Cover
Cover - shares | 9 Months Ended | |
Dec. 31, 2021 | Feb. 08, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Dec. 31, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --03-31 | |
Entity File Number | 1-31785 | |
Entity Registrant Name | MEXCO ENERGY CORPORATION | |
Entity Central Index Key | 0000066418 | |
Entity Tax Identification Number | 84-0627918 | |
Entity Incorporation, State or Country Code | CO | |
Entity Address, Address Line One | 415 West Wall Street | |
Entity Address, Address Line Two | Suite 475 | |
Entity Address, City or Town | Midland | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 79701 | |
City Area Code | (432) | |
Local Phone Number | 682-1119 | |
Title of 12(b) Security | Common Stock, par value $0.50 per share | |
Trading Symbol | MXC | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,121,666 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Mar. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 880,190 | $ 57,813 |
Accounts receivable: | ||
Oil and natural gas sales | 750,683 | 621,384 |
Trade | 4 | 30,402 |
Prepaid costs and expenses | 21,160 | 47,895 |
Total current assets | 1,652,037 | 757,494 |
Property and equipment, at cost | ||
Oil and gas properties, using the full cost method | 39,720,323 | 38,664,347 |
Other | 120,208 | 120,208 |
Accumulated depreciation, depletion and amortization | (29,828,011) | (29,015,612) |
Property and equipment, net | 10,012,520 | 9,768,943 |
Investment – cost basis | 250,000 | 200,000 |
Operating lease, right-of-use asset | 143,182 | 20,861 |
Other noncurrent assets | 15,657 | 83,389 |
Total assets | 12,073,396 | 10,830,687 |
Current liabilities | ||
Accounts payable and accrued expenses | 154,571 | 116,569 |
Operating lease liability, current | 53,788 | 21,965 |
Total current liabilities | 208,359 | 138,534 |
Long-term liabilities | ||
Long-term debt | 1,154,949 | |
Operating lease liability, long-term | 89,394 | |
Asset retirement obligations | 737,457 | 713,797 |
Total long-term liabilities | 826,851 | 1,868,746 |
Total liabilities | 1,035,210 | 2,007,280 |
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; 2,188,666 and 2,143,666 shares issued; 2,121,666 and 2,076,666 shares outstanding as of December 31, 2021 and March 31, 2021, respectively | 1,094,333 | 1,071,833 |
Additional paid-in capital | 7,959,357 | 7,624,214 |
Retained earnings | 2,330,497 | 473,361 |
Treasury stock, at cost (67,000 shares) | (346,001) | (346,001) |
Total stockholders’ equity | 11,038,186 | 8,823,407 |
Total liabilities and stockholders’ equity | $ 12,073,396 | $ 10,830,687 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Mar. 31, 2021 |
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 | 0 | 0 |
Common stock, par value | $ 0.50 | $ 0.50 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 2,188,666 | 2,143,666 |
Common stock, shares outstanding | 2,121,666 | 2,076,666 |
Treasury stock, shares | 67,000 | 67,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating revenue: | ||||
Total operating revenues | $ 1,595,344 | $ 699,894 | $ 4,413,023 | $ 1,706,392 |
Operating expenses: | ||||
Production | 291,068 | 235,958 | 903,643 | 624,741 |
Accretion of asset retirement obligation | 7,327 | 7,116 | 21,630 | 21,540 |
Depreciation, depletion, and amortization | 268,018 | 237,459 | 812,398 | 697,698 |
General and administrative | 272,552 | 193,288 | 794,961 | 634,526 |
Total operating expenses | 838,965 | 673,821 | 2,532,632 | 1,978,505 |
Operating income (loss) | 756,379 | 26,073 | 1,880,391 | (272,113) |
Other income (expenses): | ||||
Interest income | 55 | 71 | 126 | 387 |
Interest expense | (3,132) | (14,604) | (23,381) | (39,174) |
PPP loan forgiveness | 68,957 | 68,957 | ||
Loss on derivative instruments | (19,200) | |||
Net other (expense) income | (3,077) | 54,424 | (23,255) | 10,970 |
Income (loss) before income taxes | 753,302 | 80,497 | 1,857,136 | (261,143) |
Net income (loss) | $ 753,302 | $ 80,497 | $ 1,857,136 | $ (261,143) |
Income (loss) per common share: | ||||
Basic: | $ 0.36 | $ 0.04 | $ 0.89 | $ (0.13) |
