Mexco Energy (MXC) 10-Q 5 Nov 20 2021 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Sep. 30, 2020	Nov. 05, 2020
Cover [Abstract]
Entity Registrant Name	MEXCO ENERGY CORP
Entity Central Index Key	0000066418
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,051,866
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Current assets
Cash and cash equivalents	$ 62,678	$ 34,381
Accounts receivable:
Oil and natural gas sales	320,772	271,315
Trade	592	13,382
Prepaid costs and expenses	23,901	50,188
Total current assets	407,943	369,266
Property and equipment, at cost
Oil and gas properties, using the full cost method	38,022,952	37,465,172
Other	120,208	116,993
Accumulated depreciation, depletion and amortization	(28,569,491)	(28,109,252)
Property and equipment, net	9,573,669	9,472,913
Investment - cost basis	175,000	150,000
Operating lease, right-of-use asset	53,113	76,130
Other noncurrent assets	44	2,200
Total assets	10,209,769	10,070,509
Current liabilities
Accounts payable and accrued expenses	112,288	116,760
Operating lease liability, current	54,912	65,721
Total current liabilities	167,200	182,481
Long-term liabilities
Long-term debt	1,143,686	757,423
PPP loan payable	68,574
Operating lease liability, long-term		10,982
Asset retirement obligations	770,204	755,261
Total long-term liabilities	1,982,464	1,523,666
Total liabilities	2,149,664	1,706,147
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; 2,108,666 and 2,107,166 shares issued; 2,041,666 and 2,040,166 shares outstanding as of September 30, 2020 and March 31, 2020, respectively	1,054,333	1,053,583
Additional paid-in capital	7,375,984	7,339,351
Retained (losses) earnings	(24,211)	317,429
Treasury stock, at cost (67,000 shares)	(346,001)	(346,001)
Total stockholders' equity	8,060,105	8,364,362
Total liabilities and stockholders' equity	$ 10,209,769	$ 10,070,509

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Mar. 31, 2020
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 1	$ 1
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding
Common stock, par value	$ 0.50	$ 0.50
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	2,108,666	2,107,166
Common stock, shares outstanding	2,041,666	2,040,166
Treasury stock, shares	67,000	67,000

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Operating revenues:
Total operating revenues	$ 636,042	$ 625,884	$ 1,006,498	$ 1,325,475
Operating expenses:
Production	217,117	229,042	388,783	448,437
Accretion of asset retirement obligations	7,237	6,590	14,424	13,337
Depreciation, depletion, and amortization	236,134	209,729	460,239	419,967
General and administrative	192,360	255,294	441,238	566,355
Total operating expenses	652,848	700,655	1,304,684	1,448,096
Operating loss	(16,806)	(74,771)	(298,186)	(122,621)
Other income (expenses):
Interest income	301	479	316	499
Interest expense	(13,515)	(8,495)	(24,570)	(14,851)
Loss on derivative instruments	(11,950)		(19,200)
Net other expense	(25,164)	(8,016)	(43,454)	(14,352)
Loss before income taxes	(41,970)	(82,787)	(341,640)	(136,973)
Income tax
Net loss	$ (41,970)	$ (82,787)	$ (341,640)	$ (136,973)
Loss per common share:
Basic:	$ (0.02)	$ (0.04)	$ (0.17)	$ (0.07)
Diluted:	$ (0.02)	$ (0.04)	$ (0.17)	$ (0.07)
Weighted average common shares outstanding:
Basic:	2,040,941	2,040,166	2,040,553	2,040,166
Diluted:	2,040,941	2,040,166	2,040,553	2,040,166
Oil Sales [Member]
Operating revenues:
Total operating revenues	$ 504,957	$ 531,086	$ 787,327	$ 1,119,522
Natural Gas Sales [Member]
Operating revenues:
Total operating revenues	125,007	94,664	206,816	197,922
Other [Member]
Operating revenues:
Total operating revenues	$ 6,078	$ 134	$ 12,355	$ 8,031

