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MEXCO ENERGY CORP - Quarter Report: 2022 December (Form 10-Q)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended December 31, 2022

 

OR

 

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

 

For the transition period from            to

 

Commission File No. 1-31785

 

MEXCO ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

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

 

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

 

(432) 682-1119

(Registrant’s telephone number, including area code)

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

The number of shares outstanding of the registrant’s common stock, par value $.50 per share, as of February 10, 2023 was 2,142,000.

 

 

 

 
 

 

MEXCO ENERGY CORPORATION AND SUBSIDIARIES

 

Table of Contents

 

      Page
       
PART I. FINANCIAL INFORMATION  
   
  Item 1.

Financial Statements

3
       
    Consolidated Balance Sheets as of December 31, 2022 (Unaudited) and March 31, 2022 3
       
    Consolidated Statements of Operations (Unaudited) for the three months and nine months ended December 31, 2022 and December 31, 2021 4
       
   

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the three and nine months ended December 31, 2022 and December 31, 2021

5
       
    Consolidated Statements of Cash Flows (Unaudited) for the nine months ended December 31, 2022 and December 31, 2021 6
       
    Notes to Consolidated Financial Statements (Unaudited) 7
       
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12
       
  Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
       
  Item 4. Controls and Procedures 16
       
PART II. OTHER INFORMATION  
   
  Item 1. Legal Proceedings 17
       
  Item 1A. Risk Factors 17
       
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 17
       
  Item 6. Exhibits 17
       
SIGNATURES 18
   
CERTIFICATIONS  

 

2
 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

 

   December 31,   March 31, 
   2022   2022 
   (Unaudited)     
ASSETS          
Current assets          
Cash and cash equivalents  $631,036   $1,370,766 
Accounts receivable:          
Oil and natural gas sales   2,048,695    1,310,137 
Prepaid costs and expenses   21,387    52,636 
Prepaid drilling   11,138    - 
Other   3,132    - 
Total current assets   2,715,388    2,733,539 
Property and equipment, at cost          
Oil and gas properties, using the full cost method   45,164,341    40,373,741 
Other   121,926    120,208 
Accumulated depreciation, depletion and amortization   (31,629,063)   (30,361,047)
Property and equipment, net   13,657,204    10,132,902 
Investment – cost basis   500,000    275,000 
Operating lease, right-of-use asset   89,394    129,923 
Other noncurrent assets   -    13,156 
Total assets  $16,961,986   $13,284,520 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities          
Accounts payable and accrued expenses  $191,233   $209,469 
Operating lease liability, current   55,841    54,294 
Total current liabilities   247,074    263,763 
Long-term liabilities          
Operating lease liability, long-term   33,553    75,629 
Asset retirement obligations   721,489    720,512 
Total long-term liabilities   755,042    796,141 
Total liabilities   1,002,116    1,059,904 
           
Commitments and contingencies   -    - 
           
Stockholders’ equity          
Preferred stock - $1.00 par value; 10,000,000 shares authorized; none outstanding   -    - 
Common stock - $0.50 par value; 40,000,000 shares authorized; 2,221,416 and 2,216,416 shares issued;  2,142,000 and 2,149,416 shares outstanding as of December 31, 2022 and March 31, 2022, respectively   1,110,708    1,108,208 
Additional paid-in capital   8,279,823    8,133,982 
Retained earnings   7,083,600    3,328,427 
Treasury stock, at cost (79,416 and 67,000 shares, respectively)   (514,261)   (346,001)
Total stockholders’ equity   15,959,870    12,224,616 
Total liabilities and stockholders’ equity  $16,961,986   $13,284,520 

 

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

 

3
 

 

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   2022   2021   2022   2021 
   Three Months Ended   Nine Months Ended 
   December 31   December 31 
   2022   2021   2022   2021 
Operating revenue:                    
Oil sales  $1,750,539   $1,073,078   $4,707,735   $3,193,315 
Natural gas sales   735,478    500,906    2,476,290    1,177,405 
Other   95,193    21,360    171,950    42,303 
Total operating revenues   2,581,210    1,595,344    7,355,975    4,413,023 
                     
Operating expenses:                    
Production   478,670    291,068    1,308,143    903,643 
Accretion of asset retirement obligation   7,553    7,327    22,902    21,630 
Depreciation, depletion, and amortization   496,509    268,018    1,268,016    812,398 
General and administrative   288,536    239,767    876,735    739,469 
Total operating expenses   1,271,268    806,180    3,475,796    2,477,140 
                     