Diluted: | $ 0.35 | $ 0.04 | $ 0.87 | $ (0.13) |
Weighted average common shares outstanding: | ||||
Basic: | 2,120,912 | 2,051,081 | 2,096,433 | 2,044,054 |
Diluted: | 2,176,240 | 2,054,288 | 2,146,717 | 2,044,054 |
Oil Sales [Member] | ||||
Operating revenue: | ||||
Total operating revenues | $ 1,073,078 | $ 520,261 | $ 3,193,315 | $ 1,307,588 |
Natural Gas Sales [Member] | ||||
Operating revenue: | ||||
Total operating revenues | 500,906 | 171,982 | 1,177,405 | 378,798 |
Other [Member] | ||||
Operating revenue: | ||||
Total operating revenues | $ 21,360 | $ 7,651 | $ 42,303 | $ 20,006 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Beginning balance, value at Mar. 31, 2020 | $ 1,053,583 | $ 7,339,351 | $ 317,429 | $ (346,001) | $ 8,364,362 |
Net income (loss) | (261,143) | (261,143) | |||
Issuance of stock through options exercised | 5,850 | 72,945 | 78,795 | ||
Stock based compensation | 41,813 | 41,813 | |||
Ending balance, value at Dec. 31, 2020 | 1,059,433 | 7,454,109 | 56,286 | (346,001) | 8,223,827 |
Beginning balance, value at Sep. 30, 2020 | 1,054,333 | 7,375,984 | (24,211) | (346,001) | 8,060,105 |
Net income (loss) | 80,497 | 80,497 | |||
Issuance of stock through options exercised | 5,100 | 64,260 | 69,360 | ||
Stock based compensation | 13,865 | 13,865 | |||
Ending balance, value at Dec. 31, 2020 | 1,059,433 | 7,454,109 | 56,286 | (346,001) | 8,223,827 |
Beginning balance, value at Mar. 31, 2021 | 1,071,833 | 7,624,214 | 473,361 | (346,001) | $ 8,823,407 |
Beginning balance, shares at Mar. 31, 2021 | 2,143,666 | ||||
Beginning balance, held in treasury, shares at Mar. 31, 2021 | (67,000) | ||||
Net income (loss) | 1,857,136 | $ 1,857,136 | |||
Issuance of stock through options exercised | 22,500 | 273,140 | 295,640 | ||
Stock based compensation | 62,003 | $ 62,003 | |||
Common stock shares, issued | 45,000 | ||||
Common stock shares, held in treasury, Acquisitions, shares | |||||
Ending balance, value at Dec. 31, 2021 | 1,094,333 | 7,959,357 | 2,330,497 | (346,001) | $ 11,038,186 |
Ending balance, shares at Dec. 31, 2021 | 2,188,666 | ||||
Ending balance, held in treasury, shares at Dec. 31, 2021 | (67,000) | ||||
Common stock shares, outstanding at Dec. 31, 2021 | 2,121,666 | ||||
Beginning balance, value at Sep. 30, 2021 | 1,085,783 | 7,832,429 | 1,577,195 | (346,001) | $ 10,149,406 |
Net income (loss) | 753,302 | 753,302 | |||
Issuance of stock through options exercised | 8,550 | 101,358 | 109,908 | ||
Stock based compensation | 25,570 | 25,570 | |||
Ending balance, value at Dec. 31, 2021 | $ 1,094,333 | $ 7,959,357 | $ 2,330,497 | $ (346,001) | $ 11,038,186 |
Ending balance, shares at Dec. 31, 2021 | 2,188,666 | ||||
Ending balance, held in treasury, shares at Dec. 31, 2021 | (67,000) | ||||
Common stock shares, outstanding at Dec. 31, 2021 | 2,121,666 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,857,136 | $ (261,143) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Stock-based compensation | 62,003 | 41,813 |
Depreciation, depletion and amortization | 812,398 | 697,698 |
Accretion of asset retirement obligations | 21,630 | 21,540 |
Non-cash lease expense | 42,687 | 48,503 |
PPP loan forgiveness | (68,574) | |
Amortization of debt issuance costs | 9,394 | 9,394 |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable | (98,901) | (94,769) |
Decrease in prepaid expenses | 26,736 | 41,433 |
Increase (decrease) in accounts payable and accrued expenses | 42,034 | (8,009) |
Settlement of asset retirement obligations | (2,741) | (7,398) |
Decrease in operating lease liability | (43,790) | (47,625) |
Net cash provided by operating activities | 2,728,586 | 372,863 |
Cash flows from investing activities: | ||
Additions to oil and gas properties | (1,213,618) | (1,024,104) |
Additions to other property and equipment | (3,215) | |
Drilling refund | 229,800 | 121,970 |
Investment in limited liability company at cost | (50,000) | (25,000) |
Proceeds from sale of oil and gas properties and equipment | 11,969 | 111,752 |
