in cash and cash equivalents			(1,563,479	)			1,343,167
Cash and cash equivalents at beginning of period			2,473,484				2,235,771
Cash and cash equivalents at end of period		$	910,005			$	3,578,938
Supplemental disclosure of cash flow information:
Cash paid for interest		$	1,802			$	-
Cash paid for income taxes		$	200,683			$	-
Accrued capital expenditures included in accounts payable		$	4,991			$	15,667
Non-cash investing and financing activities:
Asset retirement obligations		$	3,631			$	2,838

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

Mexco Energy Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1. Nature of Operations

 

Mexco Energy Corporation (a Colorado corporation) and its wholly owned subsidiaries, Forman Energy Corporation (a New York corporation), Southwest Texas Disposal Corporation (a Texas corporation) and TBO Oil & Gas, LLC (a Texas limited liability company) (collectively, the “Company”) are engaged in the acquisition, exploration, development and production of crude oil, natural gas, condensate and natural gas liquids (“NGLs”). Most of the Company’s oil and gas interests are centered in West Texas and Southeastern New Mexico; however, the Company owns producing properties and undeveloped acreage in fifteen states. All of the Company’s oil and gas interests are operated by others.

 

2. Basis of Presentation and Significant Accounting Policies

 

Principles of Consolidation. The consolidated financial statements include the accounts of Mexco Energy Corporation and its wholly owned subsidiaries. All significant intercompany balances and transactions associated with the consolidated operations have been eliminated.

 

Estimates and Assumptions. In preparing financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), management is required to make informed judgments, estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and affect the reported amounts of revenues and expenses during the reporting period. In addition, significant estimates are used in determining proved oil and gas reserves. Although management believes its estimates and assumptions are reasonable, actual results may differ materially from those estimates. The estimate of the Company’s oil and natural gas reserves, which is used to compute depreciation, depletion, amortization and impairment of oil and gas properties, is the most significant of the estimates and assumptions that affect these reported results.

 

Interim Financial Statements. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of December 31, 2024, and the results of its operations and cash flows for the interim periods ended December 31, 2024 and 2023. The consolidated financial statements as of December 31, 2024 and for the three and nine month periods ended December 31, 2024 and 2023 are unaudited. The consolidated balance sheet as of March 31, 2024 was derived from the audited balance sheet filed in the Company’s 2024 annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The results of operations for the periods presented are not necessarily indicative of the results to be expected for a full year. The accounting policies followed by the Company are set forth in more detail in Note 2 of the “Notes to Consolidated Financial Statements” in the Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the SEC. However, the disclosures herein are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Form 10-K.

 

Oil and Natural Gas Properties. The Company uses the full cost method of accounting for oil and natural gas properties. Under this method, all costs (direct and indirect) associated with acquisition, exploration, and development of oil and natural gas properties are capitalized. Costs capitalized include acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling and equipping productive and non-productive wells. Drilling costs include directly related overhead costs. All of the Company’s capitalized costs are subject to amortization.

 

In addition, capitalized costs less accumulated depletion and related deferred income taxes are not allowed to exceed an amount (the full cost ceiling) equal to the sum of: 1)the present value of estimated future net revenues discounted at ten percent computed in compliance with SEC guidelines; 2)plus the cost of properties not being amortized; 3)plus the lower of cost or estimated fair value of unproven properties included in the costs being amortized; 4)less income tax effects related to differences between the book and tax basis of the properties.

 

No impairments on oil and natural gas properties as a result of the ceiling test were recorded for the three and nine months ended December 31, 2024 and 2023.

 

Investments. The Company accounts for investments of less than 3% of any limited liability companies at cost. The Company has no control of the limited liability companies. The cost of the investment is recorded as an asset on the consolidated balance sheets and when income from the investment is received, it is immediately recognized on the consolidated statements of operations.

 

Segments. Based on the Company’s organizational structure, the Company has one operating segment, which is crude oil and natural gas development, exploration and production. In addition, the Company has a single, company-wide management team that allocates capital resources to maximize profitability and measures financial performance as a single enterprise.

 

3. Asset Retirement Obligations

 

The Company’s asset retirement obligations (“ARO”) relate to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and gas properties. The fair value of a liability for an ARO is recorded in the period in which it is incurred, discounted to its present value using the credit adjusted risk-free interest rate, and a corresponding amount capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted each period until the liability is settled or the well is sold, at which time the liability is removed. The related asset retirement cost is capitalized as part of the carrying amount of our oil and natural gas properties. The ARO is included in the consolidated balance sheets with the current portion being included in the accounts payable and other accrued expenses.

 

7

 

 

The following table provides a rollforward of the AROs for the first nine months of fiscal 2025:

 Schedule of Rollforward of Asset Retirement Obligations

Carrying amount of asset retirement obligations as of April 1, 2024		$	718,808
Liabilities incurred			3,631
Liabilities settled			(33,607	)
Accretion expense			23,229
Carrying amount of asset retirement obligations as of December 31, 2024			712,061
Less: Current portion			30,000
Non-Current asset retirement obligation		$	682,061

 

4. Stock-based Compensation

 

The Company recognized stock-based compensation expense of $51,630 and $58,847 in general and administrative expense in the Consolidated Statements of Operations for the three months ended December 31, 2024 and 2023, respectively. Stock-based compensation expense recognized for the nine months ended December 31, 2024 and 2023 was $155,699 and $172,670, respectively. The total cost related to non-vested awards not yet recognized at December 31, 2024 totals $330,113 which is expected to be recognized over a weighted average of 1.78 years.

 

During the nine months ended December 31, 2024, no stock options were granted. During the nine months ended December 31, 2023, the Compensation Committee of the Board of Directors approved and the Company granted 32,000 stock options exercisable at $12.68 per share with an estimated fair value of $279,360. These options are exercisable at a price not less than the fair market value of the stock at the date of grant, have an exercise period of ten years and generally vest over four years.

 

Included in the following table is a summary of the grant-date fair value of stock options granted and the related assumptions used in the Binomial models for stock options granted during the nine months ended December 31, 2024 and 2023. All such amounts represent the weighted average amounts.

 Schedule of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binominal Models

		Nine Months Ended
		December 31
		2024				2023
Grant-date fair value			-			$	8.73
Volatility factor			-				56.5	%
Dividend yield			-				-
Risk-free interest rate			-				3.44	%
Expected term (in years)			-				6.25

 

The following table is a summary of activity of stock options for the nine months ended December 31, 2024:

 Summary of Activity of Stock Options

		Number of Shares				Weighted Average Exercise Price				Weighted Average Remaining Contract Life in Years				Intrinsic Value
Outstanding at April 1, 2024			165,750			$	9.36				6.62			$	103,275
Granted			-				-
Exercised			(12,367	)			6.28
Forfeited or Expired			(2,500	)			-
Outstanding at December 31, 2024			150,883			$	9.52				6.23			$	265,761
Vested at December 31, 2024			105,508			$	7.69				5.55			$	378,561
Exercisable at December 31, 2024			105,508			$	7.69				5.55			$	378,561

 

During the nine months ended December 31, 2024, stock options covering 12,367 shares were exercised with a total intrinsic value of $92,316. The Company received proceeds of $77,641 from these exercises. During the nine months ended December 31, 2023, stock options covering 500 shares were exercised with a total intrinsic value of $2,416. The Company received proceeds of $2,962 from these exercises.

 

8

 

 

During the nine months ended December 31, 2024, 1,875 unvested stock options and 625 vested stock options were forfeited due to the resignation of an employee. There were no stock options forfeited or expired during the nine months ended December 31, 2023. No forfeiture rate is assumed for stock options granted to directors or employees due to the forfeiture rate history of these types of awards.

 

Outstanding options at December 31, 2024 expire between September 2028 and April 2033 and have exercise prices ranging from $3.34 to $18.05.

 

5. Long Term Debt

 

On December 28, 2018, the Company entered into a loan agreement (the “Agreement”) with West Texas National Bank (“WTNB”), which originally provided for a credit facility of $1,000,000 with a maturity date of December 28, 2021. The Agreement has no monthly commitment reduction and a borrowing base to be evaluated annually.

 

On February 28, 2020, the Agreement was amended to increase the credit facility to $2,500,000, extend the maturity date to March 28, 2023 and increase the borrowing base to $1,500,000. On March 28, 2023, the Agreement was amended to extend the maturity date to March 28, 2026.

 

Under the Agreement, interest on the facility accrues at a rate equal to the prime rate as quoted in the Wall Street Journal plus one-half of one percent (0.5%) floating daily. Interest on the outstanding amount under the Agreement is payable monthly. In addition, the Company will pay an unused commitment fee in an amount equal to one-half of one percent (0.5%) times the daily average of the unadvanced amount of the commitment. The unused commitment fee is payable quarterly in arrears on the last day of each calendar quarter. As of December 31, 2024, there was $1,500,000 available for borrowing by the Company on the facility.

 

No principal payments are anticipated to be required through the maturity date of the credit facility, March 28, 2026. Upon closing the second amendment to the Agreement, the Company paid a loan origination fee of $9,000 plus legal and recording expenses totaling $12,950, which were deferred over the life of the credit facility.

 

Amounts borrowed under the Agreement are collateralized by the common stock of the Company’s wholly owned subsidiaries and substantially all of the Company’s oil and gas properties.

 

The Agreement contains customary covenants for credit facilities of this type including limitations on change in control, disposition of assets, mergers and reorganizations. The Company is also obligated to meet certain financial covenants under the Agreement and requires senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratios (Senior Debt/EBITDA) less than or equal to 4.00 to 1.00 measured with respect to the four trailing quarters and minimum interest coverage ratios (EBITDA/Interest Expense) of 2.00 to 1.00 for each quarter.

 

In addition, this Agreement prohibits the Company from paying cash dividends on its common stock without written permission of WTNB. The Company obtained written permission from WTNB prior to declaring the special dividend on April 30, 2024 as discussed in Note 10. The Agreement does not permit the Company to enter into hedge agreements covering crude oil and natural gas prices without prior WTNB approval.

 

There was no balance outstanding on the line of credit as of December 31, 2024.

 

6. Leases

 

The Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for our corporate office located in Midland, Texas. This includes 702 square feet of office space shared with and paid by our majority shareholder. In June 2024, the Company agreed to re-extend its lease at a flat (unescalated) rate for another 36 months. The amended lease now expires on July 31, 2027.

 

The Company determines an arrangement is a lease at inception. Operating leases are recorded in operating lease right-of-use asset, operating lease liability, current, and operating lease liability, long-term on the consolidated balance sheets.

 

9

 

 

Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s lease does not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate used at adoption was 9%. Significant judgement is required when determining the incremental borrowing rate. Rent expense for lease payments is recognized on a straight-line basis over the lease term.

 

The balance sheets classification of lease assets and liabilities was as follows:

 Schedule of Operating Lease Assets and Liabilities

		December 31, 2024
Assets
Operating lease right-of-use asset, beginning balance		$	19,263
Current period amortization			(38,759	)
Lease extension			158,073
Total operating lease right-of-use asset		$	138,577
Liabilities
Operating lease liability, current		$	49,872
Operating lease liability, long term			88,705
Total lease liabilities		$	138,577

 

Future minimum lease payments as of December 31, 2024 under non-cancellable operating leases are as follows:

 Schedule of Future Minimum Lease Payments

		Lease Obligation
Fiscal Year Ended March 31, 2025		$	15,080
Fiscal Year Ended March 31, 2026			60,320
Fiscal Year Ended March 31, 2027			60,320
Fiscal Year Ended March 31, 2028			20,107
Total lease payments		$	155,827
Less: imputed interest			(17,250	)
Operating lease liability			138,577
Less: operating lease liability, current			(49,872	)
Operating lease liability, long term		$	88,705

 

Net cash paid for our operating lease for the nine months ended December 31, 2024 and 2023 was $35,116 and $32,001, respectively. Rent expense, less sublease income of $9,430 is included in general and administrative expenses.

