-----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, VXLOMXAixdibTBYEZB3CpUPank4o7PqtkGTf6voOI+o/HhV++ax86nKOloVfW1Tr BuuVfaiewaJRlahSUD79eQ== 0001012709-02-000146.txt : 20020414 0001012709-02-000146.hdr.sgml : 20020414 ACCESSION NUMBER: 0001012709-02-000146 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020212 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEXCO ENERGY CORP CENTRAL INDEX KEY: 0000066418 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 840627918 STATE OF INCORPORATION: CO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06694 FILM NUMBER: 02535654 BUSINESS ADDRESS: STREET 1: 214 W TEXAS AVENUE STREET 2: SUITE 1101 CITY: MIDLAND STATE: TX ZIP: 79701 BUSINESS PHONE: 9156821119 MAIL ADDRESS: STREET 1: 214 W TEXAS AVENUE STREET 2: SUITE 1101 CITY: MIDLAND STATE: TX ZIP: 79701 FORMER COMPANY: FORMER CONFORMED NAME: MILLER OIL CO DATE OF NAME CHANGE: 19800702 10-Q 1 x10q-202.txt MEXCO ENERGY CORPORATION UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2001 Commission file number 0-6994 MEXCO ENERGY CORPORATION (Exact name of registrant as specified in its charter) Colorado 84-0627918 (State or other jurisdiction (IRS Employer of incorporation) Identification Number) 214 West Texas Avenue, Suite 1101, Midland, Texas 79701 (Address of principal executive offices) (915) 682-1119 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: State the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Common Stock, $0.50 par value: 1,607,900 shares outstanding at January 31, 2002 MEXCO ENERGY CORPORATION Table of Contents ----------------- Page ---- PART I. FINANCIAL INFORMATION - ------------------------------ Consolidated Balance Sheets as of December 31, 2001 (Unaudited) and March 31, 2001 3 Consolidated Statements of Operations (Unaudited) for the three and nine month periods ended December 31, 2001 and December 31, 2000 4 Consolidated Statements of Cash Flows (Unaudited) for the nine month periods ended December 31, 2001 and December 31, 2000 5 Notes to Unaudited Consolidated Financial Statements 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Quantitative and Qualitative Disclosures About Market Risk 11 PART II. OTHER INFORMATION 11 - --------------------------- SIGNATURES 12 - ---------- Page 2 MEXCO ENERGY CORPORATION AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS December 31, March 31, 2001 2001 ------------ ------------ (Unaudited) ASSETS - ------ Current assets: Cash and cash equivalents $ 73,000 $ 379,000 Accounts receivable: Oil and gas sales 186,000 489,000 Trade 28,000 1,000 Related parties 1,000 8,000 Prepaid expenses 47,000 74,000 ------------ ------------ Total current assets 335,000 951,000 Property and equipment, at cost: Oil and gas properties and equipment, using full cost method, pledged 13,550,000 11,558,000 Office and computer equipment and software 28,000 24,000 ------------ ------------ 13,578,000 11,582,000 Less accumulated depreciation, depletion and amortization 7,884,000 7,572,000 ------------ ------------ Property and equipment, net 5,694,000 4,010,000 ------------ ------------ Total assets $ 6,029,000 $ 4,961,000 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current liabilities: Accounts payable and accrued expenses $ 143,000 $ 78,000 Income taxes payable -- 52,000 ------------ ------------ Total current liabilities 143,000 130,000 Long-term debt 1,400,000 600,000 Deferred income tax liability 261,000 185,000 Stockholders' equity: Preferred stock, par value $1 per share; 10,000,000 shares authorized; none issued -- -- Common stock, par value $0.50 per share; 40,000,000 shares authorized; 1,607,900 shares issued December 31, 2001 (1,621,387 shares issued March 31,2001) 804,000 811,000 Additional paid in capital 2,874,000 2,900,000 Retained earnings 547,000 407,000 Treasury stock, at cost (72,000) ------------ ------------ Total stockholders' equity 4,225,000 4,046,000 ------------ ------------ Total liabilities and stockholders' equity $ 6,029,000 $ 4,961,000 ============ ============ THE ACCOMPANYING NOTE IS AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. Page 3 MEXCO ENERGY CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS For the Three and Nine Months ended December 31, 2001 and 2000 (Unaudited)
Three Months Ended Nine Months Ended December 31 December 31 ----------------------------- ----------------------------- 2001 2000 2001 2000 ------------ ------------ ------------ ------------ Operating revenue: Oil and gas sales $ 330,000 $ 798,000 $ 1,360,000 $ 2,103,000 Other 1,000 2,000 5,000 6,000 ------------ ------------ ------------ ------------ Total operating revenue 331,000 800,000 1,365,000 2,109,000 Operating costs and expenses: Oil and gas production 131,000 135,000 502,000 376,000 Depreciation, depletion and amortization 106,000 59,000 312,000 274,000 General and administrative 120,000 74,000 310,000 238,000 ------------ ------------ ------------ ------------ Total operating costs and expenses 357,000 268,000 1,124,000 888,000 ------------ ------------ ------------ ------------ Operating income (26,000) 532,000 241,000 1,221,000 Other income and (expenses): Interest income 1,000 0 2,000 2,000 Interest expense (16,000) (24,000) (39,000) (80,000) ------------ ------------ ------------ ------------ Net other income and expenses (15,000) (24,000) (37,000) (78,000) ------------ ------------ ------------ ------------ Income (loss) before income taxes (41,000) 508,000 204,000 1,143,000 Income tax expense: Current -- 4,000 (12,000) 4,000 Deferred (9,000) 95,000 76,000 95,000 ------------ ------------ ------------ ------------ (9,000) 99,000 64,000 99,000 ------------ ------------ ------------ ------------ Net income (loss) $ (32,000) $ 409,000 $ 140,000 $ 1,044,000 ============ ============ ============ ============ Net income (loss) per share: Basic ($0.02) $ 0.25 $ 0.09 $ 0.64 Diluted ($0.02) $ 0.25 $ 0.09 $ 0.64 Weighted average shares outstanding: Basic 1,603,155 1,623,293 1,607,790 1,623,293 Diluted 1,603,155 1,634,827 1,608,478 1,627,138
THE ACCOMPANYING NOTE IS AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. Page 4 MEXCO ENERGY CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months ended December 31, 2001 and 2000 (Unaudited) 2001 2000 ------------ ------------ Cash flows from operating activities: Net income $ 140,000 $ 1,044,000 Adjustments to reconcile net income to net cash provided by operating activities: Increase in deferred income taxes 76,000 96,000 Stock-based compensation 39,000 12,000 Depreciation, depletion and Amortization 312,000 274,000 (Increase) decrease in accounts receivable 283,000 (244,000) Increase (decrease) in accounts payable and accrued expenses (15,000) (5,000) Decrease (increase) in prepaid expenses 27,000 (47,000) Increase(decrease)in income taxes payable (52,000) 4,000 ------------ ------------ Net cash provided by operating activities 810,000 1,134,000 Cash flows from investing activities: Additions to property and equipment (1,833,000) (699,000) ------------ ------------ Net cash used in investing activities (1,833,000) (699,000) Cash flows from financing activities: Repurchase of common stock (83,000) -- Principal payments on long-term debt (50,000) (300,000) Principal borrowings on long-term debt 850,000 -- ------------ ------------ Net cash (used in) provided by financing activities 717,000 (300,000) ------------ ------------ Net increase (decrease) in cash (306,000) 135,000 Cash, beginning of the period 379,000 98,000 ------------ ------------ Cash, end of period $ 73,000 $ 233,000 ============ ============ Interest paid $ 38,000 $ 80,000 Income taxes paid $ 80,000 $ -- THE ACCOMPANYING NOTE IS AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. Page 5 MEXCO ENERGY CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A. Organization and Significant Accounting Policies - ------- ------------------------------------------------ Organization and Basis of Presentation -------------------------------------- Mexco Energy Corporation, a Colorado corporation, was organized in 1972 and maintains its principal office in Midland, Texas. The Company and its wholly owned subsidiary, Forman Energy Corporation, a New York corporation, (collectively the "Company") are engaged in the acquisition, exploration, development and production of oil and gas. While the Company owns producing properties and undeveloped acreage in eleven states, the majority of its activities are centered in the Permian Basin of West Texas. Although most of the Company's oil and gas interests are operated by others, the Company operates a number of properties in which it owns an interest. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position of the Company and its wholly owned subsidiary as of December 31, 2001, and the results of its operations and cash flows for the interim periods ended December 31, 2001 and 2000. The results of operations for the periods presented are not necessarily indicative of the results to be expected for a full year. The accounting policies followed by the Company are set forth in more detail in Note A of the "Notes to Consolidated Financial Statements" in the Company's annual report on Form 10-K filed with the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. However, the disclosures herein are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Form 10-K. Principles of Consolidation - --------------------------- The accompanying consolidated balance sheets include the accounts of the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. Earnings Per Share - ------------------ Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares and dilutive potential common shares (stock options) outstanding during the period. The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share for the periods ended December 31, 2001 and 2000. Page 6
Three Months Ended Nine Months Ended December 31 December 31 ------------------------ ------------------------ 2001 2000 2001 2000 ---------- ---------- ---------- ---------- Weighted average number of common shares outstanding 1,603,155 1,623,293 1,607,790 1,623,293 Incremental shares from the assumed exercise of dilutive stock options 0 11,534 688 3,845 ---------- ---------- ---------- ---------- Dilutive potential common shares 1,603,155 1,634,827 1,608,478 1,627,138