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock Par Value [Member]	Additional Paid-In Capital [Member]	Retained Earnings (Losses) [Member]	Treasury Stock [Member]	Total
Balance at Mar. 31, 2019	$ 1,053,583	$ 7,305,048	$ 416,907	$ (346,001)	$ 8,429,537
Net loss			(136,973)		(136,973)
Stock based compensation		16,250			16,250
Balance at Sep. 30, 2019	1,053,583	7,321,298	279,934	(346,001)	8,308,814
Balance at Jun. 30, 2019	1,053,583	7,313,173	362,721	(346,001)	8,383,476
Net loss			(82,787)		(82,787)
Stock based compensation		8,125			8,125
Balance at Sep. 30, 2019	1,053,583	7,321,298	279,934	(346,001)	8,308,814
Balance at Mar. 31, 2020	1,053,583	7,339,351	317,429	(346,001)	$ 8,364,362
Common stock shares, issued at Mar. 31, 2020					2,107,166
Common stock shares, held in treasury at Mar. 31, 2020					(67,000)
Net loss			(341,640)		$ (341,640)
Issuance of stock through options exercised	750	8,685			9,435
Stock based compensation		27,948			$ 27,948
Common stock shares, issued					1,500
Common stock shares, held in treasury, Acquisitions, shares
Balance at Sep. 30, 2020	1,054,333	7,375,984	(24,211)	(346,001)	$ 8,060,105
Common stock shares, issued at Sep. 30, 2020					2,108,666
Common stock shares, held in treasury at Sep. 30, 2020					(67,000)
Common stock shares outstanding at Sep. 30, 2020					2,041,666
Balance at Jun. 30, 2020	1,053,583	7,353,356	17,759	(346,001)	$ 8,078,697
Net loss			(41,970)		(41,970)
Issuance of stock through options exercised	750	8,685			9,435
Stock based compensation		13,943			13,943
Balance at Sep. 30, 2020	$ 1,054,333	$ 7,375,984	$ (24,211)	$ (346,001)	$ 8,060,105
Common stock shares, issued at Sep. 30, 2020					2,108,666
Common stock shares, held in treasury at Sep. 30, 2020					(67,000)
Common stock shares outstanding at Sep. 30, 2020					2,041,666

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net loss	$ (341,640)	$ (136,973)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation	27,948	16,250
Depreciation, depletion and amortization	460,239	419,967
Accretion of asset retirement obligations	14,424	13,337
Amortization of debt issuance costs	6,263	7,188
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(36,667)	456
Decrease in right-of-use asset	23,017	32,628
Decrease in prepaid expenses	26,287	14,568
Decrease in other assets		30,421
Increase (decrease) in accounts payable and accrued expenses	7,185	(13,956)
Settlement of asset retirement obligations	(1,028)	(8,694)
Decrease in operating lease liability	(21,791)	(32,254)
Net cash provided by operating activities	164,237	342,938
Cash flows from investing activities:
Additions to oil and gas properties	(714,079)	(842,139)
Drilling refunds	42,060
Investment - cost basis	(25,000)	(100,000)
Proceeds from sale of oil and gas properties and equipment	106,285	26,448
Additions to other property and equipment	(3,215)
Net cash used in investing activities	(593,949)	(915,691)
Cash flows from financing activities:
Proceeds from exercise of stock options	9,435
Proceeds from long-term debt	673,574	555,000
Reduction of long-term debt	(225,000)	(40,000)
Net cash provided by financing activities	458,009	515,000
Net increase (decrease) in cash and cash equivalents	28,297	(57,753)
Cash and cash equivalents at beginning of period	34,381	128,252
Cash and cash equivalents at end of period	62,678	70,499
Supplemental disclosure of cash flow information:
Cash paid for interest	17,859	7,395
Non-cash investing and financing activities:
Asset retirement obligations	11,269	10,421
Operating lease - right of use asset and associated liabilities	$ 9,360	$ 141,385

Nature of Operations

Nature of Operations	6 Months Ended
	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations	1. Nature of Operations Mexco Energy Corporation (a Colorado corporation) and its wholly owned subsidiaries, Forman Energy Corporation (a New York corporation), Southwest Texas Disposal Corporation (a Texas corporation) and TBO Oil & Gas, LLC (a Texas limited liability company) (collectively, the “Company”) are engaged in the 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 the 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. Recent Events The outbreak of the novel coronavirus (“COVID-19”) in the first calendar quarter of 2020 and its continued spread across the globe in the second and third calendar quarters of 2020 has resulted, and is likely to continue to result, in significant economic disruption and has, and is likely to continue to, adversely affect the operations of the Company’s business, as the significantly reduced global and national economic activity has resulted in reduced demand for oil and natural gas. Federal, state and local governments mobilized to implement containment mechanisms to minimize impacts to their populations and economies. Various containment measures, which include the quarantining of cities, regions and countries, while aiding in the prevention of further outbreak, have resulted in a severe drop in general economic activity and a resulting decrease in energy demand. In addition, the global economy has experienced a significant disruption to global supply chains. The extent of the COVID-19 outbreak on the Company’s operational and financial performance will continue to depend on certain developments, including the duration and spread of the outbreak and its continued impact on customer activity and third-party providers. The direct impact to the Company’s operations began to take effect at the close of the fiscal year ended March 31, 2020, and continued through the issuance of these condensed consolidated financial statements. The full extent to which the COVID-19 outbreak may affect the Company’s financial conditions, results of operations or liquidity subsequent to the issuance of these condensed consolidated financial statements is uncertain. At the time of this filing, cases of COVID-19 in the U.S. remain high, including in Texas, where we conduct significant operations. The severe drop in economic activity, travel restrictions and other restrictions due to COVID-19 have had a significant negative impact on the demand for oil and gas. Due to the significantly reduced demand for oil and natural gas as a result of the COVID-19 pandemic and the current oversupply of oil and natural gas in the market, available storage and capacity for the Company’s customers’ production may be limited or completely unavailable in the future, which may further negatively impact the price of oil. The Company cannot predict whether, or when, the global supply and demand imbalance will be resolved or whether, or when, oil and natural gas production and economic activities will return to normalized levels. In the absence of additional reductions to global production, oil, natural gas and NGLs prices could remain at current levels, or decline further, for an extended period of time.