Operating income   1,309,942    789,164    3,880,179    1,935,883 
                     
Other income (expenses):                    
Interest income   59    55    152    126 
Interest expense   (3,230)   (3,132)   (9,922)   (23,381)
Net other expense   (3,171)   (3,077)   (9,770)   (23,255)
                     
Net income before income taxes   1,306,771    786,087    3,870,409    1,912,628 
                     
State income tax expense   61,986    32,785    115,236    55,492 
                     
Net income  $1,244,785   $753,302   $3,755,173   $1,857,136 
                     
Income per common share:                    
Basic:  $0.58   $0.36   $1.75   $0.89 
Diluted:  $0.56   $0.35   $1.70   $0.89 
                     
Weighted average common shares outstanding:                    
Basic:   2,147,750    2,120,912    2,148,859    2,096,433 
Diluted:   2,205,706    2,176,240    2,213,652    2,146,717 

 

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

 

4
 

 

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

For the three and nine months ended December 31, 2022 and 2021:

 

  

Common

Stock Par

Value

  

Additional

Paid-In

Capital

  

Retained

Earnings

  

Treasury

Stock

  

Total

Stockholders’

Equity

 
Balance at April 1, 2022  $1,108,208   $8,133,982   $3,328,427   $(346,001)  $12,224,616 
Net income   -    -    1,298,672    -    1,298,672 
Stock based compensation   -    25,571    -    -    25,571 
Balance at June 30, 2022  $1,108,208   $8,159,553   $4,627,099   $(346,001)  $13,548,859 
Net income   -    -    1,211,716    -    1,211,716 
Profit from purchase of stock by insider        30,179              30,179 
Stock based compensation   -    34,431    -    -    34,431 
Balance at September 30, 2022  $1,108,208   $8,224,163   $5,838,815   $(346,001)  $14,825,185 
Net income   -    -    1,244,785    -    1,244,785 
Issuance of stock through options exercised   2,500    14,200    -    -    16,700 
Stock based compensation   -    41,460    -    -    41,460 
Purchase of stock   -    -    -    (168,260)   (168,260)
Balance at December 31, 2022  $1,110,708   $8,279,823   $7,083,600   $(514,261)  $15,959,870 

 

  

Common

Stock Par

Value

  

Additional

Paid-In

Capital

  

Retained

Earnings

  

Treasury

Stock

  

Total

Stockholders’

Equity

 
Balance at April 1, 2021  $1,071,833   $7,624,214   $473,361   $(346,001)  $8,823,407 
Net income   -    -    395,006    -    395,006 
Issuance of stock through options exercised   2,500    31,500    -    -    34,000 
Stock based compensation   -    13,865    -    -    13,865 
Balance at June 30, 2021  $1,074,333   $7,669,579   $868,367   $(346,001)  $9,266,278 
Net income   -    -    708,828    -    708,828 
Issuance of stock through options exercised   11,450    140,282    -    -    151,732 
Stock based compensation   -    22,568    -    -    22,568 
Balance at September 30, 2021  $1,085,783   $7,832,429   $1,577,195   $(346,001)  $10,149,406 
Net income   -    -    753,302    -    753,302 
Issuance of stock through options exercised   8,550    101,358    -    -    109,908 
Stock based compensation   -    25,570    -    -    25,570 
Balance at December 31, 2021  $1,094,333   $7,959,357   $2,330,497   $(346,001)  $11,038,186 
                          
SHARE ACTIVITY                         
Common stock shares, issued:                         
Balance at April 1, 2022        2,216,416                
Issued        5,000                
Balance at Dec. 31, 2022        2,221,416                
Common stock shares, held in treasury:                         
Balance at April 1, 2022        (67,000)               
Acquisitions        (12,416)               
Balance at Dec. 31, 2022        (79,416)               
Common stock shares, outstanding at December 31, 2022        2,142,000                

 

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

 

5
 

 

Mexco Energy Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended December 31,

(Unaudited)

 

   2022   2021 
Cash flows from operating activities:          
Net income  $3,755,173   $1,857,136 
Adjustments to reconcile net income to net cash provided by operating activities:          
Stock-based compensation   101,462    62,003 
Depreciation, depletion and amortization   1,268,016    812,398 
Accretion of asset retirement obligations   22,902    21,630 
Amortization of debt issuance costs   9,394    9,394 
Changes in operating assets and liabilities:          
Increase in accounts receivable   (738,558)   (98,901)
Decrease in right-of-use asset   40,529    42,687 
Decrease in prepaid expenses   31,249    26,736 
(Decrease) increase in accounts payable and accrued expenses   (81,236)   42,034 
Settlement of asset retirement obligations   (17,482)   (2,741)
Decrease in operating lease liability   (40,529)   (43,790)
Net cash provided by operating activities   4,350,920    2,728,586 
           
