FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20539
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarterly period ended September 30, 1995
----------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ________________
For Quarter Ended September 30, 1995 Commission File No. 0-6994
---------------------
MEXCO ENERGY CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-0627918
- - ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
214 W. Texas, Suite 1101, Midland, TX 79701
- - ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (915) 682-1119
NONE
- - ------------------------------------------------------------------
(Former Name, Former Address & Former Fiscal Year if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------ ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at September 30, 1994
- - ---------------------------- --------------------------------
Common stock, $.50 par value 1,423,229
1
MEXCO ENERGY CORPORATION
Index
Page
Part I. Financial information:
Condensed Balance Sheets as of
March 31, 1995 and September 30, 1995 3
Condensed Statements of Operations
for the three months ended
September 30, 1995 and 1994 4
Condensed Statements of Operations
for the six months ended September 30, 5
1995 and 1994
Condensed Statements of Cash Flows
for the six months ended September 30,
1995 and 1994 6
Notes to condensed Financial Statements 7
Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
Part II. Other information: Not Applicable
2
MEXCO ENERGY CORPORATION
CONDENSED BALANCE SHEETS
September 30, 1995 and March 31, 1995
ASSETS
------
September 30, March 31,
1995 1995
------------- ------------
(Unaudited)
CURRENT ASSETS
Cash $ 535,282 $ 220,974
Accounts Receivable 63,848 71,981
Prepaid Assets 450 1,350
Recoverable Income Taxes 9,501 9,126
----------- -----------
Total current assets 609,081 303,431
PROPERTY AND EQUIPMENT
Oil and gas properties-accounted for
under the full cost method 4,288,604 3,954,959
Office furniture and fixtures 2,431 2,431
----------- -----------
4,291,035 3,957,390
Less accumulated depreciation,
depletion and amortization (2,425,861) (2,308,925)
----------- -----------
Net property and equipment 1,865,174 1,648,465
----------- -----------
TOTAL ASSETS $ 2,474,255 $ 1,951,896
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable-trade $ 26,296 $ 37,472
Income taxes payable 0 38,148
----------- -----------
Total current liabilities 26,296 75,620
DEFERRED INCOME TAXES 36,922 31,737
----------- -----------
Total liabilities 63,218 107,357
STOCKHOLDERS' EQUITY
Common Stock-$.50 par value, authorized
5,000,000, issued and outstanding-
1,423,229 1,086,614 586,614
Paid in capital 1,600,429 1,600,429
Accumulated Deficit (276,006) (342,504)
----------- -----------
Total stockholders' equity 2,411,037 1,844,539
----------- -----------
TOTAL LIABILITIES & EQUITY $ 2,474,255 $ 1,951,896
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
MEXCO ENERGY CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
Three months ended September 30,
(Unaudited)
1995 1994
------------ -----------
Revenues:
Gross revenues from oil and gas
production $ 176,066 $ 150,752
Production costs 74,384 58,229
---------- ----------
Net revenues from oil and gas
production 101,682 92,523
Administrative service charges and
reimbursements 2,487 2,692
---------- ----------
104,169 95,215
---------- ----------
Costs and expenses:
Depreciation, depletion and amortization 66,402 52,891
General and administrative 20,517 13,934
Other Income ( 951) (5,158)
Interest income (4,484) (3,519)
---------- ----------
81,484 58,148
---------- ----------
Income before income tax expense 22,685 37,067
Income tax expense 1,632 136
---------- ----------
NET INCOME $ 21,053 $ 36,931
========== ==========
Net income per share $ .02 $ .03
========== ==========
Weighted average common shares
outstanding 1,349,859 1,173,229
========== ==========
The accompanying notes are an integral part of these financial statements.
4
MEXCO ENERGY CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
Six months ended September 30,
(Unaudited)
1995 1994
------------ ------------
Revenues:
Gross revenues from oil and gas
production $ 347,790 $ 242,717
Production costs 125,943 100,787
---------- ----------
Net revenues from oil and gas
production 221,847 141,930
Administrative service charges
and reimbursements 4,973 5,290
---------- ----------
226,820 147,220
---------- ----------
Costs and expenses:
Depreciation, depletion and amortization 116,936 93,397
General and administrative 46,103 47,655
Other income (951) (5,164)
Interest income (6,951) (7,941)
---------- ----------
155,137 127,947
---------- ----------
Income before income tax expense 71,683 19,273
Income tax expense (benefit) 5,185 (21,755)
---------- ----------
NET INCOME $ 66,498 $ 41,028
========== ==========
Net income per share $ .05 $ .03
========== ==========
Weighted average common shares
outstanding 1,262,027 1,173,229
========== ==========
The accompanying notes are an integral part of these financial statements.