 

7. Income Taxes

 

The income tax provision consists of the following for the nine months ended December 31, 2024 and 2023:

 Schedule of Income Tax Provision

		2024				2023
		Nine Months Ended
		December 31
		2024				2023
Current income tax expense:
Federal		$	322,708			$	-
State			33,012				79,123
Total current income tax expense			355,720				79,123
Deferred income tax (benefit) expense:
Federal			(94,746	)			319,848
State			(60,940	)			-
Total deferred income tax (benefit) expense			(155,686	)			319,848
Total income tax expense:		$	200,034			$	398,971

 

10

 

 

The following table summarizes our income tax expense and effective income tax rate for the nine months ended December 31 follows:

 Schedule of Reconciliation of Provision for Income Taxes

		2024				2023
Income tax expense		$	200,034			$	398,971
Effective income tax rate (1)			16	%			27	%

 

(1)

The federal statutory rate was 21% for nine months ended December 31, 2024 and 2023.

 

Total income tax expense from continuing operations for the nine months ended December 31, 2024 and 2023 differed from amounts computed by applying the U.S. federal statutory tax rate to pre-tax income primarily due to state income taxes net of federal benefit and the impact of permanent differences between book and taxable income.

 

8. Related Party Transactions

 

Related party transactions for the Company primarily relate to shared office expenditures in addition to administrative and operating expenses paid on behalf of the principal stockholder. The total billed to and reimbursed by the stockholder for the three months ended December 31, 2024 and 2023 was $16,174 and $3,625, respectively. The total billed to and reimbursed by the stockholder for the nine months ended December 31, 2024 and 2023 was $21,462 and $21,619, respectively. The principal stockholder pays for his share of the lease amount for the shared office space directly to the lessor. Amounts paid by the principal stockholder directly to the lessor for the three months ending December 31, 2024 and 2023 were $2,544 and $3,893, respectively. Amounts paid by the principal stockholder directly to the lessor for the nine months ending December 31, 2024 and 2023 were $9,430 and $11,679, respectively.

 

9. Income Per Common Share

 

The following is a reconciliation of the number of shares used in the calculation of basic and diluted net income per share for the three and nine month periods ended December 31, 2024 and 2023:

 Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share

		2024				2023				2024				2023
		Three Months Ended								Nine Months Ended
		December 31								December 31
		2024				2023				2024				2023
Net income		$	469,133			$	345,610			$	1,077,370			$	1,080,657
Shares outstanding:
Weighted avg. shares outstanding – basic			2,046,000				2,103,503				2,070,086				2,120,611
Effect of assumed exercise of dilutive stock options			45,808				48,280				44,850				49,097
Weighted avg. shares outstanding – dilutive			2,091,808				2,151,783				2,114,936				2,169,708
Income per common share:
Basic		$	0.23			$	0.16			$	0.52			$	0.51
Diluted		$	0.22			$	0.16			$	0.51			$	0.50

 

For the three and nine months ended December 31, 2024, 60,500 shares relating to stock options were excluded from the computation of diluted net income because their inclusion would be anti-dilutive. Anti-dilutive stock options have a weighted average exercise price of $15.34 at December 31, 2024. For the three and nine months ended December 31, 2023, 63,000 shares relating to stock options were excluded from the computation of diluted net income because their inclusion would be anti-dilutive. Anti-dilutive stock options have a weighted average exercise price of $15.32 at December 31, 2023.

 

10. Stockholders’ Equity

 

In April 2024, the Board of Directors authorized the use of up to $1,000,000 to repurchase shares of the Company’s common stock, par value $0.50, for the treasury account. This program does not have an expiration date and may be modified, suspended or terminated at any time by the board of directors. Under the repurchase program, shares of common stock may be purchased from time to time through open market purchases or other transactions. The amount and timing of repurchases will be subject to the availability of stock, prevailing market conditions, the trading price of the stock, our financial performance and other conditions. Repurchases may also be made from time-to-time in connection with the settlement of our share-based compensation awards. Repurchases will be funded from cash flow.

 

11

 

 

During the nine months ended December 31, 2024, the Company repurchased 57,766 shares for the treasury at an aggregate cost of $703,216. During the nine months ended December 31, 2023, the Company repurchased 37,161 shares for the treasury at an aggregate cost of $455,133.

 

On April 30, 2024, the Board of Directors declared a regular annual dividend of $0.10 per common share. The Company paid the dividend of $209,000 on June 4, 2024 to the stockholders of record at the close of business on May 21, 2024. On April 10, 2023, the Board of Directors declared a special dividend of $0.10 per common share. The Company paid the dividend of $213,600 on May 15, 2023 to the stockholders of record at the close of business on May 1, 2023. The Company can provide no assurance that dividends will be declared in the future or as to the amount of any future dividend.

 

Dividends declared by the Board and stock repurchased during the period are presented in the Company’s consolidated statements of changes in stockholders’ equity as dividends paid and purchases of treasury stock, respectively. Dividends paid and stock repurchased during the period are presented as cash used in financing activities in the Company’s consolidated statements of cash flows. Stock repurchases are included as treasury stock in the consolidated balance sheets.

 

11. Acquisitions

 

During the nine months ended December 31, 2024, the Company incurred approximately $2,000,000 in acquisition costs to acquire various royalty interests in approximately 700 wells located in Adams, Broomfield and Weld Counties, Colorado; DeSoto Parish, Louisiana; Eddy County, New Mexico; Karnes, Live Oak, Reagan, Reeves and Upton Counties, Texas; Laramie County, Wyoming; and multiple counties in Nebraska, North and South Dakota and Montana.

 

During the nine months ended December 31, 2023, the Company incurred approximately $490,000 in acquisition costs to acquire various royalty interests in approximately 60 producing wells in Crane, Ector, Howard, Midland, Reeves and Upton Counties, Texas.

 

12. Subsequent Events

 

In January 2025, the Company expended approximately $70,000 for the drilling of six horizontal wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico.

 

The Company completed a review and analysis of all events that occurred after the consolidated balance sheet date to determine if any such events must be reported and has determined that there are no other subsequent events to be disclosed.

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Unless the context otherwise requires, references to the “Company”, “Mexco”, “we”, “us” or “our” mean Mexco Energy Corporation and its consolidated subsidiaries.

 

Cautionary Statements Regarding Forward-Looking Statements. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements regarding our plans, beliefs or current expectations and may be signified by the words “could”, “should”, “expect”, “project”, “estimate”, “believe”, “anticipate”, “intend”, “budget”, “plan”, “forecast”, “predict” and other similar expressions. Forward-looking statements appear throughout this Form 10-Q with respect to, among other things: profitability; planned capital expenditures; estimates of oil and gas production; future project dates; estimates of future oil and gas prices; estimates of oil and gas reserves; our future financial condition or results of operations; and our business strategy and other plans and objectives for future operations. Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement.

 

While we have made assumptions that we believe are reasonable, the assumptions that support our forward-looking statements are based upon information that is currently available and is subject to change. All forward-looking statements in the Form 10-Q are qualified in their entirety by the cautionary statement contained in this section. We do not undertake to update, revise or correct any of the forward-looking information. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Form 10-K.

 

Liquidity and Capital Resources. Historically, we have funded our operations, acquisitions, exploration and development expenditures from cash generated by operating activities, bank borrowings, sales of non-core properties and issuance of common stock. Our primary financial resource is our base of oil and gas reserves. We have pledged our producing oil and gas properties to secure our credit facility. We do not have any delivery commitments to provide a fixed and determinable quantity of its oil and gas under any existing contract or agreement.

 

Our long-term strategy is on increasing profit margins while concentrating on obtaining reserves with low cost operations by acquiring and developing oil and gas properties with potential for long-lived production. We focus our efforts on the acquisition of royalties and working interests in non-operated properties in areas with significant development potential.

 

At December 31, 2024, we had working capital of $1,469,195 compared to working capital of $3,259,200 at March 31, 2024, a decrease of $1,790,005 for the reasons set forth below.

 

Cash Flows

 

Changes in the net funds provided by or (used in) each of our operating, investing and financing activities are set forth in the table below:

 

		For the Nine Months Ended December 31,
		2024				2023				Change
Net cash provided by operating activities		$	2,941,115			$	3,374,717			$	(433,602	)
Net cash used in investing activities		$	(3,670,019	)		$	(1,365,030	)		$	2,304,989
Net cash used in financing activities		$	(834,575	)		$	(666,520	)		$	168,055

 

Cash Flow Provided by Operating Activities. Cash flow from operating activities is primarily derived from the production of our crude oil and natural gas reserves and changes in the balances of non-cash accounts, receivables, payables or other non-energy property asset account balances. Cash flow provided by our operating activities for the nine months ended December 31, 2024 was $2,941,115 in comparison to $3,374,717 for the nine months ended December 31, 2023. This decrease of $433,602 in our cash flow operating activities consisted of an increase in our accounts receivable of $529,751; an increase of $106,391 of our accounts payable and accrued expenses and income tax payable; and, a decrease in our net income for the current nine months of $3,287. Variations in cash flow from operating activities may impact our level of exploration and development expenditures.

 

Our expenditures in operating activities consist primarily of drilling expenses, production expenses and engineering services. Our expenses also consist of employee compensation, accounting, insurance and other general and administrative expenses that we have incurred in order to address normal and necessary business activities of a public company in the crude oil and natural gas production industry.

 

Cash Flow Used in Investing Activities. Cash flow from investing activities is derived from changes in oil and gas property balances. For the nine months ended December 31, 2024, we had net cash of $3,670,019 used for additions to oil and gas properties compared to $1,365,030 for the nine months ended December 31, 2023.

 

Cash Flow Provided by Financing Activities. Cash flow from financing activities is derived from our changes in long-term debt and in equity account balances. Net cash flow used in our financing activities was $834,575 for the nine months ended December 31, 2024 compared to cash flow used in our financing activities of $666,520 for the nine months ended December 31, 2023. During the nine months ended December 31, 2024, we expended $209,000 to pay the regular annual dividend and $703,216 to purchase 57,766 shares of our stock for the treasury account and received $77,641 from the exercise of stock options.

 

 

Accordingly, net cash decreased $1,563,479, leaving cash and cash equivalents on hand of $910,005 as of December 31, 2024.

 

Oil and Natural Gas Property Development

 

New Participations in Fiscal 2025. The Company currently plans to participate in the drilling and completion of 28 horizontal wells at an estimated cost of approximately $1,500,000 for the fiscal year ending March 31, 2025. Twenty-five of these wells are in the Delaware Basin located in the western portion of the Permian Basin in Lea and Eddy Counties, New Mexico. The remaining 3 wells are in Grady County, Oklahoma.

 

During the first nine months of fiscal 2025, Mexco expended approximately $207,000 to participate in the drilling of five horizontal wells in the Bone Spring formation of the Delaware Basin in Lea County, New Mexico. In November 2024, these wells were completed with initial average production rates of 1,106 barrels of oil, 2,583 barrels of water and 1,165,000 cubic feet of gas per day, or 1,300 BOE per day.