Cash flows from investing activities:          
Additions to oil and gas properties   (4,760,880)   (1,213,618)
Additions to other property and equipment   (1,718)   - 
Drilling refunds   18,329    229,800 
Investment – cost basis   (225,000)   (50,000)
Proceeds from sale of oil and gas properties and equipment   -    11,969 
Net cash used in investing activities   (4,969,269)   (1,021,849)
           
Cash flows from financing activities:          
Proceeds from exercise of stock options   16,700    295,640 
Profits from purchase of stock by insider   30,179    - 
Proceeds from long-term debt   675,000    275,000 
Reduction of long-term debt   (675,000)   (1,455,000)
Acquisition of treasury stock   (168,260)   - 
Net cash used in financing activities   (121,381)   (884,360)
           
Net (decrease) increase in cash and cash equivalents   (739,730)   822,377 
           
Cash and cash equivalents at beginning of period   1,370,766    57,813 
           
Cash and cash equivalents at end of period  $631,036   $880,190 
           
Supplemental disclosure of cash flow information:          
Cash paid for interest  $528   $14,834 
           
Non-cash investing and financing activities:          
Asset retirement obligations  $21,554   $12,499 
Operating lease – right of use asset and associated liabilities  $-   $165,007 

 

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

 

6
 

 

Mexco Energy Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1. Nature of Operations

 

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

 

2. Basis of Presentation and Significant Accounting Policies

 

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

 

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

 

Interim Financial Statements. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position of the Company as of December 31, 2022, and the results of its operations and cash flows for the interim periods ended December 31, 2022 and 2021. The consolidated financial statements as of December 31, 2022 and for the three and nine month periods ended December 31, 2022 and 2021 are unaudited. The consolidated balance sheet as of March 31, 2022 was derived from the audited balance sheet filed in the Company’s 2022 annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The results of operations for the periods presented are not necessarily indicative of the results to be expected for a full year. The accounting policies followed by the Company are set forth in more detail in Note 2 of the “Notes to Consolidated Financial Statements” in the Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the SEC. However, the disclosures herein are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Form 10-K.

 

Investments. The Company accounts for investments of less than 3% of any limited liability companies at cost. The Company has no control or significant influence 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. 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.

 

3. Asset Retirement Obligations

 

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

 

7
 

 

The following table provides a rollforward of the AROs for the first nine months of fiscal 2022:

 

Carrying amount of asset retirement obligations as of April 1, 2022  $735,512 
Liabilities incurred   21,554 
Liabilities settled   (43,479)
Accretion expense   22,902 
Carrying amount of asset retirement obligations as of December 31, 2022   736,489 
Less: Current portion   15,000 
Non-Current asset retirement obligation  $721,489 

 

4. Stock-based Compensation

 

The Company recognized stock-based compensation expense of $41,460 and $25,570 in general and administrative expense in the Consolidated Statements of Operations for the three months ended December 31, 2022 and 2021, respectively. Stock-based compensation expense recognized for the nine months ended December 31, 2022 and 2021 was $101,462 and $62,003, respectively. The total cost related to non-vested awards not yet recognized at December 31, 2022 totals approximately $498,285 which is expected to be recognized over a weighted average of 2.63 years.

 

During the nine months ended December 31, 2022, the Compensation Committee of the Board of Directors approved and the Company granted 31,000 stock options exercisable at $18.05 per share with an estimated fair value of $385,640. During the nine months ended December 31, 2021, the Compensation Committee of the Board of Directors approved and the Company granted 31,000 stock options exercisable at $8.51 per share with an estimated fair value of $187,550. These options are exercisable at a price not less than the fair market value of the stock at the date of grant, have an exercise period of ten years and generally vest over four years.

 

Included in the following table is a summary of the grant-date fair value of stock options granted and the related assumptions used in the Binomial models for stock options granted during the nine months ended December 31, 2022 and 2021. All such amounts represent the weighted average amounts.

