What changed in MEXCO ENERGY CORP's 2024 10-K compared to 2023?

Across the narrative sections we track, MEXCO ENERGY CORP (MXC) added 190 paragraphs, removed 170, and edited 128 between the 2023 and 2024 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+73/−61), Item 1A. Risk Factors (+32/−29), Item 1. Business (+35/−34).

Did MEXCO ENERGY CORP add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 32 new/edited paragraphs and 29 removed paragraphs versus the 2023 10-K.

What changed in MEXCO ENERGY CORP's MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 73 new/edited paragraphs and 61 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did MEXCO ENERGY CORP's Legal Proceedings (Item 3) change in 2024?

Item 3 shows 21 added/edited paragraphs and 2 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this MXC 10-K diff come from?

The source filings are MEXCO ENERGY CORP's official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in MEXCO ENERGY CORP's 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of MEXCO ENERGY CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+190 added−170 removedSource: 10-K (2024-06-27) vs 10-K (2023-06-26)

Top changes in MEXCO ENERGY CORP's 2024 10-K

190 paragraphs added · 170 removed · 128 edited across 7 sections

Item 7. Management's Discussion & Analysis+73 / −61 · 54 edited
Item 1A. Risk Factors+32 / −29 · 17 edited
Item 1. Business+35 / −34 · 31 edited
Item 3. Legal Proceedings+21 / −2
Item 2. Properties+21 / −21 · 20 edited

Item 1. Business

Business — how the company describes what it does

31 edited+4 added−3 removed47 unchanged

2023 filing

2024 filing

Biggest changeRoyalty interests, purchase price of $117,200 covering 28 producing wells in 6 counties in the Haynesville trend area of Louisiana and 5 counties in Texas. 5 Industry Environment and Outlook The outbreak of the novel coronavirus (“COVID-19”) resulted in a severe worldwide economic downturn, significantly disrupting the demand for oil throughout the world, and created significant volatility, uncertainty and turmoil in the oil and gas industry.

Biggest changeRoyalty interests, purchase price of $117,200 covering 28 producing wells in 6 counties in the Haynesville trend area of Louisiana and 5 counties in Texas. 2023-2024 Royalty interests, purchase price of $455,000 covering 8 producing wells and additional potential locations for development in Reeves County, Texas.

The Company paid $1.46 million in cash and the remainder was paid as 26,833 shares of its common stock issued from treasury shares. 2011 Non-operating working interests, purchase price $670,000 covering 160 gross acres in the Fuhrman-Mascho Field of Andrews County, Texas containing 5 producing wells in the Grayburg and San Andres formations and additional 11 potential drill sites.

Because a ready market exists for oil and gas production, we do not believe the loss of any individual purchaser would have a material adverse effect on our financial position or results of operations. Environmental Regulation The oil and gas industry is extensively regulated at the federal, state, and local levels.

Because a ready market exists for oil and gas production, we do not believe the loss of any individual purchaser would have a material adverse effect on our financial position or results of operations. 7 Environmental Regulation The oil and gas industry is extensively regulated at the federal, state, and local levels.

From 1983 to 2023, Mexco Energy Corporation made numerous acquisitions of royalties, overriding royalties, minerals and working interests in producing oil and gas properties including the following most significant acquisitions: 1990-1994 Royalty interests, aggregate purchase price of approximately $501,000 covering multiple wells in the Gomez (Ellenberger) Field of Pecos County, Texas. 1993-2014 Tabbs Bay Oil Company and Thompson Brothers Lumber Company, respectively dissolved in 1957 and 1947.

From 1983 to 2024, Mexco Energy Corporation made numerous acquisitions of royalties, overriding royalties, minerals and working interests in producing oil and gas properties including the following most significant acquisitions: 1990-1994 Royalty interests, aggregate purchase price of approximately $501,000 covering multiple wells in the Gomez (Ellenberger) Field of Pecos County, Texas. 1993-2014 Tabbs Bay Oil Company and Thompson Brothers Lumber Company, respectively dissolved in 1957 and 1947.

This process usually intensifies the competition and makes it extremely difficult to acquire reserves without assuming significant price and production risks. We actively search for opportunities to acquire proved oil and gas properties. However, because the competition is intense, we cannot give any assurance that we will be successful in our efforts during fiscal 2024.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources Commitments”. We own partial interests in approximately 6,400 producing wells all of which are located within the United States in the states of Texas, New Mexico, Oklahoma, Louisiana, Alabama, Mississippi, Arkansas, Wyoming, Kansas, Colorado, Montana, Virginia, North Dakota, and Ohio.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources Commitments”. We own partial interests in approximately 6,800 producing wells all of which are located within the United States in the states of Texas, New Mexico, Oklahoma, Louisiana, Alabama, Mississippi, Arkansas, Wyoming, Kansas, Colorado, Montana, Virginia, North Dakota, and Ohio.

We maintain insurance coverage customary for operations of a similar nature, but losses could arise from uninsured risks or in amounts in excess of existing insurance coverage. Executive Officers The following table sets forth certain information concerning the executive officers of the Company as of March 31, 2023. Name Age Position Nicholas C.

She has also served the Company as Assistant Treasurer of the Company since 2010 and from 2006 to 2021 was Assistant Secretary. Prior thereto, Ms. Hardin served as Assistant Controller. Employees As of March 31, 2023, we had three full-time and three part-time employees. We believe that relations with these employees are generally satisfactory.

She has also served the Company as Assistant Treasurer of the Company since 2010 and from 2006 to 2021 was Assistant Secretary. Prior thereto, Ms. Hardin served as Assistant Controller. Employees As of March 31, 2024, we had three full-time and three part-time employees. We believe that relations with these employees are generally satisfactory.

Royalty interest investment, $2,000,000 for an approximate 2% investment commitment in a limited liability company, capitalized at approximately $100 million to purchase royalty interests consisting of minerals located in the Marcellus and Utica areas of Ohio. As of the date of this report, $400,000 of the commitment has been expended.

Nicholas C. Taylor beneficially owns approximately 44% of the outstanding shares of our common stock. Mr. Taylor is also our Chairman of the Board and Chief Executive Officer. As a result, Mr. Taylor has significant influence in matters voted on by our shareholders, including the election of our Board members. Mr.

Nicholas C. Taylor beneficially owns approximately 45% of the outstanding shares of our common stock. Mr. Taylor is also our Chairman of the Board and Chief Executive Officer. As a result, Mr. Taylor has significant influence in matters voted on by our shareholders, including the election of our Board members. Mr.

We did not incur any material capital expenditures for remediation or pollution control activities for the year ended March 31, 2023. Additionally, as of the date of this report, we are not aware of any environmental issues or claims that will require material capital expenditures during fiscal 2024.

We did not incur any material capital expenditures for remediation or pollution control activities for the year ended March 31, 2024. Additionally, as of the date of this report, we are not aware of any environmental issues or claims that will require material capital expenditures during fiscal 2025.

See Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for discussion of our fiscal 2023 operating results and potential impact on fiscal 2024 operating results due to commodity price changes.

See Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for discussion of our fiscal 2024 operating results and potential impact on fiscal 2025 operating results due to commodity price changes.

Of these discounted future net cash flows from proved reserves, approximately 8% are attributable to proven undeveloped reserves which would be developed through new drilling.

Of these discounted future net cash flows from proved reserves, approximately 5% are attributable to proven undeveloped reserves which would be developed through new drilling.

The Permian Basin in total accounts for 80% of our discounted future net cash flows from proved reserves and 79% of our gross revenues. The Permian Basin is one of the oldest and most prolific producing basins in North America which has been a significant source of oil production since the 1920s.

The Permian Basin in total accounts for 85% of our discounted future net cash flows from proved reserves and 87% of our gross revenues. The Permian Basin is one of the oldest and most prolific producing basins in North America which has been a significant source of oil production since the 1920s.

Major Customers We made sales that amounted to 10% or more of oil and gas revenues as follows for the years ended March 31: 2023 2022 Company A 53 % 68 % Historically, the Company has not experienced significant credit losses on our oil and gas accounts and management is of the opinion that significant credit risk does not exist.

Major Customers We made sales that amounted to 10% or more of operating revenues as follows for the years ended March 31: 2024 2023 Company A 59 % 53 % Historically, the Company has not experienced significant credit losses on our oil and gas accounts and management is of the opinion that significant credit risk does not exist.

Overriding royalty interests, purchase price $1,650,000 covering 5,120 gross acres over 8 sections in the Haynesville trend area of DeSoto Parish, Louisiana containing 6 horizontal producing wells, 2 wells drilling wells, and 57 additional potential drill sites.

This LLC has returned $226,725 and 76% of the total investment since inception in fiscal 2020. 2022-2023 Overriding royalty interests, purchase price of $567,000 covering 53 producing wells and several additional potential locations for development in Atascosa and Karnes Counties, Texas.

This LLC has returned $276,098 and 92% of the total investment since inception in fiscal 2020. 2022-2023 Overriding royalty interests, purchase price of $567,000 covering 53 producing wells and several additional potential locations for development in Atascosa and Karnes Counties, Texas.

Royalty interests, purchase price $500,000 covering 4 producing gas units in Freestone County, Texas containing 33 producing wells and 17 potential undeveloped locations in the Cotton Valley formation. 2005 Royalty interests, purchase price $550,000 covering 75 producing wells, 9 permitted and/or drilling wells, and 83 potential undeveloped locations in the Cotton Valley formation of Freestone and Limestone Counties, Texas. 2007 Non-operated working interests, purchase price $425,000 covering 2 properties in Lea County, New Mexico.

Royalty interests, purchase price $500,000 covering 4 producing gas units in Freestone County, Texas containing 33 producing wells and additional potential undeveloped locations in the Cotton Valley formation. 2005 Royalty interests, purchase price $550,000 covering 75 producing wells and additional potential undeveloped locations in the Cotton Valley formation of Freestone and Limestone Counties, Texas. 2007 Non-operated working interests, purchase price $425,000 covering 2 properties in Lea County, New Mexico.

Royalty (mineral) acreage, purchase price $1,850,000 covering 122 mineral acres in the Newark East (Barnett Shale) Field of Tarrant County, Texas amounting to approximately 21.45% royalty interest. 2008 Royalty (mineral) acreage, purchase price $429,000 covering 522 mineral acres in the Newark East (Barnett Shale) Field of Tarrant County, Texas containing 6 producing natural gas wells, 5 proven undeveloped well locations, and 6 potential drill sites on this acreage.

Royalty (mineral) acreage, purchase price $1,850,000 covering 122 mineral acres in the Newark East (Barnett Shale) Field of Tarrant County, Texas amounting to approximately 21.45% royalty interest. 2008 Royalty (mineral) acreage, purchase price $429,000 covering 522 mineral acres in the Newark East (Barnett Shale) Field of Tarrant County, Texas containing 6 producing natural gas wells and additional potential undeveloped well locations.

For fiscal 2023, these properties accounted for 62% of our net revenues. Of these discounted future net cash flows from proved reserves, approximately 15% are attributable to proven undeveloped reserves which would be developed through new drilling.

For fiscal 2024, these properties accounted for 62% of our gross revenues. Of these discounted future net cash flows from proved reserves, approximately 29% are attributable to proven undeveloped reserves which would be developed through new drilling.