 

During the first nine months of fiscal 2025, Mexco expended approximately $293,000 to drill and complete four horizontal wells in the Wolfcamp Sand formation of the Delaware Basin in Lea County, New Mexico. In November 2024, these wells were completed with initial average production rates of 1,089 barrels of oil, 4,716 barrels of water and 3,601,000 cubic feet of gas per day, or 1,689 BOE per day.

 

In October 2024, the Company expended approximately $74,000 for the drilling of two horizontal wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is .5%. Subsequently, in January 2025, the Company expended approximately $43,000 to complete these wells.

 

In November 2024, the Company expended approximately $78,000 for the drilling of two horizontal wells in the Penn Shale formation of the Delaware Basin in Lea County, New Mexico. Mexco’s average working interest in these wells is .5%.

 

In October 2022, the Company made an approximately 2% equity investment commitment in a limited liability company amounting to $2,000,000 of which $1,600,000 has been funded as of December 31, 2024. The limited liability company is capitalized at approximately $100 million to purchase mineral interests in the Utica and Marcellus areas in the state of Ohio. To date, this LLC has returned $182,767 or 11% of the total investment.

 

Completion of Wells Drilled in Fiscal 2024. The Company expended approximately $300,000 for the completion of 19 horizontal wells in which the Company participated during fiscal 2024.

 

The Company expended approximately $107,000 for the completion costs of two horizontal wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico that the Company participated in drilling during fiscal 2024. Mexco’s working interest in these wells is .53%. In July 2024, these wells were completed with initial average production rates of 1,402 barrels of oil, 2,009 barrels of water and 2,168,000 cubic feet of gas per day, or 1,763 BOE per day.

 

Five horizontal wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico in which the Company participated during fiscal 2024 were completed in April 2024 with initial average production rates of 732 barrels of oil, 1,481 barrels of water and 657,000 cubic feet of gas per day, or 842 of oil equivalent per day. Mexco’s working interest in these wells is approximately 1.16%.

 

A horizontal well in the Penn Shale formation of the Delaware Basin in Lea County, New Mexico was completed in May 2024 with the initial production rate of 964 barrels of oil, 2,441 barrels of water and 626,000 cubic feet of gas per day, or 1,068 of oil equivalent per day. Mexco’s working interest in this well is .165%.

 

The Company expended approximately $207,000 for the completion costs of four horizontial wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico that the Company participated in drilling during fiscal 2024. Mexco’s working interest in these wells is .45%. In October 2024, these wells were completed with initial average production rates of 893 barrels of oil, 2,990 barrels of water and 1,161,000 cubic feet of gas per day, or 1,087 BOE per day.

 

Acquisitions. In April 2024, the Company acquired royalty interests in 21 producing wells operated by Anadarko Petroleum Corporation and Cimarex Energy Company and located in Reeves County, Texas for a purchase price of $158,000.

 

In August 2024, the Company acquired royalty interests in 6 producing wells operated by Marathon Oil and located in Karnes County, Texas for a purchase price of $50,000. This acquisition was effective August 1, 2024.

 

 

In August 2024, the Company acquired royalty interests in 15 producing wells operated by Anadarko Petroleum Corporation and located in Weld County, Colorado for a purchase price of $118,000; and, royalty interests in approximately 250 producing wells operated by Samson Exploration, EOG Resources and others in Laramie County, Wyoming and Adams and Weld Counties, Colorado for a purchase price of $483,000. All of these acquisitions were effective September 1, 2024.

 

In September 2024, the Company acquired royalty interests in 20 producing wells operated by Marathon Oil and Murphy Exploration and located in Karnes County, Texas for a purchase price of $90,000 and effective August 1, 2024.

 

In October 2024, the Company acquired a .3% royalty interest in 15 producing wells operated by Civitas Resources, Inc. and located in Broomfield and Adams Counties, Colorado for a purchase price of $450,000. This acquisition was effective November 1, 2024.

 

In October 2024, the Company acquired a .5% royalty interest in 3 producing wells operated by Mewbourne Oil Company and located in Eddy County, New Mexico for a purchase price of $260,000. This acquisition was effective November 1, 2024 and includes acreage for further development.

 

In October 2024, the Company acquired royalty interests in 8 producing wells operated by Marathon Oil and located in Live Oak County, Texas for a purchase price of $20,000; royalty interests in 6 producing wells operated by SWN Production Company, LLC and located in DeSoto Parish, Louisiana for a purchase price of $25,000; royalty interests in 10 producing wells operated by Ovintiv, Inc. and located in Upton County, Texas for a purchase price of $65,000; and, royalty interests in 12 producing wells operated by Pioneer Natural Resources and located in Reagan and Upton Counties, Texas for a purchase price of $65,000. All of these acquisitions were effective November 1, 2024.

 

Also in October 2024 and effective November 1, 2024, the Company acquired various small royalty interests in over 300 producing wells operated by Petro-Hunt Corporation, Hess Bakken Investments II, LLC, Marathon Oil, WPX Energy and others in multiple counties throughout the states of Nebraska, North Dakota, South Dakota and Montana for a purchase price of $185,000.

 

Other Projects. We are participating in other projects and are reviewing projects in which we may participate. The cost of such projects would be funded, to the extent possible, from existing cash balances and cash flow from operations. The remainder may be funded through borrowings on the credit facility and, if appropriate, sales of non-core properties.

 

Sale of Properties. In November 2024, the Company conveyed its working and royalty interests in 13.5 net acres in Ward County, Texas. The Company received $15,000 per acre in the total amount of $202,500. The Company retained an overriding royalty interest equal to the positive difference between 25% and any existing burdens of record as of the effective date. The divestitures of this non-core oil and gas asset did not result in a significant alteration of the relationship between the Company’s capitalized costs and proved reserves and, accordingly, the Company recorded the proceeds as sales proceeds, a reduction of its full cost pool, with no gain or loss recognized on the sale.

 

Pricing. Crude oil and natural gas prices generally remained volatile during the last year. The volatility of the energy markets makes it extremely difficult to predict future oil and natural gas price movements with any certainty. For example, in the last twelve months, the NYMEX West Texas Intermediate (“WTI”) posted price for crude oil has ranged from a low of $61.73 per bbl in September 2024 to a high of $82.89 per bbl in April 2024. The Henry Hub Spot Market Price (“Henry Hub”) for natural gas has ranged from a low of $1.21 per MMBtu in November 2024 to a high of $3.40 per MMBtu in December 2024.

 

On December 31, 2024, the WTI posted price for crude oil was $67.70 and the Henry Hub spot price for natural gas was $3.40 per MMBtu. See Results of Operations below for realized prices. Pipeline capacity constraints and maintenance in the Permian Basin area has contributed to a wider difference between the WaHa Hub and the Henry Hub and at times prices were negative.

 

 

Contractual Obligations. We have no off-balance sheet debt or unrecorded obligations and have not guaranteed the debt of any other party. The following table summarizes our future payments we are obligated to make based on agreements in place as of December 31, 2024:

 

						Payments due in:
		Total				less than 1 year				1 - 3 years				over 3 years
Contractual obligations:
Leases (1)		$	155,827			$	60,320			$	95,507			$	-

 

(1)

The lease amount represents the monthly rent amount for our principal office space in Midland, Texas under a 36-month lease agreement expiring July 31, 2027. Of this total obligation for the remainder of the lease, our majority shareholder will pay $10,175 less than 1 year and $16,110 1-3 years for his portion of the shared office space.

 

Results of Operations – Three Months Ended December 31, 2024 and 2023. For the quarter ended December 31, 2024, there was net income of $469,133 compared to $345,610 for the quarter ended December 31, 2023 as a result of an increase in operating revenues due to a increase in oil and gas production volumes partially offset by a decrease in oil and gas prices and an increase in operating expenses that is further explained below.

 

Oil and gas sales. Revenue from oil and gas sales was $1,828,404 for the third quarter of fiscal 2025, a 14% increase from $1,610,595 for the same period of fiscal 2024. This resulted from an increase in oil and natural gas production volumes partially offset by a decrease in oil and natural gas prices. Natural gas prices have been negatively impacted by limited pipeline capacity in the Permian Basin.

 

		2024				2023				% Difference
Oil:
Revenue		$	1,563,663			$	1,387,008				12.7	%
Volume (bbls)			22,451				17,636				27.3	%
Average Price (per bbl)		$	69.65			$	78.65				(11.4)	%
Gas:
Revenue		$	264,741			$	223,587				18.4	%
Volume (mcf)			149,945				122,794				22.1	%
Average Price (per mcf)		$	1.77			$	1.82				(2.7)	%

 

Other operating revenues. Other revenues increased to $62,861 for the three months ended December 31, 2024, from $45,848 for the three months ended December 31, 2023. This increase resulted from a settlement in a class action lawsuit from Contango Resources and an increase in income from one of our limited liability company investments.

 

Interest income. Interest income on corporate funds decreased to $7,315 for the three months ended December 31, 2024, from $36,936 for the three months ended December 31, 2023. This decrease resulted from using the corporate funds for property acquisitions.

 

Production and exploration. Production costs were $460,241 for the third quarter of fiscal 2025, a 15% increase from $401,035 for the same period of fiscal 2024. This is the result of an increase in production taxes due to an increase in oil revenues and an increase in marketing and other charges due to the current natural gas pricing environment from limited pipeline takeaway capacity in the Permian and an increase in lease operating expenses on new wells in which we own an interest.

 

Depreciation, depletion and amortization. Depreciation, depletion and amortization expense was $636,424 for the third quarter of fiscal 2025, a 59% increase from $400,337 for the same period of fiscal 2024, primarily due to an increase in the full cost amortization base, an increase in oil and gas production and a decrease in gas reserves partially offset by a increase in oil reserves.

 

General and administrative expenses. General and administrative expenses were $340,514 for the third quarter of fiscal 2025, a 2% increase from $335,152 for the same period of fiscal 2024. This was primarily due to an increase in contract services.

 

Income taxes. There was an income tax benefit of $18,305 for the three months ended December 31, 2024 compared to an expense of $202,945 for the three months ended December 31, 2023, primarily due to a decrease in state income taxes and a decrease in the deferred tax provision. The effective tax rate for state and federal taxes combined for the three months ended December 31, 2024 and 2023 was (4%) and 37%, respectively. The decrease in the effective tax rate is primarily the result of state income taxes net of federal benefit, primarily in New Mexico, and the impact of permanent differences between book and taxable income.

 

Results of Operations – Nine Months Ended December 31, 2024 and 2023. For the nine months ended December 31, 2024, there was a net income of $1,077,370 compared to net income of $1,080,657 for the nine months ended December 31, 2023. This was a result of an increase in operating revenues due to an increase in oil and gas production volumes partially offset by a decrease in oil and gas prices and an increase in operating expenses that is further explained below.

 

 

Oil and gas sales. Revenue from oil and gas sales was $5,212,313 for the nine months ended December 31, 2024, an 11% increase from $4,706,395 for the same period of fiscal 2024. This resulted from a increase in oil and natural gas production partially offset by a decrease in oil and natural gas prices. Natural gas prices have been negatively impacted by pipeline capacity in the Permian Basin.

 

		2024				2023				% Difference
Oil:
Revenue		$	4,595,585			$	3,916,792				17.3	%
Volume (bbls)			61,685				50,826				21.4	%
Average Price (per bbl)		$	74.50			$	77.06				(3.3)	%
Gas:
Revenue		$	616,728			$	789,903				(21.9)	%
Volume (mcf)			420,236				372,459				12.8	%
Average Price (per mcf)		$	1.47			$	2.12				(30.7)	%

 

Other operating revenues. Other revenues increased to $156,014 for the nine months ended December 31, 2024, from $105,077 for the nine months ended December 31, 2023. This increase resulted from a settlement in a class action lawsuit from Contango Resources and an increase in income from one of our limited liability company investments.

