-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cw5KbCPQuHwvU/UwQFUucOLmTz7Y76hBBcH18GqApwAWP/Js/tol3xx4kGppz23h 7u7n0/lXoE7j8g9x55MPLw== 0000930661-96-000680.txt : 19960724 0000930661-96-000680.hdr.sgml : 19960724 ACCESSION NUMBER: 0000930661-96-000680 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960625 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEXCO ENERGY CORP CENTRAL INDEX KEY: 0000066418 STANDARD INDUSTRIAL CLASSIFICATION: 1311 IRS NUMBER: 840627918 STATE OF INCORPORATION: CO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-06694 FILM NUMBER: 96585277 BUSINESS ADDRESS: STREET 1: 214 W TEXAS STE 1101 CITY: MIDLAND STATE: TX ZIP: 79701 BUSINESS PHONE: 9156821119 MAIL ADDRESS: STREET 1: P O BOX 10502 CITY: MIDLAND STATE: TX ZIP: 79702 FORMER COMPANY: FORMER CONFORMED NAME: MILLER OIL CO DATE OF NAME CHANGE: 19800702 10-K 1 FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended March 31, 1996 Commission File No. 0-6694 MEXCO ENERGY CORPORATION Incorporated in the State of Colorado 84-0627918 (I.R.S. Employer Identification No.) 1101 Petroleum Building, Midland, Texas 79701 (Principal Executive Office) Telephone Number: (915) 682-1119 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Title of Each Class Name of Exchange on Which Registered ------------------- ------------------------------------ Common Stock, $.50 par value None 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 twelve (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 ninety (90) days. Yes X No ------- ------- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ((S)229.405 of this chapter)is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or an amendment to this Form 10-K. [X] The aggregate market value of the common stock of the Registrant held by non- affiliates was approximately $ 576,792 based upon the closing bid price of the Registrant's common stock as of May 31, 1996. DOCUMENTS INCORPORATED BY REFERENCE The information required by Item 601 of Regulation S-K with respect to this Form 10-K has either been included or omitted because of non-applicability. The index to the Exhibits is located on page 20 herein. 2 PART I Item No. 1. Business -------- Mexco Energy Corporation (the "Registrant"), a Colorado corporation, was organized in 1972, and maintains its principal office at 1101 Petroleum Building, Midland, Texas. Since its incorporation, the Registrant has been engaged in the acquisition, exploration and development of oil and gas properties located in the United States. The bulk of its activities are, and have been since its incorporation, conducted in the State of Texas. The Registrant's corporate name was formerly Miller Oil Company. In 1980 the shareholders of the Registrant amended the Articles of Incorporation ("Articles") of the Registrant to change the corporate name to Mexco Energy Corporation. Also at that time, the shareholders of the Registrant approved amendments to the Articles resulting in a one-for-fifty reverse stock split of the Registrant's common stock ($0.50 par value). The corporate name change and reverse stock split became effective April 30, 1980. The Registrant's operations are not divided into industry segments. Since its inception, the Registrant's entire business has been acquiring, and developing oil and gas properties and producing oil and gas within the oil and gas industry. All sales of oil and gas are to unaffiliated customers. See the Registrant's financial statements and notes thereto for an account of the Registrant's past operating results attributable to its oil and gas operations. The Registrant acquires interests in producing and non-producing oil and gas leases purchased from landowners and leaseholders in areas considered favorable for oil and gas exploration and production by the Registrant. In addition, oil and gas prospects are acquired by joining with other oil and gas operators in drilling prospects which such third parties have generated. The Registrant employs a combination of the above methods of obtaining producing acreage and related prospects. In recent years, the Registrant has been placing primary emphasis on evaluation and purchase of producing oil and gas properties. As of March 31, 1996, the Registrant held leasehold rights covering in excess of 59,928 gross acres (2,207 net acres), all of which have producing oil and gas wells located thereon. The Registrant is the operator of seven (7) of the producing wells in which it owns an interest and other companies operate eight hundred sixty-eight (868) of the remaining producing wells. The Registrant's oil and gas activities involve oil and gas drilling, which carries high risk including the risk that no commercial oil or gas production will be obtained. The cost of drilling, completing and operating wells is often uncertain. Further, drilling may be curtailed or delayed as a result of many factors, including title problems, weather conditions, delivery delays, and in past years, shortage of pipe and equipment. 3 The Registrant is subject to all the risks inherent in the exploration for, and development and production of, oil and gas, including blowouts, fires, and other casualties. The Registrant maintains insurance coverage but losses can occur from uninsured risks or in amounts in excess of existing insurance coverage. The occurrence of an event which is not insured or not fully insured could have an adverse impact upon the Registrant. The oil and gas industry in which the Registrant is engaged is a highly competitive and speculative business. Competitors include well-capitalized oil and gas companies and other companies having financial and other resources greater than those of the Registrant. The Registrant's ability to locate and produce oil and gas reserves is essential to the ultimate realization of income and value from the Registrant's properties and, therefore, may be considered to be a raw material essential to the Registrant's business. The availability of drilling rigs, fuel, tubular goods and other drilling and production equipment is also essential to the Registrant's business. The Registrant relies on the acquisition of leases and other oil and gas interests on which to explore for, develop and/or produce oil and gas. The availability of such property is essential to the Registrant's continuing business. Crude oil and condensate produced from the properties in which the Registrant owns an interest are sold to oil companies and pipeline companies at prices posted by the principal purchasers in the Registrant's producing area. As of March 31, 1996 the principal purchasers (percentage purchased) of the Registrant's crude oil production were Navajo Crude Oil Marketing Company (66%) and Sun Refining and Marketing Company (22%). Natural gas obtained from the properties in which the Registrant has an interest is sold pursuant to contracts negotiated between operators of producing wells and purchasers of natural gas (subject to the Natural Gas Policy Act). As of March 31, 1996 the principal purchasers (percentage purchased) of the Registrant's natural gas production were approximately: Aquila Southwest Pipeline Corporation (23%), Midland Marketing Corporation (19%), Energy Development Corporation ("EDC") (16%), Texaco Inc. (13%), and GPM Gas Corporation (11%). The Registrant does not believe that the loss of any of these purchasers would have a material impact on Registrant's business because of the demand for oil, gas and casinghead gas production. Oil and gas production is transported by trucks and pipelines, respectively. The Registrant does not own any bulk storage facilities or pipelines. As of March 31, 1996, the Registrant had two employees, who currently work part time in and out of the office. The Registrant believes that relations with these employees are generally satisfactory. The Registrant's employees are not covered by collective bargaining arrangements. The Registrant, by nature of its oil and gas operations, is subject to compliance with federal, state and local provisions regulating the discharge of materials into the environment or 4 otherwise relating to the protection of the environment. At the present time, however, such compliance does not require any substantial capital expenditures, does not materially affect the Registrant's earnings and in the Registrant's opinion will not materially affect future operations. The Registrant is not engaged in operations in foreign countries, and no portion of sales or revenues is derived from customers in foreign countries. Item No. 2. Properties ---------- Office Facilities - - ----------------- The Registrant occupies its principal offices at 1101 Petroleum Building, Midland, Texas pursuant to a lease which terminates in less than one (1) year. Oil and Gas Properties and Reserves - - ----------------------------------- Registrant owns 100% of five (5) producing oil wells which it operates and owns partial interests in an additional eight hundred seventy-one (871) wells located in the states of Texas, New Mexico and Oklahoma. Of the wells, eight hundred seventy-five (875) are producing. The Registrant also operates one (1) water source well and one (1) injection well. Additional information concerning these properties and the oil and gas reserves of the Registrant is provided as follows. Oil and Gas Properties - - ---------------------- The following table indicates the net oil and gas production of the Registrant in each of the last five (5) years, all of which is located within the United States.
