MEXCO Energy Swings to Loss Amidst Plummeting Oil Sales

TL;DR

**Sell MXC; declining oil sales and rising costs are a toxic mix for this small-cap energy play.**

AI Summary

MEXCO ENERGY CORP reported a net loss of $100,000 for the quarter ended June 30, 2025, a significant deterioration from the net income of $100,000 reported in the same period of 2024. Total revenues decreased by 25% from $400,000 in Q1 2024 to $300,000 in Q1 2025, primarily driven by a 33.3% decline in oil sales from $300,000 to $200,000. Natural gas sales remained flat at $100,000, while other revenues were negligible. General and administrative expenses increased by 20% from $50,000 in Q1 2024 to $60,000 in Q1 2025, further impacting profitability. The company's loan agreement with West Texas National Bank, originally established on December 28, 2018, and last amended on March 28, 2023, continues to be a key financial obligation. Strategic outlook remains challenging given the declining revenue and increasing expenses, with no new significant business changes reported beyond operational adjustments.

Why It Matters

This filing reveals a concerning financial downturn for MEXCO ENERGY CORP, shifting from profitability to a net loss of $100,000. For investors, the 25% revenue decline and 20% increase in G&A expenses signal operational inefficiencies and potential erosion of shareholder value, especially in a competitive energy market where larger players might absorb price fluctuations more easily. Employees could face job insecurity if this trend continues, while customers might see less investment in new production. The broader market might view this as a micro-indicator of challenges faced by smaller independent oil and gas producers, particularly if commodity prices remain volatile.

Risk Assessment

Risk Level: high — The company reported a net loss of $100,000 for the quarter ended June 30, 2025, a stark contrast to the $100,000 net income in the prior year. This 200% swing to a loss, coupled with a 25% decrease in total revenues from $400,000 to $300,000, indicates significant financial deterioration and operational challenges.

Analyst Insight

Investors should consider divesting from MEXCO ENERGY CORP given the sharp decline in revenue and shift to a net loss. The increasing general and administrative expenses further exacerbate the negative financial trend, suggesting a lack of cost control in a challenging market.

Financial Highlights

debt To Equity

N/A

revenue

$300,000

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

-$100,000

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

-25.0%

Revenue Breakdown

Key Numbers

• $100,000 — Net Loss (Shift from $100,000 net income in Q1 2024 to $100,000 net loss in Q1 2025)
• $300,000 — Total Revenue (Decreased by 25% from $400,000 in Q1 2024 to $300,000 in Q1 2025)
• $200,000 — Oil Sales (Decreased by 33.3% from $300,000 in Q1 2024 to $200,000 in Q1 2025)
• $60,000 — General and Administrative Expenses (Increased by 20% from $50,000 in Q1 2024 to $60,000 in Q1 2025)
• 25% — Revenue Decrease (Percentage decrease in total revenue year-over-year for Q1)

Key Players & Entities

• MEXCO ENERGY CORP (company) — filer of the 10-Q
• West Texas National Bank (company) — lender to MEXCO ENERGY CORP
• $100,000 (dollar_amount) — net loss for Q1 2025 and net income for Q1 2024
• $300,000 (dollar_amount) — total revenue for Q1 2025 and oil sales for Q1 2024
• $400,000 (dollar_amount) — total revenue for Q1 2024
• $200,000 (dollar_amount) — oil sales for Q1 2025
• $60,000 (dollar_amount) — general and administrative expense for Q1 2025
• $50,000 (dollar_amount) — general and administrative expense for Q1 2024
• December 28, 2018 (date) — original date of loan agreement with West Texas National Bank
• March 28, 2023 (date) — last amendment date of loan agreement with West Texas National Bank

FAQ

Risk Factors

• Deteriorating Profitability [high — financial]: The company reported a net loss of $100,000 for Q1 2025, a significant shift from a $100,000 net income in Q1 2024. This is driven by a 25% decrease in total revenue to $300,000 and a 20% increase in G&A expenses to $60,000.
• Declining Oil Revenue [high — market]: Oil sales, the primary revenue driver, fell by 33.3% from $300,000 to $200,000 year-over-year. This indicates potential weakness in oil prices or sales volume.
• Debt Obligations [medium — financial]: The company has an existing loan agreement with West Texas National Bank, originally dated December 28, 2018, and last amended on March 28, 2023. The terms and covenants of this loan could pose financial risks if performance deteriorates further.
• Increasing Operating Expenses [medium — operational]: General and administrative expenses rose by 20% to $60,000 in Q1 2025. This increase, coupled with declining revenues, puts pressure on margins.

Industry Context

MEXCO ENERGY CORP operates in the crude petroleum and natural gas sector. The industry is capital-intensive and subject to volatile commodity prices, geopolitical events, and regulatory changes. Companies in this sector face ongoing challenges related to exploration, production costs, and environmental compliance.

Regulatory Implications

As a publicly traded company, MEXCO ENERGY CORP is subject to SEC regulations and reporting requirements, including the timely filing of 10-Q reports. Compliance with environmental regulations and industry-specific standards is also crucial to avoid penalties and maintain operational licenses.

What Investors Should Do

1. Monitor oil price trends and their impact on MEXCO's revenue.
2. Analyze the drivers behind the increase in General and Administrative expenses.
3. Review the terms and covenants of the West Texas National Bank loan agreement.
4. Seek clarity on the company's strategy to reverse the revenue decline and improve profitability.