 

   NIne Months Ended 
   December 31 
   2022   2021 
Grant-date fair value  $12.44   $6.05 
Volatility factor   57.3%   65.38%
Dividend yield   -    - 
Risk-free interest rate   3.15%   0.92%
Expected term (in years)   6.25    6.25 

 

The following table is a summary of activity of stock options for the nine months ended December 31, 2021:

 

  

Number of

Shares

  

Weighted

Average

Exercise Price

  

Weighted Average

Remaining

Contract Life in

Years

  

Intrinsic

Value

 
Outstanding at April 1, 2022   114,250   $5.51    7.40   $1,221,670 
Granted   31,000    18.05           
Exercised   (5,000)   3.34           
Forfeited or Expired   -    -           
Outstanding at December 31, 2022   140,250   $8.36    7.29   $578,290 
                     
Vested at December 31, 2022   65,500   $5.28    5.76   $471,288 
Exercisable at December 31, 2022   65,500   $5.28    5.76   $471,288 

 

8
 

 

During the nine months ended December 31, 2022, stock options covering 5,000 shares were exercised with a total intrinsic value of $47,575. The Company received proceeds of $16,700 from these exercises. During the nine months ended December 31, 2021, stock options covering 45,000 shares were exercised with a total intrinsic value of $241,226. The Company received proceeds of $295,640 from these exercises.

 

There were no stock options forfeited or expired during the nine months ended December 31, 2022 and 2021. No forfeiture rate is assumed for stock options granted to directors or employees due to the forfeiture rate history of these types of awards.

 

Outstanding options at December 31, 2022 expire between August 2024 and August 2032 and have exercise prices ranging from $3.34 to $18.05.

 

5. Long Term Debt

 

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

 

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

 

Under the Agreement, interest on the credit facility accrues at a rate equal to the prime rate as quoted in the Wall Street Journal plus one-half of one percent (0.5%) floating daily. Interest on the outstanding amount under the Agreement is payable monthly. In addition, the Company will pay an unused commitment fee in an amount equal to one-half of one percent (0.5%) times the daily average of the unadvanced amount of the commitment. The unused commitment fee is payable quarterly in arrears on the last day of each calendar quarter. As of December 31, 2022, there was $1,500,000 available for borrowing by the Company on the facility.

 

No principal payments are anticipated to be required through the maturity date of the credit facility, March 28, 2023. Upon closing with WTNB on the original Agreement, the Company paid a .5% loan origination fee in the amount of $5,000 plus legal and recording expenses totaling $34,532, which were deferred over the original life of the credit facility. Upon closing the amendment to the Agreement, the Company paid a .1% loan origination fee of $2,500 and an extension fee of $3,125 plus legal and recording expenses totaling $12,266, which were also deferred over the life of the credit facility.

 

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

 

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

 

In addition, this Agreement prohibits the Company from paying cash dividends on its common stock without written permission of WTNB. The Agreement does not permit the Company to enter into hedge agreements covering crude oil and natural gas prices without prior WTNB approval.

 

There was no balance outstanding on the line of credit as of December 31, 2022. The following table is a summary of activity on the WTNB line of credit for the nine months ended December 31, 2022:

 

   Principal 
Balance at April 1, 2022:  $- 
Borrowings   675,000 
Repayments   (675,000)
Balance at December 31, 2022:  $- 

 

9
 

 

6. Leases

 

The Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for the corporate office located in Midland, Texas. This includes 1,112 square feet of office space shared with and reimbursed by the majority shareholder. The lease does not include an option to renew and is a 36-month lease that was to expire in May 2021. In June 2020, in exchange for a reduction in rent for the months of June and July 2020, the Company agreed to a 2-month extension to its current lease agreement at the regular monthly rate extending its current lease expiration date to July 2021. In June 2021, the Company agreed to extend its current lease at a flat (unescalated) rate for 36 months. The amended lease now expires on July 31, 2024.

 

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

 

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

 

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

 

   December 31, 2022 
Assets     
Operating lease right-of-use asset, beginning balance  $129,923 
Current period amortization   (40,529)
Total operating lease right-of-use asset  $89,394 
      
Liabilities     
Operating lease liability, current  $55,841 
Operating lease liability, long term   33,553 
Total lease liabilities  $89,394 

 

Future minimum lease payments as of December 31, 2022 under non-cancellable operating leases are as follows:

 

   Lease Obligation 
Fiscal Year Ended March 31, 2023   14,560 
Fiscal Year Ended March 31, 2024   58,240 
Fiscal Year Ended March 31, 2025   19,413 
Total lease payments  $92,213 
Less: imputed interest   (2,819)
Operating lease liability   89,394 
Less: operating lease liability, current   (55,841)
Operating lease liability, long term  $33,553 

 

Net cash paid for our operating lease for the nine months ended December 31, 2022 and 2021 was $32,001 and $31,570, respectively. Rent expense, less sublease income of $11,679 and $14,662, respectively, is included in general and administrative expenses.