Options to purchase 200,000 and 90,000 shares outstanding at December 31, 2001 and December 31, 2000, respectively, were not included in the computation of diluted net income per share because either (i) the exercise price of the options was greater than the average market price of the common stock of the Company, or (ii) the Company had a net loss from continuing operations and, therefore, the effect would be antidilutive. Income Taxes - ------------ The income tax provision in the statements of operations for the three and nine month periods ended December 31, 2000 is less than the expected statutory rate primarily due to a decrease in valuation allowance. Stockholders' Equity - -------------------- During the quarter ended December 31, 2001, the board of directors authorized the purchase of 23,333 shares of the Company's common stock totaling $93,000. Of these 23,333 purchased shares, 18,400 shares were exchanged for oil and gas lease rights representing 368 net acres valued at $83,000 and 2,700 shares were awarded to employees and consultants valued at $11,000. The remaining 2,233 shares purchased along with the 11,254 shares of the Company's stock held in the treasury were cancelled. Related Party Transactions - -------------------------- During the quarter ended December 31, 2001, the Company entered into two transactions with a Company director and employee. In the first transaction the Company purchased oil and gas lease rights representing 369 net acres for cash consideration of $83,000. In the second transaction the Company exchanged 18,400 shares of its $.50 par value common stock for oil and gas lease rights representing 368 net acres with a value of $83,000. Such acreage is available for exploration and production of oil and gas. Subsequent Events - ----------------- On February 1, 2002 the Company unanimously approved a 10% stock dividend payable to all shareholders of record as of February 15, 2002. Page 7 MEXCO ENERGY CORPORATION AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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"). All statements, other than statements of historical fact included in MD&A, including statements regarding the Company's operating strategy, plans, objectives and beliefs of management for future operations, planned capital expenditures and acquisitions are forward-looking statements. Although the Company believes that the assumptions upon which such forward-looking statements are based are reasonable, it can give no assurance that such assumptions will prove to be correct. Liquidity and Capital Resources - ------------------------------- Historically, the Company's sources of funding have been from operating activities, bank financing and the issuance of common stock. The Company's focus is on increasing profit margins while concentrating on obtaining gas reserves with low cost operations by acquiring and developing primarily gas properties with potential for long-lived production. For the first nine months of fiscal 2002, cash flow from operations was $810,000 compared to $1,134,000 for the first nine months of fiscal 2001. The cash flow from operations for the first nine months of fiscal 2002 included the effects of an increase in deferred income taxes and a decrease in both accounts receivable and prepaid expenses. Cash of $1,833,000 was used for additions to property and equipment, of which $800,000 came from borrowings. Accordingly, net cash decreased $306,000. During the quarter ended December 31, 2001, the board of directors authorized the purchase of 23,333 shares of the Company's common stock totaling $93,000. Of these 23,333 shares, 18,400 shares were exchanged for oil and gas lease rights representing 386 net acres valued at $83,000, and 2,700 shares were awarded to employees and consultants valued at $11,000. The remaining 2,233 shares purchased along with the 11,254 shares of the Company's stock held in the treasury were retired. As of September 1, 2000, the Company acquired three producing properties in Pecos County, Texas for $198,000. The Company owns working interests ranging from 97% to 99%. Net operating cash flow from these properties was approximately $101,000 for the twelve months ended December 31, 2001. Since January 2001, workovers were performed on four of these producing wells, increasing production at a total additional cost to the Company of approximately $197,000. Effective September 1, 2000, the Company leased 159 gross non-producing acres in Pecos County, Texas, in which it retained a 96% working interest. The Company re-entered a plugged well at an approximate cost of $165,000 and commenced gas production in August 2001. In April 2001, the Company acquired additional joint venture interests in properties Page 8 located in various counties and states for $174,000, adjusted for revenues and expenses from January 1, 2001, the effective date, through April 29, 2001, date of closing. In May 2001, the Company acquired a 12.5% working interest (9.375% net revenue interest) in 8,934 acres in Edwards County, Texas for approximately $125,400. The initial test well was drilled on this acreage and completed and fractured at a cost to the Company of approximately $129,500. The well is shut-in pending completion of a pipeline at an estimated cost of $25,000 to the Company's