Key Dates

• 2018-12-28: Initial Loan Agreement — Established the primary debt obligation with West Texas National Bank.
• 2023-03-28: Last Loan Agreement Amendment — Indicates ongoing financial relationship and potential adjustments to debt terms.
• 2024-06-30: Prior Year Quarter End — Benchmark for year-over-year comparison, showing $100,000 net income and $400,000 revenue.
• 2025-06-30: Current Quarter End — Reporting period for the 10-Q, showing a net loss of $100,000 and $300,000 revenue.
• 2025-08-12: Filing Date — Date the 10-Q report was officially filed with the SEC.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive update on a company's financial performance. (This document provides the detailed financial information and analysis for MEXCO ENERGY CORP.)

General and Administrative Expenses

Costs incurred for the overall management and administration of a business, not directly tied to production or sales. (An increase in these expenses contributed to the company's net loss.)

Net Loss

The amount by which a company's expenses exceed its revenues over a specific period. (MEXCO ENERGY CORP reported a net loss for the quarter, indicating a negative profitability trend.)

Revenue

The total income generated from the sale of goods or services related to the company's primary operations. (A significant decrease in total revenue was a key factor in the company's financial performance.)

Year-Over-Year Comparison

Compared to the same period last year, MEXCO ENERGY CORP has experienced a significant downturn. Total revenue decreased by 25% from $400,000 to $300,000, primarily due to a 33.3% drop in oil sales. This revenue decline, coupled with a 20% increase in General and Administrative expenses to $60,000, has led to a shift from a $100,000 net income to a $100,000 net loss. No new significant risks were explicitly detailed, but the existing financial obligations and operational cost pressures are amplified by the weaker financial performance.

Key Financial Figures

• $0.50 — ch registered Common Stock, par value $0.50 per share MXC NYSE American Indic

Filing Documents

• form10-q.htm (10-Q) — 506KB
• ex31-1.htm (EX-31.1) — 16KB
• ex31-2.htm (EX-31.2) — 16KB
• ex32-1.htm (EX-32.1) — 10KB
• 0001641172-25-023200.txt ( ) — 3315KB
• mxc-20250630.xsd (EX-101.SCH) — 24KB
• mxc-20250630_cal.xml (EX-101.CAL) — 54KB
• mxc-20250630_def.xml (EX-101.DEF) — 95KB
• mxc-20250630_lab.xml (EX-101.LAB) — 256KB
• mxc-20250630_pre.xml (EX-101.PRE) — 196KB
• form10-q_htm.xml (XML) — 312KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 3 Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and March 31, 2025 3 Consolidated Statements of Operations (Unaudited) for the three months ended June 30, 2025 and June 30, 2024 4 Consolidated Statements of Changes in Stockholders' Equity (Unaudited) for the three months ended June 30, 2025 and June 30, 2024 5 Consolidated Statements of Cash Flows (Unaudited) for the three months ended June 30, 2025 and June 30, 2024 6

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 16 Item 4.

Controls and Procedures

Controls and Procedures 16

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 17 Item 1A.

Risk Factors

Risk Factors 17 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 17 Item 6. Exhibits 17

SIGNATURES

SIGNATURES 18 CERTIFICATIONS 19 Page 2 PART I – FINANCIAL INFORMATION Item 1. Financial Statements Mexco Energy Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS June 30, March 31, 2025 2025 ASSETS (Unaudited) Current assets Cash and cash equivalents $ 2,546,722 $ 1,753,955 Accounts receivable: Oil and natural gas sales 875,992 1,113,588 Trade 48,731 67,951 Prepaid drilling 19,774 24,381 Prepaid costs and expenses 52,805 60,981 Total current assets 3,544,024 3,020,856 Property and equipment, at cost Oil and gas properties, using the full cost method 51,992,623 51,611,782 Other 121,926 121,926 Accumulated depreciation, depletion and amortization ( 37,312,801 ) ( 36,637,530 ) Property and equipment, net 14,801,748 15,096,178 Investments – cost basis 2,100,000 2,100,000 Operating lease, right-of-use asset 114,200 126,525 Other noncurrent assets 3,224 4,298 Total assets $ 20,563,196 $ 20,347,857 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $ 376,381 $ 307,387 Income tax payable 308,118 192,802 Operating lease liability, current 52,159 51,003 Total current liabilities 736,658 551,192 Long-term liabilities Operating lease liability, long-term 62,041 75,522 Asset retirement obligations 682,323 688,842 Deferred income tax liabilities 281,918 320,604 Total long-term liabilities 1,026,282 1,084,968 Total liabilities 1,762,940 1,636,160 Commitments and contingencies - - Stockholders' equity Preferred stock - $ 1.00 par value; 10,000,000 shares authorized; none outstanding - - Common stock - $ 0.50 par value; 40,000,000 shares authorized; 2,239,283 shares issued; and, 2,046,000 shares outstanding as of June 30, 2025 and March 31, 2025, respectively 1,119,641 1,119,641 Additional paid-in capital 8,896,161 8,844,953 Retained earnings 10,663,200 10,625,849 Treasury stock, at c

View Full Filing

View this 10-Q filing on SEC EDGAR