5
MEXCO ENERGY CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
Six Months ended September 30,
(Unaudited)
1995 1994
------------ ------------
Cash flows from operating activities:
- - ------------------------------------
Cash received from oil & gas operations $ 360,362 $ 220,395
Cash paid for oil & gas operations (136,585) (162,993)
General & administrative expenses (45,203) (39,119)
Interest received 6,951 7,941
Other cash received 951 5,164
Income Taxes paid (38,523) -0-
--------- ---------
Net cash provided by operations 147,953 31,388
Cash flows from investing activities:
- - ------------------------------------
Capital expenditures (333,645) (431,654)
Sales of assets -0- 24,000
--------- ---------
Net cash used in investing activities (333,645) (407,654)
Cash flows from financing activities:
- - ------------------------------------
Sale of common stock 500,000 -0-
--------- ---------
Net increase (decrease) in cash & cash
equivalents 314,308 (376,266)
Cash & cash equivalents at the beginning
of the period 220,974 739,453
--------- ---------
Cash & cash equivalents at the end
of the period $ 535,282 $ 363,187
========= =========
Reconciliation of net income to net cash
- - ----------------------------------------
provided by operating activities:
--------------------------------
Net income $ 66,498 $ 41,028
--------- ---------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 116,936 93,397
(Increase) decrease in accounts receivable 8,134 (48,767)
Decrease in accounts payable (11,177) (41,051)
Decrease in prepaid expenses 900 8,536
Decrease in income taxes payable (33,338) (21,755)
--------- ---------
Total adjustments 81,455 (9,640)
--------- ---------
Net cash provided by operating activities $ 147,953 $ 31,388
========= =========
The accompanying notes are an integral part of these financial statements.
6
MEXCO ENERGY CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
September 30, 1995 and 1994
MANAGEMENT COMMENTS
In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly the
financial position of the Company as of March 31, 1995 and September 30,
1995, the results of its operations for the three-month and six-month
periods ended September 30, 1995 and 1994 and the cash flows for the six-
month periods ended September 30, 1995 and 1994. All adjustments are of a
normal and recurring nature.
The results of operations for the three-month and six-month periods ended
September 30, 1995 are not necessarily indicative of the results to be
expected for the full year.
The condensed balance sheets as of March 31, 1995 have been prepared based
upon the Registrant's audited balance sheets as of that date.
7
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE CONDENSED STATEMENTS OF OPERATIONS
Results of Operations - 3 Months Ended September 30, 1995
---------------------------------------------------------
Operating revenues increased $25,314 (17%) from the second quarter of
fiscal 1994 primarily as a result of increased production from additions of
oil and gas properties.
Production costs increased $16,155 (28%) due to increased operating
expenses.
Depreciation, depletion and amortization increased $13,511 (25%) as
compared to the same quarter during the prior year due to the addition of
oil and gas properties.
General and administrative costs increased $6,583 (47%) primarily due to
increased accounting costs and legal fees for the private placement of
common stock.
Interest income increased $965 (27%) due to increased funds invested in
money market accounts.
Other income decreased $4,207 (81.5%) due to nonrecurring proceeds from a
farmout of interest in a lease to another operator in 1994.
During the quarter, the Company participated in the conversion of a
temporarily abandoned well to a saltwater disposal well. The well (.0625
working interest to the account of the Company) is in Pecos County, Texas.
Results of Operations - 6 Months Ended September 30, 1995
---------------------------------------------------------
Operating revenues increased $105,073 (43%) from the first six months of
fiscal 1994 primarily as a result of increased production from the addition
of new wells.
Production costs increased $25,156 (25%) due to increased lease operating
expenses.
Revenue from administrative service charges and reimbursements decreased
$317 (6%) due to non-recurrence of operating overhead charges in the first
and second quarter of 1994 resulting from the sale of two leases.
Depreciation, depletion and amortization increased $23,539 (25%) due to the
addition of oil and gas properties.
General and administrative costs decreased $1,552 (3%) due primarily to
timing of accounting costs.
Interest income decreased $990 (12%) due to decreased funds invested in
money market accounts.
8
Financial Condition
-------------------
Working capital increased by $354,974 (156%) as compared to March 31, 1995
primarily due to increase in cash. Cash and cash equivalents have
increased $314,308 for the period, due to the sale of stock through a
private placement. On July 28, 1995, the Registrant completed a private
placement of 250,000 shares of its unregistered, restricted common stock,
par value $0.50 per share, for total proceeds of $500,000.
The decrease in accounts payable reflects the payment of expenses incurred
at the end of the prior fiscal year.
Management cannot specifically identify the effects of inflation and other
price changes on operations.
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MEXCO ENERGY CORPORATION
(A Colorado Corporation)
/s/ NICHOLAS C. TAYLOR
-----------------------------------
Nicholas C. Taylor,
President and Treasurer
Date: November 1, 1995
9