Basis of Presentation and Signi

Basis of Presentation and Significant Accounting Policies	6 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Basis of Presentation and Significant Accounting Policies	2. Basis of Presentation and Significant Accounting Policies Principles of Consolidation Estimates and Assumptions Interim Financial Statements. Investments. Derivative Financial Instruments. The Company accounts for derivative financial instruments using fair value accounting and recognizes gains and losses in earnings during the period in which they occur. Unsettled derivative instruments are recorded in the accompanying consolidated balance sheets as either a current or non-current asset or a liability measured at its fair value. The Company only offsets derivative assets and liabilities for arrangements with the same counterparty when right of setoff exists. Derivative assets and liabilities with different counterparties are recorded gross in the consolidated balance sheets. Derivative contract settlements are reflected in operating activities in the accompanying consolidated statements of cash flows. The Company uses certain pricing models to determine the fair value of its derivative financial instruments. Inputs to the pricing models include publicly available prices and forward price curves generated from a compilation of data gathered from third parties. Company management validates the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming that those securities trade in active markets. Recent Accounting Pronouncements.

Asset Retirement Obligations

Asset Retirement Obligations	6 Months Ended
	Sep. 30, 2020
Asset Retirement Obligation Disclosure [Abstract]
Asset Retirement Obligations	3. Asset Retirement Obligations The Company’s asset retirement obligations (“ARO”) relate to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and gas properties. The fair value of a liability for an ARO is recorded in the period in which it is initially 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 on the consolidated balance sheets with the current portion being included in the accounts payable and other accrued expenses. The following table provides a rollforward of the AROs for the first six months of fiscal 2021: Carrying amount of asset retirement obligations as of April 1, 2020 $ 762,761 Liabilities incurred 11,269 Liabilities settled (10,750 ) Accretion expense 14,424 Carrying amount of asset retirement obligations as of September 30, 2020 777,704 Less: Current portion 7,500 Non-Current asset retirement obligation $ 770,204

Long Term Debt

Long Term Debt	6 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Long Term Debt	4. Long Term Debt Long-term debt on the Consolidated Balance Sheets consisted of the following as of the dates indicated: September 30, 2020 March 31, 2020 Credit facility $ 1,175,000 $ 795,000 Unamortized debt issuance costs (31,314 ) (37,577 ) Total long-term debt $ 1,143,686 $ 757,423 On December 28, 2018, the Company entered into a loan agreement (the “Agreement”) with West Texas National Bank (“WTNB”), which 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 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 September 30, 2020, there was $325,000 available 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 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. The Company is in compliance with all covenants as of September 30, 2020. 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. The Company obtained written permission prior to entering into the current hedge agreement discussed in Note 7. The balance outstanding on the line of credit as of September 30, 2020 was $1,175,000. The following table is a summary of activity on the WTNB line of credit for the six months ended September 30, 2020: Principal Balance at April 1, 2020: $ 795,000 Borrowings 605,000 Repayments (225,000 ) Balance at September 30, 2020: $ 1,175,000 Subsequently, on October 16, 2020, the Company made a payment of $75,000 on the WTNB line of credit leaving a balance of $1,100,000. The Company also maintained a Certificate of Deposit Account at WTNB to collateralize one outstanding letter of credit for $25,000 in lieu of a plugging bond with the Texas Railroad Commission covering the properties the Company operated. The operated property was sold effective December 1, 2019 and the letter of credit was cancelled. On April 10, 2020, the Certificate of Deposit Account was terminated and the funds deposited into the Company’s operating account.