 

Interest income. Interest income on corporate funds decreased to $50,891 for the nine months ended December 31, 2024, from $86,995 for the nine months ended December 31, 2023. This decrease resulted from using the corporate funds for property acquisitions and purchase of treasury stock.

 

Production and exploration. Production costs were $1,311,066 for the nine months ended December 31, 2024, a 15% increase from $1,143,116 for the nine months ended December 31, 2023. This is the result of an increase in production taxes due to an increase in oil revenues and an increase in marketing and other charges due to the current natural gas pricing environment from limited pipeline takeaway capacity in the Permian and an increase in lease operating expenses on new wells in which we own an interest.

 

Depreciation, depletion and amortization. Depreciation, depletion and amortization expense was $1,760,409 for the nine months ended December 31, 2024, a 39% increase from $1,268,703 for the nine months ended December 31, 2023, primarily due to an increase in the full cost amortization base, an increase in oil and gas production and a decrease in gas reserves partially offset by an increase in oil reserves.

 

General and administrative expenses. General and administrative expenses were $1,042,084 for the nine months ended December 31, 2024, a 6% increase from $981,664 for the nine months ended December 31, 2023. This was primarily due to an increase in contract and engineering services partially offset by a decrease in salaries and stock option compensation.

 

Income taxes. Income taxes for the nine months ended December 31, 2024 was $200,034 compared to $398,971 for the nine months ended December 31, 2023, primarily due a decrease in state income taxes and a decrease in the deferred tax provision. The effective tax rate for state and federal taxes combined for the nine months ended December 31, 2024 and 2023 was 16% and 27%, respectively. The decrease in the effective tax rate is primarily the result of state income taxes net of federal benefit, primarily in New Mexico, and the impact of permanent differences between book and taxable income.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

The primary sources of market risk for us include fluctuations in commodity prices and interest rates. All of our financial instruments are for purposes other than trading.

 

Credit Risk. Credit risk is the risk of loss as a result of nonperformance by other parties of their contractual obligations. Our primary credit risk is related to oil and gas production sold to various purchasers and the receivables are generally not collateralized. At December 31, 2024, our largest credit risk associated with any single purchaser was $520,794 or 50% of our total oil and gas receivables. We have not experienced any significant credit losses.

 

 

Energy Price Risk. Our most significant market risk is the pricing applicable to our crude oil and natural gas production. Our financial condition, results of operations, and capital resources are highly dependent upon the prevailing market prices of, and demand for, oil and natural gas. Prices for oil and natural gas production has been volatile and unpredictable for several years, and we expect this volatility to continue in the future.

 

Pipeline capacity constraints and maintenance in the Permian Basin area has contributed to a wider difference between the WaHa Hub and the Henry Hub and at times prices were negative.

 

Factors that can cause price fluctuations include the level of global demand for petroleum products, foreign and domestic supply of oil and gas, the establishment of and compliance with production quotas by oil-exporting countries, weather conditions, the price and availability of alternative fuels and overall political and economic conditions in oil producing and consuming countries.

 

For example, in the last twelve months, the NYMEX West Texas Intermediate (“WTI”) posted price for crude oil has ranged from a low of $61.73 per bbl in September 2024 to a high of $82.89 per bbl in April 2024. The Henry Hub Spot Market Price (“Henry Hub”) posted price for natural gas has ranged from a low of $1.21 per MMBtu in November 2024 to a high of $3.40 per MMBtu in December 2024. On December 31, 2024, the WTI posted price for crude oil was $67.70 and the Henry Hub posted price for natural gas was $3.40. See Results of Operations above for the Company’s realized prices during the three and nine months. Subsequently, on January 27, 2025, the WTI posted price for crude oil was $69.15 and the Henry Hub posted price for natural gas was $3.71.

 

Declines in oil and natural gas prices will materially adversely affect our financial condition, liquidity, ability to obtain financing and operating results. Changes in oil and gas prices impact both estimated future net revenue and the estimated quantity of proved reserves. Any reduction in reserves, including reductions due to price fluctuations, can reduce the borrowing base under our credit facility and adversely affect the amount of cash flow available for capital expenditures and our ability to obtain additional capital for our acquisition, exploration and development activities. In addition, a noncash write-down of our oil and gas properties could be required under full cost accounting rules if prices declined significantly, even if it is only for a short period of time. Lower prices may also reduce the amount of crude oil and natural gas that can be produced economically. Thus, we may experience material increases or decreases in reserve quantities solely as a result of price changes and not as a result of drilling or well performance.

 

Similarly, any improvements in oil and gas prices can have a favorable impact on our financial condition, results of operations and capital resources. If the average oil price had increased or decreased by ten dollars per barrel for the first nine months of fiscal 2025, our operating revenues would have increased or decreased $616,850. If the average gas price had increased or decreased by one dollar per mcf for the first nine months of fiscal 2025, our operating revenues would have increased or decreased $420,236.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures to ensure that the information we must disclose in our filings with the SEC is recorded, processed, summarized and reported on a timely basis. At the end of the period covered by this report, our principal executive officer and principal financial officer reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e). Based on such evaluation, such officers concluded that, as of December 31, 2024, our disclosure controls and procedures were effective.

 

Changes in Internal Control over Financial Reporting. No changes in our internal control over financial reporting occurred during the nine months ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business. We are not aware of any legal or governmental proceedings against us, or contemplated to be brought against us, under various environmental protection statutes or other regulations to which we are subject.

 

Item 1A.Risk Factors

 

There have been no material changes to the information previously disclosed in Item 1A. “Risk Factors” in our 2024 Annual Report on Form 10-K.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

c. Issuer Purchases of Equity Securities

 

The following table provides information related to repurchases of our common stock for the treasury account during the nine months ended December 31, 2024:

 

		Total Number of Shares Purchased				Average Price Paid per Share				Total Number of Shares Purchased as Part of Publicly Announced Program				Approximate Dollar Value of Shares that May Yet be Purchased Under the Program
April 1-30, 2024			13,766			$	13.70				13,766			$	811,363
May 1-31, 2024			-				-				-			$	811,363
June 1-30, 2024			-				-				-			$	811,363
July 1-31, 2024			4,557			$	11.78				4,557			$	757,679
August 1-31, 2024			17,743			$	11.95				17,743			$	545,734
September 1-30, 2024			21,700			$	11.47				21,700			$	296,784
October 1-31, 2024			-				-				-			$	296,784
November 1-30, 2024			-				-				-			$	296,784
December 1-31, 2024			-				-				-			$	296,784

 

Item 6. Exhibits

 

31.1		Certification of the Chief Executive Officer of Mexco Energy Corporation
31.2		Certification of the Chief Financial Officer of Mexco Energy Corporation
32.1		Certification of the Chief Executive Officer and Chief Financial Officer of Mexco Energy Corporation pursuant to 18 U.S.C. §1350
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extenstion Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		MEXCO ENERGY CORPORATION
		(Registrant)
Dated: February 7, 2025		/s/ Nicholas C. Taylor
		Nicholas C. Taylor
		Chairman of the Board and Chief Executive Officer
Dated: February 7, 2025		/s/ Tamala L. McComic
		Tamala L. McComic
		President, Chief Financial Officer, Treasurer and Assistant Secretary

 

 

 

Exhibit 31.1

 

CHIEF EXECUTIVE OFFICER CERTIFICATION

 

CERTIFICATION

 

I, Nicholas C. Taylor, certify that:

 

1.	I have reviewed this quarterly report on Form 10-Q of Mexco Energy Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

 

	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 7, 2025		/s/ Nicholas C. Taylor
		Nicholas C. Taylor
		Chairman of the Board and Chief Executive Officer

 

 

 

Exhibit 31.2

 

CHIEF FINANCIAL OFFICER CERTIFICATION

 

CERTIFICATION

 

I, Tamala L. McComic, certify that:

 

1.	I have reviewed this quarterly report on Form 10-Q of Mexco Energy Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

 

	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 7, 2025		/s/ Tamala L. McComic
		Tamala L. McComic
		President and Chief Financial Officer

 

 

 

Exhibit 32.1

 

CERTIFICATION OF

CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

OF MEXCO ENERGY CORPORATION

PURSUANT TO 18 U.S.C. §1350

 

In connection with the Quarterly Report of Mexco Energy Corporation on Form 10-Q for the quarterly period ended December 31, 2024, as filed with the Securities and Exchange Commission on February 7, 2025 (the “Report”), the undersigned, in the capacities and on the dates indicated below, each hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:

 

	1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
	2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Mexco Energy Corporation as of the dates and for periods presented as required by such Report.

 

Date: February 7, 2025		/s/ Nicholas C. Taylor
		Nicholas C. Taylor
		Chairman of the Board and Chief Executive Officer
Date: February 7, 2025		/s/ Tamala L. McComic
		Tamala L. McComic
		President and Chief Financial Officer

 

 

v3.25.0.1

Cover - $ / shares	9 Months Ended
	Dec. 31, 2024	Feb. 07, 2025
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2024
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2025
Current Fiscal Year End Date	--03-31
Entity File Number	1-31785
Entity Registrant Name	MEXCO ENERGY CORPORATION
Entity Central Index Key	0000066418
Entity Tax Identification Number	84-0627918
Entity Incorporation, State or Country Code	CO
Entity Address, Address Line One	415 West Wall Street
Entity Address, Address Line Two	Suite 475
Entity Address, City or Town	Midland
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	79701
City Area Code	(432)
Local Phone Number	682-1119
Title of 12(b) Security	Common Stock, par value $0.50 per share
Trading Symbol	MXC
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,046,000
Entity Listing, Par Value Per Share	$ 0.50

v3.25.0.1

Consolidated Balance Sheets - USD ($)	Dec. 31, 2024	Mar. 31, 2024
Current assets
Cash and cash equivalents	$ 910,005	$ 2,473,484
Accounts receivable:
Oil and natural gas sales	1,037,754	1,001,709
Trade	48,759	9,186
Prepaid costs and expenses	26,050	56,193
Prepaid drilling	29,085	148,748
Total current assets	2,051,653	3,689,320
Property and equipment, at cost
Oil and gas properties, using the full cost method	51,263,675	48,304,585
Other	121,926	121,926
Accumulated depreciation, depletion and amortization	(35,945,246)	(34,184,837)
Property and equipment, net	15,440,355	14,241,674
Investments – cost basis	1,900,000	1,100,000
Operating lease, right-of-use asset	138,577	19,263
Other noncurrent assets	5,373	8,597
Total assets	19,535,958	19,058,854
Current liabilities
Accounts payable and accrued expenses	220,550	221,603
Income tax payable	312,036	189,254
Operating lease liability, current	49,872	19,263
Total current liabilities	582,458	430,120
Long-term liabilities
Operating lease liability, long-term	88,705
Asset retirement obligations	682,061	688,808
Deferred income tax liabilities	155,975	311,661
Total long-term liabilities	926,741	1,000,469
Total liabilities	1,509,199	1,430,589
Commitments and contingencies
Stockholders’ equity
Preferred stock - $1.00 par value; 10,000,000 shares authorized; none outstanding
Common stock - $0.50 par value; 40,000,000 shares authorized; 2,239,283 and 2,226,916 shares issued; 2,046,000 and 2,091,399 shares outstanding as of December 31, 2024 and March 31, 2024, respectively	1,119,641	1,113,458
Additional paid-in capital	8,795,013	8,567,856
Retained earnings	9,990,851	9,122,481
Treasury stock, at cost (193,283 and 135,517 shares, respectively)	(1,878,746)	(1,175,530)
Total stockholders’ equity	18,026,759	17,628,265
Total liabilities and stockholders’ equity	$ 19,535,958	$ 19,058,854