interest. The well is expected to be on production by mid-February. The Company purchased a similar interest in a second well, which is also expected to begin production in mid-February. The Company participated in the drilling of another well at an approximate cost to the Company of $56,000, which is being plugged and abandoned. The Company expects to participate in the drilling of an additional well in Edwards County in the next 60 to 90 days. The Company acquired non-operated working interests, ranging from .8512% to 3.75% with net revenue interests ranging from .6816% to 3.267%, in 21 producing and 7 inactive wells in Limestone and Freestone Counties, Texas for $200,000 as of April 1, 2001. The Company has acquired and also is reviewing several other projects for future participation. The cost of such projects would be funded, to the extent possible, with existing cash balances and cash flow from operations. The remainder may be funded through borrowings on the bank credit facility discussed below. At December 31, 2001, the Company had working capital of approximately $192,000 compared to working capital of approximately $821,000 at March 31, 2001, a decrease of $629,000, due primarily to acquisitions, development of properties and lower oil and gas prices. The Company's revolving credit agreement with Bank of America, N.A. ("Bank"), was amended to provide for a credit facility of $5,000,000, subject to a borrowing base determination. The borrowing base was increased to $3,500,000, with scheduled monthly reductions of the available borrowing base of $49,000 per month beginning September 5, 2001, and the maturity date was extended to August 15, 2003. As of December 31, 2001, the balance outstanding under this agreement was $1,400,000. No principal payments are anticipated to be required for fiscal 2002. A letter of credit for $50,000, in lieu of a plugging bond with the Texas Railroad Commission covering the properties the Company operates, is also outstanding under the facility. The borrowing base is subject to redetermination on or about August 1, of each year. Amounts borrowed under this agreement are collateralized by the common stock of Forman and the Company's oil and gas properties. Interest under this agreement is payable monthly at prime rate (4.75% at December 31, 2001). This agreement generally restricts the Company's ability to transfer assets or control of the Company, incur debt, extend credit, change the nature of the Company's business, substantially change management personnel or pay cash dividends. The prices of natural gas and crude oil have fluctuated significantly in recent years as well as in recent months. Fluctuations in price have a significant impact on the Company's financial condition and liquidity. However, management is of the opinion that cash flow from operations and funds available from financing will be sufficient to provide for its working capital requirements and capital expenditures for the current fiscal year. Results of Operations - Three Months Ended December 31, 2001 and 2000 - --------------------------------------------------------------------- Net income decreased 108%, from $409,000 for the quarter ended December 31, 2000 to a loss of $32,000 for the quarter ended December 31, 2001. Individual categories of income and expense are discussed below. Page 9 Oil and gas sales decreased from $798,000 for the third quarter of fiscal 2001 to $330,000 for the same period of fiscal 2002. This decrease of $468,000 resulted from lower oil and gas prices. Average gas prices decreased from $5.83 per mcf for the third quarter of fiscal 2001 to $2.05 per mcf for the same period of fiscal 2002, while average oil prices decreased from $31.45 per bbl for the third quarter of fiscal 2001 to $18.15 for the same period of fiscal 2002. Oil and gas production quantities were 4,391 barrels ("bbls") and 113,240 thousand cubic feet ("mcf") for the third quarter of fiscal 2001 and 5,034 bbls and 116,319 mcf for the same period of fiscal 2002, an increase of 15% and 3%, respectively. Production costs decreased 3% from $135,000 for the third quarter of fiscal 2001 to $131,000 for the same period of fiscal 2002. General and administrative expenses increased 62% from $74,000 for the third quarter of fiscal 2001 to $120,000 for the same period of fiscal 2002. This is primarily the result of an increase in financial consulting, engineering, land and geological services during the quarter. Depreciation, depletion and amortization based on production and other methods increased 80%, from $59,000 for the third quarter of fiscal 2001 to $106,000 for the same period of fiscal 2002 primarily due to increased reserves added during the third quarter of fiscal 2001. Interest expense decreased 33% from $24,000 for the third quarter of fiscal 2001 to $16,000 for the same period of fiscal 2002, due to lower interest rates. During the third quarter of fiscal 2002, the Company had a $9,000 income tax benefit due to a reduction in the deferred tax liability account. Results of Operations - Nine Months Ended December 31, 2001 and 2000 - -------------------------------------------------------------------- Net income decreased 87% from $1,044,000 