 

7. Income Taxes

 

A valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. To assess that likelihood, we use estimates and judgment regarding our future taxable income, and we consider the tax consequences in the jurisdiction where such taxable income is generated, to determine whether a valuation allowance is required. Such evidence can include our current financial position, our results of operations, both actual and forecasted, the reversal of deferred tax liabilities, and tax planning strategies as well as the current and forecasted business economics of our industry.

 

10
 

 

Based on the material write-downs of the carrying value of our oil and natural gas properties during fiscal 2016, we are in a net deferred tax asset position as of December 31, 2022. Our deferred tax asset for federal income tax purposes is $202,543 as of December 31, 2022 with a valuation amount of $202,543. We believe it is more likely than not that these deferred tax assets will not be realized. Management considers the likelihood that the Company’s net operating losses and other deferred tax attributes will be utilized prior to their expiration, if applicable. The determination to record a valuation allowance was based on management’s assessment of all available evidence, both positive and negative, supporting realizability of the Company deferred tax asset as required by applicable accounting standards. In light of those criteria for recognizing the tax benefit of deferred tax assets, the Company’s assessment resulted in application of a valuation allowance against the deferred tax asset as of December 31, 2022.

 

8. Related Party Transactions

 

Related party transactions for the Company relate to shared office expenditures in addition to administrative and operating expenses paid on behalf of the principal stockholder. The total billed to and reimbursed by the stockholder for the three months ended December 31, 2022 and 2021 was $11,598 and $12,276, respectively. The total billed to and reimbursed by the stockholder for the nine months ended December 31, 2022 and 2021 was $35,333 and $35,332, respectively. The principal stockholder pays for his share of the lease amount for the shared office space directly to the lessor. Amounts paid by the principal stockholder directly to the lessor for the three months ending December 31, 2022 and 2021 were $3,893. Amounts paid by the principal stockholder directly to the lessor for the nine months ending December 31, 2022 and 2021 were $11,679 and $11,882, respectively.

 

9. Income Per Common Share

 

The following is a reconciliation of the number of shares used in the calculation of basic and diluted net income per share for the three and nine month periods ended December 31, 2022 and 2021:

 

   2022   2021   2022   2021 
   Three Months Ended   Nine Months Ended 
   December 31   December 31 
   2022   2021   2022   2021 
Net income  $1,244,785   $753,302   $3,755,173   $1,857,136 
                     
Shares outstanding:                    
Weighted avg. shares outstanding – basic   2,147,750    2,120,912    2,148,859    2,096,433 
Effect of assumed exercise of dilutive stock options   57,956    55,328    64,793    50,284 
Weighted avg. shares outstanding – dilutive   2,205,706    2,176,240    2,213,652    2,146,717 
                     
Income per common share:                    
Basic  $0.58   $0.36   $1.75   $0.89 
Diluted  $0.56   $0.35   $1.70   $0.89 

 

For the three months ended December 31, 2022, 31,000 shares relating to stock options were excluded from the computation of diluted net income because their inclusion would be anti-dilutive. Anti-dilutive stock options have a weighted average exercise price of $18.05 at December 31, 2022.

 

For the three and nine months ended December 31, 2021, 31,000 shares relating to stock options were excluded from the computation of diluted net income because their inclusion would be anti-dilutive. Anti-dilutive stock options have a weighted average exercise price of $8.51 at December 31, 2021.

 

10. Stockholders’ Equity

 

In June 2022, the Board of Directors authorized the use of up to $250,000 to repurchase shares of the Company’s common stock for the treasury account. This program does not have an expiration date and may be modified, suspended or terminated at any time by the board of directors. Under the repurchase program, shares of common stock may be purchased from time to time through open market purchases or other transactions. The amount and timing of repurchases will be subject to the availability of stock, prevailing market conditions, the trading price of the stock, our financial performance and other conditions. Repurchases may also be made from time-to-time in connection with the settlement our share-based compensation awards. Repurchases will be funded from cash flow from operations.

 

During the three months ended December 31, 2022, the Company repurchased 12,416 shares for the treasury at an aggregate cost of $168,260. There were no shares of common stock repurchased for the treasury account during the three months ended December 31, 2021. Subsequently, in January 2023, the Company repurchased 1,300 shares for the treasury at an aggregate cost of $16,359.