Leases

Leases	6 Months Ended
	Sep. 30, 2020
Leases [Abstract]
Leases	5. Leases The Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for our corporate office located in Midland, Texas. This includes 1,021 square feet of office space shared with and reimbursed by our majority shareholder. The lease is a 36 month lease that expires in May 2021 and does not include an option to renew. 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. 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 6.0%. Significant judgement is required when determining the incremental borrowing rate. The Company chose not to discount because the difference is not significant. 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: September 30, 2020 Assets Operating lease right-of-use asset, beginning balance $ 76,130 Current period amortization (32,377 ) Lease amendment (1,622 ) Lease extension 10,982 Total operating lease right-of-use asset $ 53,113 Liabilities Operating lease liability, current $ 54,912 Operating lease liability, long term - Total lease liabilities $ 54,912 Future minimum lease payments as of September 30, 2020 under non-cancellable operating leases are as follows: Lease Obligation Fiscal Year Ended March 31, 2021 32,947 Fiscal Year Ended March 31, 2022 21,965 Total lease payments $ 54,912 Less: imputed interest - Operating lease liability 54,912 Less: operating lease liability, current (54,912 ) Operating lease liability, long term $ - Net cash paid for our operating lease for the six months ended September 30, 2020 and 2019 was $21,693 and $24,173, respectively. Rent expense, less sublease income of $9,459 and $8,080, respectively, is included in general and administrative expenses.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Sep. 30, 2020
Fair Value Disclosures [Abstract]
Fair Value Measurements	6. Fair Value Measurements The Company applies FASB ASC Topic 820, Fair Value Measurements and Disclosure (“ASC Topic 820”), which establishes a framework for measuring fair value based upon inputs that market participants use in pricing an asset or liability, which are classified into two catagories: observable inputs or unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. These two types of inputs are further prioritized into the following fair value input hierarchy: Level 1: Quoted prices for identical instruments in active markets at the measurement date. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at the measurement date and for the anticipated term of the instrument. Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability acquired, based on the best information available in the circumstances. The carrying amount reported in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. The fair value amount reported in the accompanying consolidated balance sheets for long-term debt approximates fair value because the actual interest rates do not significantly differ from current rates offered for instruments with similar characteristics. See the Company’s note 4 on Long Term Debt for further discussion. Fair Value Measurements on a Recurring Basis A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s commodity derivative instruments were carried at fair value on a recurring basis in the Company’s consolidated balance sheets. The Company uses certain pricing models to determine the fair value of its derivative financial instruments. Inputs to the pricing models include publicly available prices and forward price curves generated from a compilation of data gathered from third parties. Company management validates the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming that those securities trade in active markets. Assumed credit risk adjustments, based on published credit ratings and public bond yield spreads are applied to the Company’s commodity derivatives. The Company’s derivative instruments are subject to netting arrangements and qualify for net presentation in the consolidated balance sheets in those instances where such arrangements exist with the respective counterparty. To ensure these derivative instruments are recorded at fair value, valuation adjustments may be required to reflect the creditworthiness of either party as well as market constraints on liquidity. Any such adjustment was not material as of September 30, 2020. Fair Value Measurements on a Nonrecurring Basis The asset retirement obligation estimates are derived from historical costs and management’s expectation of future cost environments and, therefore, the Company has designated these liabilities as Level 3 measurements. The significant inputs to this fair value measurement include estimates of plugging, abandonment and remediation costs, well life, inflation and credit-adjusted risk-free rate. See Note 3 for a reconciliation of the beginning and ending balances of the liability for the Company’s asset retirement obligations.

Derivative Financial Instrument

Derivative Financial Instruments	6 Months Ended
	Sep. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Financial Instruments	7. Derivative Financial Instruments It is the Company’s policy to enter into derivative contracts only with counterparties that are creditworthy financial institutions deemed by management as competent and competitive. The Company is exposed to certain risks relating to its ongoing business operations, such as commodity price risk. Derivative contracts are utilized to economically hedge the Company’s exposure to price fluctuations and reduce the variability in the Company’s cash flows associated with anticipated sales of future oil and natural gas production. The Company follows FASB ASC Topic 815, Derivatives and Hedging (ASC Topic 815), to account for its derivative financial instruments. The Company’s crude oil derivative positions consist of put options. The Company has elected not to designate any of its derivative contracts for hedge accounting. Accordingly, the Company records the net change in the mark-to-market valuation of these derivative contracts, as well as all payments and receipts on settled derivative contracts, in net realized and unrealized gain (loss) on commodity price hedging contracts on the consolidated statements of operations. All derivative contracts are recorded at fair market value and included in the consolidated balance sheets as assets or liabilities. The Company may have multiple hedge positions that span a several-month time period and result in fair value asset and liability positions. At the end of the reporting periods, those positions are offset to a single fair value asset or liability for each commodity and the netted balance is reflected in the consolidated balance sheets as an asset or liability. During the quarter ended June 30, 2020 the Company entered into a series of crude oil put option contracts. All of these such contracts expired in July and August 2020. The following tables summarizes the amounts of the Company’s realized and unrealized losses on derivative contracts in the Company’s consolidated statements of operations for the six months ended September 30, 2020. Loss Recognized Realized loss on oil price hedging contracts $ (19,200 ) Unrealized gain (loss) on oil price hedging contracts - Net realized and unrealized loss on derivative contracts $ (19,200 )