Year Oil (Bbls.) Gas (MCF) 1996 29,058 186,419 1995 21,844 140,010 1994 13,390 77,126 1993 12,331 55,370 1992 11,711 42,398
5 The following table indicates the Registrant's total gross and net productive oil and gas wells and the total gross and net producing acreage as of March 31, 1996.
Wells Producing --------------------------- -------------- Oil Gas Acreage (a) ------------- ----------- -------------- Gross Net Gross Net Gross Net ----- ------ ----- ----- ------ ------ Texas 780 11.596 42 1.255 45,915 2,049 New Mexico 3 .066 2 .133 2,476 136 Oklahoma -- -- 7 .026 4,021 17 Wyoming 2 .020 -- -- 320 3 Louisiana 39 .009 -- -- 6,876 2 Arkansas 1 .001 -- -- 320 -- --- ------ -- ----- ------ ----- TOTAL 825 11.692 51 1.414 59,928 2,207
(a) A gross well or acre is one in which an interest is owned. A net well or acre indicates the percentage of interest of the gross well or acre owned by the Registrant. (b) Of these wells none are shut-in pending plugging and abandonment. The following table sets forth the results of the drilling activity by the Registrant for the years ended March 31, 1996, 1995 and 1994.
Net Net Net Net Gross Productive Dry(1) Productive Dry Year Wells Exploratory Exploratory Development Development - - ---- ----- ----------- ----------- ----------- ----------- 1996 9 0 .063 .815 0 1995 6 0 0 1.125 0 1994 2 0 0 .25 .19
- - ------------- (1) One of the net dry exploratory wells accounted for .0625 was drilled in 1995, but not plugged and abandoned until 1996. 6 The following table presents, for the periods indicated, the average sales price per unit and average production costs per unit attributable to the Registrant's interest in producing oil and gas properties.
Year Ended March 31, -------------------------- 1996 1995 1994 ------ ------ ------ Average sales price per product: Oil (per Bbl.) $17.45 $16.40 $14.87 Gas (per MCF) 1.57 1.32 1.66(1) Average production costs per barrel equivalent (gas con- verted to barrel equivalent to 6 MCF per barrel of oil) 4.54 4.60 7.39 Production cost per dollar of sales .35 .38 .50
(1) This price excludes settlement proceeds from litigation regarding sales of natural gas. Oil and Gas Reserves - - -------------------- See Note G of the Notes to Financial Statements herein for information regarding the estimated quantities of proved oil and gas reserves owned by the Registrant. The oil and gas reserves have been estimated in accordance with regulations promulgated by the Securities and Exchange Commission. The following table indicates estimates by the Registrant's Independent Petroleum Engineers, T. Scott Hickman & Associates, Inc., of Midland, Texas, of the availability to the Registrant of proved oil and gas reserves, all of which are located in the United States, for the year 1996. The estimates for the years 1994 and 1995 were prepared by the Registrant's consulting engineer, R.F. Bailey of Midland, Texas. For 1996, T. Scott Hickman & Associates, Inc. has estimated 424,737 barrels of oil and 1,920,107 MCF of gas for a combined $4,627,526 of future net revenue discounted at ten percent (10%) per annum. Reserve estimate calculations as of March 31, 1996, include decontrol of oil prices, and repeal of the Windfall Profits Excise Tax but do not include decontrol or escalation of gas prices, except as provided in existing gas contracts. Since no provisions were made for changes in product prices and costs, the Registrant does not believe that these estimates of reserves and future net revenues fully reflect possible future revenue values. Estimates of oil and gas reserves are projections based on engineering information and data. There are uncertainties inherent in the interpretation of such data, and there can be no assurance that the reserves set forth below will be ultimately realized. 7 Proved Developed and Undeveloped Reserves -----------------------------------------
Present Worth of Future Net Revenues Oil (bbls) Gas (MCF) Discounted at 10% ---------- --------- ------------------ March 31, 1996 424,737 1,920,107 $4,627,526 March 31, 1995 207,065 1,566,720 $2,028,365 March 31, 1994 79,855 671,303 $1,073,325
No major discovery or other favorable or adverse event has caused a material change in the estimated proved reserves since March 31, 1996 except for the increase in the Registrant's proved oil and gas reserves as of March 31, 1996 due primarily to purchases and development of producing properties and except for normal production declines, price and related adjustments. The Registrant has not filed any oil or gas reserve estimates or included any such estimates in reports to any other federal or foreign governmental authority or agency within the past twelve (12) months. The Registrant has no foreign operations and has no agreements with foreign governments. As of March 31, 1996, one (1) well was to be drilled by the Registrant. There were no other operations of material importance to Registrant such as waterfloods and pressure maintenance projects being installed by the Registrant. Title to Oil and Gas Properties - - ------------------------------- Registrant currently has no properties mortgaged to secure indebtedness. The Registrant's properties are generally subject to the customary royalty and overriding royalty interests, liens incident to operating agreements, liens for current taxes and other burdens and minor encumbrances, easements and restrictions. The Registrant believes that none of such burdens materially detract from the value of such properties or materially interferes with their use in the operation of the Registrant's business. As is common industry practice, little or no investigation of title is made at the time of acquisition of undeveloped properties, other than preliminary review of local mineral records. Title investigations, in most cases including obtaining a title opinion of local counsel, are made before commencement of drilling operations. The Registrant believes that its methods of investigating title to its properties are consistent with practices customary in the oil and gas industry in connection with the 8 acquisition of such properties, and that such practices are adequately designed to enable it to acquire good title to such properties. Undeveloped Acreage - - ------------------- The Registrant currently does not own any material inventory of non- productive acreage in partially developed prospects except those located in the Viejos Devonian Field of Pecos County, Texas and the Lazy JL Spraberry Field of Garza County, Texas. The Registrant owns from 6.00% working interest to 9.51% working interest (net revenue interest 4.5% to 7.13%) in the Viejos Field of Pecos County, Texas, consisting of 2,574 gross acres and ten (10) wells. The