 

On September 6, 2022, one of the Company’s directors paid the Company $30,179, representing profit on Company stock purchased within the six-month window of a previous Company stock sale. Such payment was made in accordance with Section 16(b) of the Securities Exchange Act of 1934.

 

11. Subsequent Events

 

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

 

11
 

 

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

 

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

 

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

 

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

 

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

 

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

 

At December 31, 2022, we had working capital of $2,468,314 compared to working capital of $2,469,776 at March 31, 2022, a decrease of $1,462 for the reasons set forth below.

 

12
 

 

Cash Flows

 

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

 

   For the Nine Months Ended
December 31,
     
   2022   2021   Change 
Net cash provided by operating activities   4,350,920    2,728,586    1,622,334 
Net cash used in investing activities   (4,969,269)   (1,021,849)   3,947,420 
Net cash used in financing activities   (121,381)   (884,360)   (762,979)

 

Cash Flow Provided by Operating Activities. Cash flow from operating activities is primarily derived from the production of our crude oil and natural gas reserves and changes in the balances of non-cash accounts, receivables, payables or other non-energy property asset account balances. Cash flow provided by our operating activities for the nine months ended December 31, 2022 was $4,350,920 in comparison to $2,728,586 for the nine months ended December 31, 2021. This increase of $1,622,334 in our cash flow operating activities consisted of an increase in our non-cash expenses of $496,349; an increase in our accounts receivable of $639,657; and, an increase in our net income for the current nine months of $1,898,037. Variations in cash flow from operating activities may impact our level of exploration and development expenditures.

 

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

 

Cash Flow Used in Investing Activities. Cash flow from investing activities is derived from changes in oil and gas property balances. For the nine months ended December 31, 2022, we had net cash of $4,969,269 used for additions to oil and gas properties compared to $1,021,849 for the nine months ended December 31, 2021.

 

Cash Flow Provided by Financing Activities. Cash flow from financing activities is derived from our changes in long-term debt and in equity account balances. Cash flow used in our financing activities was $121,381 for the nine months ended December 31, 2022 compared to cash flow used in our financing activities of $884,360 for the nine months ended December 31, 2021. During the nine months ended December 31, 2022, we received advances and made repayments of $675,000 on our credit facility, 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, and expended $168,260 for the purchase of 12,416 shares of our stock for the treasury.

 

Accordingly, net cash decreased $739,730, leaving cash and cash equivalents on hand of $631,036 as of December 31, 2022.

 

Oil and Natural Gas Property Development.

 

New Participations in Fiscal 2023. The Company currently plans to participate in the drilling and completion of 50 horizontal wells at an estimated aggregate cost of approximately $4,000,000 for the fiscal year ending March 31, 2023, of which 53% will be spent in the Delaware Basin and the remaining balance in the Midland Basin. Thirty-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 and twelve are in the Midland Basin located in the eastern portion of the Permian Basin in Reagan County, Texas.

 

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%.

 

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%. 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.

 

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%. These wells are currently being completed.

 

13
 

 

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%. This well was completed in October 2022 with initial average production rates of 134 barrels of oil, 874 barrels of water and 143,000 cubic feet of gas per day, or, 158 barrels of oil equivalent per day.

 

Mexco expended approximately $625,000 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%. 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.

 

Mexco expended approximately $78,000 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%. These wells are currently being completed.

 

Mexco expended approximately $85,000 to participate in the drilling and completion of eight horizontal wells in the Spraberry trend of the Midland Basin in Reagan County, Texas. Mexco’s working interest in these wells is approximately .08%. These wells are currently being completed.

 

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%. These wells are currently being completed.

 

In October 2022, the Company made an approximately 2% equity investment commitment in a limited liability company amounting to $2,000,000 of which $200,000 has been funded through December 31, 2022. 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 2022. 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. 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 953 barrels of oil, 4,063 barrels of water and 3,071,000 cubic feet of gas per day, or, 1,465 barrels of oil equivalent per day.

 

Acquisitions in Fiscal 2023. 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.

 

Subsequent Participations. 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.

 

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.

 

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

 

Crude oil and natural gas generally remained volatile during the last year. The volatility of the energy markets makes it extremely difficult to predict future oil and natural gas price movements with any certainty. For example, in the last twelve months, the NYMEX West Texas Intermediate (“WTI”) posted price for crude oil has ranged from a low of $67.00 per bbl in December 2022 to a high of $119.68 per bbl in March 2022. The Henry Hub Spot Market Price (“Henry Hub”) posted price for natural gas has ranged from a low of $3.46 per MMBtu in November 2022 to a high of $9.85 per MMBtu in August 2022.