Additional information concerning these properties and our oil and gas reserves is provided below. 6 The following table indicates our oil and gas production in each of the last five years: Year Oil(Bbls) Gas (Mcf) 2023 73,968 534,363 2022 61,689 393,841 2021 50,327 324,205 2020 44,301 294,007 2019 35,359 295,133 Competition and Markets The oil and gas industry is a highly competitive business.

Additional information concerning these properties and our oil and gas reserves is provided below. 6 The following table indicates our oil and gas production in each of the last five years: Year Oil(Bbls) Gas (Mcf) 2024 69,999 502,879 2023 73,968 534,363 2022 61,689 393,841 2021 50,327 324,205 2020 44,301 294,007 Competition and Markets The oil and gas industry is a highly competitive business.

Taylor 85 Chairman and Chief Executive Officer Tamala L. McComic 54 President, Chief Financial Officer, Treasurer, and Assistant Secretary Donna Gail Yanko 78 Vice President Stacy D. Hardin 58 Secretary and Assistant Treasurer Set forth below is a description of the principal occupations during at least the past five years of each executive officer of the Company. Nicholas C.

Taylor 86 Chairman and Chief Executive Officer Tamala L. McComic 55 President, Chief Financial Officer, Treasurer, and Assistant Secretary Donna Gail Yanko 79 Vice President Stacy D. Hardin 59 Secretary and Assistant Treasurer Set forth below is a description of the principal occupations during at least the past five years of each executive officer of the Company. Nicholas C.

Our total estimated proved reserves at March 31, 2023 were approximately 1.552 million barrels of oil equivalent (“MMBOE”) of which 47% was oil and natural gas liquids and 53% was natural gas, and our estimated present value of proved reserves was approximately $39 million based on estimated future net revenues excluding taxes discounted at 10% per annum, pricing and other assumptions set forth in “Item 2 – Properties” below.

Our total estimated proved reserves at March 31, 2024 were approximately 1.547 million barrels of oil equivalent (“MMBOE”) of which 51% was oil and natural gas liquids and 49% was natural gas, and our estimated present value of proved reserves was approximately $29 million based on estimated future net revenues excluding taxes discounted at 10% per annum, pricing and other assumptions set forth in “Item 2 – Properties” below.

Royalty interests, purchase price $580,000 covering 580 wells in 87 counties of 8 states. Approximately 90% of the net revenue from these royalties is produced by 157 wells located in the Barnett Shale of the Fort Worth Basin of Texas. Also included are interests in 423 wells in 8 states.

Royalty interests, purchase price $580,000 covering 580 wells in 87 counties of 8 states. Approximately 90% of the net revenue from these royalties is produced by 157 wells located in the Barnett Shale of the Fort Worth Basin of Texas. Royalty and mineral interests, purchase price $1,000,000 covering approximately 1,800 wells in 27 counties of Texas.

The Permian Basin is known to have a number of zones of oil and natural gas bearing rock throughout. The Delaware Basin properties, encompassing 30,007 gross acres, 195 net acres, 610 gross producing wells and 4 net wells account for approximately 58% of our discounted future net cash flows from proved reserves as of March 31, 2023.

The Permian Basin is known to have a number of zones of oil and natural gas bearing rock throughout. The Delaware Basin properties, encompassing 39,112 gross acres, 213 net acres, 742 gross producing wells or 4 net wells account for approximately 70% of our discounted future net cash flows from proved reserves as of March 31, 2024.

Occupational Safety and Health Administration (“OSHA”), have legal and regulatory authority and oversight over the operations on the properties in which the Company owns an interest. 7 Under certain environmental laws and regulations, the operators of the Company properties could be subject to strict, joint and several liability for the removal or remediation of property contamination, whether at a drill site or a waste disposal facility, even when the operators did not cause the contamination or their activities were in compliance with all applicable laws at the time the actions were taken.

Under certain environmental laws and regulations, the operators of the Company properties could be subject to strict, joint and several liability for the removal or remediation of property contamination, whether at a drill site or a waste disposal facility, even when the operators did not cause the contamination or their activities were in compliance with all applicable laws at the time the actions were taken.

Oil and Gas Operations As of March 31, 2023, oil constituted approximately 70% of our oil and gas revenues and approximately 47% of our total proved reserves volumes for fiscal 2023. Revenues from oil and gas royalty interests accounted for approximately 28% of our oil and gas revenues for fiscal 2023.

Oil and Gas Operations As of March 31, 2024, oil constituted approximately 83% of our oil and natural gas sales and approximately 51% of our total proved reserves volumes for fiscal 2024. Revenues from oil and gas royalty interests accounted for approximately 28% of our total operating revenues for fiscal 2024.

Royalty and mineral interests, purchase price $1,000,000 covering approximately 1,800 wells in 27 counties of Texas. Of these oil and gas reserves, approximately 80% is natural gas and 20% oil. Non-Operated working interests, purchase price $840,000 in 70 Natural gas producing wells located in 5 counties of Oklahoma.

Of these oil and gas reserves, approximately 60% is natural gas and 40% oil. Non-Operated working interests, purchase price $840,000 in 70 Natural gas producing wells located in 5 counties of Oklahoma. Non-Operated working interests, purchase price $200,000 covering 80 wells located in Hockley and Pecos Counties, Texas.

The Midland Basin properties, encompassing 97,584 gross acres, 256 net acres, 1,016 gross producing wells and 2 net wells account for approximately 18% of our discounted future net cash flows from proved reserves as of March 31, 2023. For fiscal 2023, these properties accounted for 14% of our net revenues.

The Midland Basin properties, encompassing 115,030 gross acres, 249 net acres, 1,731 gross producing wells or 5 net wells account for approximately 13% of our discounted future net cash flows from proved reserves as of March 31, 2024. For fiscal 2024, these properties accounted for 23% of our gross revenues.

This acreage contains 13 permitted or drilling wells and approximately 100 potential undrilled locations.

This acreage also contains additional potential undrilled locations.

Environmental Protection Agency (the “EPA”), the Department of Transportation (“DOT”) and the U.S.

Environmental Protection Agency (the “EPA”), the Department of Transportation (“DOT”) and the U.S. Occupational Safety and Health Administration (“OSHA”), have legal and regulatory authority and oversight over the operations on the properties in which the Company owns an interest.

Removed

Non-Operated working interests, purchase price $200,000 covering 80 wells located in Hockley and Pecos Counties, Texas.

Added

Royalty interests, purchase price of $367,500 covering 84 producing wells and additional potential locations for development in 6 counties in Texas. Royalty interest, purchase price of $575,600 covering 9 producing wells with additional potential locations for development and 4 producing wellbores in Weld County, Colorado.

Removed

The decrease in demand for oil, combined with excess supply of oil and related products, resulted in oil prices declining significantly in late February 2020. Since mid-2020, oil prices have improved, with demand steadily increasing despite the uncertainties surrounding the COVID-19 variants, which have continued to inhibit a full global demand recovery.

Added

Royalty interests, purchase price of $390,300 covering 255 producing wells in the Haynesville trend area of Caddo Parish, Louisiana. 5 Industry Environment and Outlook The commodity price environment was challenging in fiscal 2024.

Removed

In addition, worldwide oil inventories, from a historical perspective, remain low and concerns exist with the ability of Organization of Petroleum Exporting Countries (“OPEC”) and other oil producing nations to meet forecasted future oil demand growth in 2023 and 2024, with many OPEC countries not able to produce at their OPEC agreed upon quota levels due to their limited capital investments, and increases in cost over the last few years directed towards developing incremental oil supplies.

Added

The war in Ukraine and the Israel-Hamas war, rising interest rates, global supply chain disruptions, concerns about a potential economic downturn or recession and measures to combat persistent inflation and instability in the financial sector have contributed to recent economic and pricing volatility and may continue to impact pricing throughout fiscal 2025.

Added

In light of these challenges facing our industry and in response to the continued challenging environment, our primary business strategies for fiscal 2025 will continue to include: (1) optimizing cash flows through operating efficiencies and cost reductions, (2) divesting of non-core assets, and (3) working to balance capital spending with cash flows to minimize borrowings and maintain ample liquidity.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

17 edited+15 added−12 removed51 unchanged

2023 filing

2024 filing

Biggest changeIf these conditions worsen, combined with a decline in economic growth in other parts of the world, there could be a significant adverse effect on global financial markets and commodity prices. In addition, continued hostilities in the Middle East and the occurrence or threat of terrorist attacks in the United States or other countries could adversely affect the global economy.

Biggest changeThe United States and certain countries in Europe and Asia are facing economic struggles or slowing economic growth. If these conditions worsen, combined with a decline in economic growth in other parts of the world, there could be a significant adverse effect on global financial markets and commodity prices.

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 exploration and development activities. 10 Oil and natural gas prices do not necessarily fluctuate in direct relationship to each other.

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 exploration and development activities. Oil and natural gas prices do not necessarily fluctuate in direct relationship to each other.

In addition, we incur the risk that no commercially productive reservoirs will be encountered, and there is no assurance that we will recover all or any portion of our investment in wells drilled or re-entered. We may not be able to fund the capital expenditures that will be required for us to increase reserves and production.

In addition, we incur the risk that no commercially productive reservoirs will be encountered, and there is no assurance that we will recover all or any portion of our investment in wells drilled or re-entered. 12 We may not be able to fund the capital expenditures that will be required for us to increase reserves and production.

Taylor, or any change in the power to vote shares beneficially owned by Mr. Taylor, could result in negative market or industry perception and could have an adverse effect on our business. RISKS RELATED TO OUR COMMON STOCK We may issue additional shares of common stock in the future, which could cause dilution to all shareholders.

Taylor, or any change in the power to vote shares beneficially owned by Mr. Taylor, could result in negative market or industry perception and could have an adverse effect on our business. 14 RISKS RELATED TO OUR COMMON STOCK We may issue additional shares of common stock in the future, which could cause dilution to all shareholders.

Many of these factors are beyond our control, and we cannot predict their potential effects on the price of our common stock. We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future. In addition, the stock markets in general can experience considerable price and volume fluctuations. ITEM 1B.

McComic, who have extensive experience and expertise in evaluating and analyzing producing oil and gas properties and drilling prospects, maximizing production from oil and gas properties and developing and executing acquisitions and financing. As of March 31, 2023, we do not have key-man insurance on the lives of Mr. Taylor and Ms. McComic.

McComic, who have extensive experience and expertise in evaluating and analyzing producing oil and gas properties and drilling prospects, maximizing production from oil and gas properties and developing and executing acquisitions and financing. As of March 31, 2024, we do not have key-man insurance on the lives of Mr. Taylor and Ms. McComic.

There were no ceiling test impairments on our oil and gas properties during fiscal 2023 and 2022. 11 We must replace reserves we produce. Our future success depends upon our ability to find, develop or acquire additional, economically recoverable oil and gas reserves.

There were no ceiling test impairments on our oil and gas properties during fiscal 2024 and 2023. 11 We must replace reserves we produce. Our future success depends upon our ability to find, develop or acquire additional, economically recoverable oil and gas reserves.