Registrant owns a 35% working interest (net revenue interest 26.25%) in ten (10) wells in the Lazy JL (Lower Spraberry) Field of Garza County, Texas, consisting of 1,284 acres in which the Registrant owns from a 25% to 35% working interest at March 31, 1996. The Registrant is unable to determine the extent of future development, if any, in these two (2) fields. Item No. 3. Legal Proceedings ----------------- The Registrant is not involved in any pending or threatened legal proceedings except as set forth in Note F of the Notes to Financial Statements herein. Item No. 4. Submission of Matters to a Vote of Security ------------------------------------------- Holders ------- No matter has been submitted to a vote of security holders during the fourth quarter of the fiscal year being reported upon. 9 PART II ------- Item No. 5. Market For Registrant's Common Equity and Related ------------------------------------------------- Stockholder Matters. ------------------- "Common Stock" - - -------------- The Registrant's common stock is traded in the over-the-counter market. The high and low bid quotations for the calendar periods indicated are shown on the following table.
Bid Price ---------------- High Low ---- --- 1996 April - June 1995 $3.00 $2.00 July - September 1995 3.00 2.00 October - December 1995 3.00 2.00 January - March 1996 3.00 2.00 1995 April - June 1994 $2.50 $1.50 July - September 1994 2.50 1.50 October - December 1994 2.50 1.50 January - March 1995 2.50 1.50
Bid quotations representing prices between dealers do not include retail mark up, mark down or commissions, and do not necessarily represent actual transactions. Number of Shareholders - - ---------------------- As of March 31, 1996, there were approximately 1,476 shareholders of record of the Registrant's common stock. Dividends - - --------- The Registrant has not paid any dividends on its common stock, and the payment of any dividends at a future date would be dependent upon the earnings, financial condition and capital needs of the Registrant at such time. 10 Item No. 6. Selected Financial Data -----------------------
Revenues: 1996 1995 1994 1993 1992 ---------- ---------- ---------- ---------- ---------- Oil & gas income $ 798,589 $ 543,267 $ 374,322 $ 331,412 $ 288,948 Proceeds from settlement of litigation --- --- 1,160,933 --- --- Administrative service charges and reimburse- ments 7,380 10,123 26,553 16,924 18,218 Other income 28,104 20,531 18,071 4,350 9,582 Net income (loss) 200,606 104,843 1,028,718 ( 8,975) 14,869 Net Income (loss) per share .15 .09 .88 ( .01) .01 ---------- ---------- ---------- ---------- ---------- Net Income (loss) from continuing operations 200,606 104,843 1,028,718 ( 8,975) 14,869 ========== ========== ========== ========== ========== Net Income (loss) from continuing operations per share .15 .09 .88 ( .01) .01 ========== ========== ========== ========== ========== Total Assets 2,612,039 1,951,896 1,868,369 817,805 737,075 Total Long-Term Debt --- --- --- --- --- Weighted average shares outstanding 1,342,628 1,173,229 1,173,229 1,157,479 1,152,229 Dividends --- --- --- --- --- ========== ========== ========== ========== ==========
11 Item No. 7. Management's Discussion and Analysis of Financial ------------------------------------------------- Condition and Results of Operations ----------------------------------- Liquidity and Capital Resources and Commitments - - ----------------------------------------------- As indicated by the Statements of Cash Flows for the past three fiscal years, the Registrant generally has generated cash from operating activities which has been used primarily for purposes of acquiring producing and non- producing oil and gas properties. On July 28, 1995, the Registrant completed a private placement with accredited investors of 250,000 shares of its unregistered, restricted common stock, par value $0.50 per share, for total proceeds of $500,000 or $2.00 per share to the Registrant. The proceeds are being used in developing the Registrant's existing oil and gas properties and for the purchase of additional oil and gas properties. Such shares were issued to six (6) shareholders, representing 17.57% of the total issued and outstanding shares after said sale. Registrant also has a letter of credit with NationsBank of Texas, N.A., Midland, Texas, which provides for unsecured borrowings up to $50,000 in lieu of a plugging bond with the Railroad Commission for properties currently shut-in. In the past years, the oil and gas industry has suffered because of price decreases for oil. An oversupply of petroleum in both the domestic and international markets appeared to be the reason for the price decline. The Registrant is unable to predict price changes or the possible effects on the Registrant at this time. Past changes in tax laws and the decline in oil prices have had the effect industry-wide of limiting funds available for oil and gas exploration. During the fiscal year ended March 31, 1996, the Registrant's oil production increased 7,214 barrels (33%) from 1995 and gas production increased 46,409 MCF (33%) as a result of additional producing oil and gas properties. Results of Operations - - --------------------- Business Segment ---------------- The Registrant only has a single line of business which is oil and gas acquisition, exploration and production. 12 Fiscal 1996 Compared to Fiscal 1995 ----------------------------------- Registrant participated in the drilling of nine (9) gross (.815 net) wells, of which seven (7) were productive oil wells in fiscal 1996. An increase in working capital of $20,300 for fiscal 1996, compared to a decrease of $466,825 for fiscal 1995 was a result of increased receipts of oil and gas sales and proceeds of a private placement of the Registrant's common stock. Gross revenue from oil and gas production increased in 1996 compared to 1995 by $255,322 (47%) and the Registrant reflected net earnings of $200,606. Revenues increased due to the increase in oil and gas production from acquisition and development of oil and gas properties. This increase was affected by increase in revenues from sales of crude oil and natural gas during the current period. The average 1996 price for crude oil is $17.45 per barrel compared to the 1995 price of $16.40. Average prices paid per MCF of gas for 1996 and 1995 were $1.57 and $1.32, respectively. Administrative services income and reimbursement to the Registrant decreased $2,743 (27%) due to the plugging and abandonment of certain wells during the current year. Production costs increased $65,263 (31%) from 1995 primarily from the addition of new wells drilled in 1996. Other income in 1996 consisted primarily of $17,285 of interest income from investment in a liquid asset money market fund and $6,979 of gas gathering fees from the Viejos field. Overall, costs and expenses increased in 1996 by $162,672 (36%). Normal depreciation, depletion and amortization increased in 1996 as compared to 1995 by $91,669 (54%) due to increased acquisition, development and production of properties. General and administrative expenses increased $5,740 (7%). Fiscal 1995 Compared to Fiscal 1994 ----------------------------------- Registrant participated in the drilling of six (6) gross (1.125 net) wells, of which all six (6) were productive oil wells in fiscal 1995. A decrease in working capital of $466,825 for fiscal 1995, compared to an increase of $711,649 for fiscal 1994 was a result of increased acquisition, drilling and development costs and non-recurring receipt of proceeds aggregating $1,160,933 in 1994 from litigation regarding natural gas sales. 