Stock-based Compensation

Stock-based Compensation	6 Months Ended
	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Stock-based Compensation	8. Stock-based Compensation The Company recognized stock-based compensation expense of $13,943 and $8,125 in general and administrative expense in the Consolidated Statements of Operations for the three months ended September 30, 2020 and 2019, respectively. Stock-based compensation expense recognized for the six months ended September 30, 2020 and 2019 was $27,948 and $16,250, respectively. The total cost related to non-vested awards not yet recognized at September 30, 2020 totals $141,861 which is expected to be recognized over a weighted average of 2.94 years. The following table is a summary of activity of stock options for the six months ended September 30, 2020: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Life in Years Outstanding at April 1, 2020 227,700 $ 5.65 4.83 Granted - - Exercised (1,500 ) 6.29 Forfeited or Expired (35,200 ) - Outstanding at September 30, 2018 191,000 $ 5.56 5.14 Vested at September 30, 2020 130,000 $ 6.37 3.35 Exercisable at September 30, 2020 130,000 $ 6.37 3.35 During the six months ended September 30, 2020, stock options covering 1,500 shares were exercised with a total intrinsic value of $135. The Company received proceeds of $9,435 from these exercises. During the six months ended September 30, 2019, no stock options were exercised. During the six months ended September 30, 2020, 1,000 unvested stock options were forfeited due to the resignation of an employee and 34,200 vested stock options expired unexercised. There were no stock options forfeited or expired during the six months ended September 30, 2019. 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 September 30, 2020 expire between November 2021 and March 2030 and have exercise prices ranging from $3.34 to $7.00.

Income Taxes

Income Taxes	6 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	9. 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. 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 September 30, 2020. Our deferred tax asset is $1,389,101 as of September 30, 2020 with a valuation amount of $1,389,101. We believe it is more likely than not that these deferred tax assets will not be realized. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of deferred tax assets. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as future expected growth.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Sep. 30, 2020
Related Party Transactions [Abstract]
Related Party Transactions	10. 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 quarters ended September 30, 2020 and 2019 was $8,219 and $9,842, respectively. The total billed to and reimbursed by the stockholder for the six months ended September 30, 2020 and 2019 was $18,321 and $19,943, 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 September 30, 2020 and 2019 were $3,846 and $3,981, respectively. Amounts paid by the principal stockholder directly to the lessor for the six months ending September 30, 2020 and 2019 were $7,649 and $7,919, respectively.

Loss Per Common Share

Loss Per Common Share	6 Months Ended
	Sep. 30, 2020
Loss per common share:
Loss Per Common Share	11. Loss Per Common Share The Company’s basic net loss per share has been computed based on the weighted average number of common shares outstanding during the period. Diluted net loss per share assumes the exercise of all stock options having exercise prices less than the average market price of the common stock during the period using the treasury stock method and is computed by dividing net loss by the weighted average number of common shares and dilutive potential common shares (stock options) outstanding during the period. In periods where losses are reported, the weighted-average number of common shares outstanding excludes potential common shares, because their inclusion would be anti-dilutive. The following is a reconciliation of the number of shares used in the calculation of basic and diluted net loss per share for the three and six month periods ended September 30, 2020 and 2019. Three Months Ended Six Months Ended September 30, September 30, 2020 2019 2020 2019 Net loss $ (41,970 ) $ (82,787 ) $ (341,640 ) $ (136,973 ) Shares outstanding: Weighted avg. shares outstanding – basic 2,040,941 2,040,166 2,040,553 2,040,166 Effect of assumed exercise of dilutive stock options - - - - Weighted avg. shares outstanding – dilutive 2,040,941 2,040,166 2,040,553 2,040,166 Loss per common share: Basic $ (0.02 ) $ (0.04 ) $ (0.17 ) $ (0.07 ) Diluted $ (0.02 ) $ (0.04 ) $ (0.17 ) $ (0.07 ) Due to a net loss for the for the three and six months ended September 30, 2020, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

Subsequent Events

Subsequent Events	6 Months Ended
	Sep. 30, 2020
Subsequent Events [Abstract]
Subsequent Events	12. Subsequent Events On October 16, 2020, the Company made a payment of $75,000 on the WTNB line of credit leaving a balance of $1,100,000. On October 13, 2020, the Company expended $10,200 for its share to participate in 2 horizontal wells in the Bone Spring formation of the Delaware Basin located in Lea County, New Mexico. On October 9, 2020, stock options covering 10,200 shares were exercised with a total intrinsic value of $12,083. The Company received proceeds of $69,360 from these exercises. 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.