The unexpected loss of the services of one or more of these individuals could, therefore, significantly and adversely affect our operations. 14 We may be affected by one substantial shareholder. Nicholas C. Taylor beneficially owns approximately 44% of the outstanding shares of our common stock. Mr. Taylor is also our Chairman of the Board and Chief Executive Officer.

The unexpected loss of the services of one or more of these individuals could, therefore, significantly and adversely affect our operations. We may be affected by one substantial shareholder. Nicholas C. Taylor beneficially owns approximately 45% of the outstanding shares of our common stock. Mr. Taylor is also our Chairman of the Board and Chief Executive Officer.

If the economic climate in the United States or abroad were to deteriorate, due to inflation, rising interest rates or otherwise, demand for petroleum products could diminish or stagnate, which could depress the prices at which the Company could sell its oil, NGLs and gas, affect the ability of the Company’s vendors, suppliers and customers to continue operations and ultimately decrease the Company’s cash flows and profitability.

Deteriorating economic climate in the United States or abroad due to inflation, rising interest rates or otherwise, demand for petroleum products could diminish or stagnate, which could depress the prices at which the Company could sell its oil, NGLs and gas, affect the ability of the Company’s vendors, suppliers and customers to continue operations and ultimately decrease the Company’s cash flows and profitability.

Approximately 26% and 37% of our total estimated net proved reserves at March 31, 2023 and 2022, respectively, were undeveloped, and those reserves may not ultimately be developed. Recovery of undeveloped reserves requires significant capital expenditures and successful drilling. Our reserve data assumes that we can and will make these expenditures and conduct these operations successfully.

Approximately 33% and 26% of our total estimated net proved reserves at March 31, 2024 and 2023, respectively, were undeveloped, and those reserves may not ultimately be developed. Recovery of undeveloped reserves requires significant capital expenditures and successful drilling. Our reserve data assumes that we can and will make these expenditures and conduct these operations successfully.

Control by our executive officers and directors may limit your ability to influence the outcome of matters requiring stockholder approval and could discourage our potential acquisition by third parties. As of March 31, 2023, our executive officers and directors beneficially owned approximately 47% of our common stock.

Control by our executive officers and directors may limit your ability to influence the outcome of matters requiring stockholder approval and could discourage our potential acquisition by third parties. As of March 31, 2024, our executive officers and directors beneficially owned approximately 48% of our common stock.

Lower prices or lack of storage may have an adverse affect on our financial condition due to reduction of our revenues, operating income and cash flows; curtailment or shut-in of our production due to lack of transportation or storage capacity; cause certain properties in our portfolio to become economically unviable; and, limit our financial condition, liquidity, and/or ability to finance planned capital expenditures and operations.

Our ability to acquire and develop additional properties in the future will depend upon our ability to select and acquire suitable producing properties and prospects for future development activities. We may not be insured against all of the operating hazards to which our business is exposed.

As a result, we may be placed at a competitive disadvantage. Our ability to acquire and develop additional properties in the future will depend upon our ability to select and acquire suitable producing properties and prospects for future development activities. 13 We may not be insured against all of the operating hazards to which our business is exposed.

Competition for oil and gas reserve acquisitions is significant. We may compete with major oil and gas companies, other independent oil and gas companies and individual producers and operators, some of which have financial and personnel resources substantially in excess of those available to us. As a result, we may be placed at a competitive disadvantage.

Acquiring reserves in the oil and gas industry is highly competitive. Competition for oil and gas reserve acquisitions is significant. We may compete with major oil and gas companies, other independent oil and gas companies and individual producers and operators, some of which have financial and personnel resources substantially in excess of those available to us.

We cannot predict future oil and natural gas prices with any certainty. Historically, the markets for oil and gas have been volatile, and they are likely to continue to be volatile.

RISKS RELATED TO OUR BUSINESS AND INDUSTRY Volatility of oil and gas prices significantly affects our results and profitability. Prices for oil and natural gas fluctuate widely. We cannot predict future oil and natural gas prices with any certainty. Historically, the markets for oil and gas have been volatile, and they are likely to continue to be volatile.

These factors include availability of workover and drilling rigs, well blowouts, cratering, explosions, fires, formations with abnormal pressures, pollution, releases of toxic gases and other environmental hazards and risks. Any of these operating hazards could result in substantial losses to us.

Drilling and operating activities are high risk activities that subject us to a variety of factors that we cannot control. These factors include availability of workover and drilling rigs, well blowouts, cratering, explosions, fires, formations with abnormal pressures, pollution, releases of toxic gases and other environmental hazards and risks.

Increases in the differential between the benchmark prices for oil and gas and the wellhead price we receive could significantly reduce our revenues and our cash flow from operations. 12 Drilling and operating activities are high risk activities that subject us to a variety of factors that we cannot control.

During fiscal 2024, differentials averaged $2.68 per Bbl of oil and ($0.15) per Mcf of gas. Increases in the differential between the benchmark prices for oil and gas and the wellhead price we receive could significantly reduce our revenues and our cash flow from operations.

Removed

ITEM 1A. RISK FACTORS There are many factors that affect our business and results of operations, some of which are beyond our control. The following is a description of some of the important factors that could have a material adverse effect on our business, financial position, liquidity and results of operations.

Added

ITEM 1A. RISK FACTORS The Company is subject to various risks and uncertainties in the ordinary course of business. The following summarizes significant risks and uncertainties that may adversely affect our business, financial condition or results of operations. We could also face additional risks and uncertainties not currently known to us or that we currently deem to be immaterial.

Removed

Some of the following risks relate principally to the industry in which we operate and to our business. Other risks relate principally to the securities markets and ownership of our common stock. RISKS RELATED TO OUR BUSINESS AND INDUSTRY Volatility of oil and gas prices significantly affects our results and profitability. Prices for oil and natural gas fluctuate widely.

Added

If any of these risks actually occurs, it could materially harm our business, financial condition or results of operations and the trading price of our shares could decline. Investors should carefully consider each of the following risk factors and all of the other information set forth in this Annual Report on Form 10-K.

Removed

Our results of operations may be negatively impacted by current global events. The economies in the United States and certain countries in Europe and Asia have been growing, with resulting improvements in industrial demand and consumer confidence. However, other economies, such as those of certain South American nations, continue to face economic struggles or slowing economic growth.

Added

In addition, continued hostilities in the Middle East and the occurrence or threat of terrorist attacks in the United States or other countries could adversely affect the global economy.

Removed

We incurred impairment charges during fiscal 2016 and may incur additional impairment charges in the future, particularly if commodity prices decline, which could have a material adverse effect on our results of operations for the periods in which such charges are taken.

Added

Any of these operating hazards could result in substantial losses to us.

Removed

During fiscal 2023, differentials averaged $4.57 per Bbl of oil and ($0.28) per Mcf of gas.

Added

We own non-operating interests in properties developed and operated by third parties and, as a result, we are unable to control the operation and profitability of such properties. We participate in the drilling and completion of wells with third-party operators that exercise exclusive control over such operations.

Removed

We have limited control over activities on properties we do not operate, which could reduce our production and revenues. All of our business activities are conducted through joint operating or other agreements under which we own working and royalty interests in natural gas and oil properties in which we do not operate.

Added

As a participant, we rely on third-party operators to successfully operate these properties pursuant to joint operating agreements and other similar contractual arrangements. As a participant in these operations, we may not be able to maximize the value associated with these properties in the manner we believe appropriate, or at all.

Removed

As a result, we have a limited ability to exercise influence over normal operating procedures, expenditures or future development of underlying properties and their associated costs. The failure of an operator of our wells to adequately perform operations could reduce our revenues and production. 13 Acquiring reserves in the oil and gas industry is highly competitive.

Added

For example, we cannot control the success of drilling and development activities on properties operated by third-parties, which depend on a number of factors under the control of a third-party operator, including such operator’s determinations with respect to, among other things, the nature and timing of drilling and operational activities, the timing and amount of capital expenditures and the selection of suitable technology.

Removed

Certain U.S. federal income tax deductions currently available with respect to crude oil and natural gas exploration and development may be eliminated as a result of proposed legislation. Legislation previously has been proposed that would, if enacted into law, make significant changes to U.

Added

In addition, the third-party operator’s operational expertise and financial resources and its ability to gain the approval of other participants in drilling wells will impact the timing and potential success of drilling and development activites in a manner that we are unable to control.

Removed

S. federal income tax laws, including the elimination of certain key U.S. federal income tax incentives currently available to crude oil and natural gas exploration and production companies.

Added

A third-party operator’s failure to adequately perform operations, breach of the applicable agreements or failure to act in ways that are favorable to us could reduce our production and revenues, negatively impact our liquidity and cause us to spend capital in excess of our current plans, and have a material adverse effect on our financial condition and results of operations.

Removed

These changes include, but are not limited to: (1) the repeal of the percentage depletion allowance for crude oil and natural gas properties, (2) the elimination of current deductions for intangible drilling and development costs, (3) the elimination of the deduction for certain U.S. domestic production activities, and (4) an extension of the amortization period for certain geological and geophysical expenditures.

Added

Our effective tax rate may change in the future, which could adversely impact us.

Removed

It is unclear whether any such changes will be enacted and, if enacted, how soon any such changes could become effective.

Added

The Tax Cuts and Jobs Act of 2017 (“TCJA”) significantly changed the U.S. federal income taxation of U.S. corporations, including by reducing the U.S. corporate tax rate, limiting interest deductions and certain deductions for executive compensation, permitting immediate expensing of certain capital expenditures, and revising the rules governing net operating losses.

Removed

The passage of this type of legislation or any other similar changes in U.S. federal income tax laws could eliminate or postpone certain tax deductions that are currently available with respect to crude oil and natural gas exploration and development, and any such change could have an adverse effect on the value of an investment in our Common Stock as well as our financial position, results of operations and cash flows.

Added

The TCJA remains unclear in some respects and continues to be subject to potential amendments and technical corrections. The U.S. Treasury Department and the IRS have issued significant guidance since the TCJA was enacted, interpreting the TCJA and clarifying some the uncertainties, and are continuing to issue new guidance.

Added

There are still significant aspects of the TCJA for which further guidance is expected, and both the timing and contents of any such future guidance are uncertain. Further, changes to the U.S. federal income tax laws are proposed regularly and there can be no assurance that, if enacted, any such changes would not have an adverse impact on us.

Added

For example, President Biden has suggested the reversal or modification of some portions of the TCJA and certain of these proposals, if enacted, could increase our effective tax rate. There can be no assurance that any such proposed changes will be introduced as legislation or, if introduced, later enacted and, if enacted, what form such enacted legislation would take.

Added

Such changes could potentially have retroactive effect. In light of these factors, there can be no assurance that our effective tax rate will not change in future periods. If the effective tax rates were to increase as a result of the future legislation, our business could be adversely affected.

Item 2. Properties

Properties — owned and leased real estate

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2023 filing

2024 filing

Biggest changeDrilling Activities The following table sets forth our drilling activity in wells in which we own a working interest for the years ended March 31: Year Ended March 31, 2023 2022 Gross Net Gross Net Exploratory Wells Beginning wells in progress - - - - Wells spud - - - - Successful wells - - - - Ending wells in progress - - - - Development Wells Beginning wells in progress 11 .04 12 .06 Wells spud 54 .36 44 .13 Successful wells (44 ) (.35 ) (45 ) (.15 ) Ending wells in progress 21 .05 11 .04 The information contained in the foregoing table should not be considered indicative of future drilling performance, nor should it be assumed that there is any necessary correlation between the number of productive wells drilled and the amount of oil and gas that may ultimately be recovered by us.