Net cash used in investing activities | (1,021,849) | (818,597) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 295,640 | 78,795 |
Proceeds from long-term debt | 275,000 | 680,000 |
Proceeds from PPP loan | 68,574 | |
Reduction of long-term debt | (1,455,000) | (375,000) |
Net cash (used in) provided by financing activities | (884,360) | 452,369 |
Net increase in cash and cash equivalents | 822,377 | 6,635 |
Cash and cash equivalents at beginning of period | 57,813 | 34,381 |
Cash and cash equivalents at end of period | 880,190 | 41,016 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 14,834 | 28,634 |
Non-cash investing and financing activities: | ||
Asset retirement obligations | 12,499 | 14,013 |
Operating lease – right of use asset and associated liabilities | $ 165,007 | $ 9,360 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Dec. 31, 2021 | |
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 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. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2021 | |
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 The Company accounts for investments of less than 1% of any limited liability companies at cost. 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 offset 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. As of December 31, 2021, the Company had no derivative contracts. During the nine months ended December 31, 2020, the Company entered into a series of crude oil put option contracts. All of these such contracts expired in July and August 2020. |
Asset Retirement Obligations
Asset Retirement Obligations | 9 Months Ended |
Dec. 31, 2021 | |
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 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. The following table provides a rollforward of the AROs for the first nine months of fiscal 2022: Schedule of Rollforward of Asset Retirement Obligations Carrying amount of asset retirement obligations as of April 1, 2021 $ 728,797 Liabilities incurred 12,499 Liabilities settled (10,469 ) Accretion expense 21,630 Carrying amount of asset retirement obligations as of December 31, 2021 752,457 Less: Current portion 15,000 Non-Current asset retirement obligation $ 737,457 |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | 4. Stock-based Compensation The Company recognized stock-based compensation expense of $ 25,570 13,865 62,003 41,813 239,677 2.57 During the nine months ended December 31, 2021, the Compensation Committee of the Board of Directors approved and the Company granted 31,000 8.51 187,550 no ten years 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, 2021 and 2020. All such amounts represent the weighted average amounts. Summary of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binomial Models NIne Months Ended December 31 2021 2020 Grant-date fair value $ 6.05 - Volatility factor 65.38 % - Dividend yield - - Risk-free interest rate 0.92 % - Expected term (in years) 6.25 - The following table is a summary of activity of stock options for the nine months ended December 31, 2021: Summary of Activity of Stock Options Number of Weighted Weighted Average Intrinsic Outstanding at April 1, 2021 156,000 $ 5.28 5.53 $ 555,100 Granted 31,000 8.51 Exercised (45,000 ) 6.57 Forfeited or Expired - - Outstanding at December 31, 2021 142,000 $ 5.58 6.78 $ 539,850 Vested at December 31, 2021 70,250 $ 5.35 4.94 $ 282,775 Exercisable at December 31, 2021 70,250 $ 5.35 4.94 $ 282,775 During the nine months ended December 31, 2021, stock options covering 45,000 241,226 295,640 1,500 135 9,435 There were no 1,000 34,200 Outstanding options at December 31, 2021 expire between April 2023 July 2031 3.34 8.51 |
Long Term Debt