 

On December 31, 2022, the WTI posted price for crude oil was $76.24 and the Henry Hub posted price for natural gas was $3.52. See Results of Operations below for realized price.

 

14
 

 

Contractual Obligations. We have no off-balance sheet debt or unrecorded obligations and have not guaranteed the debt of any other party. The following table summarizes our future payments we are obligated to make based on agreements in place as of December 31, 2022:

 

   Payments due in: 
   Total   less than 1 year   1 - 3 years   over 3 years 
Contractual obligations:                    
Leases (1)  $92,213   $58,240   $33,973   $- 

 

  (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. Of this total obligation for the remainder of the lease, our majority shareholder will pay $15,572 less than 1 year and $9,083 1-3 years for his portion of the shared office space.

 

Results of Operations – Three Months Ended December 31, 2022 and 2021. For the quarter ended December 31, 2022, there was net income of $1,244,785 compared to $753,302 for the quarter ended December 31, 2021, a 65% increase as a result of an increase in operating revenues due to an increase in oil and gas production and prices partially offset by an increase in operating expenses that is further explained below.

 

Oil and gas sales. Revenue from oil and gas sales was $2,486,017 for the third quarter of fiscal 2023, a 58% increase from $1,573,984 for the same period of fiscal 2022. This resulted from an increase in oil and natural gas production volumes and an increase in oil price partially offset by a decrease in natural gas price.

 

   2022   2021   % Difference 
Oil:               
Revenue  $1,750,539   $1,073,078    63.1%
Volume (bbls)   21,308    14,142    50.7%
Average Price (per bbl)  $82.15   $75.88    8.3%
                
Gas:               
Revenue  $735,478   $500,906    46.8%
Volume (mcf)   145,980    91,534    59.5%
Average Price (per mcf)  $5.04   $5.47    (7.9%)

 

Production and exploration. Production costs were $478,670 for the third quarter of fiscal 2023, a 64% increase from $291,068 for the same period of fiscal 2022. This is 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. Depreciation, depletion and amortization expense was $496,509 for the third quarter of fiscal 2023, an 85% increase from $268,018 for the same period of fiscal 2022, primarily due to an increase in production and full cost pool amortization base partially offset by an increase in oil and gas reserves.

 

General and administrative expenses. General and administrative expenses were $288,536 for the third quarter of fiscal 2023, a 20% increase from $239,767 for the same period of fiscal 2022. This was primarily due to an increase in salaries, employee stock option compensation and accounting fees.

 

Interest expense. Interest expense was $3,230 for the third quarter of fiscal 2023, a 3% increase from $3,132 for the same period of fiscal 2022, due to an increase in interest rate.

 

Income taxes. Income tax expense was $61,986 for the three months ended December 31, 2022, an 89% increase from $32,785 for the three months ended December 31, 2021 consisting only of state income tax. This increase was due to our continuing development program primarily in the State of New Mexico. The effective tax rate for the three months ended December 31, 2022 and 2021 was 5% and 4%, respectively. For federal income tax purposes, 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.

 

Results of Operations – Nine Months Ended December 31, 2022 and 2021. For the nine months ended December 31, 2022, there was a net income of $3,755,173 compared to net income of $1,857,136 for the nine months ended December 31, 2021. This was a result of an increase in operating revenues due to an increase in oil and gas production volumes and prices partially offset by an increase in operating expenses that is further explained below.

 

15
 

 

Oil and gas sales. Revenue from oil and gas sales was $7,184,025 for the nine months ended December 31, 2022, a 64% increase from $4,370,720 for the same period of fiscal 2022. This resulted from an increase in oil and natural gas prices and an increase in oil and natural gas production volumes.

 

   2022   2021   % Difference 
Oil:               
Revenue  $4,707,735   $3,193,315    47.4%
Volume (bbls)   50,052    45,857    9.1%
Average Price (per bbl)  $94.06   $69.64    35.1%
                
Gas:               
Revenue  $2,476,290   $1,177,405    110.3%
Volume (mcf)   394,293    274,204    43.8%
Average Price (per mcf)  $6.28   $4.29    46.3%

 

Production and exploration. Production costs were $1,308,143 for the nine months ended December 31, 2022, a 45% increase from $903,643 for the nine months ended December 31, 2021. This increase is 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. Depreciation, depletion and amortization expense was $1,268,016 for the nine months ended December 31, 2022, a 56% increase from $812,398 for the nine months ended December 31, 2021, due to an increase production and full cost pool amortization base partially offset by an increase in oil and gas reserves.

