MEXCO ENERGY CORP
For the period ended Jun 30, 2026. Filed Aug 12, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 12, 2026
MXC$8.92+1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-10.
0001493152-26-005981
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-12.
0001493152-26-037396
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 49 previous paragraphs and 43 current paragraphs.
6 unchanged; 23 reworded; 12 added; 20 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 5 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Although we believe the expectations and assumptions reflected in these forward-looking statements are reasonable, they are inherently subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Except as required by the Exchange Act and Securities Act, we undertake no obligation to update or revise any forward-looking statements. Readers should review the consolidated financial statements and related notes, as well as the risk factors, included in our Annual Report on Form 10-K.
Current report
The Company expended approximately $100,000 for additional drilling and completion costs of five horizontal wells in the Wolfcamp B formation in the Spraberry trend area of the Midland Basin in Midland and Glasscock Counties, Texas that the Company participated in drilling during fiscal 2026. Mexco’s working interest in these wells is 1.9%.
Current report
Subsequently, in July 2026, the Company expended approximately $70,000 to drill and complete three horizontal wells in the Bone Spring formation of the Delaware Basin in Lea County, New Mexico.
Current report
Subsequently, in July 2026, the Company entered into an agreement to make a capital commitment of $1,000,000 to another limited liability company formed to acquire non-cost bearing mineral and royalty interests in the Utica Shale play in the state of Ohio.
Current report
**Acquisitions.**In April 2026, the Company acquired royalty interests in 82 producing wells in Weld County, Colorado for an aggregate purchase price of $690,900. These acquisitions were effective May 1, 2026.
Current report
In April 2026, the Company acquired royalty interests in 62 producing wells in Atascosa, Howard, LaSalle, Martin, and Yoakum Counties, Texas, and additional royalty interests in 3 properties in which we already owned an interest in Howard County, Texas for an aggregate purchase price of $337,700. These acquisitions were effective May 1, 2026.
Current report
In June 2026, the Company acquired royalty interests in 32 producing wells in Adams and Larimer Counties, Colorado for an aggregate purchase price of $377,600. These acquisitions are effective July 1, 2026.
Current report
In June 2026, the Company acquired royalty interests in 30 producing wells in Karnes, McMullen, Panola, and Winkler Counties, Texas for an aggregate purchase price of $408,700. These acquisitions are effective July 1, 2026.
Current report
In June 2026, the Company acquired royalty interests in 9 producing wells and additional royalty interests in 8 properties in which we already owned an interest in Caddo and DeSoto Parishes, Louisiana for an aggregate purchase price of $266,200. These acquisitions are effective July 1, 2026.
Current report
In June 2026, the Company acquired royalty interests in 185 producing wells in Ashtabula County, Ohio for a purchase price of $14,100. These acquisitions are effective July 1, 2026.
Current report
All of our acquisitions were funded from existing cash resources.
Current report
*Income from investments in LLCs.*Income from investments in LLCs increased 101% to $115,254 for the quarter ended June 30, 2026 from $57,236 for the quarter ended June 30, 2025. This increase resulted primarily from higher earnings from one of the Company’s limited liability companies.
Removed paragraphs (20)
Previous report
While we have made assumptions that we believe are reasonable, the assumptions that support our forward-looking statements are based upon information that is currently available and is subject to change. All forward-looking statements in the Form 10-Q are qualified in their entirety by the cautionary statement contained in this section. We do not undertake to update, revise or correct any of the forward-looking information. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Form 10-K.
Previous report
Mexco expended approximately $166,000 to participate in the drilling and completion of five horizontal wells in the Bone Spring formation of the Delaware Basin in Eddy County, New Mexico. In November 2025, two of these wells were completed with initial average production rates of 1,194 barrels of oil, 2,924 barrels of water, and 1,819,000 cubic feet of gas per day, or 1,497 BOE per day. Mexco’s working interest in these wells is .5%. Subsequently, in February 2026, the Company expended approximately $64,000 to complete the remaining three wells.
Previous report
Mexco expended approximately $79,000 to drill and complete two horizontal wells in the Bone Spring formation of the Delaware Basin in Lea County, New Mexico. In August 2025, these wells were completed with initial average production rates of 741 barrels of oil, 3,276 barrels of water, and 1,110,000 cubic feet of gas per day, or 926 BOE per day. Mexco’s working interest in these wells is .3%.