Long Term Debt | 9 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long Term Debt | 5. Long Term Debt Long-term debt on the Consolidated Balance Sheets consisted of the following as of the dates indicated: Schedule of Long-Term Debt December 31, 2021 March 31, 2021 Credit facility $ - $ 1,180,000 Unamortized debt issuance costs (1) (25,051 ) Total long-term debt $ - $ 1,154,949 (1) For the current period, since the Company has no long-term debt outstanding, unamortized debt issuance costs in the amount of $ 15,657 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 December 28, 2021 On February 28, 2020, the Agreement was amended to increase the credit facility to $ 2,500,000 March 28, 2023 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 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 1,500,000 No principal payments are anticipated to be required through the maturity date of the credit facility, March 28, 2023 .5% 5,000 34,532 .1% 2,500 3,125 12,266 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, 2021. The following table is a summary of activity on the WTNB line of credit for the nine months ended December 31, 2021: Summary of Line of Credit Activity Principal Balance at April 1, 2021: $ 1,180,000 Borrowings 275,000 Repayments (1,455,000 ) Balance at December 31, 2021: $ - |
Leases
Leases | 9 Months Ended |
Dec. 31, 2021 | |
Leases | |
Leases | 6. Leases The Company leases approximately 4,160 1,112 36 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 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 The balance sheets classification of lease assets and liabilities was as follows: Schedule of Operating Lease Assets and Liabilities December 31, 2021 Assets Operating lease right-of-use asset, beginning balance $ 20,861 Current period amortization (42,686 ) Lease amendment 165,007 Total operating lease right-of-use asset $ 143,182 Liabilities Operating lease liability, current $ 53,788 Operating lease liability, long term 89,394 Total lease liabilities $ 143,182 Future minimum lease payments as of December 31, 2021 under non-cancellable operating leases are as follows: Schedule of Future Minimum Lease Payments Lease Obligation Fiscal Year Ended March 31, 2022 14,560 Fiscal Year Ended March 31, 2023 58,240 Fiscal Year Ended March 31, 2024 58,240 Fiscal Year Ended March 31, 2025 19,413 Total lease payments $ 150,453 Less: imputed interest (7,271 ) Operating lease liability 143,182 Less: operating lease liability, current (53,788 ) Operating lease liability, long term $ 89,394 Net cash paid for our operating lease for the nine months ended December 31, 2021 and 2020 was $ 31,570 34,121 14,662 14,315 |
Income Taxes
Income Taxes | 9 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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. 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, 2021. Our deferred tax asset is $ 887,701 887,701 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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, 2021 and 2020 was $ 12,276 9,122 35,332 27,443 3,893 4,045 11,882 11,694 |
Income (loss) Per Common Share
Income (loss) Per Common Share | 9 Months Ended |
Dec. 31, 2021 | |
Income (loss) per common share: | |
Income (loss) Per Common Share | 9. Income (loss) Per Common Share The Company’s basic net income (loss) per share has been computed based on the weighted average number of common shares outstanding during the period. Diluted net income (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 income (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 income (loss) per share for the three and nine month periods ended December 31, 2021 and 2020: Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share Three Months Ended Nine Months Ended December 31 December 31 2021 2020 2021 2020 Net income (loss) $ 753,302 $ 80,497 $ 1,857,136 $ (261,143 ) Shares outstanding: Weighted avg. shares outstanding – basic 2,120,912 2,051,081 2,096,433 2,044,054 Effect of assumed exercise of dilutive stock options 55,328 3,207 50,284 - Weighted avg. shares outstanding – dilutive 2,176,240 2,054,288 2,146,717 2,044,054 Income (loss) per common share: Basic $ 0.36 $ 0.04 $ 0.89 $ (0.13 ) Diluted $ 0.35 $ 0.04 $ 0.87 $ (0.13 ) For the three and nine months ended December 31, 2021, 31,000 8.51 For the three ended December 31, 2020, 139,800 6.12 Due to a net loss for the nine months ended December 31, 2020, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events In January 2022, the Company expended $ 25,000 10 250,000 1 On February 1, 2022 the Company entered into a Purchase and Sale Agreement to acquire various overriding royalty interests in approximately 75 567,000 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) | 9 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