Biggest changeWe have not filed any other oil or gas reserve estimates or included any such estimates in reports to other federal or foreign governmental authority or agency during the year ended March 31, 2024, and no major discovery is believed to have caused a significant change in our estimates of proved reserves since that date. 18 Drilling Activities The following table sets forth our drilling activity in wells in which we own a working interest for the years ended March 31: Year Ended March 31, 2024 2023 Gross Net Gross Net Exploratory Wells Beginning wells in progress - - - - Wells spud - - - - Successful wells - - - - Ending wells in progress - - - - Development Wells Beginning wells in progress 21 .05 11 .04 Wells spud 48 .22 54 .36 Successful wells (53 ) (.09 ) (44 ) (.35 ) Ending wells in progress 16 .17 21 .05 The information contained in the foregoing table should not be considered indicative of future drilling performance, nor should it be assumed that there is any necessary correlation between the number of productive wells drilled and the amount of oil and gas that may ultimately be recovered by us.

Our Chief Financial Officer who has over 25 years experience in the oil and gas industry reviews the final reserves estimate and consults with a degreed geological consultant with extensive geological experience and if necessary, discusses the process used and findings with Alan Neal, the technical person at Hall and Associates responsible for evaluating the proved reserves covered by this report.

Our Chief Financial Officer who has over 26 years experience in the oil and gas industry reviews the final reserves estimate and consults with a degreed geological consultant with extensive geological experience and if necessary, discusses the process used and findings with Alan Neal, the technical person at Hall and Associates responsible for evaluating the proved reserves covered by this report.

The engineering report with respect to Mexco’s estimates of proved oil and gas reserves as of March 31, 2023 and 2022 is based on evaluations prepared by Russell K. Hall and Associates, Inc. Environmental Engineering Consultants, based in Midland, Texas (“Hall and Associates”), a summary of which is filed as Exhibit 99.1 to this annual report.

The engineering report with respect to Mexco’s estimates of proved oil and gas reserves as of March 31, 2024 and 2023 is based on evaluations prepared by Russell K. Hall and Associates, Inc. Environmental Engineering Consultants, based in Midland, Texas (“Hall and Associates”), a summary of which is filed as Exhibit 99.1 to this annual report.

In addition to the working interests mentioned above, other operators drilled 85 gross wells (.04 net wells) on company-owned minerals and royalties at no expense to the Company. We expect the production of our mineral interests will increase as operators continue to drill, complete and develop our acreage.

In addition to the working interests mentioned above, other operators drilled 101 gross wells (.02 net wells) on company-owned minerals and royalties at no expense to the Company. We expect the production of our mineral interests will increase as operators continue to drill, complete and develop our acreage.

Mr. Neal is a member of the Society of Petroleum Engineers and has over 35 years of experience in the oil and gas industry. Our Chairman and Chief Executive Officer who has over 45 years of experience in the oil and gas industry also reviews the final reserves estimate. Numerous uncertainties exist in estimating quantities of proved reserves.

Mr. Neal is a member of the Society of Petroleum Engineers and has over 36 years of experience in the oil and gas industry. Our Chairman and Chief Executive Officer who has over 46 years of experience in the oil and gas industry also reviews the final reserves estimate. Numerous uncertainties exist in estimating quantities of proved reserves.

The benchmark price of $87.45 per bbl of oil at March 31, 2023 versus $71.72 at March 31, 2022, was adjusted by lease for gravity, transportation fees and market differentials and did not give effect to derivative transactions.

The benchmark price of $73.96 per bbl of oil at March 31, 2024 versus $87.45 at March 31, 2023, was adjusted by lease for gravity, transportation fees and market differentials and did not give effect to derivative transactions.

The benchmark price of $5.96 per mcf of natural gas at March 31, 2023 versus $4.09 at March 31, 2022, was adjusted by lease for BTU content, transportation fees and market differentials.

The benchmark price of $2.45 per mcf of natural gas at March 31, 2024 versus $5.96 at March 31, 2023, was adjusted by lease for BTU content, transportation fees and market differentials.

(4) These prices reflect adjustment by lease for quality, transportation fees and market differentials. During fiscal 2023, we added proved reserves of 101 thousand BOE (“MBOE”) through extensions and discoveries, added 52 MBOE through acquisitions, subtracted 54 MBOE for downward revisions of previous estimates.

(4) These prices reflect adjustment by lease for quality, transportation fees and market differentials. During fiscal 2024, we added proved reserves of 272 thousand BOE (“MBOE”) through extensions and discoveries, added 44 MBOE through acquisitions, subtracted 163 MBOE for downward revisions of previous estimates.

Business – Company Profile on page 4 hereto. The first LLC has returned $226,725 and 76% of the total investment since inception in fiscal 2020.

Business – Company Profile on page 4 hereto. The first LLC has returned $276,098 and 92% of the total investment since inception in fiscal 2020.

As of March 31, 2023, we held an interest in approximately 6,400 gross (18.5 net) productive wells, including approximately 5,200 wells in which we held an overriding or royalty interest and 1,100 wells in which we held a working interest. 18 A gross acre is an acre in which an interest is owned.

As of March 31, 2024, we held an interest in approximately 6,800 gross (25.7 net) productive wells, including approximately 5,700 wells in which we held an overriding or royalty interest and 1,100 wells in which we held a working interest. A gross acre is an acre in which an interest is owned.

The following table sets forth the approximate developed acreage in which we held a leasehold mineral or other interest as of March 31, 2023: Acreage Gross Net Texas 348,600 1,586 Oklahoma 70,900 884 Louisiana 35,300 25 New Mexico 30,600 185 North Dakota 22,600 29 Ohio 14,500 1 Kansas 8,500 41 Montana 5,000 1 Wyoming 3,800 5 Arkansas 1,600 5 Colorado 1,100 1 Alabama 1,000 2 Mississippi 700 2 Virginia 100 1 Total 544,300 2,768 Net Production, Unit Prices and Costs The following table summarizes our net oil and natural gas production, the average sales price per barrel (“bbl”) of oil and per thousand cubic feet (“mcf”) of natural gas produced and the average production (lifting) cost per unit of production for the years ended March 31: Years Ended March 31, 2023 2022 Oil (a): Production (Bbls) 73,968 61,689 Revenue $ 6,522,163 $ 4,685,094 Average Bbls per day (d) 203 169 Average sales price per Bbl $ 88.18 $ 75.95 Gas (b): Production (Mcf) 534,363 393,841 Revenue $ 2,858,460 $ 1,840,170 Average Mcf per day (d) 1,464 1,079 Average sales price per Mcf $ 5.35 $ 4.67 Total BOE (c) 163,029 127,329 Production costs: Production expenses: $ 1,039,893 $ 778,308 Production expenses per BOE $ 6.38 $ 6.11 Production expenses per sales dollar $ 0.11 $ 0.12 Production and ad valorem taxes: $ 679,826 $ 502,804 Production and ad valorem taxes per BOE $ 4.17 $ 3.95 Production and ad valorem taxes per sales dollar $ 0.07 $ 0.08 Total oil and gas revenue $ 9,380,623 $ 6,525,264 (a) Includes condensate.

The following table sets forth the approximate developed acreage in which we held a leasehold mineral or other interest as of March 31, 2024: Acreage Gross Net Texas 373,500 1,531 Oklahoma 69,300 815 Louisiana 38,900 87 New Mexico 31,000 184 North Dakota 22,400 23 Ohio 20,300 1 Kansas 8,500 41 Montana 5,000 1 Wyoming 3,800 5 Colorado 3,000 11 Arkansas 1,600 5 Alabama 1,000 2 Mississippi 600 2 Virginia 100 1 Total 579,000 2,709 19 Net Production, Unit Prices and Costs The following table summarizes our net oil and natural gas production, the average sales price per barrel (“bbl”) of oil and per thousand cubic feet (“mcf”) of natural gas produced and the average production (lifting) cost per unit of production for the years ended March 31: Years Ended March 31, 2024 2023 Oil (a): Production (Bbls) 69,999 73,968 Revenue $ 5,348,257 $ 6,522,163 Average Bbls per day (d) 192 203 Average sales price per Bbl $ 76.40 $ 88.18 Gas (b): Production (Mcf) 502,879 534,363 Revenue $ 1,114,390 $ 2,858,460 Average Mcf per day (d) 1,378 1,464 Average sales price per Mcf $ 2.22 $ 5.35 Total BOE (c) 153,812 163,029 Production costs: Production expenses: $ 1,029,279 $ 1,039,893 Production expenses per BOE $ 6.69 $ 6.38 Production expenses per sales dollar $ 0.16 $ 0.11 Production and ad valorem taxes: $ 497,193 $ 679,826 Production and ad valorem taxes per BOE $ 3.23 $ 4.17 Production and ad valorem taxes per sales dollar $ 0.08 $ 0.07 Total oil and gas revenue $ 6,462,647 $ 9,380,623 (a) Includes condensate.

The present value of future net cash flows does not purport to be an estimate of the fair market value of the Company’s proved reserves.

Oil and gas prices significantly impact the calculation of the PV-10 and the standardized measure of discounted future net cash flows. The present value of future net cash flows does not purport to be an estimate of the fair market value of the Company’s proved reserves.

Except to the extent that we acquire additional properties containing proved reserves or conduct successful exploration and development activities, or both, our proved reserves will decline as reserves are produced. 17 Our estimated proved oil and gas reserves and present value of estimated future net revenues from proved oil and gas reserves in the periods ended March 31 are summarized below.

Our estimated proved oil and gas reserves and present value of estimated future net revenues from proved oil and gas reserves in the periods ended March 31 are summarized below. 16 PROVED RESERVES March 31, 2023 2022 Oil (Bbls): Proved developed – Producing 451,000 391,060 Proved developed – Non-producing 35,770 37,620 Proved undeveloped 240,060 380,550 Total 726,830 809,230 Natural gas (Mcf): Proved developed – Producing 3,826,370 3,454,310 Proved developed – Non-producing 145,000 129,160 Proved undeveloped 978,010 1,258,220 Total 4,949,380 4,841,690 Total net proved reserves (BOE) (1) 1,551,725 1,616,180 PV-10 Value (2) $ 39,473,000 $ 30,777,000 Present value of future income tax discounted at 10% (6,658,000 ) (4,857,000 ) Standardized measure of discounted future net cash flows (3) $ 32,815,000 $ 25,920,000 Prices used in Calculating Reserves: (4) Natural gas (per Mcf) $ 5.68 $ 4.60 Oil (per Bbl) $ 92.02 $ 74.52 (1) These reserve estimates do not include the Company’s interest in two LLCs referred to in Item 1.