Previous report
Mexco expended approximately $155,000 to participate in the drilling and completion of three horizontal wells in the Wolfcamp Sand Formation of the Delaware Basin in Lea County, New Mexico. In December 2025, these wells were completed with initial average production rates of 827 barrels of oil, 3,483 barrels of water, and 2,354,000 cubic feet of gas per day, or 1,219 BOE per day. Mexco’s working interest in these wells is .52%.
Previous report
Mexco expended approximately $65,000 to participate in an exploratory vertical well in the Ellenburger formation of Ward County, Texas. In November, this well was determined to be noncommercial.
Previous report
**Acquisitions.**In May 2025, the Company acquired royalty (mineral) interests in 2 wells operated by Chevron Corporation and located in Pecos County, Texas for a purchase price of $40,000. This acquisition was effective April 1, 2025 and includes acreage for future development.
Previous report
In August 2025, the Company acquired royalty interests in 12 producing wells operated by Diamondback Energy, Inc. and located in Martin County, Texas for a purchase price of $60,300 and royalty interests in 25 wells operated by Chevron Corporation and located in Weld County, Colorado for a purchase price of $26,300. These acquisitions were effective September 1, 2025.
Previous report
In October 2025, the Company acquired royalty interests in 3 producing wells operated by Expand Energy Corporation and located in Caddo Parish, Louisiana for a purchase price of $31,300; royalty interests in 14 producing wells operated by Diamondback Energy, Inc. and located in Martin County, Texas for a purchase price of $44,300; royalty interests in 3 producing wells operated by Permian Resources Corporation and located in Eddy County, New Mexico for a purchase price of $6,800; and, overriding royalty interest in 4 producing wells operated by Tap Rock Resources and located in Eddy County, New Mexico for a purchase price of $240,300. These acquisitions were effective November 1, 2025.
Previous report
In December 2025, the Company acquired royalty interests in 14 producing wells operated by Anadarko Petroleum Corporation and located in Weld County, Colorado for a purchase price of $35,300; royalty interests in approximately 4 producing wells operated by SM Energy Company and located in Howard County, Texas for a purchase price of $100,600; royalty interests in 11 producing wells operated by Ovintiv Inc. and located in Martin County, Texas for a purchase price of $18,300. These acquisitions were effective December 1, 2025.
Previous report
Also in December 2025, the Company acquired additional royalty interests in the 3 producing wells operated by Expand Energy Corporation and located in Caddo Parish, Louisiana for a purchase price of $22,300 and effective January 1, 2026.
Previous report
Subsequently, in January 2026, the Company royalty interests in 3 producing wells operated by ConocoPhillips and located in Karnes County, Texas for a purchase price of $27,800. This acquisition is effective January 1, 2026.
Previous report
Oil and gas sales. Revenue from oil and gas sales was $1,301,794 for the third quarter of fiscal 2026, a 29% decrease from $1,828,404 for the same period of fiscal 2025. This resulted from a decrease in oil production volumes and a decrease in oil and natural gas prices partially offset by an increase in natural gas production volumes. Natural gas prices have been negatively impacted by limited pipeline capacity in the Permian Basin.
Previous report
*Other operating revenues.*Other revenues increased to $82,093 for the three months ended December 31, 2025, from $62,861 for the three months ended December 31, 2024. This increase resulted from an increase in income from our most recent limited liability company investment.
Previous report
*Production and exploration.*Production costs were $302,572 for the third quarter of fiscal 2026, a 34% decrease from $460,241 for the same period of fiscal 2025. This was primarily the result of a decrease in lease operating expenses on wells in which we own a working interest and a decrease in production taxes due to the decrease in oil and gas revenues.
Previous report
*General and administrative expenses.*General and administrative expenses were $317,524 for the third quarter of fiscal 2026, a 7% decrease from $340,514 for the same period of fiscal 2025. This was primarily due to a decrease in contract services.
Previous report
*Income taxes.*Income tax expense for the three months ended December 31, 2025 was $64,106 compared an income tax benefit of $18,305 for the three months ended December 31, 2024. The effective tax rate for state and federal taxes combined for the three months ended December 31, 2025 and 2024 was 56% and (4%), respectively. The effective tax rate for the three months ended December 31, 2025 reflects the timing of estimated income tax accruals and other tax items recognized during the quarter. See Note 7 – Income Taxes to the Notes to Consolidated Financial Statements for additional information.
Previous report
Results of Operations – Nine Months Ended December 31, 2025 and 2024. For the nine months ended December 31, 2025, there was a net income of $615,702 compared to net income of $1,077,370 for the nine months ended December 31, 2024. This was primarily a result of a decrease in operating revenues that is further explained below.