Estimates and Assumptions | Estimates and Assumptions |
Interim Financial Statements | Interim Financial Statements |
Investments | Investments The Company accounts for investments of less than 1% of any limited liability companies at cost. |
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 offset 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. As of December 31, 2021, the Company had no derivative contracts. During the nine months ended December 31, 2020, the Company entered into a series of crude oil put option contracts. All of these such contracts expired in July and August 2020. |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Rollforward of Asset Retirement Obligations | The following table provides a rollforward of the AROs for the first nine months of fiscal 2022: Schedule of Rollforward of Asset Retirement Obligations Carrying amount of asset retirement obligations as of April 1, 2021 $ 728,797 Liabilities incurred 12,499 Liabilities settled (10,469 ) Accretion expense 21,630 Carrying amount of asset retirement obligations as of December 31, 2021 752,457 Less: Current portion 15,000 Non-Current asset retirement obligation $ 737,457 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binomial Models | 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, 2021 and 2020. All such amounts represent the weighted average amounts. Summary of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binomial Models NIne Months Ended December 31 2021 2020 Grant-date fair value $ 6.05 - Volatility factor 65.38 % - Dividend yield - - Risk-free interest rate 0.92 % - Expected term (in years) 6.25 - |
Summary of Activity of Stock Options | The following table is a summary of activity of stock options for the nine months ended December 31, 2021: Summary of Activity of Stock Options Number of Weighted Weighted Average Intrinsic Outstanding at April 1, 2021 156,000 $ 5.28 5.53 $ 555,100 Granted 31,000 8.51 Exercised (45,000 ) 6.57 Forfeited or Expired - - Outstanding at December 31, 2021 142,000 $ 5.58 6.78 $ 539,850 Vested at December 31, 2021 70,250 $ 5.35 4.94 $ 282,775 Exercisable at December 31, 2021 70,250 $ 5.35 4.94 $ 282,775 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
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: Schedule of Long-Term Debt December 31, 2021 March 31, 2021 Credit facility $ - $ 1,180,000 Unamortized debt issuance costs (1) (25,051 ) Total long-term debt $ - $ 1,154,949 (1) For the current period, since the Company has no long-term debt outstanding, unamortized debt issuance costs in the amount of $ 15,657 |
Summary of Line of Credit Activity | There was no balance outstanding on the line of credit as of December 31, 2021. The following table is a summary of activity on the WTNB line of credit for the nine months ended December 31, 2021: Summary of Line of Credit Activity Principal Balance at April 1, 2021: $ 1,180,000 Borrowings 275,000 Repayments (1,455,000 ) Balance at December 31, 2021: $ - |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Leases | |
Schedule of Operating Lease Assets and Liabilities | The balance sheets classification of lease assets and liabilities was as follows: Schedule of Operating Lease Assets and Liabilities December 31, 2021 Assets Operating lease right-of-use asset, beginning balance $ 20,861 Current period amortization (42,686 ) Lease amendment 165,007 Total operating lease right-of-use asset $ 143,182 Liabilities Operating lease liability, current $ 53,788 Operating lease liability, long term 89,394 Total lease liabilities $ 143,182 |