v3.25.0.1

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2024	Mar. 31, 2024
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.50	$ 0.50
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	2,239,283	2,226,916
Common stock, shares outstanding	2,046,000	2,091,399
Treasury stock, shares	193,283	135,517

v3.25.0.1

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Operating revenue:
Total operating revenues	$ 1,891,265	$ 1,656,443	$ 5,368,327	$ 4,811,472
Operating expenses:
Production	460,241	401,035	1,311,066	1,143,116
Accretion of asset retirement obligation	7,705	7,225	23,229	22,121
Depreciation, depletion, and amortization	636,424	400,337	1,760,409	1,268,703
General and administrative	340,514	335,152	1,042,084	981,664
Total operating expenses	1,444,884	1,143,749	4,136,788	3,415,604
Operating income	446,381	512,694	1,231,539	1,395,868
Other income (expenses):
Interest income	7,315	36,936	50,891	86,995
Interest expense	(2,868)	(1,075)	(5,026)	(3,235)
Net other income (expense)	4,447	35,861	45,865	83,760
Income before provision for income taxes	450,828	548,555	1,277,404	1,479,628
Total income tax (benefit) expense	(18,305)	202,945	200,034	398,971
Income tax expense (benefit):
Current	257,042	32,959	355,720	79,123
Deferred	(275,347)	169,986	(155,686)	319,848
Net income	$ 469,133	$ 345,610	$ 1,077,370	$ 1,080,657
Income per common share:
Basic:	$ 0.23	$ 0.16	$ 0.52	$ 0.51
Diluted:	$ 0.22	$ 0.16	$ 0.51	$ 0.50
Weighted average common shares outstanding:
Basic:	2,046,000	2,103,503	2,070,086	2,120,611
Diluted:	2,091,808	2,151,783	2,114,936	2,169,708
Dividends declared per share			$ 0.10	$ 0.10
Oil Sales [Member]
Operating revenue:
Total operating revenues	$ 1,563,663	$ 1,387,008	$ 4,595,585	$ 3,916,492
Natural Gas Sales [Member]
Operating revenue:
Total operating revenues	264,741	223,587	616,728	789,903
Other [Member]
Operating revenue:
Total operating revenues	$ 62,861	$ 45,848	$ 156,014	$ 105,077

v3.25.0.1

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock, Common [Member]	Total
Balance at Mar. 31, 2023	$ 1,110,708	$ 8,321,145	$ 7,991,129	$ (590,495)	$ 16,832,487
Net income			465,614		465,614
Dividends paid			(213,600)		(213,600)
Issuance of stock through options exercised	250	2,712			2,962
Stock based compensation		54,975			54,675
Balance at Jun. 30, 2023	1,110,958	8,378,832	8,243,143	(590,495)	17,142,438
Balance at Mar. 31, 2023	1,110,708	8,321,145	7,991,129	(590,495)	16,832,487
Net income					1,080,657
Purchase of stock					(455,133)
Balance at Dec. 31, 2023	1,110,958	8,496,527	8,858,186	(1,045,627)	17,420,044
Balance at Jun. 30, 2023	1,110,958	8,378,832	8,243,143	(590,495)	17,142,438
Net income			269,433		269,433
Purchase of stock				(325,256)	(325,256)
Stock based compensation		58,848			58,848
Balance at Sep. 30, 2023	1,110,958	8,437,680	8,412,576	(915,751)	17,145,463
Net income			345,610		345,610
Purchase of stock				(129,876)	(129,876)
Stock based compensation		58,847			58,847
Balance at Dec. 31, 2023	1,110,958	8,496,527	8,858,186	(1,045,627)	17,420,044
Balance at Mar. 31, 2024	1,113,458	8,567,856	9,122,481	(1,175,530)	$ 17,628,265
Balance, shares at Mar. 31, 2024					2,226,916
Treasury stock, shares at Mar. 31, 2024					(135,517)
Net income			291,039		$ 291,039
Dividends paid			(209,000)		(209,000)
Issuance of stock through options exercised	6,183	71,458			77,641
Purchase of stock				(188,637)	(188,637)
Stock based compensation		52,439			52,439
Balance at Jun. 30, 2024	1,119,641	8,691,753	9,204,520	(1,364,167)	17,651,747
Balance at Mar. 31, 2024	1,113,458	8,567,856	9,122,481	(1,175,530)	$ 17,628,265
Balance, shares at Mar. 31, 2024					2,226,916
Treasury stock, shares at Mar. 31, 2024					(135,517)
Net income					$ 1,077,370
Purchase of stock					$ (703,216)
Issuance of stock, shares					12,367
Acquisitions, shares					(57,766)
Balance at Dec. 31, 2024	1,119,641	8,795,013	9,990,851	(1,878,746)	$ 18,026,759
Balance, shares at Dec. 31, 2024					2,239,283
Treasury stock, shares at Dec. 31, 2024					(193,283)
Common stock, shares outstanding at Dec. 31, 2024					2,046,000
Balance at Jun. 30, 2024	1,119,641	8,691,753	9,204,520	(1,364,167)	$ 17,651,747
Net income			317,198		317,198
Purchase of stock				(514,579)	(514,579)
Stock based compensation		51,630			51,630
Balance at Sep. 30, 2024	1,119,641	8,743,383	9,521,718	(1,878,746)	17,505,996
Net income			469,133		469,133
Stock based compensation		51,630			51,630
Balance at Dec. 31, 2024	$ 1,119,641	$ 8,795,013	$ 9,990,851	$ (1,878,746)	$ 18,026,759
Balance, shares at Dec. 31, 2024					2,239,283
Treasury stock, shares at Dec. 31, 2024					(193,283)
Common stock, shares outstanding at Dec. 31, 2024					2,046,000

v3.25.0.1

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Cash flows from operating activities:
Net income	$ 1,077,370	$ 1,080,657
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax (benefit) expense	(155,686)	319,848
Stock-based compensation	155,699	172,670
Depreciation, depletion and amortization	1,760,409	1,268,703
Accretion of asset retirement obligations	23,229	22,121
Amortization of debt issuance costs	3,224	3,235
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(75,618)	454,133
(Increase) decrease in right-of-use asset	(119,314)	42,076
Decrease in prepaid expenses	30,143	36,023
Increase in accounts payable and accrued expenses	15,651	32,042
Settlement of asset retirement obligations	(16,088)	(14,715)
Increase in income taxes payable	122,782
Decrease (increase) in operating lease liability	119,314	(42,076)
Net cash provided by operating activities	2,941,115	3,374,717
Cash flows from investing activities:
Additions to oil and gas properties	(3,072,589)	(1,471,543)
Investment in limited liability companies at cost	(800,000)	(200,000)
Proceeds from sale of oil and gas properties and equipment	202,570	306,513
Net cash used in investing activities	(3,670,019)	(1,365,030)
Cash flows from financing activities:
Proceeds from exercise of stock options	77,641	2,962
Debt issuance costs		(750)
Proceeds from long-term debt	650,000
Reduction of long-term debt	(650,000)
Dividends paid	(209,000)	(213,600)
Acquisition of treasury stock	(703,216)	(455,132)
Net cash used in financing activities	(834,575)	(666,520)
Net (decrease) increase in cash and cash equivalents	(1,563,479)	1,343,167
Cash and cash equivalents at beginning of period	2,473,484	2,235,771
Cash and cash equivalents at end of period	910,005	3,578,938
Supplemental disclosure of cash flow information:
Cash paid for interest	1,802
Cash paid for income taxes	200,683
Accrued capital expenditures included in accounts payable	4,991	15,667
Non-cash investing and financing activities:
Asset retirement obligations	$ 3,631	$ 2,838

v3.25.0.1

Nature of Operations	9 Months Ended
	Dec. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations	1. Nature of Operations   Mexco Energy Corporation (a Colorado corporation) and its wholly owned subsidiaries, Forman Energy Corporation (a New York corporation), Southwest Texas Disposal Corporation (a Texas corporation) and TBO Oil & Gas, LLC (a Texas limited liability company) (collectively, the “Company”) are engaged in the acquisition, exploration, development and production of crude oil, natural gas, condensate and natural gas liquids (“NGLs”). Most of the Company’s oil and gas interests are centered in West Texas and Southeastern New Mexico; however, the Company owns producing properties and undeveloped acreage in fifteen states. All of the Company’s oil and gas interests are operated by others.

v3.25.0.1

Basis of Presentation and Significant Accounting Policies	9 Months Ended
	Dec. 31, 2024
Accounting Policies [Abstract]
Basis of Presentation and Significant Accounting Policies	2. Basis of Presentation and Significant Accounting Policies   Principles of Consolidation. The consolidated financial statements include the accounts of Mexco Energy Corporation and its wholly owned subsidiaries. All significant intercompany balances and transactions associated with the consolidated operations have been eliminated.   Estimates and Assumptions. In preparing financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), management is required to make informed judgments, estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and affect the reported amounts of revenues and expenses during the reporting period. In addition, significant estimates are used in determining proved oil and gas reserves. Although management believes its estimates and assumptions are reasonable, actual results may differ materially from those estimates. The estimate of the Company’s oil and natural gas reserves, which is used to compute depreciation, depletion, amortization and impairment of oil and gas properties, is the most significant of the estimates and assumptions that affect these reported results.   Interim Financial Statements. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of December 31, 2024, and the results of its operations and cash flows for the interim periods ended December 31, 2024 and 2023. The consolidated financial statements as of December 31, 2024 and for the three and nine month periods ended December 31, 2024 and 2023 are unaudited. The consolidated balance sheet as of March 31, 2024 was derived from the audited balance sheet filed in the Company’s 2024 annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The results of operations for the periods presented are not necessarily indicative of the results to be expected for a full year. The accounting policies followed by the Company are set forth in more detail in Note 2 of the “Notes to Consolidated Financial Statements” in the Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the SEC. However, the disclosures herein are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Form 10-K.   Oil and Natural Gas Properties. The Company uses the full cost method of accounting for oil and natural gas properties. Under this method, all costs (direct and indirect) associated with acquisition, exploration, and development of oil and natural gas properties are capitalized. Costs capitalized include acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling and equipping productive and non-productive wells. Drilling costs include directly related overhead costs. All of the Company’s capitalized costs are subject to amortization.   In addition, capitalized costs less accumulated depletion and related deferred income taxes are not allowed to exceed an amount (the full cost ceiling) equal to the sum of: 1)the present value of estimated future net revenues discounted at ten percent computed in compliance with SEC guidelines; 2)plus the cost of properties not being amortized; 3)plus the lower of cost or estimated fair value of unproven properties included in the costs being amortized; 4)less income tax effects related to differences between the book and tax basis of the properties.   No impairments on oil and natural gas properties as a result of the ceiling test were recorded for the three and nine months ended December 31, 2024 and 2023.   Investments. The Company accounts for investments of less than 3% of any limited liability companies at cost. The Company has no control of the limited liability companies. The cost of the investment is recorded as an asset on the consolidated balance sheets and when income from the investment is received, it is immediately recognized on the consolidated statements of operations.   Segments. Based on the Company’s organizational structure, the Company has one operating segment, which is crude oil and natural gas development, exploration and production. In addition, the Company has a single, company-wide management team that allocates capital resources to maximize profitability and measures financial performance as a single enterprise.