PROVED RESERVES March 31, 2024 2023 Oil (Bbls): Proved developed – Producing 394,000 451,000 Proved developed – Non-producing 50,620 35,770 Proved undeveloped 346,330 240,060 Total 790,950 726,830 Natural gas (Mcf): Proved developed – Producing 3,346,460 3,826,370 Proved developed – Non-producing 219,780 145,000 Proved undeveloped 970,880 978,010 Total 4,537,120 4,949,380 Total net proved reserves (BOE) (1) 1,547,127 1,551,725 PV-10 Value (2) $ 29,078,000 $ 39,473,000 Present value of future income tax discounted at 10% (4,450,000 ) (6,658,000 ) Standardized measure of discounted future net cash flows (3) $ 24,628,000 $ 32,815,000 Prices used in Calculating Reserves: (4) Natural gas (per Mcf) $ 2.75 $ 5.68 Oil (per Bbl) $ 76.88 $ 92.02 (1) These reserve estimates do not include the Company’s interest in two LLCs referred to in Item 1.

As of March 31, 2023, we had interests in approximately 6,400 gross (18.5 net) producing oil and gas wells and owned leasehold mineral, royalty and other interests in approximately 544,000 gross (2,768 net) acres. 15 Oil and Natural Gas Reserves In accordance with current SEC rules, the average prices used in computing reserves at March 31, 2023 were $92.02 per bbl of oil compared to $74.52 in 2022, an increase of 23%, and $5.68 per mcf of natural gas compared to $4.60 in 2022, an increase of 23%, such prices are based on the 12-month unweighted arithmetic average market prices for sales of oil and natural gas on the first calendar day of each month during fiscal 2023.

Oil and Natural Gas Reserves In accordance with current SEC rules, the average prices used in computing reserves at March 31, 2024 were $76.88 per bbl of oil compared to $92.02 in 2023, a decrease of 16%, and $2.75 per mcf of natural gas compared to $5.68 in 2023, a decrease of 52%, such prices are based on the 12-month unweighted arithmetic average market prices for sales of oil and natural gas on the first calendar day of each month during fiscal 2024.

For information concerning our costs incurred for oil and gas operations, net revenues from oil and gas production, estimated future net revenues attributable to our oil and gas reserves, present value of future net revenues discounted at 10% and changes therein, see Notes to the Company’s consolidated financial statements. 16 Proved reserves are estimated reserves of crude oil (including condensate and natural gas liquids) and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

During the fiscal year ending March 31, 2023, we had a working or royalty interest in the development of 59 wells converting reserves of approximately 186,000 BOE from proved undeveloped to proved developed – producing with capital cost of approximately $3,612,000. 17 Oil and gas prices significantly impact the calculation of the PV-10 and the standardized measure of discounted future net cash flows.

During the fiscal year ending March 31, 2024, we had a working or royalty interest in the development of 43 wells converting reserves of approximately 62,000 BOE from proved undeveloped to proved developed – producing with capital cost of approximately $940,000.

Such downward revisions are primarily the result of reserves written off due to the five-year limitation and the change in the timing of new development. They are primarily royalty interests on leases in Loving, Pecos and Ward Counties, Texas which are held by production and still in place to be developed in the future.

The reserves written off were primarily royalty interests on leases in DeSoto Parish, Louisiana and Karnes County, Texas which are held by production and still in place to be developed in the future.

ITEM 2. PROPERTIES Our properties consist primarily of oil and gas wells and our ownership in leasehold acreage, both developed and undeveloped.

ITEM 2. PROPERTIES Our properties consist primarily of oil and gas wells and our ownership in leasehold acreage, both developed and undeveloped. As of March 31, 2024, we had interests in approximately 6,800 gross (25.7 net) producing oil and gas wells and owned leasehold mineral, royalty and other interests in approximately 579,000 gross (2,709 net) acres.

Proved reserves are estimated reserves of crude oil (including condensate and natural gas liquids) and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are those expected to be recovered through existing wells, equipment and operating methods.

Proved developed reserves are those expected to be recovered through existing wells, equipment and operating methods.

Removed

We have not filed any other oil or gas reserve estimates or included any such estimates in reports to other federal or foreign governmental authority or agency during the year ended March 31, 2023, and no major discovery is believed to have caused a significant change in our estimates of proved reserves since that date.

Added

Such downward revisions are primarily attributable to a decrease in crude oil and natural gas prices and partially the result of reserves written off due to the five-year limitation and the change in the timing of new development.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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2023 filing

2024 filing

Removed

ITEM 3. 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.

Added

ITEM 3. LEGAL PROCEEDINGS We may, from time to time, be a party to various proceedings and claims incidental to our business.

Removed

ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 19 PART II

Added

While many of these matters involve inherent uncertainty, we believe that the amount of the liability, if any, ultimately incurred with respect to these proceedings and claims will not have a material adverse effect on our consolidated financial position as a whole or on our liquidity, capital resources or future results of operations. ITEM 4.

Added

MINE SAFETY DISCLOSURES Not applicable. 20 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information In September 2003, our common stock began trading on the NYSE American, formerly the American Stock Exchange and more recently the NYSE MKT, under the symbol “MXC”.

Added

Prior to September 2003, the Company’s common stock was traded on the over-the-counter bulletin board market under the symbol “MEXC”. The registrar and transfer agent is Issuer Direct Corporation, 500 Perimeter Park Drive, Suite D, Morrisville, North Carolina, 27560 (Tel: 877-481-4014).

Added

The following table sets forth certain information as to the high and low sales price quoted for Mexco’s common stock on the NYSE American.

Added

High Low 2024: April - June 2023 $ 13.84 $ 10.30 July - September 2023 13.63 11.36 October - December 2023 13.50 9.05 January - March 2024 10.49 9.02 2023: April - June 2022 $ 24.18 $ 13.79 July - September 2022 20.84 14.43 October - December 2022 18.25 12.40 January - March 2023 15.39 10.50 On March 31, 2024, the closing sales price of our common stock on the NYSE American was $9.98 per share.

Added

Stockholders As of March 31, 2024, we had 2,226,916 shares issued and 827 shareholders of record which does not include shareholders for whom shares are held in a “nominee” or “street” name. Of these issued shares, 135,517 are held in the treasury. Dividends As of March 31, 2023, the Company had never paid a cash dividend to the Company’s shareholders.

Added

Payment of dividends are at the discretion of our Board of Directors after taking into account many factors, including our financial condition, operating results, current and anticipated cash needs and plans for expansion. In addition, our current bank loan prohibits us from paying cash dividends on our common stock without written permission.

Added

On April 10, 2023, the Company announced that its Board of Directors declared a special dividend of $0.10 per common share to its shareholders of record at the close of business on May 1, 2023. The special dividend was paid on May 15, 2023. The Company obtained written permission from WTNB prior to declaring the special dividend.

Added

The Company can provide no assurance that dividends will be authorized or declared in the future or as to the amount or type of any future dividends.

Added

Subsequently, on April 30, 2024, the Company announced that its Board of Directors declared a regular annual dividend of $0.10 per common share to its shareholders of record at the close of business on May 21, 2024. The dividend was paid on June 4, 2024. The Company obtained written permission from WTNB prior to declaring the regular annual dividend.

Added

Securities Authorized for Issuance Under Compensation Plans The following table includes certain information about our Employee Incentive Stock Plan as of March 31, 2024, which has been approved by our stockholders.

Added

Number of Shares Authorized for Issuance under Plan Number of Shares to be Issued upon Exercise of Outstanding Options Weighted Average Exercise Price of Outstanding Options Number of Shares Remaining Available for Future Issuance under Plan 2009 Plan 200,000 45,250 $ 5.27 - 2019 Plan 200,000 120,500 10.89 66,000 Total 400,000 165,750 $ 9.36 66,000 21 Issuer Repurchases In March 2023, the Board of Directors authorized the use of up to $1,000,000 to repurchase shares of the Company’s common stock for the treasury account.

Added

This program does not have an expiration date and may be modified, suspended or terminated at any time by the Board. Under the repurchase program, share of common stock may be purchased from time to time through open market purchases or other transactions.

Added

The amount and timing of repurchases will be subject to the availability of stock, prevailing market conditions, the trading price of 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.

Added

The following table provides information related to repurchases of our common stock for the treasury account during the year ended March 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 July 1-31, 2023 9,500 $ 12.28 9,500 $ 883,293 August 1-31, 2023 9,500 $ 12.69 9,500 $ 762,742 September 1-30, 2023 7,000 $ 12.57 7,000 $ 674,744 October 1-31, 2023 6,000 $ 12.58 6,000 $ 599,267 November 1-30, 2023 1,839 $ 11.49 1,839 $ 578,141 December 1-31, 2023 3,322 $ 10.02 3,322 $ 544,867 January 1-31, 2024 1,501 $ 10.01 1,501 $ 529,849 February 1-28, 2024 4,266 $ 9.98 4,266 $ 487,288 March 1-31, 2024 7,173 $ 10.08 7,173 $ 414,965 Total 50,101 $ 11.68 50,101 During the year ended March 31, 2024, the Company repurchased 50,101 shares for the treasury account at an aggregate cost of $585,035, an average price of $11.68 per share.

Added

During the year ended March 31, 2023, the Company repurchased 18,416 shares for the treasury account at an aggregate cost of $244,494, an average price of $13.28 per share. Subsequently, in April 2024, the Company’s 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.

Added

This authorization replaced the previously authorized $1,000,000 common stock repurchase program which had $414,965 remaining at the time it was replaced. Also in April 2024, the Company repurchased 13,766 shares for the treasury account at an aggregate cost of $188,637, an average price of $13.70 per share.

Added

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“IRA 2022”). The IRA 2022, among other tax provisions, establishes a 1% excise tax on stock repurchases made by publicly traded U.S. corporations, effective for stock repurchases after December 31, 2022.

Added

The IRA 2022 does provide for certain exceptions for repurchases of stock including an exception as long as the aggregate value of the repurchases for the tax year does not exceed $1,000,000.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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2023 filing

2024 filing

Removed

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information In September 2003, our common stock began trading on the NYSE American, formerly the American Stock Exchange and more recently the NYSE MKT, under the symbol “MXC”.

Added

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 21 Item 6. Reserved 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 30 Item 8. Financial Statements and Supplementary Data 31 Item 9.

Removed

Added

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 31 Item 9A. Controls and Procedures 31 Item 9B. Other Information 32

Removed

The following table sets forth certain information as to the high and low sales price quoted for Mexco’s common stock on the NYSE American.

Removed

High Low 2023: April - June 2022 $ 24.18 $ 13.79 July - September 2022 20.84 14.43 October - December 2022 18.25 12.40 January - March 2023 15.39 10.50 2022: April - June 2021 $ 10.60 $ 6.88 July - September 2021 11.80 7.80 October - December 2021 18.00 8.35 January - March 2022 43.00 9.00 On March 31, 2023, the closing sales price of our common stock on the NYSE American was $11.38 per share.

Removed

Stockholders As of March 31, 2023, we had 2,221,416 shares issued and 849 shareholders of record which does not include shareholders for whom shares are held in a “nominee” or “street” name. Of these issued shares, 85,416 are held in the treasury. Dividends As of March 31, 2023, the Company had never paid a cash dividend to the Company’s shareholders.

Removed

Subsequently, on April 10, 2023, the Company announced that its Board of Directors declared a special dividend of $0.10 per common share to its shareholders of record at the close of business on May 1, 2023. The special dividend was paid on May 15, 2023. The Company obtained written permission from WTNB prior to declaring the special dividend.

