<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20539
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarterly period ended December 31, 1995
----------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ________________
For Quarter Ended December 31, 1995 Commission File No. 0-6994
---------------------
MEXCO ENERGY CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-0627918
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
214 W. Texas, Suite 1101, Midland, TX 79701
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (915) 682-1119
NONE
- -------------------------------------------------------------------------------
(Former Name, Former Address & Former Fiscal Year if changed since last report)
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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO ______
------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at December 31, 1995
- ---------------------------- ---------------------------------
Common stock, $.50 par value 1,423,229
1
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MEXCO ENERGY CORPORATION
Index
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Part I. Financial information:
Condensed Balance Sheets as of
March 31, 1995 and December 31, 1995 3
Condensed Statements of Operations
for the three months ended
December 31, 1995 and 1994 4
Condensed Statements of Operations
for the nine months ended December 31, 5
1995 and 1994
Condensed Statements of Cash Flows
for the nine months ended December 31,
1995 and 1994 6
Notes to condensed Financial Statements 7
Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
Part II. Other information: Not Applicable
</TABLE>
2
<PAGE>
MEXCO ENERGY CORPORATION
CONDENSED BALANCE SHEETS
December 31, 1995 and March 31, 1995
ASSETS
------
<TABLE>
<CAPTION>
December 31, March 31,
1995 1995
------------ ---------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 458,034 $ 220,974
Accounts Receivable 99,256 71,981
Prepaid Assets 0 1,350
Recoverable Income Taxes 375 9,126
----------- -----------
Total current assets 557,665 303,431
PROPERTY AND EQUIPMENT
Oil and gas properties-accounted for
under the full cost method 4,433,258 3,954,959
Office furniture and fixtures 2,431 2,431
----------- -----------
4,435,689 3,957,390
Less accumulated depreciation,
depletion and amortization (2,488,780) (2,308,925)
----------- -----------
Net property and equipment 1,946,909 1,648,465
----------- -----------
TOTAL ASSETS $ 2,504,574 $ 1,951,896
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable-trade $ 32,741 $ 37,472
Income taxes payable 0 38,148
----------- -----------
Total current liabilities 32,741 75,620
DEFERRED INCOME TAXES 29,294 31,737
----------- -----------
Total liabilities 62,035 107,357
STOCKHOLDERS' EQUITY
Common Stock-$.50 par value, authorized
5,000,000, issued and outstanding-
1,423,229 711,614 586,614
Paid in capital 1,975,429 1,600,429
Accumulated Deficit (244,504) (342,504)
----------- -----------
Total stockholders' equity 2,442,539 1,844,539
----------- -----------
TOTAL LIABILITIES & EQUITY $ 2,504,574 $ 1,951,896
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
MEXCO ENERGY CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
Three months ended December 31,
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Revenues:
Gross revenues from oil and gas
production $ 176,343 $ 123,869
Production costs 75,647 55,013
---------- ----------
Net revenues from oil and gas
production 100,696 68,856
Administrative service charges and
reimbursements 1,203 2,417
---------- ----------
101,899 71,273
---------- ----------
Costs and expenses:
Depreciation, depletion and amortization 62,919 56,220
General and administrative 19,529 19,822
Other Income (7,039) 0
Interest income (6,510) (4,293)
---------- ----------
68,899 71,749
---------- ----------
Income (loss) before income tax expense 33,000 (476)
Income tax expense 1,498 0
---------- ----------
NET INCOME (LOSS) $ 31,502 $ (476)
========== ==========
Net income per share $ .02 $ .00
========== ==========
Weighted average common shares
outstanding 1,423,229 1,173,229
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
MEXCO ENERGY CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
Nine months ended December 31,
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Revenues:
Gross revenues from oil and gas
production $ 524,133 $ 366,586
Production costs 201,590 155,800
---------- ----------
Net revenues from oil and gas
production 322,543 210,786
Administrative service charges
and reimbursements 6,176 7,707
---------- ----------
328,719 218,493
---------- ----------
Costs and expenses:
Depreciation, depletion and amortization 179,855 149,617
General and administrative 65,632 67,477
Other income (7,990) (5,164)
Interest income (13,461) (12,234)
---------- ----------
224,036 199,696
---------- ----------
Income before income tax expense 104,683 18,797
Income tax expense (benefit) 6,683 (21,755)
---------- ----------
NET INCOME $ 98,000 $ 40,552
========== ==========
Net income per share $ .07 $ .02
========== ==========
Weighted average common shares
outstanding 1,315,956 1,173,229
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
MEXCO ENERGY CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
Nine Months ended December 31,
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
- ------------------------------------
Cash received from oil & gas operations $ 535,570 $ 351,544
Cash paid for oil & gas operations (238,856) (198,350)
General & administrative expenses (64,282) (58,491)
Interest received 13,461 12,234
Other cash received 7,990 5,164
Income Taxes (paid) refunded (38,523) 30,874
------------ ------------
Net cash provided by operations 215,360 142,975
Cash flows from investing activities:
- ------------------------------------
Capital expenditures (479,800) (709,196)
Sales of assets 1,500 24,000
------------ ------------
Net cash used in investing activities (478,300) (197,232)
------------ ------------
Cash flows from financing activities:
- ------------------------------------
Sale of common stock 500,000 -0-
------------ ------------
Net increase (decrease) in cash & cash
equivalents 237,060 (542,221)
Cash & cash equivalents at the beginning
of the period 220,974 739,453
------------ ------------
Cash & cash equivalents at the end
of the period $ 458,034 $ 197,232
============ ============
Reconciliation of net income to net cash
- ----------------------------------------
provided by operating activities:
--------------------------------
Net income $ 98,000 $ 40,552
------------ ------------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 179,855 149,617
Increase in accounts receivable (27,275) (13,845)
Decrease in accounts payable (4,730) (51,454)
Decrease in prepaid expenses 1,350 8,986
Increase (Decrease) in income taxes payable (31,840) 9,119
------------ ------------
Total adjustments 117,360 102,423
------------ ------------
Net cash provided by operating activities $ 215,360 $ 142,975
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
MEXCO ENERGY CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
December 31, 1995 and 1994
MANAGEMENT COMMENTS
In the opinion of the Company, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the financial position of
the Company as of March 31, 1995 and December 31, 1995, the results of its
operations for the three-month and nine-month periods ended December 31, 1995
and 1994 and the cash flows for the nine-month periods ended December 31, 1995
and 1994. All adjustments are of a normal and recurring nature.