Previous report
*Other operating revenues.*Other revenues increased 61% to $251,712 for the nine months ended December 31, 2025, from $156,014 for the nine months ended December 31, 2024. This increase resulted from an increase in income from our most recent limited liability company investment.
Previous report
*Interest income.*Interest income on corporate funds increased to $58,610 for the nine months ended December 31, 2025, from $50,891 for the nine months ended December 31, 2024. This increase resulted from an increase in our investment fund balances.
Previous report
Depreciation, depletion and amortization. Depreciation, depletion and amortization expense was $2,002,182 for the nine months ended December 31, 2025, a 14% increase from $1,760,409 for the nine months ended December 31, 2024, primarily due to a decrease in oil and gas reserves and an increase in gas production partially offset by a decrease in oil production and a decrease in the full cost amortization base.
Reworded paragraphs (23)
Previous wording
Cautionary Statements Regarding Forward-Looking Statements. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements regarding our plans, beliefs or current expectations and may be signified by the words “could”, “should”, “expect”, “project”, “estimate”, “believe”, “anticipate”, “intend”, “budget”, “plan”, “forecast”, “predict” and other similar expressions. Forward-looking statements appear throughout this Form 10-Q with respect to, among other things: profitability; planned capital expenditures; estimates of oil and gas production; future project dates; estimates of future oil and gas prices; estimates of oil and gas reserves; our future financial condition or results of operations; and our business strategy and other plans and objectives for future operations. Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement.
Current wording
Cautionary Statements Regarding Forward-Looking Statements. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are based on management’s current expectations, assumptions and beliefs and may be identified by words such as “could”, “should”, “expect”, “project”, “estimate”, “believe”, “anticipate”, “intend”, “plan”, “forecast”, “predict”, and similar expressions.
Previous wording
Liquidity and Capital Resources. Historically, we have funded our operations, acquisitions, exploration and development expenditures from cash generated by operating activities, bank borrowings, sales of non-core properties and issuance of common stock. Our primary financial resource is our base of oil and gas reserves. We have pledged our producing oil and gas properties to secure our credit facility. We do not have any delivery commitments to provide a fixed and determinable quantity of its oil and gas under any existing contract or agreement.
Current wording
Liquidity and Capital Resources. Historically, we have funded our operations, acquisitions, exploration, and development expenditures from cash generated by operating activities, bank borrowings, sales of non-core properties, and issuance of common stock. Our primary financial resource is our base of oil and gas reserves. We have pledged our producing oil and gas properties to secure our credit facility. We do not have any delivery commitments to provide a fixed and determinable quantity of our oil and gas under any existing contract or agreement.
Previous wording
Our long-term strategy is on increasing profit margins while concentrating on obtaining reserves with low-cost operations by acquiring and developing oil and gas properties with potential for long-lived production. We focus our efforts on the acquisition of royalties and working interests in non-operated properties in areas with significant development potential.
Current wording
Our long-term strategy is on increasing profit margins while concentrating on obtaining reserves with low-cost operations by acquiring and developing oil and gas properties with potential for long-lived production. We focus our efforts on the acquisition of royalty and working interests and non-operated properties in areas with significant development potential.
Previous wording
**Cash Flow Provided by Operating Activities.**Cash flow from operating activities is primarily derived from the production of our crude oil and natural gas reserves and changes in the balances of non-cash accounts, receivables, payables or other non-energy property asset account balances. Cash flow provided by our operating activities for the nine months ended December 31, 2025 was $2,930,832 in comparison to $2,941,115 for the nine months ended December 31, 2024. This decrease of $10,283 in our cash flow operating activities consisted of an increase in our non-cash expenses, an increase in our accounts receivable of $481,198; a decrease of $376,035 of our accounts payable and accrued expenses and income tax payable; and, a decrease in our net income for the current nine months of $461,668. Variations in cash flow from operating activities may impact our level of exploration and development expenditures.
Current wording
**Cash Flow Provided by Operating Activities.**Cash flow from operating activities is primarily derived from the production of our crude oil and natural gas reserves and changes in the balances of non-cash accounts, receivables, payables, or other non-energy property asset account balances. Net cash provided by operating activities was $1,451,247 for the three months ended June 30, 2026 compared to $1,363,277 for the three months ended June 30, 2025, an increase of $87,970. The increase was primarily attributable to a $259,114 increase in net income, a $60,634 increase in net non-cash adjustments, and a $26,135 increase in accounts payables and accrued expenses. These increases were partially offset by a decrease in our accounts receivable of $135,552 and income tax payable of $132,519. Variations in cash flow from operating activities may affect our level of exploration and development expenditures.