 

General and administrative expenses. General and administrative expenses were $876,735 for the nine months ended December 31, 2022, a 19% increase from $739,469 for the nine months ended December 31, 2021. This was primarily due to an increase in employee stock option compensation, salaries and contract services, and legal fees.

Interest expense. Interest expense was $9,770 for the nine months ended December 31, 2022, a 58% decrease from $23,255 for the nine months ended December 31, 2021 due to a decrease in borrowings.

 

Income taxes. Income tax expense was $115,236 for the nine months ended December 31, 2022, a 108% increase from $55,492 for the nine months ended December 31, 2021 consisting only of state income tax. This increase was due to our continuing development program primarily in the State of New Mexico. The effective tax rate for the nine months ended December 31, 2022 and 2021 was 3%. For federal income tax purposes, 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.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

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

 

Credit Risk. Credit risk is the risk of loss as a result of nonperformance by other parties of their contractual obligations. Our primary credit risk is related to oil and gas production sold to various purchasers and the receivables are generally not collateralized. At December 31, 2022, our largest credit risk associated with any single purchaser was $1,255,427 or 61% of our total oil and gas receivables. We have not experienced any significant credit losses.

 

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

 

For example, in the last twelve months, the NYMEX West Texas Intermediate (“WTI”) posted price for crude oil has ranged from a low of $67.00 per bbl in December 2022 to a high of $119.68 per bbl in March 2022. The Henry Hub Spot Market Price (“Henry Hub”) posted price for natural gas has ranged from a low of $3.46 per MMBtu in November 2022 to a high of $9.85 per MMBtu in August 2022. On December 31, 2022, the WTI posted price for crude oil was $76.24 and the Henry Hub posted price for natural gas was $3.52. See Results of Operations above for the Company’s realized prices during the three and nine months. Subsequently, on January 24, 2023, the WTI posted price for crude oil was $76.11 and the Henry Hub posted price for natural gas was $3.35.

 

Similarly, any improvements in oil and gas prices can have a favorable impact on our financial condition, results of operations and capital resources. If the average oil price had increased or decreased by ten dollars per barrel for the first nine months of fiscal 2023, pretax income would have changed by $500,520. If the average gas price had increased or decreased by one dollar per mcf for the first nine months of fiscal 2023, pretax income would have changed by $394,293.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures to ensure that the information we must disclose in our filings with the SEC is recorded, processed, summarized and reported on a timely basis. At the end of the period covered by this report, our principal executive officer and principal financial officer reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e). Based on such evaluation, such officers concluded that, as of December 31, 2022, our disclosure controls and procedures were effective.

 

Changes in Internal Control over Financial Reporting. No changes in our internal control over financial reporting occurred during the nine months ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

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

 

Item 1A.Risk Factors

 

There have been no material changes to the information previously disclosed in Item 1A. “Risk Factors” in our 2022 Annual Report on Form 10-K.

 

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

 

c. Issuer Purchases of Equity Securities

 

On June 23, 2022, our board of directors authorized the use of up to $250,000 to repurchase shares of our common stock for the treasury account. This program does not have an expiration date and may be modified, suspended or terminated at any time by the board of directors. The following table provides information related to repurchases of our common stock for the treasury account during the nine months ended December 31, 2022:

 

  

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 (1)

 
July 1-31, 2022   -    -    -   $250,000 
August 1-31, 2022   -    -    -   $250,000 
September 1-30, 2022   -    -    -   $250,000 
October 1-31, 2022   -    -    -   $250,000 
November 1-30, 2022   3,716   $14.51    3,716   $196,072 
December 1-31, 2022   8,700   $13.14    8,700   $81,740 

 

  (1) The program authorizing the use of up to $250,000 to repurchase shares of our common stock for the treasury account was approved by the board of directors on June 23, 2022 and does not have an expiration date. As of December 31, 2022, 12,416 shares of Mexco’s common stock have been purchased for a total of $168,260.

 

Item 6. Exhibits

 

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

 

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SIGNATURES

 

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

 

  MEXCO ENERGY CORPORATION
  (Registrant)
   
Dated: February 10, 2023 /s/ Nicholas C. Taylor
  Nicholas C. Taylor
  Chairman of the Board and Chief Executive Officer
   
Dated: February 10, 2023 /s/ Tamala L. McComic
  Tamala L. McComic
  President, Chief Financial Officer, Treasurer and Assistant Secretary

 

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