Schedule of Future Minimum Lease Payments | Future minimum lease payments as of December 31, 2021 under non-cancellable operating leases are as follows: Schedule of Future Minimum Lease Payments Lease Obligation Fiscal Year Ended March 31, 2022 14,560 Fiscal Year Ended March 31, 2023 58,240 Fiscal Year Ended March 31, 2024 58,240 Fiscal Year Ended March 31, 2025 19,413 Total lease payments $ 150,453 Less: imputed interest (7,271 ) Operating lease liability 143,182 Less: operating lease liability, current (53,788 ) Operating lease liability, long term $ 89,394 |
Income (loss) Per Common Share
Income (loss) Per Common Share (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Income (loss) per common share: | |
Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share | The following is a reconciliation of the number of shares used in the calculation of basic and diluted net income (loss) per share for the three and nine month periods ended December 31, 2021 and 2020: Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share Three Months Ended Nine Months Ended December 31 December 31 2021 2020 2021 2020 Net income (loss) $ 753,302 $ 80,497 $ 1,857,136 $ (261,143 ) Shares outstanding: Weighted avg. shares outstanding – basic 2,120,912 2,051,081 2,096,433 2,044,054 Effect of assumed exercise of dilutive stock options 55,328 3,207 50,284 - Weighted avg. shares outstanding – dilutive 2,176,240 2,054,288 2,146,717 2,044,054 Income (loss) per common share: Basic $ 0.36 $ 0.04 $ 0.89 $ (0.13 ) Diluted $ 0.35 $ 0.04 $ 0.87 $ (0.13 ) |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Details Narrative) | 9 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Cost method investments, percentage description | The Company accounts for investments of less than 1% of any limited liability companies at cost. |
Derivative contract expiration | During the nine months ended December 31, 2020, the Company entered into a series of crude oil put option contracts. All of these such contracts expired in July and August 2020. |
Schedule of Rollforward of Asse
Schedule of Rollforward of Asset Retirement Obligations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | |
Asset Retirement Obligation Disclosure [Abstract] | |||||
Asset Retirement Obligation, Beginning Balance | $ 728,797 | ||||
Asset Retirement Obligation, Liabilities Incurred | 12,499 | ||||
Asset Retirement Obligation, Liabilities Settled | (10,469) | ||||
Asset Retirement Obligation, Accretion Expense | $ 7,327 | $ 7,116 | 21,630 | $ 21,540 | |
Asset Retirement Obligation, Ending Balance | 752,457 | 752,457 | |||
Asset Retirement Obligation, Current | 15,000 | 15,000 | |||
Asset Retirement Obligations, Noncurrent | $ 737,457 | $ 737,457 | $ 713,797 |
Summary of Grant-date Fair Valu
Summary of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binomial Models (Details) - $ / shares | 9 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Grant-date fair value | $ 6.05 | |
Volatility factor | 65.38% | |
Dividend yield | ||
Risk-free interest rate | 0.92% | |
Expected term (in years) | 6 years 3 months |
Summary of Activity of Stock Op
Summary of Activity of Stock Options (Details) - USD ($) | 9 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Granted | 31,000 | 0 |
Number of Shares, Exercised | (45,000) | (1,500) |
Number of Shares, Forfeited or Expired | 0 | |
Number of Shares, Exercisable | 8.51 | |
Share-based Payment Arrangement, Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Beginning Balance | 156,000 | |
Weighted Average Exercise Price Per Share, Beginning Balance | $ 5.28 | |
Weighted Average Remaining Contract Life in Years, Beginning Balance | 5 years 6 months 10 days | |
Intrinsic Value, Beginning Balance | $ 555,100 | |
Number of Shares, Granted | 31,000 | |
Weighted Average Exercise Price Per Share, Granted | $ 8.51 | |
Number of Shares, Exercised | (45,000) | |
Weighted Average Exercise Price Per Share, Exercised | $ 6.57 | |
Number of Shares, Forfeited or Expired | ||
Weighted Average Exercise Price Per Share, Forfeited or Expired | ||
Number of Shares, Ending Balance | 142,000 | |
Weighted Average Exercise Price Per Share, Ending Balance | $ 5.58 | |