Removed

The Company can provide no assurance that dividends will be authorized or declared in the future or as to the amount or type of any future dividends.

Removed

Our board of directors’ determination with respect to any such dividends, including the record date, the payment date and the actual amount of the dividend, will depend upon our profitability and financial condition, contractual restrictions, restrictions imposed by applicable law and other factors that the board deems relevant at the time of such determination. 20 Securities Authorized for Issuance Under Compensation Plans The following table includes certain information about our Employee Incentive Stock Plan as of March 31, 2023, which has been approved by our stockholders.

Removed

Number of Shares Authorized for Issuance under Plan Number of Shares to be Issued upon Exercise of Outstanding Options Weighted Average Exercise Price of Outstanding Options Number of Shares Remaining Available for Future Issuance under Plan 2009 Plan 200,000 45,250 $ 5.27 - 2019 Plan 200,000 94,000 9.85 98,000 Total 400,000 139,250 $ 8.36 98,000 Issuer Repurchases In September 2022, the board of directors authorized the use of up to $250,000 to repurchase shares of our common stock for the treasury account.

Removed

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.

Removed

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 from operations.

Removed

The following table provides information related to repurchases of our common stock for the treasury account during the year ended March 31, 2023: 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 November 1-30, 2022 3,716 $ 14.51 3,716 $ 196,072 December 1-31, 2022 8,700 $ 13.14 8,700 $ 81,740 January 1-31, 2023 1,300 $ 12.58 1,300 $ 65,381 February 1-28, 2023 1,727 $ 12.75 1,727 $ 43,359 March 1-31, 2023 2,973 $ 12.73 2,973 $ 5,506 During the year ended March 31, 2023, the Company repurchased 18,416 shares for the treasury account at an aggregate cost of $244,494, an average price of $13.28 per share.

Removed

There were no shares of our common stock repurchased for the treasury account during the fiscal year ended March 31, 2022. Subsequently, in April 2023, the Company’s 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.

Removed

This authorization replaced the previously authorized $250,000 common stock repurchase program which had $5,506 remaining at the time it was replaced. On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“IRA 2022”).

Removed

The IRA 2022, among other tax provisions, establishes a 1% excise tax on stock repurchases made by publicly traded U.S. corporations, effective for stock repurchases after December 31, 2022.

Removed

The IRA 2022 does provide for certain exceptions for repurchases of stock including an exception as long as the aggregate value of the repurchases for the tax year does not exceed $1,000,000. ITEM 6. RESERVED 21

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

54 edited+19 added−7 removed40 unchanged

2023 filing

2024 filing

Biggest changeThese wells began producing in February 2023 with initial average production rates of 622 barrels of oil, 1,991 barrels of water and 262,000 cubic feet of gas per day, or, 666 barrels of oil equivalent per day. 23 Mexco expended approximately $93,000 to participate in the drilling and completion of eight horizontal wells in the Spraberry trend of the Midland Basin in Reagan County, Texas.

Biggest changeSeven horizontal wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico in which the Company participated during fiscal 2023 were completed with initial average production rates of 1,827 barrels of oil, 1,945 barrels of water and 2,264,000 cubic feet of gas per day, or, 2,204 barrels of oil equivalent per day.

These charges are not recoverable when prices return to higher levels. Our crude oil and natural gas reserves have a relatively long life. However, temporary drops in commodity prices can have a material impact on our business including impact from the full cost method of accounting. 26 Ceiling Test .

The estimates of proved reserves materially impact DD&A expense. If the estimates of proved reserves decline, the rate at which we record DD&A expense will increase, reducing future net income. Such a decline may result from lower market prices, which may make it uneconomic to drill for and produce higher cost projects. Use of Estimates .

Since the revenue checks are generally received two to three months after the production month, the Company accrues for revenue earned but not received by estimating production volumes and product prices. Any identified differences between its revenue estimates and actual revenue received historically have not been significant. 27 Asset Retirement Obligations .

The following represents those policies that management believes are particularly important to the financial statements and that require the use of estimates and assumptions to describe matters that are inherently uncertain. Full Cost Method of Accounting for Crude Oil and Natural Gas Activities .

The following represents those policies that management believes are particularly important to the financial statements and that require the use of estimates and assumptions to describe matters that are inherently uncertain. 27 Full Cost Method of Accounting for Crude Oil and Natural Gas Activities .

The following table summarizes future payments we are obligated to make based on agreements in place as of March 31, 2023: Payments due in: Total less than 1 year 1 - 3 years over 3 years Contractual obligations: Leases (1) $ 77,653 $ 58,240 $ 19,413 $ - (1) The lease amount represents the monthly rent amount for our principal office space in Midland, Texas under a 38-month lease agreement effective May 15, 2018 and extended another 36 months to July 31, 2024.

The following table summarizes future payments we are obligated to make based on agreements in place as of March 31, 2024: Payments due in: Total less than 1 year 1 - 3 years over 3 years Contractual obligations: Leases (1) $ 19,413 $ 19,413 - $ - (1) The lease amount represents the monthly rent amount for our principal office space in Midland, Texas under a 38-month lease agreement effective May 15, 2018 and extended another 36 months to July 31, 2024.

During the year ended March 31, 2023, we received advances and made payments of $675,000 on our credit facility, received proceeds of $16,700 from the exercise of director stock options, received payment of $30,179 form a director for profits on purchase of stock within the six-month window of a previous stock sale, expended $244,494 for the purchase of 18,416 shares of our stock for the treasury and, expended $12,200 for the renewal of our credit facility.

During the year ended March 31, 2023, we received proceeds of $16,700 from the exercise of director stock options, received payment of $30,179 from a director for profits on purchase of stock within the six-month window of a previous stock sale, expended $244,494 for the purchase of 18,416 shares of our stock for the treasury and, expended $12,200 for the renewal of our credit facility.

Mexco expended approximately $84,000 to participate in the drilling and completion of two horizontal wells in the Penn Shale formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is .22%.

Mexco expended approximately $105,000 to participate in the drilling and completion of two horizontal wells in the Penn Shale formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is approximately .285%.

Mexco expended approximately $30,000 to participate in the drilling and completion of two horizontal wells in the Bone Spring formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is .1%.

In July 2023, Mexco expended approximately $36,000 to participate in the drilling and completion 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 approximately .1%.

Cash Flow Used in 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 $209,815 for the year ended March 31, 2023 compared to net cash flow used in our financing activities of $721,430 for the year ended March 31, 2022.

Cash Flow Used in 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 $779,723 for the year ended March 31, 2024 compared to net cash flow used in our financing activities of $209,815 for the year ended March 31, 2023.

Cash flow from investing activities is derived from changes in oil and gas property balances. For the year ended March 31, 2023, we had net cash of $5,014,357 used for additions to oil and gas properties and a $425,000 investment in two limited liability companies compared to $1,635,024 and $75,000, respectively, for the year ended March 31, 2022.

Cash flow from investing activities is derived from changes in oil and gas property balances. For the year ended March 31, 2024, we had net cash of $3,016,499 used for additions to oil and gas properties and a $400,000 investment in two limited liability companies compared to $5,014,357 and $425,000, respectively, for the year ended March 31, 2023.

General and administrative expenses were $1,120,691 for the year ended March 31, 2023, an 18% increase from $949,079 for the year ended March 31, 2022. This was primarily due to an increase in employee stock option compensation, salaries and contract services, legal and accounting fees. Interest expense.

General and administrative expenses were $1,243,548 for the year ended March 31, 2024, an 11% increase from $1,120,691 for the year ended March 31, 2023. This was primarily due to an increase in employee stock option compensation, salaries and contract services, and accounting fees. Interest expense.

In March 2023, Mexco expended approximately $60,000 to participate in the drilling of two horizontal wells in the Penn Shale formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is approximately .285%. These wells began drilling in April 2023.

Mexco expended approximately $152,000 to participate in the drilling of two horizontal wells in the Penn Shale formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is .4%.

In October 2022, the Company made an approximately 2% equity investment commitment in a limited liability company amounting to $2,000,000 of which $400,000 has been funded to date. 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. Completion of Wells Drilled in Fiscal 2023.

In October 2022, the Company made an approximately 2% equity investment commitment in a limited liability company amounting to $2,000,000 of which $800,000 has been funded as of March 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.

Cash flow provided by our operating activities for the year ended March 31, 2023 was $6,515,895 in comparison to $3,744,407 for the year ended March 31, 2022.

Cash flow provided by our operating activities for the year ended March 31, 2024 was $4,433,935 in comparison to $6,515,895 for the year ended March 31, 2023.

Oil and natural gas sales. Revenue from oil and natural gas sales was $9,380,623 for the year ended March 31, 2023, a 44% increase from $6,525,264 for the year ended March 31, 2022. This resulted from an increase in oil and natural gas production volumes and an increase in oil and natural gas prices.

Oil and natural gas sales. Revenue from oil and natural gas sales was $6,462,647 for the year ended March 31, 2024, a 31% decrease from $9,380,623 for the year ended March 31, 2023. This resulted from a decrease in oil and natural gas prices and production volumes.

For example, in the last twelve months, the NYMEX West Texas Intermediate (“WTI”) posted price for crude oil has ranged from a low of $62.72 per bbl in March 2023 to a high of $118.09 per bbl in June 2022.

For example, in the last twelve months, the NYMEX West Texas Intermediate (“WTI”) posted price for crude oil has ranged from a low of $63.10 per bbl in June 2023 to a high of $89.66 per bbl in September 2023.

The Henry Hub Spot Market Price (“Henry Hub”) for natural gas has ranged from a low of $1.93 per MMBtu in March 2023 to a high of $9.85 per MMBtu in August 2022.

The Henry Hub Spot Market Price (“Henry Hub”) for natural gas has ranged from a low of $1.25 per MMBtu in March 2024 to a high of $3.34 per MMBtu in October 2023.

Mexco expended approximately $649,000 to participate in the drilling and completion of four horizontal wells in the Bone Spring formation of the Delaware Basin in Eddy County, New Mexico. Mexco’s working interest in these wells is 2.1%.

Mexco expended approximately $870,000 to participate in the drilling of five 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 approximately 1.16%.

These wells began producing in October 2022 with initial average production rates of 1,154 barrels of oil, 2,887 barrels of water and 2,966,000 cubic feet of gas per day, or, 1,648 barrels of oil equivalent per day.

These wells began producing in October 2023 with initial average production rates of 825 barrels of oil, 3,540 barrels of water and 2,150,000 cubic feet of gas per day, or, 1,183 BOE per day.

See Results of Operations below for realized prices. 24 Results of Operations Fiscal 2023 Compared to Fiscal 2022 We had net income of $4,662,702 for the year ended March 31, 2023 compared to $2,855,066 for the year ended March 31, 2022, a 63% increase as a result of an increase in operating revenues due to an increase in oil and natural gas prices and production partially offset by an increase in operating expenses that is further explained below.

Results of Operations Fiscal 2024 Compared to Fiscal 2023 We had net income of $1,344,952 for the year ended March 31, 2024 compared to $4,662,702 for the year ended March 31, 2023, a 71% decrease as a result of a decrease in operating revenues due to a decrease in oil and natural gas prices and production that is further explained below.