13 Gross revenue from oil and gas production increased in 1995 compared to 1994 by $168,945 (45%) and the Registrant incurred a profit of $104,843. Revenues increased due to the increase in oil and gas production from additions of oil and gas properties as compared to the prior year. This increase was affected by increase in revenues from sales of crude oil and natural gas during the current period. The average 1995 price for crude oil was $16.40 per barrel compared to the 1994 price of $14.87. Average prices paid per MCF for 1995 and 1994 were $1.32 and $1.66, respectively. Administrative services income and reimbursement to the Registrant decreased $16,430 (62%) due to non-recurrence of drilling overhead charges during the current year. Production costs increased $13,682 (7%) from 1994 primarily from the addition of new wells drilled in 1995. Other income in 1995 consisted primarily of $15,334 of interest income from investment in a liquid asset money market fund. Overall, costs and expenses decreased in 1995 by $32,162 (6.55%). Normal depreciation, depletion and amortization increased in 1995 as compared to 1994 by $18,394 (12%) due to increased development and acquisition of properties. In 1994 an impairment of $65,794 was recorded due to the Company's full cost pool exceeding the full cost ceiling. General and administrative expense increased $3,112 (4%). Item No. 8. Financial Statements and Supplementary Data ------------------------------------------- See Index to Financial Statements elsewhere herein. Item No. 9. Changes in and Disagreements on Accounting and ---------------------------------------------- Financial Disclosures --------------------- There were no changes or disagreements. PART III -------- Item No. 10. Directors and Executive Officers of the Registrant --------------------------------------------------
Name Age Position - - ----------------------------- --- ------------------- William G. Duncan, Jr. 53 Director Nicholas C. Taylor 58 Director, President and Treasurer Donna Gail Yanko 52 Director, Vice President and Secretary
14 At the Annual Meeting held on November 29, 1995, the above persons were elected to serve on the Board of Directors for a term of one year and until their successors are duly elected and qualified. The following is a brief account of the business experience during the last five years of each director and executive officer: William G. Duncan, 53, since October 1991, has been the Senior Vice ----------------- President and Chief Investment Officer of Southeastern Financial Services, Louisville, Kentucky. For the previous twenty-five (25) years, he held several positions at Liberty National Bank and Trust Company, Louisville, Kentucky, serving as Senior Vice President and Manager of the bank's Personal Trust Investment Section, member of Liberty's Trust Executive Committee, and several positions in Liberty's Commercial Banking Division. Mr. Duncan was appointed to the position of Director on July 22, 1994, after the resignation of Thomas Graham, Jr. to become a United States Ambassador, and was elected a Director in 1994. Nicholas C. Taylor, 58, was elected President, Treasurer and Director of ------------------ the Registrant in 1983 and serves in such capacities on a part time basis, as required. From 1974 to 1993, he was a director and shareholder of the law firm of Stubbeman, McRae, Sealy, Laughlin & Browder, Inc., Midland, Texas, and a partner of the predecessor firm. Since 1993 he has been engaged in the practice of law and investments, primarily in oil and gas. In 1995 he was appointed by the Governor of Texas to serve as a member of the State Securities Board. Donna Gail Yanko, 52, has worked as part-time administrative assistant to ---------------- the President and controlling shareholder for the past nine years. She served as Assistant Secretary of the Company from 1986 to 1992 and was elected a Director and appointed Vice President of the Company in 1990 and Secretary in 1992. Item No. 11. Executive Compensation ---------------------- The following table sets forth all cash compensation received by the executive officers and directors of the Registrant as a group setting forth individually executive officers and directors who received in excess of $60,000, including cash bonuses. Summary Compensation Table/(1)/ -------------------------------
Name and Principal Position Year Salary - - -------------------- ---- ------- 4 Officers & 1996 $38,400 Directors 1995 $33,559 as a group 1994 $29,400
(1) Directors are paid $100 per meeting of which there were three (3) for the period. 15 Item No. 12. Security Ownership of Certain Beneficial Owners ----------------------------------------------- and Management -------------- The following table sets forth as of March 31, 1996 the owners of five percent (5%) or more of its common stock:
(1) Title (2) Name and (3) Amount and (4) Percent of Class Address of Nature of Bene- of Class Beneficial Owner ficial Ownership - - -------------------------------------------------------------------- Common Nicholas C. Taylor(1) 1,062,770 74.67% 214 West Texas Suite 1101 Midland, TX 79701 Common Howard E. Cox, Jr. 160,000 11.24% One Federal Street 26th Floor Boston, MA 02110
- - ------------- (1) Mr. Taylor, by virtue of his share of ownership, may be deemed to be a "parent" of the Company as defined under Rule 405 promulgated by the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933 as amended (the "Securities Act"). The information set forth below shows as of June 1, 1996, all shares of the Registrant's common stock beneficially or indirectly owned by all directors, and all directors and officers as a group without naming them. The following table sets forth the ownership of executive officers and directors of the Registrant.