v3.25.0.1

Asset Retirement Obligations	9 Months Ended
	Dec. 31, 2024
Asset Retirement Obligation Disclosure [Abstract]
Asset Retirement Obligations	3. Asset Retirement Obligations   The Company’s asset retirement obligations (“ARO”) relate to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and gas properties. The fair value of a liability for an ARO is recorded in the period in which it is incurred, discounted to its present value using the credit adjusted risk-free interest rate, and a corresponding amount capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted each period until the liability is settled or the well is sold, at which time the liability is removed. The related asset retirement cost is capitalized as part of the carrying amount of our oil and natural gas properties. The ARO is included in the consolidated balance sheets with the current portion being included in the accounts payable and other accrued expenses.     The following table provides a rollforward of the AROs for the first nine months of fiscal 2025:  Schedule of Rollforward of Asset Retirement Obligations           Carrying amount of asset retirement obligations as of April 1, 2024   $ 718,808   Liabilities incurred     3,631   Liabilities settled     (33,607 ) Accretion expense     23,229   Carrying amount of asset retirement obligations as of December 31, 2024     712,061   Less: Current portion     30,000   Non-Current asset retirement obligation   $ 682,061

v3.25.0.1

Stock-based Compensation	9 Months Ended
	Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]
Stock-based Compensation	4. Stock-based Compensation   The Company recognized stock-based compensation expense of $51,630 and $58,847 in general and administrative expense in the Consolidated Statements of Operations for the three months ended December 31, 2024 and 2023, respectively. Stock-based compensation expense recognized for the nine months ended December 31, 2024 and 2023 was $155,699 and $172,670, respectively. The total cost related to non-vested awards not yet recognized at December 31, 2024 totals $330,113 which is expected to be recognized over a weighted average of 1.78 years.   During the nine months ended December 31, 2024, no stock options were granted. During the nine months ended December 31, 2023, the Compensation Committee of the Board of Directors approved and the Company granted 32,000 stock options exercisable at $12.68 per share with an estimated fair value of $279,360. These options are exercisable at a price not less than the fair market value of the stock at the date of grant, have an exercise period of ten years and generally vest over four years.   Included in the following table is a summary of the grant-date fair value of stock options granted and the related assumptions used in the Binomial models for stock options granted during the nine months ended December 31, 2024 and 2023. All such amounts represent the weighted average amounts.  Schedule of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binominal Models     Nine Months Ended       December 31       2024     2023   Grant-date fair value     -     $ 8.73   Volatility factor     -       56.5 % Dividend yield     -       -   Risk-free interest rate     -       3.44 % Expected term (in years)     -       6.25     The following table is a summary of activity of stock options for the nine months ended December 31, 2024:  Summary of Activity of Stock Options     Number of Shares     Weighted Average Exercise Price     Weighted Average Remaining Contract Life in Years     Intrinsic Value   Outstanding at April 1, 2024     165,750     $ 9.36       6.62     $ 103,275   Granted     -       -                   Exercised     (12,367 )     6.28                   Forfeited or Expired     (2,500 )     -                   Outstanding at December 31, 2024     150,883     $ 9.52       6.23     $ 265,761                                     Vested at December 31, 2024     105,508     $ 7.69       5.55     $ 378,561   Exercisable at December 31, 2024     105,508     $ 7.69       5.55     $ 378,561     During the nine months ended December 31, 2024, stock options covering 12,367 shares were exercised with a total intrinsic value of $92,316. The Company received proceeds of $77,641 from these exercises. During the nine months ended December 31, 2023, stock options covering 500 shares were exercised with a total intrinsic value of $2,416. The Company received proceeds of $2,962 from these exercises.     During the nine months ended December 31, 2024, 1,875 unvested stock options and 625 vested stock options were forfeited due to the resignation of an employee. There were no stock options forfeited or expired during the nine months ended December 31, 2023. No forfeiture rate is assumed for stock options granted to directors or employees due to the forfeiture rate history of these types of awards.   Outstanding options at December 31, 2024 expire between September 2028 and April 2033 and have exercise prices ranging from $3.34 to $18.05.

v3.25.0.1

Long Term Debt	9 Months Ended
	Dec. 31, 2024
Debt Disclosure [Abstract]
Long Term Debt	5. Long Term Debt   On December 28, 2018, the Company entered into a loan agreement (the “Agreement”) with West Texas National Bank (“WTNB”), which originally provided for a credit facility of $1,000,000 with a maturity date of December 28, 2021. The Agreement has no monthly commitment reduction and a borrowing base to be evaluated annually.   On February 28, 2020, the Agreement was amended to increase the credit facility to $2,500,000, extend the maturity date to March 28, 2023 and increase the borrowing base to $1,500,000. On March 28, 2023, the Agreement was amended to extend the maturity date to March 28, 2026.   Under the Agreement, interest on the facility accrues at a rate equal to the prime rate as quoted in the Wall Street Journal plus one-half of one percent (0.5%) floating daily. Interest on the outstanding amount under the Agreement is payable monthly. In addition, the Company will pay an unused commitment fee in an amount equal to one-half of one percent (0.5%) times the daily average of the unadvanced amount of the commitment. The unused commitment fee is payable quarterly in arrears on the last day of each calendar quarter. As of December 31, 2024, there was $1,500,000 available for borrowing by the Company on the facility.   No principal payments are anticipated to be required through the maturity date of the credit facility, March 28, 2026. Upon closing the second amendment to the Agreement, the Company paid a loan origination fee of $9,000 plus legal and recording expenses totaling $12,950, which were deferred over the life of the credit facility.   Amounts borrowed under the Agreement are collateralized by the common stock of the Company’s wholly owned subsidiaries and substantially all of the Company’s oil and gas properties.   The Agreement contains customary covenants for credit facilities of this type including limitations on change in control, disposition of assets, mergers and reorganizations. The Company is also obligated to meet certain financial covenants under the Agreement and requires senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratios (Senior Debt/EBITDA) less than or equal to 4.00 to 1.00 measured with respect to the four trailing quarters and minimum interest coverage ratios (EBITDA/Interest Expense) of 2.00 to 1.00 for each quarter.   In addition, this Agreement prohibits the Company from paying cash dividends on its common stock without written permission of WTNB. The Company obtained written permission from WTNB prior to declaring the special dividend on April 30, 2024 as discussed in Note 10. The Agreement does not permit the Company to enter into hedge agreements covering crude oil and natural gas prices without prior WTNB approval.   There was no balance outstanding on the line of credit as of December 31, 2024.

v3.25.0.1

Leases	9 Months Ended
	Dec. 31, 2024
Leases
Leases	6. Leases   The Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for our corporate office located in Midland, Texas. This includes 702 square feet of office space shared with and paid by our majority shareholder. In June 2024, the Company agreed to re-extend its lease at a flat (unescalated) rate for another 36 months. The amended lease now expires on July 31, 2027.   The Company determines an arrangement is a lease at inception. Operating leases are recorded in operating lease right-of-use asset, operating lease liability, current, and operating lease liability, long-term on the consolidated balance sheets.     Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s lease does not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate used at adoption was 9%. Significant judgement is required when determining the incremental borrowing rate. Rent expense for lease payments is recognized on a straight-line basis over the lease term.   The balance sheets classification of lease assets and liabilities was as follows:  Schedule of Operating Lease Assets and Liabilities     December 31, 2024   Assets         Operating lease right-of-use asset, beginning balance   $ 19,263   Current period amortization     (38,759 ) Lease extension     158,073   Total operating lease right-of-use asset   $ 138,577             Liabilities         Operating lease liability, current   $ 49,872   Operating lease liability, long term     88,705   Total lease liabilities   $ 138,577     Future minimum lease payments as of December 31, 2024 under non-cancellable operating leases are as follows:  Schedule of Future Minimum Lease Payments     Lease Obligation   Fiscal Year Ended March 31, 2025   $ 15,080   Fiscal Year Ended March 31, 2026     60,320   Fiscal Year Ended March 31, 2027     60,320   Fiscal Year Ended March 31, 2028     20,107   Total lease payments   $ 155,827   Less: imputed interest     (17,250 ) Operating lease liability     138,577   Less: operating lease liability, current     (49,872 ) Operating lease liability, long term   $ 88,705     Net cash paid for our operating lease for the nine months ended December 31, 2024 and 2023 was $35,116 and $32,001, respectively. Rent expense, less sublease income of $9,430 is included in general and administrative expenses.

v3.25.0.1

Income Taxes	9 Months Ended
	Dec. 31, 2024
Income Tax Disclosure [Abstract]
Income Taxes	7. Income Taxes   The income tax provision consists of the following for the nine months ended December 31, 2024 and 2023:  Schedule of Income Tax Provision     2024     2023       Nine Months Ended       December 31       2024     2023   Current income tax expense:                 Federal   $ 322,708     $ -   State     33,012       79,123   Total current income tax expense     355,720       79,123   Deferred income tax (benefit) expense:                 Federal     (94,746 )     319,848   State     (60,940 )     -   Total deferred income tax (benefit) expense     (155,686 )     319,848   Total income tax expense:   $ 200,034     $ 398,971                         The following table summarizes our income tax expense and effective income tax rate for the nine months ended December 31 follows:  Schedule of Reconciliation of Provision for Income Taxes     2024     2023   Income tax expense   $ 200,034     $ 398,971   Effective income tax rate (1)     16 %     27 %     (1) The federal statutory rate was 21% for nine months ended December 31, 2024 and 2023.   Total income tax expense from continuing operations for the nine months ended December 31, 2024 and 2023 differed from amounts computed by applying the U.S. federal statutory tax rate to pre-tax income primarily due to state income taxes net of federal benefit and the impact of permanent differences between book and taxable income.

v3.25.0.1

Related Party Transactions	9 Months Ended
	Dec. 31, 2024
Related Party Transactions [Abstract]
Related Party Transactions	8. Related Party Transactions   Related party transactions for the Company primarily relate to shared office expenditures in addition to administrative and operating expenses paid on behalf of the principal stockholder. The total billed to and reimbursed by the stockholder for the three months ended December 31, 2024 and 2023 was $16,174 and $3,625, respectively. The total billed to and reimbursed by the stockholder for the nine months ended December 31, 2024 and 2023 was $21,462 and $21,619, respectively. The principal stockholder pays for his share of the lease amount for the shared office space directly to the lessor. Amounts paid by the principal stockholder directly to the lessor for the three months ending December 31, 2024 and 2023 were $2,544 and $3,893, respectively. Amounts paid by the principal stockholder directly to the lessor for the nine months ending December 31, 2024 and 2023 were $9,430 and $11,679, respectively.

v3.25.0.1

Income Per Common Share	9 Months Ended
	Dec. 31, 2024
Income per common share:
Income Per Common Share	9. Income Per Common Share   The following is a reconciliation of the number of shares used in the calculation of basic and diluted net income per share for the three and nine month periods ended December 31, 2024 and 2023:  Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share     2024     2023     2024     2023       Three Months Ended     Nine Months Ended       December 31     December 31       2024     2023     2024     2023   Net income   $ 469,133     $ 345,610     $ 1,077,370     $ 1,080,657                                     Shares outstanding:                                 Weighted avg. shares outstanding – basic     2,046,000       2,103,503       2,070,086       2,120,611   Effect of assumed exercise of dilutive stock options     45,808       48,280       44,850       49,097   Weighted avg. shares outstanding – dilutive     2,091,808       2,151,783       2,114,936       2,169,708                                     Income per common share:                                 Basic   $ 0.23     $ 0.16     $ 0.52     $ 0.51   Diluted   $ 0.22     $ 0.16     $ 0.51     $ 0.50     For the three and nine months ended December 31, 2024, 60,500 shares relating to stock options were excluded from the computation of diluted net income because their inclusion would be anti-dilutive. Anti-dilutive stock options have a weighted average exercise price of $15.34 at December 31, 2024. For the three and nine months ended December 31, 2023, 63,000 shares relating to stock options were excluded from the computation of diluted net income because their inclusion would be anti-dilutive. Anti-dilutive stock options have a weighted average exercise price of $15.32 at December 31, 2023.

