Stock of the Day: Mexco Energy Corporation (NYSE American: MXC) up 121%

Company Profile

Mexco Energy Corporation is an independent oil and gas company. The Company is engaged in the exploration, development and production of natural gas and crude oil properties located in the United States. At March 31, 2016, its total estimated proved reserves were approximately 2.051 million barrels of oil equivalent (Boe) of which 53% was oil and natural gas liquids and 47% was natural gas. It also owns producing properties and undeveloped acreage in approximately 10 states. It acquires interests in producing and non-producing oil and gas leases from landowners and leaseholders in areas considered favorable for oil and gas exploration, development and production. It may acquire oil and gas interests by joining in oil and gas drilling prospects generated by third parties. It owns interests in and operates approximately 10 producing wells and a water injection well. Its subsidiaries include Forman Energy Corporation, Southwest Texas Disposal Corporation and TBO Oil & Gas, LLC.

Mexco Energy Corporation (NYSE American: MXC) 1 year chart

General

Mexco Energy Corporation, a Colorado corporation, is an independent oil and gas company engaged in the exploration, development and production of crude oil and natural gas properties located in the United States. Incorporated in April 1972 under the name Miller Oil Company, the Company changed its name to Mexco Energy Corporation effective April 30, 1980. At that time, the shareholders of the Company also approved amendments to the Articles of Incorporation resulting in a one-for-fifty reverse stock split of the Company’s common stock.

Our total estimated proved reserves at March 31, 2020 were approximately 1.816 million barrels of oil equivalent (“MMBOE”) of which 55% was oil and natural gas liquids and 45% was natural gas, and our estimated present value of proved reserves was approximately $22 million based on estimated future net revenues excluding taxes discounted at 10% per annum, pricing and other assumptions set forth in “Item 2 – Properties” below. During fiscal 2020, we added proved reserves of 119 thousand BOE (“MBOE”) through extensions and discoveries and subtracted 136 MBOE through downward revisions of previous estimates. Such downward revisions are primarily the result of reserves written off due to the five-year limitation. They are primarily royalty interests in the Barnett Shale in Tarrant County, Texas and the Goldsmith field in Ector County, Texas, both of which are on a lease held by production and still in place to be developed in the future. There were also reserves written off for a working interest in the Fuhrman Mascho Field in Andrews County, Texas due to market conditions. These properties are also on a lease held by production and still in place to be developed in the future.

Nicholas C. Taylor beneficially owns approximately 47% of the outstanding shares of our common stock. Mr. Taylor is also our Chairman of the Board and Chief Executive Officer. As a result, Mr. Taylor has significant influence in matters voted on by our shareholders, including the election of our Board members. Mr. Taylor participates in all facets of our business and has a significant impact on both our business strategy and daily operations.

Company Profile

Since our inception, we have been engaged in acquiring and developing oil and gas properties and the exploration for and production of natural gas, crude oil, condensate and natural gas liquids (“NGLs”) within the United States. We especially seek to acquire proved reserves that fit well with existing operations or in areas where Mexco has established production. Acquisitions preferably will contain most of their value in producing wells, behind pipe reserves and high quality proved undeveloped locations. Competition for the purchase of proved reserves is intense. Sellers often utilize a bid process to sell properties. This process usually intensifies the competition and makes it extremely difficult to acquire reserves without assuming significant price and production risks. We actively search for opportunities to acquire proved oil and gas properties. However, because the competition is intense, we cannot give any assurance that we will be successful in our efforts during fiscal 2021.

While we own oil and gas properties in other states, the majority of our activities are centered in West Texas and Southeastern New Mexico. The Company also owns producing properties and undeveloped acreage in fourteen states. We acquire interests in producing and non-producing oil and gas leases from landowners and leaseholders in areas considered favorable for oil and gas exploration, development and production. In addition, we may acquire oil and gas interests by joining in oil and gas drilling prospects generated by third parties. We may also employ a combination of the above methods of obtaining producing acreage and prospects. In recent years, we have placed primary emphasis on the evaluation and purchase of producing oil and gas properties, including working, royalty and mineral interests, and prospects that could have a potentially meaningful impact on our reserves. All of the Company’s oil and gas interests are operated by others.

From 1983 to 2020, Mexco Energy Corporation made approximately 80 acquisitions of producing oil and gas properties including royalties, overriding royalties, minerals and working interests both operated and non-operated plus the following most significant and recent acquisitions:

1993-2010Tabbs Bay Oil Company and Thompson Brothers Lumber Company, respectively dissolved in 1957 and 1947. Purchase covering thousands of acres located respectively in 19 counties of Texas, 3 parishes of Louisiana and one county in Arkansas and 8 counties of Texas, respectively consisting of various mineral, royalty and overriding royalty interests.
  
1997Forman Energy Corporation, purchase price of $1,591,000 consisting of primarily working interests in approximately 634 wells located in 12 states.
  
2010Southwest Texas Disposal Corporation, purchase price $478,000 consisting of royalty interests in over 300 wells located in 60 counties and parishes of 6 states.
  
2012TBO Oil and Gas, LLC, purchase price of $1,150,000 consisting of working interests in approximately 280 wells located in 16 counties of 3 states.
  
2014Royalty interests, purchase price of $200,000 covering 43 wells in 12 counties of eight states, primarily in Texas.  

Royalty interests, purchase price $580,000 covering 580 wells in 87 counties of eight states. Approximately 90% of the net revenue from these royalties is produced by 157 wells located in the Barnett Shale of the Fort Worth Basin of Texas. Also included are interests in 423 wells in 8 states.

Non-Operated working interests, purchase price $525,000 for 12.5% (approximately 10% net revenue interest). The purchase included eight wells producing oil on 20-acre spacing at approximately 3,600 foot depth on 190 acres in Pecos County, TX.

Royalty and mineral interests, purchase price $1,000,000 covering approximately 1,800 wells in 27 counties of Texas. Of these oil and gas reserves, approximately 80% is natural gas and 20% oil.

Non-Operated working interests, purchase price $840,000 in 70 Natural gas producing wells located in 5 counties of Oklahoma.

READ Rest of 10k HERE

FORM 10-K

For the fiscal year ended March 31, 2020

Mexco Energy Corporation (NYSE American: MXC) 1 day chart 7/22/20

IS MEXCO ENERGY CORPORATION (MXC) A KEEPER? BULLISH PRICE TARGET $14.00

Mexco Energy Corporation (AMEX:MXC) Worth an Investment?

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