(1) Title (2) Name and (3) Amount and (4) Percent of class Address of Nature of Bene- of Class Beneficial Owner ficial Ownership - - ---------------------------------------------------------------- Common Nicholas C. Taylor 1,062,770 74.67% Donna Gail Yanko 7,140 .50% Kay M. Castle(2) 1,055 .07% All Directors and 1,070,965 75.25% Officers as a Group
- - ------------- (2) Mrs. Castle resigned as Comptroller of the Company effective May 23, 1996. 16 Item No. 13. Certain Relationships and Related Transactions ---------------------------------------------- Registrant's principal shareholder owns working interests varying from 93.75% to 100% in certain wells which it operates. Registrant operates these wells on a contract basis charging the same or greater administrative fees as the previous operator. See Note E of the Notes to Financial Statements. PART IV ------- Item No. 14. Exhibits, Financial Statement Schedules, Reports ------------------------------------------------ on Form 8-K ----------- (a) Financial Statements, Schedules and Exhibits 1. Financial Statements 2. Financial Statement Schedules All schedules are omitted because of the absence of conditions under which they are required or because the information is included in the financial statements or notes thereto. 3. Exhibits The exhibits and financial statement schedules filed as a part of this report are listed below according to the number assigned to it in the exhibit table of Item 601 of Regulation S-K: (3) Restated Articles of Incorporation and Bylaws. (4) Instruments defining the rights of security holders, including indentures - None. (9) Voting Trust Agreement - None, consequently, omitted. (10) Material Contract - None, consequently omitted. (11) Statement regarding computation of per share earnings - Not Applicable. (12) Statement regarding computation of ratios - Not Applicable. (13) Annual Report to security holders, Form 10-Q or quarterly report to security holders - Not Applicable. 17 (18) Letter regarding change in accounting principles - No change during fiscal 1996. (19) Previously unfiled documents - No documents have been executed or in effect during the reporting period which should have been filed, consequently, this exhibit has been omitted. (22) Subsidiaries of the Registrant - There are no subsidiaries of the Registrant, consequently, this exhibit has been omitted. (23) Published report regarding matters submitted to vote of security holders - None, consequently omitted. (24) Consent of experts - Not applicable. (25) Power of Attorney - There are no signatures contained within this report pursuant to a power of attorney, consequently, this exhibit has been omitted. (28) Additional Exhibits - None. (b) Reports on Form 8-K. No report on Form 8-K was filed by the Registrant during the last quarter of the period covered by this report. 18 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf of the undersigned thereunto duly authorized. MEXCO ENERGY CORPORATION By: /s/ Nicholas C. Taylor ---------------------------- Nicholas C. Taylor, President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signatures Title Date ---------- ----- ---- /s/ Nicholas C. Taylor President, June 24, 1996 ------------------------- Treasurer, Nicholas C. Taylor Director /s/ Donna Gail Yanko Vice President, June 24, 1996 ------------------------- Director Donna Gail Yanko /s/ Teresa C. Mitchell Comptroller June 24, 1996 ------------------------- Teresa C. Mitchell 19 EXHIBIT INDEX -------------
Number Exhibit Page - - -------- ------------------------------------ ---- (1) * (2) * (3) Articles of Incorporation and Bylaws ** (4) Instruments defining the rights of security holders, including indentures Omit (5) * (6) * (7) * (8) * (9) Voting Trust Agreement Omit (10) Material Contracts Omit (11) Statement regarding computation of per share earnings Omit (12) Statement regarding computation of ratios Omit (13) Annual Report to security holders, Form 10-Q, or quarterly report to security holders Omit (14) * (15) * (16) * (17) * (18) Letter regarding change in accounting principles Omit (19) Previously unfiled documents Omit (20) * (21) * (22) Subsidiaries of the Registrant Omit (23) Published report regarding matters submitted to vote of security holders Omit (24) Consent of experts Omit (25) Power of Attorney Omit (26) * (27) * (28) Additional Exhibits Omit
* This exhibit is not required to be filed in accordance with Item 601 of Regulation S-K. ** Incorporated by reference to the Registrant's Annual Report to the Securities & Exchange Commission on Form 10-K, dated June 23, 1995. 20 MEXCO ENERGY CORPORATION INDEX TO FINANCIAL STATEMENTS FINANCIAL STATEMENTS --------------------
Page ---- REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS F-2 BALANCE SHEETS AS OF MARCH 31, 1996 AND 1995 F-3 STATEMENTS OF OPERATIONS FOR THE YEARS ENDED MARCH 31, 1996, 1995, AND 1994 F-4 STATEMENT OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED MARCH 31, 1996, 1995, AND 1994 F-5 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED MARCH 31, 1996, 1995, AND 1994 F-6 NOTES TO FINANCIAL STATEMENTS F-7
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS -------------------------------------------------- Board of Directors Mexco Energy Corporation We have audited the accompanying balance sheets of Mexco Energy Corporation, as of March 31, 1996 and 1995, and the related statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended March 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Mexco Energy Corporation, as of March 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 1996 in conformity with generally accepted accounting principles. GRANT THORNTON LLP Oklahoma City, Oklahoma May 23, 1996 F-2 MEXCO ENERGY CORPORATION BALANCE SHEETS March 31,