v3.25.0.1

Stockholders’ Equity	9 Months Ended
	Dec. 31, 2024
Equity [Abstract]
Stockholders’ Equity	10. Stockholders’ Equity   In April 2024, the Board of Directors authorized the use of up to $1,000,000 to repurchase shares of the Company’s common stock, par value $0.50, for the treasury account. This program does not have an expiration date and may be modified, suspended or terminated at any time by the board of directors. Under the repurchase program, shares of common stock may be purchased from time to time through open market purchases or other transactions. The amount and timing of repurchases will be subject to the availability of stock, prevailing market conditions, the trading price of the stock, our financial performance and other conditions. Repurchases may also be made from time-to-time in connection with the settlement of our share-based compensation awards. Repurchases will be funded from cash flow.     During the nine months ended December 31, 2024, the Company repurchased 57,766 shares for the treasury at an aggregate cost of $703,216. During the nine months ended December 31, 2023, the Company repurchased 37,161 shares for the treasury at an aggregate cost of $455,133.   On April 30, 2024, the Board of Directors declared a regular annual dividend of $0.10 per common share. The Company paid the dividend of $209,000 on June 4, 2024 to the stockholders of record at the close of business on May 21, 2024. On April 10, 2023, the Board of Directors declared a special dividend of $0.10 per common share. The Company paid the dividend of $213,600 on May 15, 2023 to the stockholders of record at the close of business on May 1, 2023. The Company can provide no assurance that dividends will be declared in the future or as to the amount of any future dividend.   Dividends declared by the Board and stock repurchased during the period are presented in the Company’s consolidated statements of changes in stockholders’ equity as dividends paid and purchases of treasury stock, respectively. Dividends paid and stock repurchased during the period are presented as cash used in financing activities in the Company’s consolidated statements of cash flows. Stock repurchases are included as treasury stock in the consolidated balance sheets.

v3.25.0.1

Acquisitions	9 Months Ended
	Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
Acquisitions	11. Acquisitions   During the nine months ended December 31, 2024, the Company incurred approximately $2,000,000 in acquisition costs to acquire various royalty interests in approximately 700 wells located in Adams, Broomfield and Weld Counties, Colorado; DeSoto Parish, Louisiana; Eddy County, New Mexico; Karnes, Live Oak, Reagan, Reeves and Upton Counties, Texas; Laramie County, Wyoming; and multiple counties in Nebraska, North and South Dakota and Montana.   During the nine months ended December 31, 2023, the Company incurred approximately $490,000 in acquisition costs to acquire various royalty interests in approximately 60 producing wells in Crane, Ector, Howard, Midland, Reeves and Upton Counties, Texas.

v3.25.0.1

Subsequent Events	9 Months Ended
	Dec. 31, 2024
Subsequent Events [Abstract]
Subsequent Events	12. Subsequent Events   In January 2025, the Company expended approximately $70,000 for the drilling of six horizontal wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico.   The Company completed a review and analysis of all events that occurred after the consolidated balance sheet date to determine if any such events must be reported and has determined that there are no other subsequent events to be disclosed.

v3.25.0.1

Basis of Presentation and Significant Accounting Policies (Policies)	9 Months Ended
	Dec. 31, 2024
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation. The consolidated financial statements include the accounts of Mexco Energy Corporation and its wholly owned subsidiaries. All significant intercompany balances and transactions associated with the consolidated operations have been eliminated.
Estimates and Assumptions	Estimates and Assumptions. In preparing financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), management is required to make informed judgments, estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and affect the reported amounts of revenues and expenses during the reporting period. In addition, significant estimates are used in determining proved oil and gas reserves. Although management believes its estimates and assumptions are reasonable, actual results may differ materially from those estimates. The estimate of the Company’s oil and natural gas reserves, which is used to compute depreciation, depletion, amortization and impairment of oil and gas properties, is the most significant of the estimates and assumptions that affect these reported results.
Interim Financial Statements	Interim Financial Statements. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of December 31, 2024, and the results of its operations and cash flows for the interim periods ended December 31, 2024 and 2023. The consolidated financial statements as of December 31, 2024 and for the three and nine month periods ended December 31, 2024 and 2023 are unaudited. The consolidated balance sheet as of March 31, 2024 was derived from the audited balance sheet filed in the Company’s 2024 annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The results of operations for the periods presented are not necessarily indicative of the results to be expected for a full year. The accounting policies followed by the Company are set forth in more detail in Note 2 of the “Notes to Consolidated Financial Statements” in the Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the SEC. However, the disclosures herein are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Form 10-K.
Oil and Natural Gas Properties	Oil and Natural Gas Properties. The Company uses the full cost method of accounting for oil and natural gas properties. Under this method, all costs (direct and indirect) associated with acquisition, exploration, and development of oil and natural gas properties are capitalized. Costs capitalized include acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling and equipping productive and non-productive wells. Drilling costs include directly related overhead costs. All of the Company’s capitalized costs are subject to amortization.   In addition, capitalized costs less accumulated depletion and related deferred income taxes are not allowed to exceed an amount (the full cost ceiling) equal to the sum of: 1)the present value of estimated future net revenues discounted at ten percent computed in compliance with SEC guidelines; 2)plus the cost of properties not being amortized; 3)plus the lower of cost or estimated fair value of unproven properties included in the costs being amortized; 4)less income tax effects related to differences between the book and tax basis of the properties.   No impairments on oil and natural gas properties as a result of the ceiling test were recorded for the three and nine months ended December 31, 2024 and 2023.
Investments	Investments. The Company accounts for investments of less than 3% of any limited liability companies at cost. The Company has no control of the limited liability companies. The cost of the investment is recorded as an asset on the consolidated balance sheets and when income from the investment is received, it is immediately recognized on the consolidated statements of operations.
Segments	Segments. Based on the Company’s organizational structure, the Company has one operating segment, which is crude oil and natural gas development, exploration and production. In addition, the Company has a single, company-wide management team that allocates capital resources to maximize profitability and measures financial performance as a single enterprise.

v3.25.0.1

Asset Retirement Obligations (Tables)	9 Months Ended
	Dec. 31, 2024
Asset Retirement Obligation Disclosure [Abstract]
Schedule of Rollforward of Asset Retirement Obligations	The following table provides a rollforward of the AROs for the first nine months of fiscal 2025:  Schedule of Rollforward of Asset Retirement Obligations           Carrying amount of asset retirement obligations as of April 1, 2024   $ 718,808   Liabilities incurred     3,631   Liabilities settled     (33,607 ) Accretion expense     23,229   Carrying amount of asset retirement obligations as of December 31, 2024     712,061   Less: Current portion     30,000   Non-Current asset retirement obligation   $ 682,061

v3.25.0.1

Stock-based Compensation (Tables)	9 Months Ended
	Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]
Schedule of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binominal Models	Included in the following table is a summary of the grant-date fair value of stock options granted and the related assumptions used in the Binomial models for stock options granted during the nine months ended December 31, 2024 and 2023. All such amounts represent the weighted average amounts.  Schedule of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binominal Models     Nine Months Ended       December 31       2024     2023   Grant-date fair value     -     $ 8.73   Volatility factor     -       56.5 % Dividend yield     -       -   Risk-free interest rate     -       3.44 % Expected term (in years)     -       6.25
Summary of Activity of Stock Options	The following table is a summary of activity of stock options for the nine months ended December 31, 2024:  Summary of Activity of Stock Options     Number of Shares     Weighted Average Exercise Price     Weighted Average Remaining Contract Life in Years     Intrinsic Value   Outstanding at April 1, 2024     165,750     $ 9.36       6.62     $ 103,275   Granted     -       -                   Exercised     (12,367 )     6.28                   Forfeited or Expired     (2,500 )     -                   Outstanding at December 31, 2024     150,883     $ 9.52       6.23     $ 265,761                                     Vested at December 31, 2024     105,508     $ 7.69       5.55     $ 378,561   Exercisable at December 31, 2024     105,508     $ 7.69       5.55     $ 378,561

v3.25.0.1

Leases (Tables)	9 Months Ended
	Dec. 31, 2024
Leases
Schedule of Operating Lease Assets and Liabilities	The balance sheets classification of lease assets and liabilities was as follows:  Schedule of Operating Lease Assets and Liabilities     December 31, 2024   Assets         Operating lease right-of-use asset, beginning balance   $ 19,263   Current period amortization     (38,759 ) Lease extension     158,073   Total operating lease right-of-use asset   $ 138,577             Liabilities         Operating lease liability, current   $ 49,872   Operating lease liability, long term     88,705   Total lease liabilities   $ 138,577
Schedule of Future Minimum Lease Payments	Future minimum lease payments as of December 31, 2024 under non-cancellable operating leases are as follows:  Schedule of Future Minimum Lease Payments     Lease Obligation   Fiscal Year Ended March 31, 2025   $ 15,080   Fiscal Year Ended March 31, 2026     60,320   Fiscal Year Ended March 31, 2027     60,320   Fiscal Year Ended March 31, 2028     20,107   Total lease payments   $ 155,827   Less: imputed interest     (17,250 ) Operating lease liability     138,577   Less: operating lease liability, current     (49,872 ) Operating lease liability, long term   $ 88,705

v3.25.0.1

Income Taxes (Tables)	9 Months Ended
	Dec. 31, 2024
Income Tax Disclosure [Abstract]
Schedule of Income Tax Provision	The income tax provision consists of the following for the nine months ended December 31, 2024 and 2023:  Schedule of Income Tax Provision     2024     2023       Nine Months Ended       December 31       2024     2023   Current income tax expense:                 Federal   $ 322,708     $ -   State     33,012       79,123   Total current income tax expense     355,720       79,123   Deferred income tax (benefit) expense:                 Federal     (94,746 )     319,848   State     (60,940 )     -   Total deferred income tax (benefit) expense     (155,686 )     319,848   Total income tax expense:   $ 200,034     $ 398,971
Schedule of Reconciliation of Provision for Income Taxes	The following table summarizes our income tax expense and effective income tax rate for the nine months ended December 31 follows:  Schedule of Reconciliation of Provision for Income Taxes     2024     2023   Income tax expense   $ 200,034     $ 398,971   Effective income tax rate (1)     16 %     27 %     (1) The federal statutory rate was 21% for nine months ended December 31, 2024 and 2023.