Mexco expended approximately $681,000 to participate in the drilling and completion of eight horizontal wells in the Wolfcamp Sand formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is .52%.

The Company expended approximately $427,000 for the completion costs of eight horizontal wells in the Wolfcamp Sand formation of the Delaware Basin in Lea County, New Mexico that the Company participated in drilling during fiscal 2023. Mexco’s working interest in these wells is .52%.

These wells began producing in January 2023 with initial average production rates of 1,367 barrels of oil, 3,900 barrels of water and 1,786,000 cubic feet of gas per day, or, 1,665 barrels of oil equivalent per day.

These wells began producing in November 2023 with initial average production rates of 837 barrels of oil, 1,794 barrels of water and 659,000 cubic feet of gas per day, or 947 BOE per day.

In April 2022, Mexco expended approximately $176,000 to participate in the drilling of four horizontal wells in the Wolfcamp Sand formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is .52%. Subsequently, in May 2023, Mexco expended approximately $211,000 to complete these wells.

In February 2024, Mexco expended approximately $74,000 to participate in 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 .53%. Subsequently, in May 2024, Mexco expended approximately $90,000 to complete these wells.

The Company participated in the drilling and completion of 50 horizontal wells at a cost of approximately $4,200,000, of which $3,750,000 was expended during the fiscal year ending March 31, 2023. Eighteen of these wells have not been completed.

New Participations in Fiscal 2024. The Company participated in the drilling and completion of 51 horizontal wells and 1 vertical well at a cost of approximately $2,300,000, of which $2,000,000 was expended during the fiscal year ending March 31, 2024. Nineteen of these wells have not been completed.

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 Years Ended March 31, 2023 2022 Change Net cash provided by operating activities $ 6,515,895 $ 3,744,407 $ 2,771,488 Net cash used in investing activities $ (5,441,075 ) $ (1,710,024 ) $ 3,731,051 Net cash used in financing activities $ (209,815 ) $ (721,430 ) $ (511,615 ) Cash Flow Provided by Operating Activities.

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 Years Ended March 31, 2024 2023 Change Net cash provided by operating activities $ 4,433,935 $ 6,515,895 $ (2,081,960 ) Net cash used in investing activities $ (3,416,499 ) $ (5,441,075 ) $ (2,024,576 ) Net cash used in financing activities $ (779,723 ) $ (209,815 ) $ 569,908 Cash Flow Provided by Operating Activities.

In May 2023, Mexco expended approximately $133,000 to participate in the drilling of four horizontal wells in the Wolfcamp Sand formation of the Delaware Basin in Lea County, New Mexico. Mexco expended approximately $68,000 to participate in the drilling of two horizontal wells in the Penn Shale formation of the Delaware Basin in Lea County, New Mexico.

In February 2024, Mexco expended approximately $170,000 to participate in the drilling of four horizontal wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico.

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.

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 3.75%. Significant judgement is required when determining the incremental borrowing rate.

These wells were subsequently completed in May 2023 with initial average production rates of 437 barrels of oil, 983 barrels of water and 603,000 cubic feet of gas per day, or, 538 barrels of oil equivalent per day.

Three horizontal wells in the Bone Spring formation of the Delaware Basin in Eddy County, New Mexico in which the Company participated during fiscal 2023 were completed in May 2023 with initial average production rates of 437 barrels of oil, 983 barrels of water and 603,000 cubic feet of gas per day, or, 538 barrels of oil equivalent per day.

The following table sets forth our oil and natural gas revenues, production quantities and average prices received during the fiscal years ended March 31: 2023 2022 % Difference Oil: Revenue $ 6,522,163 $ 4,685,094 39.2 % Volume (bbls) 73,968 61,689 19.9 % Average Price (per bbl) $ 88.18 $ 75.95 16.1 % Gas: Revenue $ 2,858,460 $ 1,840,170 55.3 % Volume (mcf) 534,363 393,841 35.7 % Average Price (per mcf) $ 5.35 $ 4.67 14.6 % Production and exploration.

The following table sets forth our oil and natural gas revenues, production quantities and average prices received during the fiscal years ended March 31: 2024 2023 % Difference Oil: Revenue $ 5,348,257 $ 6,522,163 (18.0 )% Volume (bbls) 69,999 73,968 (5.4 )% Average Price (per bbl) $ 76.40 $ 88.18 (13.4 )% Gas: Revenue $ 1,114,390 $ 2,858,460 (61.0 )% Volume (mcf) 502,879 534,363 (5.9 )% Average Price (per mcf) $ 2.22 $ 5.35 (58.5 )% 26 Production and exploration.

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 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.

Production costs were $1,719,719 in fiscal 2023, a 34% increase from $1,281,112 in fiscal 2022. This was primarily the result of an increase in production taxes and marketing charges as a result of the increase in oil and gas revenues. Depreciation, depletion and amortization.

Production costs were $1,526,472 in fiscal 2024, an 11% decrease from $1,719,719 in fiscal 2023. This was primarily the result of a decrease in production taxes as a result of the decrease in oil and gas revenues. Depreciation, depletion and amortization. Depreciation, depletion and amortization (“DD&A”) expense was $1,969,742 in fiscal 2024, a 6% increase from $1,854,047 in fiscal 2023.

Depreciation, depletion and amortization (“DD&A”) expense was $1,854,047 in fiscal 2023, a 38% increase from $1,345,435 in fiscal 2022. This was primarily due to an increase in oil and gas production and an increase in the full cost pool amortization and a decrease in the oil and gas reserves. General and administrative expenses.

This was primarily due to an increase in the full cost pool amortization and a decrease in the oil and gas reserves partially offset by a decrease in oil and gas production. General and administrative expenses.

In February 2023, Mexco expended approximately $31,000 to participate in the drilling and completion of seven horizontal wells in the Bone Spring formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is approximately .03%. These wells are currently being completed.

In November 2023, Mexco expended approximately $32,000 to participate in the drilling and completion of one horizontal well in the Penn Shale formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in this well is .165%.

These wells were completed in October 2022 with initial average production rates of 507 barrels of oil, 2,147 barrels of water and 2,147,000 cubic feet of gas per day, or, 560 barrels of oil equivalent per day.

Subsequently, in April 2024, two of these wells were completed with initial average production rates of 1,065 barrels of oil, 2,107 barrels of water and 706,500 cubic feet of gas per day, or 1,183 BOE per day.

Certain amounts in prior periods’ consolidated financial statements have been reclassified to conform with the current period’s presentation. These reclassifications had no effect on previously reported results of operations, retained earnings or net cash flows. Leases. The Company determines an arrangement is a lease at inception.

These reclassifications had no effect on previously reported results of operations, retained earnings or net cash flows. Leases. 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.

On March 31, 2023 the WTI posted price for crude oil was $71.65 per bbl and the Henry Hub spot price for natural gas was $2.10 per MMBtu.

On March 31, 2024 the WTI posted price for crude oil was $79.15 per bbl and the Henry Hub spot price for natural gas was $1.54 per MMBtu. See Results of Operations below for realized prices.

Interest expense was $13,097 in fiscal 2023, a 51% decrease from $26,512 in fiscal 2022, due to a decrease in borrowings. Income taxes. There was no federal income tax for fiscal 2023 or fiscal 2022.

Interest expense was $5,234 in fiscal 2024, a 60% decrease from $13,097 in fiscal 2023, due to a decrease in borrowings. Income taxes. Federal income tax for fiscal 2024 was $500,915. There was no federal income tax for fiscal 2023 because the Company was in a net deferred tax asset position.

These wells were completed in February and March 2023 with initial average production rates of 1,011 barrels of oil, 4,581 barrels of water and 3,577,000 cubic feet of gas per day, or 1,607 barrels of oil equivalent per day.

These wells began producing in September 2023 with initial average production rates of 582 barrels of oil, 1,488 barrels of water and 791,000 cubic feet of gas per day, or 714 BOE per day.

Thirty-nine of these horizontal wells are in the Delaware Basin located in the western portion of the Permian Basin in Lea and Eddy Counties, New Mexico and twelve are in the Midland Basin located in the eastern portion of the Permian Basin in Reagan County, Texas.

Forty-eight of these horizontal wells are in the Delaware Basin located in the western portion of the Permian Basin in Lea and Eddy Counties, New Mexico. The remaining three horizontal wells are in the Bakken formation in McKenzie County, North Dakota and the vertical well is in Irion County, Texas.

Any interest and penalties are recorded as interest expense and general and administrative expense, respectively. Other Property and Equipment . Provisions for depreciation of office furniture and equipment are computed on the straight-line method based on estimated useful lives of three to ten years. Investments.

Provisions for depreciation of office furniture and equipment are computed on the straight-line method based on estimated useful lives of three to ten years. 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.

Of this total obligation for the remainder of the lease, our majority shareholder will pay $15,572 less than 1 year and $5,191 1-3 years for his portion of the shared office space. 25 Alternative Capital Resources Although we have primarily used cash from operating activities, the sales of assets and funding from the credit facility as our primary capital resources, we have in the past, and could in the future, use alternative capital resources.

Alternative Capital Resources Although we have primarily used cash from operating activities, the sales of assets and funding from the credit facility as our primary capital resources, we have in the past, and could in the future, use alternative capital resources.

The first 4 of these wells began producing in May 2022 and the remaining 4 were completed in November 2022 with initial average production rates of 1,168 barrels of oil, 3,797 barrels of water and 2,621,000 cubic feet of gas per day, or, 1,605 barrels of oil equivalent per day. Acquisitions in Fiscal 2023.

Mexco’s working interest in these wells is .52%. Two of these wells began producing in November 2023 and the other two in March 2024 with initial average production rates of 822 barrels of oil, 4,159 barrels of water and 2,574,000 cubic feet of gas per day, or 1,251 barrels of oil equivalent (“BOE”) per day.

This increase of $2,771,488 in our cash flow operating activities consisted of an increase in our non-cash expenses of $565,838; a decrease in our accounts receivable of $594,673; a decrease of $128,615 in our accounts payable and accrued expenses; and, an increase in our net income of $1,807,636.

This decrease of $2,081,960 in our cash flow operating activities consisted of increase in our non-cash expenses of $505,448; a decrease in our accounts receivable of $426,598; an increase of $49,673 of our accounts payable and accrued expenses; and, a decrease in our net income for the current year of $3,317,518.

The Company acquired various royalty (mineral) interests in 22 wells and several additional potential locations for development operated by Chesapeake Energy Corporation and located in the Eagleford area of Dimmit County, Texas for a purchase price of $939,000 which was effective April 1, 2022.

Subsequently, in April 2024, the Company acquired small royalty (mineral) interests in 21 wells operated by Anadarko Petroleum Corporation and Cimarex Energy Company and located in Reeves County, Texas for a purchase price of $158,000 which is effective April 1, 2024. 25 Sales of Properties.

Deferred tax assets and liabilities are measured using enacted tax rates applicable to the years in which those differences are expected to be settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in net income in the period that includes the enactment date.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in net income in the period that includes the enactment date. Any interest and penalties are recorded as interest expense and general and administrative expense, respectively. 29 Other Property and Equipment .

In January 2023, Mexco expended $180,000 to participate in the drilling of four horizontal wells in the Wolfcamp Sand formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is approximately .52%. These wells are currently awaiting completion operations.