Weighted Average Remaining Contract Life in Years, Ending Balance | 6 years 9 months 10 days | |
Intrinsic Value, Ending Balance | $ 539,850 | |
Number of Shares, Vested | 70,250 | |
Weighted Average Exercise Price Per Share, Vested | $ 5.35 | |
Weighted Aggregate Average Remaining Contract Life in Years, Vested | 4 years 11 months 8 days | |
Intrinsic Value, Vested | $ 282,775 | |
Number of Shares, Exercisable | 70,250 | |
Weighted Average Exercise Price Per Share, Exercisable | $ 5.35 | |
Weighted Aggregate Average Remaining Contract Life in Years, Exercisable | 4 years 11 months 8 days | |
Intrinsic Value, Exercisable | $ 282,775 |
Stock-based Compensation (Detai
Stock-based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total cost related to non-vested awards | $ 239,677 | $ 239,677 | ||
Non-vested awards, weighted average period of recognition | 2 years 6 months 25 days | |||
Stock option granted | 31,000 | 0 | ||
Stock option exercisable | 8.51 | 8.51 | ||
Fair value of stock option exercisable | $ 187,550 | |||
Stock option exercise period | 10 years | |||
Stock option vesting period | 4 years | |||
Stock option shares exercised | 45,000 | 1,500 | ||
Intrinsic value | $ 241,226 | $ 135 | ||
Proceeds from stock-based ompensation including option exercise | $ 295,640 | $ 9,435 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares | 1,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | 34,200 | |||
Outstanding options exercise price, lower range | $ 3.34 | |||
Outstanding options exercise price, upper range | $ 8.51 | |||
Minimum [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Outstanding options expiration month and year | 2023-04 | |||
Maximum [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Outstanding options expiration month and year | 2031-07 | |||
General and Administrative Expense [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expense | $ 25,570 | $ 13,865 | $ 62,003 | $ 41,813 |
Schedule of Long-Term Debt (Det
Schedule of Long-Term Debt (Details) - USD ($) | Dec. 31, 2021 | Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |||
Credit facility | $ 1,180,000 | ||
Unamortized debt issuance costs | [1] | (25,051) | |
Total long-term debt | $ 1,154,949 | ||
[1] | For the current period, since the Company has no long-term debt outstanding, unamortized debt issuance costs in the amount of $ 15,657 |
Schedule of Long-Term Debt (D_2
Schedule of Long-Term Debt (Details) (Parenthetical) | Dec. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
Unamortized debt issuance costs | $ 15,657 |
Summary of Line of Credit Activ
Summary of Line of Credit Activity (Details) | 9 Months Ended |
Dec. 31, 2021USD ($) | |
Debt Disclosure [Abstract] | |
Beginning balance | $ 1,180,000 |
Borrowings | 275,000 |
Repayments | (1,455,000) |
Ending balance |
Long Term Debt (Details Narrati
Long Term Debt (Details Narrative) - USD ($) | Feb. 28, 2021 | Feb. 28, 2020 | Dec. 28, 2018 | Dec. 31, 2021 |
Loan Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Debt Instrument, Covenant Description | 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 | |||
Loan Agreement [Member] | West Texas National Bank [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Line of credit facility | $ 2,500,000 | $ 1,000,000 | ||
Line of credit facility maturity date | Mar. 28, 2023 | Dec. 28, 2021 | ||
Line of credit, increase in borrowing base amount | $ 1,500,000 | |||
Debt instrument rate | 0.50% | |||
Line of Credit Facility, 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 available for borrowing | $ 1,500,000 | |||
Loan origination fee percentage | 0.10% | |||
Loan Processing Fee | $ 2,500 | |||
Legal and recording expenses | 12,266 | |||
Extension fees | $ 3,125 | |||
Original Agreement [Member] | West Texas National Bank [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Loan origination fee percentage | 0.50% | |||
Loan Processing Fee | $ 5,000 | |||
Legal and recording expenses | $ 34,532 |
Schedule of Operating Lease Ass