Previous wording
Our expenditures in operating activities consist primarily of drilling expenses, production expenses and engineering services. Our expenses also consist of employee compensation, accounting, insurance and other general and administrative expenses that we have incurred in order to address normal and necessary business activities of a public company in the crude oil and natural gas production industry.
Current wording
Our expenditures in operating activities consist primarily of drilling expenses, production expenses and engineering services. Our expenses also include employee compensation, accounting, insurance, and other general and administrative expenses incurred to support the normal and necessary business activities of a public company in the crude oil and natural gas production industry.
Previous wording
**Cash Flow Used in Investing Activities.**Cash flow from investing activities is derived from changes in oil and gas property balances. For the nine months ended December 31, 2025, we had net cash of $2,212,547 used for additions to oil and gas properties and our investment in the limited liability company compared to $3,670,019 for the nine months ended December 31, 2024.
Current wording
**Cash Flow Used in Investing Activities.**Cash flow from investing activities is derived from changes in oil and gas property balances. For the three months ended June 30, 2026, net cash used for additions to oil and gas properties, net of drilling refunds was $2,729,750 compared to net cash for additions to oil and gas properties net of proceeds from property sales of $365,910 for the three months ended June 30, 2025. The increase in capital expenditures reflects our strategy of acquiring royalty interests and participating in drilling opportunities that management believes will enhance long-term reserves and production.
Previous wording
**Cash Flow Provided by Financing Activities.**Cash flow from financing activities is derived from our changes in long-term debt and in equity account balances. Net cash flow used in our financing activities was $204,600 for the nine months ended December 31, 2025 compared to cash flow used in our financing activities of $834,575 for the nine months ended December 31, 2024. During the nine months ended December 31, 2025, we expended $204,600 to pay the regular annual dividend. During the nine months ended December 31, 2024, we expended $209,000 to pay the regular annual dividend and $703,216 to purchase 57,766 shares of our stock for the treasury account and received $77,641 from the exercise of stock options.
Current wording
**Cash Flow Used in Financing Activities.**Cash flow from financing activities is derived from changes in long-term debt and in equity account balances. Net cash flow used in our financing activities was $204,600 for the three months ended June 30, 2026 and 2025 to pay the annual dividend.
Previous wording
Accordingly, net cash increased $513,685, leaving cash and cash equivalents on hand of $2,267,640 as of December 31, 2025.
Current wording
Accordingly, net cash decreased $1,483,103, leaving cash and cash equivalents on hand of $1,292,873 as of June 30, 2026.
Previous wording
At December 31, 2025, we had working capital of $3,186,231 compared to working capital of $2,469,664 at March 31, 2025, an increase of $716,567 for the reasons set forth below.
Current wording
We had working capital of $2,721,592 as of June 30, 2026 compared to $3,995,456 at March 31, 2026, a decrease of $1,273,864 for the reasons set forth below.
Previous wording
**New Participations in Fiscal 2026.**The Company currently plans to participate in the drilling and completion of fifty horizontal wells and one vertical well at an estimated cost of approximately $1,700,000 for the fiscal year ending March 31, 2026. Forty-five of these wells are in the Delaware Basin located in the western portion of the Permian Basin in Lea and Eddy Counties, New Mexico. The remaining wells are in Glasscock, Midland, and Ward Counties, Texas.
Current wording
**New Participations in Fiscal 2027.**The Company currently plans to participate in the drilling and completion of 53 horizontal wells at an estimated cost of approximately $1,300,000 for the fiscal year ending March 31, 2027. Forty-eight of these wells are in the Delaware Basin located in the western portion of the Permian Basin in Lea County, New Mexico. The remaining wells are in Reeves County, Texas.
Previous wording
In December 2025, Mexco expended approximately $46,000 to participate in the drilling and completion of six horizontal wells in the Bone Spring formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is .05%.
Current wording
In May 2026, Mexco expended approximately $400,000 to participate in the drilling and completion of five horizontal wells in the Wolfcamp A formation of the Delaware Basin in Reeves County, Texas. Mexco’s working interest in these wells is .8%.