In April 2024, Mexco expended approximately $80,000 to participate in the drilling of five horizontal wells in the Bone Spring formation of the Delaware Basin in Lea County, New Mexico and $127,800 to drill four horizontal wells in the Wolfcamp Sand formation of the Delaware Basin in Lea County, New Mexico.

The Company also acquired, for a purchase price of $117,200, royalty interests covering 28 producing wells in 6 counties in the Haynesville trend area of Louisiana and 5 counties in Texas. Subsequent Participations.

In February 2024, the Company acquired royalty interests in 255 producing wells in the Haynesville trend area of Caddo Parish, Louisiana for a purchase price of $390,300.

The effective tax rate for fiscal 2023 and fiscal 2022 was 3.4% and 3.5%, respectively. Contractual Obligations We have no off-balance sheet debt or unrecorded obligations and have not guaranteed the debt of any other party.

The increase in the effective federal tax rate is the result of the Company now being in a net deferred tax liability position and the reconciliation to the federal tax return. Contractual Obligations We have no off-balance sheet debt or unrecorded obligations and have not guaranteed the debt of any other party.

We had working capital of $3,475,776 as of March 31, 2023 compared to working capital of $2,469,776 as of March 31, 2022, an increase of $1,006,000 for the reasons set forth below. Oil and Natural Gas Property Development. New Participations in Fiscal 2023.

Accordingly, net cash increased $237,713, leaving cash and cash equivalents on hand of $2,473,484 as of March 31, 2024. 23 We had working capital of $3,259,200 as of March 31, 2024 compared to working capital of $3,475,776 as of March 31, 2023, a decrease of $216,576 for the reasons set forth below. Oil and Natural Gas Property Development.

This well was completed in October 2022 with initial average production rates of 295 barrels of oil, 1,313 barrels of water and 237,000 cubic feet of gas per day, or, 335 barrels of oil equivalent per day.

These wells began producing in September 2023 with initial average production rates of 898 barrels of oil, 1,969 barrels of water and 503,000 cubic feet of gas per day, or 982 BOE per day.

In addition to the above working interests, there were 85 gross wells (.04 net wells) drilled by other operators on Mexco’s royalty interests and 50 gross wells (.29 net wells) obtained through acquisitions.

In addition to the above working interests, there were 101 gross wells (.025 net wells) drilled by other operators on Mexco’s royalty interests and 348 gross wells (7.65 net wells) obtained through acquisitions. Mexco expended approximately $264,000 to participate in the drilling of four horizontal wells in the Wolfcamp Sand formation of the Delaware Basin in Lea County, New Mexico.

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. Reclassifications.

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. Reclassifications. Certain amounts in prior periods’ consolidated financial statements have been reclassified to conform with the current period’s presentation.

The collectability of receivables is assessed and an allowance is made for any doubtful accounts. The allowance for doubtful accounts is determined based on our previous loss history. Income Taxes . The Company recognizes deferred tax assets and liabilities for future tax consequences of temporary differences between the carrying amounts of assets and liabilities and their respective tax bases.

The Company recognizes deferred tax assets and liabilities for future tax consequences of temporary differences between the carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates applicable to the years in which those differences are expected to be settled.

Removed

During the year ended March 31, 2022, we received advances of $275,000 and made payments of $1,455,000 on our credit facility and received proceeds of $458,570 for the exercise of employee and director stock options. 22 Accordingly, net cash increased $865,005, leaving cash and cash equivalents on hand of $2,235,771 as of March 31, 2023.

Added

During the year ended March 31, 2024, we expended $213,600 to pay the annual dividend, expended $585,035 to purchase 50,101 shares of our stock for the treasury account, and received proceeds of $19,662 for the exercise of employee and director stock options.

Removed

Mexco expended approximately $1,196,000 to participate in the drilling and completion of three horizontal wells in the Wolfcamp Sand formation of the Midland Basin located in the eastern portion of the Permian Basin in Reagan County, Texas. Mexco’s working interest in these wells is 3.2%.

Added

Mexco’s working interest in these wells is .45%. 24 In February 2024, Mexco expended approximately $153,000 to participate in an exploratory well in the Fusselman Formation of Irion County, Texas. Subsequently, in May 2024, the Company expended $27,000 for additional drilling costs. This well was later determined to be noncommercial and will be plugged and abandoned in fiscal 2025.

Removed

Mexco expended approximately $607,000 to participate in the drilling and completion of a horizontal well in the Wolfcamp Sand formation of the Midland Basin in Reagan County, Texas. Mexco’s working interest in this well is 5.1%.

Added

Subsequently, in May 2024, the Company funded another $200,000 toward this investment. This LLC has returned $81,231 or 8% of the total investment. Completion of Wells Drilled in Fiscal 2023. The Company expended approximately $450,000 in the completion of 21 horizontal wells in which the Company participated in fiscal 2023.

Removed

Mexco’s working interest in these wells is approximately .11%. These wells began producing in December 2022. Mexco expended $16,000 to participate in the drilling and completion of three horizontal wells in the Bone Spring formation of the Delaware Basin in Eddy County, New Mexico. Mexco’s working interest in these wells is .05%.

Added

Mexco’s working interest in these wells is .05%.

Removed

The Company expended approximately $329,000 for the completion costs of 8 horizontal wells located in Lea County, New Mexico that the Company participated in drilling during fiscal 2022.

Added

Mexco’s working interest in these wells is .033%. Acquisitions. During the year, the Company acquired royalty interests in 39 producing wells with additional potential locations for development in Howard and Lee Counties, Texas for an aggregate purchase price of $261,700.

Removed

We are in a net deferred tax asset position and believe it is more likely than not that these deferred tax assets will not be realized. State income tax was $164,510 in fiscal 2023, a 61% increase from $102,356 in fiscal 2022, due to the increase in oil and natural gas sales.

Added

In February 2024, the Company acquired royalty interests in 8 producing wells with additional potential locations for development operated by PDC Energy, Inc. and 4 producing wellbores operated by Chevron Corporation for an aggregate purchase price of $575,600. These wells are located in Weld County, Colorado.

Removed

The incremental borrowing rate used at adoption was 3.75%. 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. 28

Added

In December 2023, the Company acquired royalty (mineral) interests in 7 wells operated by Occidental Petroleum Corporation and located in Reeves County, Texas for a purchase price of $364,000 which is effective November 1, 2023. In January 2024, the Company acquired an additional interest in these same wells for a purchase price of $91,000, effective December 1, 2023.

Added

In November 2023, the Company acquired small royalty interests in 27 producing wells as well as non-producing mineral interests in 1,280 gross acres located in Crane, Ector, Midland and Upton Counties, Texas for an aggregate purchase price of $105,800.

Added

During the first quarter of fiscal 2024, the Company received approximately $280,000 in cash from a sale of joint venture leasehold acreage and marginal producing working interest wells in Reagan County, Texas, marginal producing working interest wells in Pecos County, Texas and interest in surface acreage in Palo Pinto County, Texas.

Added

In December 2023, the Company made on a 3-year Term Assignment of 98% of the Company’s leasehold interest in certain deep rights of 200 acres in Loving and Ward Counties, Texas. The Company received $5,000 per net leasehold acre in the total amount of approximately $980,000.

Added

The Company retained the remaining 2% leasehold interest as a participating interest in the full unit at approximately .625% working interest. The Company also retained an overriding royalty interest of 5% proportionately reduced.

Added

Also in December 2023, the Company made on a 3-year Term Assignment of the Company’s leasehold interest in 12.96 net mineral acres located in Lea County, New Mexico. The Company received $2,500 per net leasehold acre in the total amount of $32,400.

Added

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. Subsequent Participations.

Added

State income tax was $119,629 in fiscal 2024, a 27% decrease from $164,510 for fiscal 2023 due to the decrease in oil and natural gas sales in the State of New Mexico. The effective tax rate for state and federal taxes combined for fiscal 2024 and fiscal 2023 was 32% and 3%, respectively.

Added

Of this total obligation for the remainder of the lease, our majority shareholder will pay $5,191 less than 1 year for his portion of the shared office space.

Added

The collectibility of receivables is assessed and an allowance is made for any credit losses.

Added

The allowance for credit losses is determined based on a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, the debtor’s current ability to pay its obligation to the Company, the condition of the general economy and the industry as a whole. Income Taxes .

Added

Rent expense for lease payments is recognized on a straight-line basis over the lease term. Recent Accounting Pronouncements. In December 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disaggregated information about the Company’s effective tax rate reconciliation and income taxes paid.

Added

This ASU is effective for annual periods beginning after December 15, 2024 on a prospective basis and early adoption is permitted. The Company is currently evaluating the impact of this standard on its tax disclosures.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−0 removed9 unchanged

2023 filing

2024 filing

Biggest changeSubsequently, on June 21, 2023, the WTI posted price for crude oil was $68.51 and the Henry Hub posted price for natural gas was $2.24. Declines in oil and natural gas prices will materially adversely affect our financial condition, liquidity, ability to obtain financing and operating results.

Biggest changeSubsequently, on June 18, 2024, the WTI posted price for crude oil was $77.55 and the Henry Hub posted price for natural gas was $2.43. 30 Declines in oil and natural gas prices will materially adversely affect our financial condition, liquidity, ability to obtain financing and operating results.

Our primary credit risk is related to oil and gas production sold to various purchasers and the receivables are generally not collateralized. At March 31, 2023, our largest credit risk associated with any single purchaser was $634,672 or 46% of our total oil and gas receivables. We have not experienced any significant credit losses. Energy Price Risk .

Our primary credit risk is related to oil and gas production sold to various purchasers and the receivables are generally not collateralized. At March 31, 2024, our largest credit risk associated with any single purchaser was $480,836 or 48% of our total oil and gas receivables. We have not experienced any significant credit losses. Energy Price Risk .

On March 31, 2023 the WTI posted price for crude oil was $71.65 per bbl and the Henry Hub spot price for natural gas was $2.10 per MMBtu. See Results of Operations above for the Company’s realized prices during the fiscal year.

On March 31, 2024 the WTI posted price for crude oil was $79.15 per bbl and the Henry Hub spot price for natural gas was $1.54 per MMBtu. See Results of Operations above for the Company’s realized prices during the fiscal year.

If the average oil price had increased or decreased by ten dollars per barrel for fiscal 2023, our pretax income would have changed by $739,680. If the average gas price had increased or decreased by one dollar per mcf for fiscal 2023, pretax income would have changed by $534,363.

If the average oil price had increased or decreased by ten dollars per barrel for fiscal 2024, our pretax income would have changed by $699,990. If the average gas price had increased or decreased by one dollar per mcf for fiscal 2024, pretax income would have changed by $502,879.

The Henry Hub Spot Market Price (“Henry Hub”) for natural gas has ranged from a low of $1.93 per MMBtu in March 2023 to a high of $9.85 per MMBtu in August 2022.

The Henry Hub Spot Market Price (“Henry Hub”) for natural gas has ranged from a low of $1.25 per MMBtu in March 2024 to a high of $3.34 per MMBtu in October 2023.

Top changes in MEXCO ENERGY CORP's 2024 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 3. Legal Proceedings

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other MXC 10-K year-over-year comparisons