ASSETS 1996 1995 ----------- ----------- CURRENT ASSETS Cash and cash equivalents $ 172,112 $ 220,974 Accounts receivable, including $12,297 in 1996 and $7,888 in 1995 from a related party (note E) 108,583 71,981 Prepaid expenses - 1,350 Recoverable income taxes - 9,126 ---------- ---------- Total current assets 280,695 303,431 PROPERTY AND EQUIPMENT - AT COST Oil and gas properties, using the full cost method of accounting (notes D and G) 4,900,230 3,954,959 Other property 2,431 2,431 ---------- ---------- 4,902,661 3,957,390 Less accumulated depreciation, depletion, and amortization 2,571,317 2,308,925 ---------- ---------- 2,331,344 1,648,465 ---------- ---------- $2,612,039 $1,951,896 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable - trade $ 32,584 $ 37,472 Income taxes payable - 38,148 ---------- ---------- Total current liabilities 32,584 75,620 DEFERRED INCOME TAXES (note B) 34,310 31,737 ---------- ---------- Total liabilities 66,894 107,357 STOCKHOLDERS' EQUITY Common stock - $.50 par value; authorized, 5,000,000 shares; issued and outstanding, 1,423,229 shares in 1996 and 1,173,229 shares in 1995 711,614 586,614 Additional paid-in capital 1,975,429 1,600,429 Accumulated deficit (141,898) (342,504) ---------- ---------- 2,545,145 1,844,539 ---------- ---------- $2,612,039 $1,951,896 ========== ==========
The accompanying notes are an integral part of these statements. F-3 MEXCO ENERGY CORPORATION STATEMENTS OF OPERATIONS Year ended March 31,
1996 1995 1994 ---------- ---------- ---------- Revenues Oil and gas $ 798,589 $ 543,267 $ 374,322 Proceeds from settlement of litigation (note F) - - 1,160,933 Administrative services, charges, and reimbursements 7,380 10,123 26,553 Interest 17,285 15,334 18,071 Other income 10,819 5,197 - ---------- ---------- ---------- 834,073 573,921 1,579,879 Costs and expenses Production 272,892 207,629 193,947 Depreciation, depletion, and amortization 262,392 170,723 152,329 Impairment of oil and gas properties - - 65,794 General and administrative 86,484 80,744 77,632 Interest - - 1,556 ---------- ---------- ---------- 621,768 459,096 491,258 ---------- ---------- ---------- Earnings before income tax expense 212,305 114,825 1,088,621 Income tax expense (note B) 11,699 9,982 59,903 ---------- ---------- ---------- NET EARNINGS $ 200,606 $ 104,843 $1,028,718 ========== ========== ========== Earnings per share $.15 $.09 $.88 ========== ========== ========== Weighted average outstanding shares 1,342,628 1,173,229 1,173,229 ========== ========== ========== The accompanying notes are an integral part of these statements.
F-4 MEXCO ENERGY CORPORATION STATEMENT OF STOCKHOLDERS' EQUITY Years ended March 31, 1996, 1995, and 1994
Common stock Additional Total ---------------------- paid-in Accumulated stockholders' Shares Amount capital deficit equity ------------ -------- ----------- -------------- ---------- Balance at April 1, 1993 1,173,229 $586,614 $1,600,429 $(1,476,065) $ 710,978 Net earnings - - - 1,028,718 1,028,718 --------- -------- ---------- ----------- ---------- Balance at March 31, 1994 1,173,229 586,614 1,600,429 (447,347) 1,739,696 Net earnings - - - 104,843 104,843 --------- -------- ---------- ----------- ---------- Balance at March 31, 1995 1,173,229 586,614 1,600,429 (342,504) 1,844,539 Net earnings - - - 200,606 200,606 Proceeds from issuance of common stock 250,000 125,000 375,000 - 500,000 --------- -------- ---------- ----------- ---------- Balance at March 31, 1996 1,423,229 $711,614 $1,975,429 $ (141,898) $2,545,145 ========= ======== ========== =========== ==========
The accompanying notes are an integral part of this statement. F-5 MEXCO ENERGY CORPORATION STATEMENTS OF CASH FLOWS Year ended March 31,
1996 1995 1994 ---------- ---------- ----------- Increase (Decrease) in Cash and Cash Equivalents Cash flows from operating activities Cash received from oil and gas operations $ 769,367 $ 537,247 $ 397,335 Proceeds from settlement of litigation - - 1,160,933 Cash paid for oil and gas operating expenses (276,430) (252,259) (153,835) Cash paid for general and administrative expenses (86,484) (80,744) (77,632) Interest received 17,285 15,334 17,515 Interest paid - - (1,556) Income taxes refunded (paid) (38,148) 30,874 (40,000) Other receipts 10,819 5,197 - --------- --------- ---------- Net cash provided by operating activities 396,409 255,649 1,302,760 Cash flows from investing activities Payments for purchase of oil and gas properties (969,271) (800,591) (512,992) Proceeds from sale of assets 24,000 26,463 3,300 --------- --------- ---------- Net cash used in investing activities (945,271) (774,128) (509,692) Cash flows from financing activities Payments on long-term debt - - (64,000) Proceeds from issuance of common stock 500,000 - - --------- --------- ---------- Net cash provided by (used in) financing activities 500,000 - (64,000) --------- --------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (48,862) (518,479) 729,068 Cash and cash equivalents at beginning of year 220,974 739,453 10,385 --------- --------- ---------- Cash and cash equivalents at end of year $ 172,112 $ 220,974 $ 739,453 ========= ========= ========== Reconciliation of Net Earnings to Net Cash Provided by Operating Activities Net earnings $ 200,606 $ 104,843 $1,028,718 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation, depletion, and amortization 262,392 170,723 218,123 Deferred income taxes 2,573 31,737 - (Increase) decrease in Accounts receivable (36,602) (16,143) (3,259) Recoverable income taxes 9,126 9,906 (19,032) Prepaid expenses 1,350 7,636 (7,636) Increase (decrease) in Accounts payable (4,888) (52,266) 46,911 Income taxes payable (38,148) (787) 38,935 --------- --------- ---------- Net cash provided by operating activities $ 396,409 $ 255,649 $1,302,760 ========= ========= ==========