Basis of Presentation and Sig_2

Basis of Presentation and Significant Accounting Policies (Policies)	6 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation
Estimates and Assumptions	Estimates and Assumptions
Interim Financial Statements	Interim Financial Statements.
Investments	Investments.
Derivative Financial Instruments	Derivative Financial Instruments. The Company accounts for derivative financial instruments using fair value accounting and recognizes gains and losses in earnings during the period in which they occur. Unsettled derivative instruments are recorded in the accompanying consolidated balance sheets as either a current or non-current asset or a liability measured at its fair value. The Company only offsets derivative assets and liabilities for arrangements with the same counterparty when right of setoff exists. Derivative assets and liabilities with different counterparties are recorded gross in the consolidated balance sheets. Derivative contract settlements are reflected in operating activities in the accompanying consolidated statements of cash flows. The Company uses certain pricing models to determine the fair value of its derivative financial instruments. Inputs to the pricing models include publicly available prices and forward price curves generated from a compilation of data gathered from third parties. Company management validates the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming that those securities trade in active markets.
Recent Accounting Pronouncements	Recent Accounting Pronouncements.

Asset Retirement Obligations (T

Asset Retirement Obligations (Tables)	6 Months Ended
	Sep. 30, 2020
Asset Retirement Obligation Disclosure [Abstract]
Schedule of Rollforward of Asset Retirement Obligations	The following table provides a rollforward of the AROs for the first six months of fiscal 2021: Carrying amount of asset retirement obligations as of April 1, 2020 $ 762,761 Liabilities incurred 11,269 Liabilities settled (10,750 ) Accretion expense 14,424 Carrying amount of asset retirement obligations as of September 30, 2020 777,704 Less: Current portion 7,500 Non-Current asset retirement obligation $ 770,204

Long Term Debt (Tables)

Long Term Debt (Tables)	6 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Schedule of Long Term Debt	Long-term debt on the Consolidated Balance Sheets consisted of the following as of the dates indicated: September 30, 2020 March 31, 2020 Credit facility $ 1,175,000 $ 795,000 Unamortized debt issuance costs (31,314 ) (37,577 ) Total long-term debt $ 1,143,686 $ 757,423
Summary of Line of Credit Activity	The following table is a summary of activity on the WTNB line of credit for the six months ended September 30, 2020: Principal Balance at April 1, 2020: $ 795,000 Borrowings 605,000 Repayments (225,000 ) Balance at September 30, 2020: $ 1,175,000

Leases (Tables)

Leases (Tables)	6 Months Ended
	Sep. 30, 2020
Leases [Abstract]
Schedule of Operating Lease Assets and Liabilities	The balance sheets classification of lease assets and liabilities was as follows: September 30, 2020 Assets Operating lease right-of-use asset, beginning balance $ 76,130 Current period amortization (32,377 ) Lease amendment (1,622 ) Lease extension 10,982 Total operating lease right-of-use asset $ 53,113 Liabilities Operating lease liability, current $ 54,912 Operating lease liability, long term - Total lease liabilities $ 54,912
Schedule of Future Minimum Lease Payments	Future minimum lease payments as of September 30, 2020 under non-cancellable operating leases are as follows: Lease Obligation Fiscal Year Ended March 31, 2021 32,947 Fiscal Year Ended March 31, 2022 21,965 Total lease payments $ 54,912 Less: imputed interest - Operating lease liability 54,912 Less: operating lease liability, current (54,912 ) Operating lease liability, long term $ -

Derivative Financial Instrume_2

Derivative Financial Instruments (Tables)	6 Months Ended
	Sep. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Summary of Realized and Unrealized Losses On Derivative Contracts	The following tables summarizes the amounts of the Company’s realized and unrealized losses on derivative contracts in the Company’s consolidated statements of operations for the six months ended September 30, 2020. Loss Recognized Realized loss on oil price hedging contracts $ (19,200 ) Unrealized gain (loss) on oil price hedging contracts - Net realized and unrealized loss on derivative contracts $ (19,200 )

Stock-based Compensation (Table

Stock-based Compensation (Tables)	6 Months Ended
	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Summary of Activity of Stock Options	The following table is a summary of activity of stock options for the six months ended September 30, 2020: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Life in Years Outstanding at April 1, 2020 227,700 $ 5.65 4.83 Granted - - Exercised (1,500 ) 6.29 Forfeited or Expired (35,200 ) - Outstanding at September 30, 2018 191,000 $ 5.56 5.14 Vested at September 30, 2020 130,000 $ 6.37 3.35 Exercisable at September 30, 2020 130,000 $ 6.37 3.35

Loss Per Common Share (Tables)

Loss Per Common Share (Tables)	6 Months Ended
	Sep. 30, 2020
Loss per common share:
Schedule of Reconciliation of Basic Net Loss Per Share and Diluted Loss Per Share	The following is a reconciliation of the number of shares used in the calculation of basic and diluted net loss per share for the three and six month periods ended September 30, 2020 and 2019. Three Months Ended Six Months Ended September 30, September 30, 2020 2019 2020 2019 Net loss $ (41,970 ) $ (82,787 ) $ (341,640 ) $ (136,973 ) Shares outstanding: Weighted avg. shares outstanding – basic 2,040,941 2,040,166 2,040,553 2,040,166 Effect of assumed exercise of dilutive stock options - - - - Weighted avg. shares outstanding – dilutive 2,040,941 2,040,166 2,040,553 2,040,166 Loss per common share: Basic $ (0.02 ) $ (0.04 ) $ (0.17 ) $ (0.07 ) Diluted $ (0.02 ) $ (0.04 ) $ (0.17 ) $ (0.07 )

Basis of Presentation and Sig_3

Basis of Presentation and Significant Accounting Policies (Details Narrative)	6 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Cost method investments, percentage description	The Company accounts for investments of less than 1% in limited liability companies using the cost method.