Previous wording
Completion of Wells Drilled in Fiscal 2025. The Company expended approximately $150,000 for the completion of seventeen horizontal wells in which the Company participated during fiscal 2025. These wells, located in Delaware Basin of Lea County, New Mexico, have been completed and turned to production.
Current wording
Completion of Wells Drilled in Fiscal 2026. The Company also expects to expend approximately $500,000 for the completion of 20 horizontal wells in which the Company participated during fiscal 2026.
Previous wording
In December 2025, Mexco expended approximately $404,000 to participate in the drilling and completion of two horizontal development wells in the Wolfcamp XY formation of the Delaware Basin in Eddy County, New Mexico. Mexco’s working interest in these wells is 2.1%.
Current wording
Two horizontal wells in the Wolfcamp XY formation of the Delaware Basin in Eddy County, New Mexico in which the Company participated during fiscal 2026 were completed in April 2026 with initial average production rates of 607 barrels of oil, 1,295 barrels of water, and 2,170,000 cubic feet of gas per day, or 969 BOE per day. Mexco’s working interest in these wells is approximately 2.1%.
Previous wording
**Investments.**In October 2022, the Company made an approximately 2% equity investment commitment in a limited liability company amounting to $2,000,000, which was fully funded as of July 2025. The limited liability company is capitalized at approximately $100 million to purchase mineral interests in the Utica and Marcellus areas in the state of Ohio. In October 2025, the Company expended $200,000 to exercise its option to participate in a voluntary optional cash call to increase its capitalized investment. And in December 2025, expended an additional $27,429 to exercise its option to acquire its share of the non-consent interests from the October cash call. As of December 31, 2025, this LLC has returned $476,635 or 21% of the total investment.
Current wording
**Investments.**In October 2022, the Company made an approximately 2% equity investment commitment in a limited liability company amounting to $2,000,000, which was fully funded as of July 2025. The limited liability company is capitalized at approximately $100 million to acquire mineral interests in the Utica and Marcellus formations in the state of Ohio. In October 2025, the Company expended $200,000 to exercise its option to participate in a voluntary optional cash call to increase its capitalized investment. In December 2025, the Company expended an additional $27,429 to exercise its option to acquire its share of the non-consenting interests from the October cash call. As of June 30, 2026, this LLC has returned $668,364, or 30% of the total investment.
Previous wording
Pricing. Crude oil and natural gas prices generally remained volatile during the last year. The volatility of the energy markets makes it extremely difficult to predict future oil and natural gas price movements with any certainty. For example, in the last twelve months, the NYMEX West Texas Intermediate (“WTI”) posted price for crude oil has ranged from a low of $51.25 per bbl in December 2025 to a high of $76.02 per bbl in January 2025. The Henry Hub Spot Market Price (“Henry Hub”) for natural gas has ranged from a low of $2.65 per MMBtu in June and October 2025 to a high of $9.86 per MMBtu in January 2025.
Current wording
Pricing. Crude oil and natural gas prices remained volatile during the last year. The volatility of the energy markets makes it extremely difficult to predict future oil and natural gas price movements with any certainty. For example, in the last twelve months, the NYMEX West Texas Intermediate (“WTI”) posted price for crude oil has ranged from a low of $51.25 per bbl in December 2025 to a high of $108.93 per bbl in April 2026. The Henry Hub Spot Market Price (“Henry Hub”) for natural gas has ranged from a low of $2.54 per MMBtu in April 2026 to a high of $30.72 per MMBtu in January 2026, reflecting a temporary price spike during a period of severe weather and significant market volatility.
Previous wording
On December 31, 2025, the WTI posted price for crude oil was $53.40 and the Henry Hub spot price for natural gas was $4.00 per MMBtu. See Results of Operations below for realized prices. Pipeline capacity constraints and maintenance in the Permian Basin area has contributed to a wider difference between the WaHa Hub and the Henry Hub and at times prices were negative. These conditions adversely impacted realized prices during certain periods and contributed to variability in operating results.
Current wording
On June 30, 2026, the WTI posted price for crude oil was $65.48 and the Henry Hub spot price for natural gas was $3.34 per MMBtu. See Results of Operations below for realized prices. Pipeline capacity constraints and maintenance in the Permian Basin area have contributed to a wider difference between the WaHa Hub and the Henry Hub, and at times prices were negative.
Previous wording
Results of Operations – Three Months Ended December 31, 2025 and 2024. For the quarter ended December 31, 2025, there was net income of $50,245 compared to $469,133 for the quarter ended December 31, 2024 as a result of a decrease in operating revenues and an increase in income taxes partially offset by a decrease in operating expenses that is further explained below.