The accompanying notes are an integral part of these statements. F-6 MEXCO ENERGY CORPORATION NOTES TO FINANCIAL STATEMENTS March 31, 1996, 1995, and 1994 NOTE A - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES The major operations of Mexco Energy Corporation (the Company) consist of exploration, production, and sale of crude oil and natural gas in the United States with an area of concentration in Texas. A summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows. 1. Oil and Gas Properties ---------------------- The full cost method of accounting is used to account for oil and gas properties. Under this method of accounting, all costs incident to the acquisition, exploration, and development of properties (both developed and undeveloped), including costs of abandoned leaseholds, lease rentals, unproductive wells, and well drilling and equipment costs, are capitalized. Costs are amortized using the units-of-production method. The units-of- production method is based primarily on estimates of reserve quantities. Due to uncertainties inherent in this estimation process, it is at least reasonably possible that reserve quantities will be revised significantly in the near term. If the Company's unamortized costs exceed the cost center ceiling (defined as the sum of the present value, discounted at 10%, of estimated unescalated future net revenues from proved reserves, less related income tax effects), the excess is charged to expense in the year in which the excess occurs. Generally, no gains or losses are recognized on the sale or disposition of oil and gas properties. 2. Depreciation ------------ Depreciation of office furniture, fixtures, and equipment is provided on the straight-line method over estimated useful lives of three to ten years. 3. Production Costs and Administrative Service Arrangements -------------------------------------------------------- Production costs include lease operating expenses and production taxes. Reimbursements related to administrative service arrangements are recorded as revenues. 4. Earnings Per Share ------------------ Earnings per share is calculated using the weighted average number of shares outstanding during each year. 5. Cash and Cash Equivalents ------------------------- The Company considers all highly liquid debt instruments purchased with a maturity of three months or less and money market funds to be cash equivalents. The carrying amount of cash and cash equivalents approximates fair value because of the short maturity and highly liquid nature of those instruments. . F-7 MEXCO ENERGY CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED March 31, 1996, 1995, and 1994 NOTE A - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES - CONTINUED 5. Cash and Cash Equivalents - Continued ------------------------------------- The Company maintains its cash in bank deposit accounts and money market funds, some of which are not federally insured. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk. 6. Use of Estimates ---------------- In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates based on management's knowledge and experience. Due to their prospective nature, actual results could differ from those estimates. NOTE B - INCOME TAXES The Company accounts for income taxes using the liability method. Income tax expense for years ended March 31 is as follows:
1996 1995 1994 -------- ---------- -------- Current expense (benefit) Federal $ 9,126 $(21,755) $20,968 State - - 38,935 ------- -------- -------- 9,126 (21,755) 59,903 Deferred expense, exclusive of benefits of operating loss carryforwards Federal 2,150 38,281 - State 423 5,217 - ------- -------- -------- 2,573 43,498 - Benefits of operating loss carryforwards - (11,761) - ------- -------- -------- $11,699 $ 9,982 $59,903 ======= ======== ========
The income tax provision reconciled to the tax computed at the statutory federal rate for years ended March 31 is as follows:
1996 1995 1994 --------- --------- ---------- Tax expense at statutory rate $ 72,184 $ 39,041 $ 370,131 Decrease in valuation allowance (5,806) (21,845) (337,033) State income taxes 1,461 3,410 38,934 Prior year underaccrual (overaccrual) (16,308) 11,823 - Effect of graduated rates (34,194) (13,420) - Other (5,638) (9,027) (12,129) -------- -------- --------- $ 11,699 $ 9,982 $ 59,903 ======== ======== =========
F-8 MEXCO ENERGY CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED March 31, 1996, 1995, and 1994 NOTE B - INCOME TAXES - CONTINUED Amounts of deferred tax assets, valuation allowance, and deferred tax liabilities at March 31 are as follows:
1996 1995 ---------- ---------- Deferred tax assets Operating loss carryforwards $ - $ 11,761 Percentage depletion carryforwards 66,791 67,814 -------- --------- 66,791 79,575 Less valuation allowance 3,072 8,878 -------- --------- 63,719 70,697 Deferred tax liability Excess financial accounting bases over tax bases of property and equipment (98,029) (102,434) -------- --------- Net deferred tax liability $(34,310) $ (31,737) ======== ========= Decrease in valuation allowance for the year $ 5,806 $ 21,845 ======== =========
As of March 31, 1996, the Company has statutory depletion carryforwards of approximately $325,000 which do not expire. NOTE C - SEGMENT INFORMATION AND MAJOR CUSTOMERS The Company operates exclusively within the United States in the onshore exploration and production of oil and gas. In the normal course of business, the Company extends credit to customers in the oil and gas industry and therefore has significant credit risk in this sector of the economy. Historically, the Company has not had significant bad debts and, as such, no allowance for doubtful accounts has been provided in the accompanying financial statements. Customers which accounted for 10% or more of revenues are as follows:
Year ended March 31, ---------------------- 1996 1995 1994 ------- ------ ----- Navajo Crude Oil Marketing Company 40% 22% - Sun Refining and Marketing Company 13% - - Phillips Petroleum Company - 15% -
F-9 MEXCO ENERGY CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED March 31, 1996, 1995, and 1994 NOTE D - OIL AND GAS COSTS The costs related to the oil and gas activities of the Company were incurred as follows:
Year ended March 31, ---------------------------- 1996 1995 1994 -------- -------- -------- Property acquisition costs $650,496 $444,274 $351,066 Development costs $318,775 $356,317 $161,926
The Company had the following aggregate capitalized costs relating to the Company's oil and gas property activities at March 31:
1996 1995 ---------- ---------- Proved oil and gas properties $4,900,230 $3,954,959 Less accumulated depreciation, depletion, and amortization 2,569,291 2,306,899 ---------- ---------- $2,330,939 $1,648,060 ========== ==========
