Mexco Energy reports net income of over $ 1 million



Midland-based Mexco Energy Corp. reported net income of $ 1.103 million, or 52 cents per diluted share, for the six-month period ended September 30, 2021. That compares to a net loss of $ 341,640. or 17 cents per diluted share, for the six-month period ended September 30, 2020.

Operating revenues were $ 2,817,679 for the six-month period, an increase of 180% from $ 1,006,498 for the six-month period of September 30, 2020.

“It’s not just the higher price of commodities, it’s production,” Tammy McComic, Mexco president and chief financial officer, told Reporter-Telegram by phone.

There was a 29 percent increase in oil production and a 9 percent increase in natural gas production as well as increases in the average selling price of oil and natural gas to $ 66.85 per barrel. (an increase of 110 percent) and $ 3.70 per MMcf (an increase), respectively, for the six months, the company said.

Mexco does not operate any wells but sees a lot of development in the properties it has invested in, she said. The company holds royalties and (mainly) direct interests.

Nick Taylor, Mexco’s president and CEO, said he sees opportunities accelerating for the company as it celebrates its 50th anniversary in 2022, especially as its partners accelerate opportunities.

He and McComic proudly noted that the Oil & Gas Journal ranked Mexco as the 74th largest US-based public oil and gas company in its September 6, 2021 issue, down from the 96th.

Net income was $ 708,828, or 33 cents per diluted share, for the quarter ended September 30, 2021, the company’s second quarter of fiscal 2022, compared with a net loss of $ 41,970, or 2 cents. per diluted share, for the quarter ending September 30, 2020, and compared to net income of $ 395,006 for the previous quarter ending June 30, 2021, an increase of 79%.

Operating revenues for the second quarter of fiscal 2022 increased by 144% to reach $ 1,553,481, compared to $ 636,042 for the second quarter of fiscal 2021. This increase is the result of a 24% increase in oil production and 4% of natural gas production as well as average sales. Oil and natural gas prices for the quarter at $ 69.62 per barrel (an 81% increase) and $ 4.41 per MMcf (an increase of 213%), respectively.

Mexco currently plans to participate in the drilling and completion of approximately 39 horizontal wells at an estimated total cost of approximately $ 1 million for the year ending March 31, 2022. During the first six months of the Fiscal year 2022, the Company participated with varying percentages of interest in drilling 19 of these wells in the Delaware Basin in Lea and Eddy counties, New Mexico and in Reeves County, Texas with total costs of approximately $ 450,000.

“We have a lot of developments going on and plan to keep investing,” McComic said.

Mexco also spent approximately $ 165,000 in the first quarter of fiscal 2022 for the additional completion costs of 12 drilled but unfinished horizontal wells located in Lea and Eddy counties in which the company was involved in drilling during during fiscal year 2021. Two of these wells were completed in late June 2021 and early July with initial average production rates of 1,406 barrels of oil, 3,214 barrels of water; and 2.146 million cubic feet of gas per day, or 1,403 barrels of oil equivalent per day. Mexco’s direct interest in these wells is 1.2%.

During the six-month period ended September 30, 2021, the Company paid in full the balance of $ 1.18 million on its bank line of credit.



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