Asset Retirement Obligations -

Asset Retirement Obligations - Schedule of Rollforward of Asset Retirement Obligations (Details) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2020
Asset Retirement Obligation Disclosure [Abstract]
Carrying amount of asset retirement obligations, beginning of the period			$ 762,761
Liabilities incurred			11,269
Liabilities settled			(10,750)
Accretion expense	$ 7,237	$ 6,590	14,424	$ 13,337
Carrying amount of asset retirement obligations, end of the period	777,704		777,704
Less: Current portion	7,500		7,500
Non-Current asset retirement obligation	$ 770,204		$ 770,204		$ 755,261

Long Term Debt (Details Narrati

Long Term Debt (Details Narrative) - USD ($)	Oct. 16, 2020	Feb. 28, 2020	Dec. 28, 2018	Sep. 30, 2020	Mar. 31, 2020
Line of credit				$ 1,175,000	$ 795,000
Repayments				225,000
Subsequent Event [Member]
Line of credit	$ 1,100,000
Repayments	75,000
West Texas National Bank [Member]
Outstanding letter of credit				$ 25,000
West Texas National Bank [Member] | Subsequent Event [Member]
Line of credit	1,100,000
Repayments	$ 75,000
Loan Agreement [Member]
Debt instrument covenant description				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.
Loan Agreement [Member] | West Texas National Bank [Member]
Credit facility face amount		$ 2,500,000	$ 1,000,000	$ 325,000
Line of credit maturity date		Mar. 28, 2023	Dec. 28, 2021
Line of credit, increase in borrowing base amount		$ 1,500,000
Accrues variable interest rate		0.50%
Line of credit commitment fee description		The Company will pay an unused commitment fee in an amount equal to one-half of one percent (0.5%) times the daily average of the unadvanced amount of the commitment.
Line of credit commitment fee, percentage		0.50%
Loan origination fee, percentage		0.50%		0.10%
Loan origination fee		$ 5,000		$ 2,500
Legal and recording expenses		$ 34,532		12,266
Extension fees				$ 3,125

Long Term Debt - Schedule of Lo

Long Term Debt - Schedule of Long Term Debt (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Debt Disclosure [Abstract]
Credit facility	$ 1,175,000	$ 795,000
Unamortized debt issuance costs	(31,314)	(37,577)
Total long-term debt	$ 1,143,686	$ 757,423

Long Term Debt - Summary of Lin

Long Term Debt - Summary of Line of Credit Activity (Details)	6 Months Ended
	Sep. 30, 2020USD ($)
Debt Disclosure [Abstract]
Balance at April 1, 2020:	$ 795,000
Borrowings	605,000
Repayments	(225,000)
Balance at September 30, 2020:	$ 1,175,000

Leases (Details Narrative)

Leases (Details Narrative)	1 Months Ended	6 Months Ended
	Jun. 30, 2020	Sep. 30, 2020USD ($)ft²	Sep. 30, 2019USD ($)
Area of lease | ft²		4,160
Lease term		36 months
Lease expiration date		May 31, 2021
Lease term extension, description	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.
Incremental borrowing interest percentage		6.00%
Net cash paid for operating lease | $		$ 21,693	$ 24,173
Sublease income | $		$ 9,459	$ 8,080
Shareholder [Member]
Area of lease | ft²		1,021

Leases - Schedule of Operating

Leases - Schedule of Operating Lease Assets and Liabilities (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Leases [Abstract]
Operating lease right-of-use asset, beginning balance	$ 76,130
Current period amortization	(32,377)
Lease amendment	(1,622)
Lease extension	10,982
Total operating lease right-of-use asset	53,113	$ 76,130
Operating lease liability, current	54,912	65,721
Operating lease liability, long term		$ 10,982
Total lease liabilities	$ 54,912

Leases - Schedule of Future Min

Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Leases [Abstract]
Fiscal Year Ended March 31, 2021	$ 32,947
Fiscal Year Ended March 31, 2022	21,965
Total lease payments	54,912
Less: imputed interest
Operating lease liability	54,912
Less: operating lease liability, current	(54,912)	$ (65,721)
Operating lease liability, long term		$ 10,982