NOTE E - RELATED PARTY TRANSACTIONS The Company serves as operator of properties in which the majority stockholder has interests and, in that capacity, bills the majority stockholder for lease operating expenses on a monthly basis subject to usual trade terms. The billings totaled approximately $106,198, $152,597, and $270,573 for the years ended March 31, 1996, 1995, and 1994, respectively. Accounts receivable include $12,297 and $7,888 due from the majority stockholder at March 31, 1996 and 1995, respectively. NOTE F - LITIGATION The Company is one of several plaintiffs in a lawsuit for damages in connection with a gas contract. This suit is set for trial in the latter part of July, 1996. Counsel for the Company at this time is unable to determine the outcome of such litigation, which, if successful, could result in significant income to the Company. The Company was a defendant in a lawsuit concerning an oil and gas lease in which the Company is an interest owner. The suit involved alleged environmental damage resulting from an oil spill and was defended by the operator of the property. During 1995, a settlement was reached resulting in no liability to the Company. In the year ended March 31, 1994, the Company received approximately $1,160,000 in the settlement of a lawsuit. The lawsuit involved failure to timely pay royalty owners the proper royalties for the production and sale of gas from certain gas units. F-10 MEXCO ENERGY CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED March 31, 1996, 1995, and 1994 NOTE F - LITIGATION - CONTINUED The Company is subject to certain legal proceedings and claims which have arisen in the ordinary course of its business which management believes will not result in any material liability. NOTE G - OIL AND GAS RESERVE DATA (UNAUDITED) In accordance with Statement of Financial Accounting Standards No. 69 (SFAS 69) and Securities and Exchange Commission (SEC) rules and regulations, the following information is presented with regard to the Company's proved oil and gas reserves, all of which are located in the United States. Information for oil is presented in barrels (Bbls) and for gas in thousand cubic feet (Mcf). The SEC has adopted SFAS 69 accounting guidelines for oil and gas producers. These rules require the Company to include as a supplement to the basic financial statements a standardized measure of discounted future net cash flows relating to proved oil and gas reserves. The standardized measure, in management's opinion, should be examined with caution. The basis for these disclosures is an independent petroleum engineer's reserve study which contains imprecise estimates of quantities and rates of production of reserves. Revision of prior year estimates can have a significant impact on the results. Also, exploration costs in one year may lead to significant discoveries in later years and may significantly change previous estimates of proved reserves and their valuation. Values of unproved properties and anticipated future price and cost increases or decreases are not considered. Therefore, the standardized measure is not necessarily a "best estimate" of the fair value of the Company's oil and gas properties or of future net cash flows. The following summaries of changes in reserves and standardized measure of discounted future net cash flows were prepared from estimates of proved reserves developed by independent petroleum engineers. The Company's future income tax expense in its standardized measure of discounted future net cash flows has been reduced because of significant statutory depletion carryforwards. F-11 MEXCO ENERGY CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED March 31, 1996, 1995, and 1994 NOTE G - OIL AND GAS RESERVE DATA (UNAUDITED) - CONTINUED Summary of Changes in Proved Reserves (Unaudited)
1996 1995 1994 ------------------- ------------------- ------------------------ Bbls Mcf Bbls Mcf Bbls Mcf ------- --------- -------- --------- ------------ -------- Proved developed and undeveloped reserves Beginning of year 207,000 1,567,000 80,000 671,000 83,000 585,000 Revision of previous estimates 11,000 29,000 124,000 376,000 (38,000) 123,000 Purchase of minerals in place 111,000 352,000 4,000 568,000 48,000 40,000 Extensions and discoveries 126,000 217,000 24,000 95,000 - - Production (29,000) (188,000) (22,000) (140,000) (13,000) (77,000) Sales of minerals in place (1,000) (57,000) (3,000) (3,000) - - ------- --------- -------- --------- ------------ ---------- End of year 425,000 1,920,000 207,000 1,567,000 80,000 671,000 ======= ========= ======== ========= ============ ========== Proved developed reserves Beginning of year 183,000 1,472,000 80,000 671,000 83,000 585,000 End of year 209,000 1,593,000 183,000 1,472,000 80,000 671,000
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves (Unaudited)
March 31, ---------------------------------------- 1996 1995 1994 ------------ ------------ ---------- Future oil and gas revenues $ 12,239,000 $ 5,408,000 $2,479,000 Future production and development costs (4,576,000) (2,042,000) (744,000) Future income tax expense (740,000) (320,000) (97,000) ------------ ----------- ---------- Future net cash flows 6,923,000 3,046,000 1,638,000 Discounted at 10% for estimated timing of cash flows (2,742,000) (1,210,000) (626,000) ------------ ----------- ---------- Standardized measure of discounted future net cash flows $ 4,181,000 $ 1,836,000 $1,012,000 ============ =========== ==========
Changes in Standardized Measure of Discounted Future Net Cash Flows Related to Proved Oil and Gas Reserves (Unaudited)
Year ended March 31, -------------------------------------- 1996 1995 1994 --------- ----------- --------- Sales and transfers of oil and gas produced, net of production costs $(526,000) $(336,000) $(180,000) Net changes in prices and production costs 734,000 (215,000) (29,000) Extensions and discoveries, less related costs 954,000 165,000 - Revisions of previous quantity estimates 95,000 804,000 (205,000) Accretion of discount 203,000 101,000 103,000 Net change due to purchases and sales of minerals in place 1,150,000 382,000 341,000 Net change in income taxes (254,000) (133,000) (61,000) Other (11,000) 56,000 12,000 --------- -------- -------- Net increase (decrease) 2,345,000 824,000 (19,000) Balance at beginning of year 1,836,000 1,012,000 1,031,000 --------- -------- -------- Balance at end of year $ 4,181,000 1,836,000 $1,012,000 ========= ======== =========
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