The results of operations for the three-month and nine-month periods ended
December 31, 1995 are not necessarily indicative of the results to be expected
for the full year.
The condensed balance sheets as of March 31, 1995 have been prepared based upon
the Registrant's audited balance sheets as of that date.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE CONDENSED STATEMENTS OF OPERATIONS
Results of Operations - 3 Months Ended December 31, 1995
- --------------------------------------------------------
Operating revenues increased $52,474 (42%) from the third quarter of fiscal 1994
primarily as a result of increased production from additions of oil and gas
properties.
Production costs increased $20,634 (37.5%) due to increased operating expenses
from additional properties.
Depreciation, depletion and amortization increased $6,699 (12%) as compared to
the same quarter during the prior year due to the addition of oil and gas
properties.
General and administrative costs decreased $293 (1.5%) primarily due to
decreased accounting costs.
Interest income increased $2,217 (52%) due to increased funds invested in money
market accounts.
Other income increased $7,039 (100%) primarily due to gas gathering fees
collected at the Viejos Field Gas Gathering Unit in Pecos County, Texas.
During the quarter, the Company purchased several royalty and leasehold
interests in Hockley County, Texas, and mineral interests in Andrews County for
$56,352. The Company also prepaid expenses of $56,375 for the drilling and
completing of a well (.275 working interest) in Garza County, Texas. The Company
plugged and abandoned nine wells in Haskell County, Texas. The Company sold one
well (.046875 working interest) in Stonewall County, Texas for $1,500.
Results of Operations - 9 Months Ended December 31, 1995
- --------------------------------------------------------
Operating revenues increased $157,547 (43%) from the first nine months of fiscal
1994 primarily as a result of increased production from the addition of new
wells.
Production costs increased $45,790 (29%) due to increased lease operating
expenses from additional properties.
Revenue from administrative service charges and reimbursements decreased $1,531
(20%) due to non-recurrence of operating overhead charges in 1994 resulting from
the plugging of nine wells operated by the Company.
Depreciation, depletion and amortization increased $30,238 (20%) due to the
addition of oil and gas properties.
General and administrative costs decreased $1,845 (3%) due primarily to timing
of accounting costs.
8
<PAGE>
Interest income increased $1,227 (10%) due to increased funds invested in money
market accounts.
Financial Condition
- -------------------
Working capital increased by $297,113 (130%) as compared to March 31, 1995
primarily due to increase in cash. Cash and cash equivalents have increased
$237,060 for the period, from the sale of stock through a private placement. On
July 28, 1995, the Registrant completed a private placement of 250,000 shares of
its unregistered, restricted common stock, par value $0.50 per share, for total
proceeds of $500,000.
The decrease in accounts payable reflects the payment of expenses incurred at
the end of the prior fiscal year.
The increase in accounts receivable is due to plugging expenses charged to
working interest owners at period end.
Management cannot specifically identify the effects of inflation and other price
changes on operations.
Signatures
- ----------
Pursuant to the requirements of the Securities 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
(A Colorado Corporation)
___________________________
Nicholas C. Taylor,
President and Treasurer
Date: February 7, 1996
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 12-MOS
<FISCAL-YEAR-END> MAR-31-1996 MAR-31-1995
<PERIOD-START> APR-01-1995 APR-01-1994
<PERIOD-END> DEC-31-1995 MAR-31-1995
<CASH> 458,034 220,974
<SECURITIES> 0 0
<RECEIVABLES> 99,256 71,981
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 557,665 303,431
<PP&E> 4,435,689 3,957,390
<DEPRECIATION> 2,488,780 2,308,925
<TOTAL-ASSETS> 2,504,574 1,951,896
<CURRENT-LIABILITIES> 32,741 75,620
<BONDS> 0 0
0 0
0 0
<COMMON> 711,614 586,614
<OTHER-SE> 2,219,933 1,942,933
<TOTAL-LIABILITY-AND-EQUITY> 2,504,574 1,951,896
<SALES> 524,133 543,267
<TOTAL-REVENUES> 551,760 573,921
<CGS> 201,590 207,629
<TOTAL-COSTS> 201,590 207,629
<OTHER-EXPENSES> 179,855 170,723
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 104,683 114,825
<INCOME-TAX> 6,683 9,982
<INCOME-CONTINUING> 98,000 104,843
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 98,000 104,843
<EPS-PRIMARY> .074 .089
<EPS-DILUTED> 0 0
</TABLE>