Current wording
**Results of Operations – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025.**For the quarter ended June 30, 2026, net income was $501,065 compared to net income of $241,951 for the quarter ended June 30, 2025. This was the result of an increase in operating revenues and a decrease in operating expenses, which is further explained below.
Previous wording
Oil and gas sales. Revenue from oil and gas sales was $4,681,094 for the nine months ended December 31, 2025, a 10% decrease from $5,212,313 for the same period of fiscal 2025. This resulted from a decrease in oil price and production volume partially offset by an increase in natural gas price and production volume. The following table sets forth our oil and natural gas revenue, production quantities, and average prices received during the nine months ended December 31:
Current wording
Oil and gas sales. Revenue from oil and gas sales was $1,978,158 for the quarter ended June 30, 2026, a 13% increase from $1,754,734 for the quarter ended June 30, 2025. This primarily resulted from an increase in oil prices partially offset by a decrease in gas prices and a decrease in oil and gas production volumes. The following table sets forth our oil and natural gas revenues, production quantities and average prices received during the three months ended June 30:
Previous wording
*Interest income.*Interest income on corporate funds increased to $23,953 for the three months ended December 31, 2025, from $7,315 for the three months ended December 31, 2024. This increase resulted from an increase in our investment fund balances.
Current wording
*Interest income.*Interest income on corporate funds increased 2% to $14,852 for the quarter ended June 30, 2026 from $14,531 for the quarter ended June 30, 2025. This increase resulted from a change in our average cash balances.
Previous wording
*Production and exploration.*Production costs were $1,076,435 for the nine months ended December 31, 2025, an 18% decrease from $1,311,066 for the nine months ended December 31, 2024. This was primarily the result of a decrease in lease operating expenses on wells in which we own a working interest and a decrease in production taxes due to the decrease in oil revenue partially offset by the increase gas revenue.
Current wording
Production and exploration. Production costs were $411,006 for the three months ended June 30, 2026, a 1.5% increase from $404,770 for the three months ended June 30, 2025. This was primarily due to an increase in lease operating expenses on wells in which we own a working interest.
Previous wording
Depreciation, depletion and amortization. Depreciation, depletion and amortization expense was $664,265 for the third quarter of fiscal 2026, a 4% increase from $636,424 for the same period of fiscal 2025, primarily due to a decrease in oil and gas reserves and an increase in gas production partially offset by a decrease in oil production and a decrease in the full cost pool amortization base.
Current wording
*Depreciation, depletion and amortization.*DD&A expense was $606,521 for the first quarter of fiscal 2027, a 10% decrease from $675,270 for the first quarter of fiscal 2026, primarily due to a decrease in oil and gas production volumes and an increase in natural gas reserves partially offset by a decrease in oil reserves and an increase in the full cost pool amortization base.
Previous wording
*General and administrative expenses.*General and administrative expenses were $1,044,225 for the nine months ended December 31, 2025, a .2% increase from $1,042,084 for the nine months ended December 31, 2024. This was primarily due to an increase in accounting and engineering services, insurance and salaries partially offset by a decrease in contract services and stock option compensation.
Current wording
General and administrative expenses. General and administrative expenses were $389,829 for the three months ended June 30, 2026, a 1% decrease from $394,437 for the three months ended June 30, 2025. This was primarily due to a decrease in stock option compensation and salaries partially offset by an increase in engineering, accounting, and legal fees.
Previous wording
*Income taxes.*Income tax expense for the nine months ended December 31, 2025 was $225,572 compared to $200,034 for the nine months ended December 31, 2024. The effective tax rate for the nine months ended December 31, 2025 and 2024 was 27% and 16%, respectively. See Note 7 – Income Taxes to the Notes to Consolidated Financial Statements for additional information.
Current wording
*Income taxes.*Income tax for the three months ended June 30, 2026 was $195,310 compared to $103,231 for the three months ended June 30, 2025. The combined federal and state effective tax rate for the three months ended June 30, 2026 and 2025 was 28% and 30%, respectively. See Note 7 – Income Taxes to the Notes to Consolidated Financial Statements for additional information.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report — wording carried from elsewhere
Forward-looking statements in this Form 10-Q include, among other things, statements regarding profitability, planned capital expenditures, estimated oil and gas production and reserves, future project dates, future oil and gas prices; future financial condition or results of operations, business strategy, and other plans and objectives for future operations. These statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.