v3.25.0.1

Income Per Common Share (Tables)	9 Months Ended
	Dec. 31, 2024
Income per common share:
Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share	The following is a reconciliation of the number of shares used in the calculation of basic and diluted net income per share for the three and nine month periods ended December 31, 2024 and 2023:  Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share     2024     2023     2024     2023       Three Months Ended     Nine Months Ended       December 31     December 31       2024     2023     2024     2023   Net income   $ 469,133     $ 345,610     $ 1,077,370     $ 1,080,657                                     Shares outstanding:                                 Weighted avg. shares outstanding – basic     2,046,000       2,103,503       2,070,086       2,120,611   Effect of assumed exercise of dilutive stock options     45,808       48,280       44,850       49,097   Weighted avg. shares outstanding – dilutive     2,091,808       2,151,783       2,114,936       2,169,708                                     Income per common share:                                 Basic   $ 0.23     $ 0.16     $ 0.52     $ 0.51   Diluted   $ 0.22     $ 0.16     $ 0.51     $ 0.50

v3.25.0.1

Basis of Presentation and Significant Accounting Policies (Details Narrative)	9 Months Ended
	Dec. 31, 2024
Accounting Policies [Abstract]
Cost method investments, percentage description	The Company accounts for investments of less than 3% of any limited liability companies at cost

v3.25.0.1

Schedule of Rollforward of Asset Retirement Obligations (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023	Mar. 31, 2024
Asset Retirement Obligation Disclosure [Abstract]
Carrying amount of asset retirement obligations as of April 1, 2024			$ 718,808
Liabilities incurred			3,631
Liabilities settled			(33,607)
Accretion expense	$ 7,705	$ 7,225	23,229	$ 22,121
Carrying amount of asset retirement obligations as of December 31, 2024	712,061		712,061
Less: Current portion	30,000		30,000
Non-Current asset retirement obligation	$ 682,061		$ 682,061		$ 688,808

v3.25.0.1

Schedule of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binominal Models (Details) - $ / shares	9 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]
Grant-date fair value		$ 8.73
Volatility factor		56.50%
Dividend yield
Risk-free interest rate		3.44%
Expected term (in years)		6 years 3 months

v3.25.0.1

Summary of Activity of Stock Options (Details) - USD ($)	9 Months Ended		12 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Mar. 31, 2024
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of Shares, Granted	0
Number of Shares, Exercised	(12,367)	(500)
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of Shares, Outstanding, Balance	165,750
Weighted Average Exercise Price per Share, Balance	$ 9.36
Weighted Average Remaining Contract Life in Years	6 years 2 months 23 days		6 years 7 months 13 days
Outstanding, Intrinsic Value, Balance	$ 103,275
Number of Shares, Granted
Weighted Average Exercise Price Per Share, Granted
Number of Shares, Exercised	(12,367)
Weighted Average Exercise Price Per Share, Exercised	$ 6.28
Number of Shares, Forfeited or Expired	(2,500)
Weighted Average Exercise Price Per Share, Forfeited or Expired
Number of Shares, Outstanding, Balance	150,883		165,750
Weighted Average Exercise Price per Share, Balance	$ 9.52		$ 9.36
Outstanding, Intrinsic Value, Balance	$ 265,761		$ 103,275
Number of Shares, Vested	105,508
Weighted Average Exercise Price Per Share, Vested	$ 7.69
Weighted Aggregate Average Remaining Contract Life in Years, Vested	5 years 6 months 18 days
Intrinsic Value, Vested	$ 378,561
Number of Shares, Exercisable	105,508
Weighted Average Exercise Price Per Share, Exercisable	$ 7.69
Weighted Aggregate Average Remaining Contract Life in Years, Exercisable	5 years 6 months 18 days
Intrinsic Value, Exercisable	$ 378,561

v3.25.0.1

Stock-based Compensation (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock based compensation expense			$ 155,699	$ 172,670
Total cost related to non-vested awards	$ 330,113		$ 330,113
Non-vested awards, weighted average period of recognition			1 year 9 months 10 days
Number of stock options granted shares			0
Stock options shares exercised			12,367	500
Stock options intrinsic value exercised			$ 92,316	$ 2,416
Proceeds from options exercised			$ 77,641	$ 2,962
Stock options shares forfeited			1,875	0
Number of stock options shares vested			625
Stock option exercise price, minimum			$ 3.34
Stock option exercise price, maximum			$ 18.05
Board of Directors [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Number of stock options granted shares				32,000
Exercisable price per share				$ 12.68
Fair value of stock option exercisable				$ 279,360
Weighted average remaining contractual term exercise period				10 years
Award vesting period				4 years
General and Administrative Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock based compensation expense	$ 51,630	$ 58,847

v3.25.0.1

Long Term Debt (Details Narrative) - Loan Agreement [Member] - West Texas National Bank [Member] - USD ($)				9 Months Ended
	Mar. 28, 2023	Feb. 28, 2020	Dec. 28, 2018	Dec. 31, 2024
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Credit facility		$ 2,500,000	$ 1,000,000
Expiration date	Mar. 28, 2026	Mar. 28, 2023	Dec. 28, 2021
Line of credit, increase in borrowing base amount		$ 1,500,000
Debt instrument rate		0.50%
Commitment fee description		the Company will pay an unused commitment fee in an amount equal to one-half of one percent (0.5%) times the daily average of the unadvanced amount of the commitment.
Line of credit available for borrowing				$ 1,500,000
Loan origination fee	$ 9,000
Legal and recording expenses	$ 12,950
Debt instrument covenant description				The Agreement contains customary covenants for credit facilities of this type including limitations on change in control, disposition of assets, mergers and reorganizations. The Company is also obligated to meet certain financial covenants under the Agreement and requires senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratios (Senior Debt/EBITDA) less than or equal to 4.00 to 1.00 measured with respect to the four trailing quarters and minimum interest coverage ratios (EBITDA/Interest Expense) of 2.00 to 1.00 for each quarter.
Line of credit balance outstanding				$ 0

v3.25.0.1

Schedule of Operating Lease Assets and Liabilities (Details) - USD ($)	9 Months Ended
	Dec. 31, 2024	Mar. 31, 2024
Leases
Operating lease right-of-use asset, beginning balance	$ 19,263
Current period amortization	(38,759)
Lease extension	158,073
Operating lease right-of-use asset, ending balance	138,577
Operating lease liability, current	49,872	$ 19,263
Operating lease liability, long term	88,705
Total lease liabilities	$ 138,577

v3.25.0.1

Schedule of Future Minimum Lease Payments (Details) - USD ($)	Dec. 31, 2024	Mar. 31, 2024
Leases
Fiscal Year Ended March 31, 2025	$ 15,080
Fiscal Year Ended March 31, 2026	60,320
Fiscal Year Ended March 31, 2027	60,320
Fiscal Year Ended March 31, 2028	20,107
Total lease payments	155,827
Less: imputed interest	(17,250)
Operating lease liability	138,577
Less: operating lease liability, current	(49,872)	$ (19,263)
Operating lease liability, long term	$ 88,705

v3.25.0.1

Leases (Details Narrative)	1 Months Ended	9 Months Ended
	Jun. 30, 2024	Dec. 31, 2024 USD ($) ft²	Dec. 31, 2023 USD ($)
Area of lease | ft²		4,160
Lease term extension, description	the Company agreed to re-extend its lease at a flat (unescalated) rate for another 36 months. The amended lease now expires on July 31, 2027.
Lease expiration date	Jul. 31, 2027
Incremental borrowing rate		9.00%
Net cash paid for operating lease | $		$ 35,116	$ 32,001
Sublease income | $		$ 9,430
Shareholder [Member]
Area of lease | ft²		702

v3.25.0.1

Schedule of Income Tax Provision (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Current income tax expense:
Federal			$ 322,708
State			33,012	79,123
Total current income tax expense	$ 257,042	$ 32,959	355,720	79,123
Deferred income tax (benefit) expense:
Federal			(94,746)	319,848
State			(60,940)
Total deferred income tax (benefit) expense	(275,347)	169,986	(155,686)	319,848
Total income tax (benefit) expense	$ (18,305)	$ 202,945	$ 200,034	$ 398,971

v3.25.0.1

Schedule of Reconciliation of Provision for Income Taxes (Details) - USD ($)		3 Months Ended		9 Months Ended
		Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Income Tax Disclosure [Abstract]
Income tax expense		$ (18,305)	$ 202,945	$ 200,034	$ 398,971
Effective income tax rate	[1]			16.00%	27.00%
[1] The federal statutory rate was 21% for nine months ended December 31, 2024 and 2023.

v3.25.0.1

Income Taxes - Schedule of Reconciliation of Provision for Income Taxes (Details) (Parenthetical)	9 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Income Tax Disclosure [Abstract]
Federal income tax rate	21.00%	21.00%

v3.25.0.1

Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Related Party [Member]
Related Party Transaction [Line Items]
Reimbursement expenses	$ 16,174	$ 3,625	$ 21,462	$ 21,619
Principal Owner [Member]
Related Party Transaction [Line Items]
Payments to lessor	$ 2,544	$ 3,893	$ 9,430	$ 11,679

v3.25.0.1

Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share (Details) - USD ($)	3 Months Ended						9 Months Ended
	Dec. 31, 2024	Sep. 30, 2024	Jun. 30, 2024	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2024	Dec. 31, 2023
Income per common share:
Net income	$ 469,133	$ 317,198	$ 291,039	$ 345,610	$ 269,433	$ 465,614	$ 1,077,370	$ 1,080,657
Weighted avg. shares outstanding – basic	2,046,000			2,103,503			2,070,086	2,120,611
Effect of assumed exercise of dilutive stock options	45,808			48,280			44,850	49,097
Weighted avg. shares outstanding – dilutive	2,091,808			2,151,783			2,114,936	2,169,708
Basic	$ 0.23			$ 0.16			$ 0.52	$ 0.51
Diluted	$ 0.22			$ 0.16			$ 0.51	$ 0.50

v3.25.0.1

Income Per Common Share (Details Narrative) - $ / shares	3 Months Ended		9 Months Ended
	Dec. 31, 2024	Dec. 31, 2023	Dec. 31, 2024	Dec. 31, 2023
Income per common share:
Antidilutive securities excluded from computation of earnings per share	60,500	63,000	60,500	63,000
Anti-dilutive stock options have a weighted average exercise price			$ 15.34	$ 15.32

v3.25.0.1

Stockholders’ Equity (Details Narrative) - USD ($)			3 Months Ended						9 Months Ended
	Jun. 04, 2024	May 15, 2023	Dec. 31, 2024	Sep. 30, 2024	Jun. 30, 2024	Dec. 31, 2023	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2024	Dec. 31, 2023	Apr. 30, 2024	Mar. 31, 2024
Common stock, par value			$ 0.50						$ 0.50		$ 0.50	$ 0.50
Stock repurchased during the period, shares									57,766	37,161
Stock repurchased during the period, value				$ 514,579	$ 188,637	$ 129,876	$ 325,256		$ 703,216	$ 455,133
Dividend declared									$ 0.10	$ 0.10
Dividend	$ 209,000	$ 213,600			$ 209,000			$ 213,600
2025 Q3 Dividends [Member]
Dividends declared date									Apr. 30, 2024
Dividend declared									$ 0.10
2024 Q3 Dividends [Member]
Dividends declared date										Apr. 10, 2023
Dividend declared										$ 0.10
Maximum [Member] | Board of Directors [Member]
Stock authorized repurchased shares for treasury											$ 1,000,000

v3.25.0.1

Acquisitions (Details Narrative) - USD ($)	9 Months Ended
	Dec. 31, 2024	Dec. 31, 2023
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
Acquisition costs	$ 2,000,000	$ 490,000

v3.25.0.1

Subsequent Events (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended
	Jan. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Subsequent Event [Line Items]
Proceeds from option exercise		$ 77,641	$ 2,962
Subsequent Event [Member] | Bone Spring Sand Formation [Member] | NEW MEXICO
Subsequent Event [Line Items]
Proceeds from option exercise	$ 70,000

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