Schedule of Operating Lease Assets and Liabilities (Details) - USD ($) | Dec. 31, 2021 | Mar. 31, 2021 |
Leases | ||
Operating lease right-of-use asset, beginning balance | $ 20,861 | |
Current period amortization | (42,686) | |
Lease amendment | 165,007 | |
Total operating lease right-of-use asset | 143,182 | $ 20,861 |
Operating lease liability, current | 53,788 | 21,965 |
Operating lease liability, long term | 89,394 | |
Total lease liabilities | $ 143,182 |
Schedule of Future Minimum Leas
Schedule of Future Minimum Lease Payments (Details) - USD ($) | Dec. 31, 2021 | Mar. 31, 2021 |
Leases | ||
Fiscal Year Ended March 31, 2022 | $ 14,560 | |
Fiscal Year Ended March 31, 2023 | 58,240 | |
Fiscal Year Ended March 31, 2024 | 58,240 | |
Fiscal Year Ended March 31, 2025 | 19,413 | |
Total lease payments | 150,453 | |
Less: imputed interest | (7,271) | |
Operating lease liability | 143,182 | |
Less: operating lease liability, current | (53,788) | $ (21,965) |
Operating lease liability, long term | $ 89,394 |
Leases (Details Narrative)
Leases (Details Narrative) | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2021USD ($)ft² | Dec. 31, 2020USD ($) | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Area of lease | ft² | 4,160 | ||
Lease term | 36 months | ||
Lease term extension, description | In June 2021, the Company agreed to extend its current lease at a flat (unescalated) rate for 36 months. | 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. | |
Lessee, operating lease, renewal term | 36 months | ||
Lease Expiration Date | Jul. 31, 2024 | ||
Incremental borrowing rate | 3.75% | ||
Net cash paid for operating lease | $ | $ 31,570 | $ 34,121 | |
Sublease income | $ | $ 14,662 | $ 14,315 | |
Shareholder [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Area of lease | ft² | 1,112 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | Dec. 31, 2021USD ($) |
Income Tax Disclosure [Abstract] | |
Deferred tax asset, net | $ 887,701 |
Deferred tax assets, valuation allowance | $ 887,701 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||||
Total billed to and reimbursed expenses | $ 12,276 | $ 9,122 | $ 35,332 | $ 27,443 |
Due to related party | $ 3,893 | $ 4,045 | $ 11,882 | $ 11,694 |
Schedule of Reconciliation of B
Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income (loss) per common share: | ||||
Net income (loss) | $ 753,302 | $ 80,497 | $ 1,857,136 | $ (261,143) |
Shares outstanding: Weighted avg. common shares outstanding - basic | 2,120,912 | 2,051,081 | 2,096,433 | 2,044,054 |
Shares outstanding: Effect of the assumed exercise of dilutive stock options | $ 55,328 | $ 3,207 | $ 50,284 | |
Shares outstanding: Weighted avg. common shares outstanding - dilutive | 2,176,240 | 2,054,288 | 2,146,717 | 2,044,054 |
Income (loss) per common share: Basic | $ 0.36 | $ 0.04 | $ 0.89 | $ (0.13) |
Income (loss) per common share: Diluted | $ 0.35 | $ 0.04 | $ 0.87 | $ (0.13) |
Income (loss) Per Common Shar_2
Income (loss) Per Common Share (Details Narrative) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income (loss) per common share: | ||||
Antidilutive securities excluded from computation of earnings per share | 31,000 | 139,800 | 31,000 | 139,800 |
Anti-dilutive stock options have a weighted average exercise price | $ 8.51 | $ 6.12 | $ 8.51 | $ 6.12 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Feb. 02, 2022USD ($)Wells | Jan. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Subsequent Event [Line Items] | ||||
Proceeds from option exercise | $ 295,640 | $ 78,795 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Proceeds from option exercise | $ 25,000 | |||
Subsequent Event [Member] | XTO Energy Inc [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of drilled wells | Wells | 75 | |||
Expended for drilling wells | $ 567,000 | |||
Subsequent Event [Member] | TBO Oil And Gas, LLC [Member] | ||||
Subsequent Event [Line Items] | ||||
Percentage for limited liability company | 10.00% | |||
Previously invested amount | $ 250,000 | |||
Percentage for partnership rate | 1.00% |