Derivative Financial Instrume_3

Derivative Financial Instruments - Summary of Realized and Unrealized Losses On Derivative Contracts (Details)	Sep. 30, 2020USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Realized loss on oil price hedging contracts	$ (19,200)
Unrealized gain (loss) on oil price hedging contracts
Net realized and unrealized loss on derivative contracts	$ (19,200)

Stock-based Compensation (Detai

Stock-based Compensation (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Total cost related to non-vested awards	$ 141,861		$ 141,861
Non-vested awards, weighted average period of recognition			2 years 11 months 8 days
Stock options shares exercised			1,500
Stock options intrinsic value exercised			$ 135
Proceeds from options exercised			$ 9,435
Stock options shares forfeited			1,000
Stock options shares expired			34,200
Outstanding options expiration date description			Outstanding options at September 30, 2020 expire between November 2021 and March 2030 and have exercise prices ranging from $3.34 to $7.00.
Stock option exercise price, minimum			$ 3.34
Stock option exercise price, maximum			$ 7
Minimum [Member]
Outstanding options expiration month and year			2021-11
Maximum [Member]
Outstanding options expiration month and year			2030-03
General and Administrative Expense [Member]
Stock based compensation expense	$ 13,943	$ 8,125	$ 27,948	$ 16,250

Stock-based Compensation - Summ

Stock-based Compensation - Summary of Activity of Stock Options (Details)	6 Months Ended
	Sep. 30, 2020$ / sharesshares
Number of Shares, Exercised	(1,500)
Stock Option [Member]
Number of Shares, Beginning Balance	227,700
Number of Shares, Granted
Number of Shares, Exercised	(1,500)
Number of Shares, Forfeited or Expired	(35,200)
Number of Shares, Ending Balance	191,000
Number of Shares, Vested	130,000
Number of Shares, Exercisable	130,000
Weighted Average Exercise Price Per Share, Beginning Balance | $ / shares	$ 5.65
Weighted Average Exercise Price Per Share, Granted | $ / shares
Weighted Average Exercise Price Per Share, Exercised | $ / shares	6.29
Weighted Average Exercise Price Per Share, Forfeited or Expired | $ / shares
Weighted Average Exercise Price Per Share, Ending Balance | $ / shares	5.56
Weighted Average Exercise Price Per Share, Vested | $ / shares	6.37
Weighted Average Exercise Price Per Share, Exercisable | $ / shares	$ 6.37
Weighted Average Remaining Contract Life in Years, Beginning Balance	4 years 9 months 29 days
Weighted Average Remaining Contract Life in Years, Ending Balance	5 years 1 month 20 days
Weighted Aggregate Average Remaining Contract Life in Years, Vested	3 years 4 months 6 days
Weighted Aggregate Average Remaining Contract Life in Years, Exercisable	3 years 4 months 6 days

Income Taxes (Details Narrative

Income Taxes (Details Narrative)	Sep. 30, 2020USD ($)
Income Tax Disclosure [Abstract]
Deferred tax asset, net	$ 1,389,101
Valuation allowance	$ 1,389,101

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Related Party Transactions [Abstract]
Total billed to and reimbursed expenses	$ 8,219	$ 9,842	$ 18,321	$ 19,943
Due to related party	$ 3,846	$ 3,981	$ 7,649	$ 7,919

Loss Per Common Share - Schedul

Loss Per Common Share - Schedule of Reconciliation of Basic Net Loss Per Share and Diluted Loss Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Loss per common share:
Net loss	$ (41,970)	$ (82,787)	$ (341,640)	$ (136,973)
Shares outstanding: Weighted avg. shares outstanding - basic	2,040,941	2,040,166	2,040,553	2,040,166
Shares outstanding: Effect of the assumed exercise of dilutive stock options
Shares outstanding: Weighted avg. shares outstanding - dilutive	2,040,941	2,040,166	2,040,553	2,040,166
Loss per common share: Basic	$ (0.02)	$ (0.04)	$ (0.17)	$ (0.07)
Loss per common share: Diluted	$ (0.02)	$ (0.04)	$ (0.17)	$ (0.07)

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - USD ($)	Oct. 16, 2020	Oct. 13, 2020	Oct. 09, 2020	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2020
Repayments of line of credit				$ 225,000
Balance of line of credit				$ 1,175,000		$ 795,000
Stock options shares exercised				1,500
Stock options intrinsic value exercised				$ 135
Proceeds from options exercised				$ 9,435
Subsequent Event [Member]
Repayments of line of credit	$ 75,000
Balance of line of credit	$ 1,100,000
Stock options shares exercised			10,200
Stock options intrinsic value exercised			$ 12,083
Proceeds from options exercised			$ 69,360
Subsequent Event [Member] | Lea County, New Mexico [Member]
Cost incurred		$ 10,200