for the nine months ended December 31, 2000 to $140,000 for the nine months ended December 31, 2001. Individual categories of income and expense are discussed below. Oil and gas sales decreased 35% from $2,103,000 for the first nine months of fiscal 2001 to $1,360,000 for the same period of fiscal 2002, primarily because of lower oil and gas prices and decreased gas production. Average gas prices decreased from $4.40 per mcf for the first nine months of fiscal 2001 to $3.04 per mcf for the same period of fiscal 2002, and average oil prices decreased from $29.56 per bbl for the first nine months of fiscal 2001 to $22.51 per bbl for the same period of fiscal 2002. Oil and gas production quantities were 13,505 bbls and 387,145 mcf for the first nine months of fiscal 2001 and 14,600 bbls and 339,418 mcf for the same period of fiscal 2002, an increase of 8% and a decrease of 12%, respectively. Production costs increased 34% from $376,000 for the first nine months of fiscal 2001 to $502,000 for the same period of fiscal 2002. Non-recurring expenses on acquired properties and other operating expenses to increase production on producing properties primarily account for this increase. General and administrative expenses increased 30% from $238,000 for the first nine months of fiscal 2001 to $310,000 for the same period of fiscal 2002 primarily due to increases in financial consulting fees, engineering, land and geological services, and compensation related to stock options granted to consultants. Page 10 Depreciation, depletion and amortization, based on production and other methods of depreciation, increased 14% from $274,000 for the first nine months of fiscal 2001 to $312,000 for the same period of fiscal 2002. This is primarily due to increased costs for oil and gas interests. Interest expense decreased 51% from $80,000 for the first nine months of fiscal 2001 to $39,000 for the same period of fiscal 2002, due primarily to lower interest rates. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The primary sources of market risk for the Company include fluctuations in commodity prices and interest rate fluctuations. At December 31, 2001, the Company had not entered into any hedge arrangements, commodity swap agreements, commodity futures, options or other similar agreements relating to crude oil and natural gas. At December 31, 2001, the Company had an outstanding loan balance of $1,400,000 under its $5.0 million revolving credit agreement, which bears interest at the prime rate, which varies from time to time. If the interest rate on the Company's bank debt increases or decreases by one percentage point, the Company's annual pretax income would change by $14,000, based on the outstanding balance. Credit Risk. Credit risk is the risk of loss as a result of nonperformance by other parties of their contractual obligations. The Company's primary credit risk is related to oil and gas production sold to various purchasers and the receivables generally are uncollateralized. At December 31, 2001, the Company's largest credit risk associated with any single purchaser was $27,000. The Company has not experienced any significant credit losses. Volatility of Oil and Gas Prices. The Company's revenues, operating results and future rate of growth are dependent upon the prices received for oil and gas. Historically, the markets for oil and gas have been volatile and are likely to continue to be so in the future. Various factors beyond the control of the Company affect the price of oil and gas, including but not limited to worldwide and domestic supplies of oil and gas, the ability of the members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls, political instability or armed conflict in oil-producing regions, the price and level of foreign imports, the level of consumer demand, the price and availability of alternative fuels, the availability of pipeline capacity, weather conditions, domestic and foreign governmental regulation and the overall economic environment. Any significant decline in prices would adversely affect the Company's revenues and operating income and may require a reduction in the carrying value of the Company's oil and gas properties. PART II - OTHER INFORMATION Item 2. Changes in securities --------------------- On December 31, 2001 the Company exchanged 18,400 reacquired shares of its Common stock having a par value of $0.50 per share in a private placement under an exemption from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended, being a transaction by an issuer not involving a public offering, with the certificate representing such shares bearing a restrictive legend imposed upon the right of resale pursuant to such act. The shares were issued to a trust. The consideration for such issuance of stock was oil and gas lease rights representing 368 net acres. See Note A to Notes to the Consolidated Financial Statements. Page 11 On February 1, 2002, the Company's Board of Directors declared a stock dividend consisting of shares of par value $0.50 common stock of the Company in the amount of ten percent (10%) of the outstanding shares, or 1 share for each 10 shares held by all stockholders of record of the Company as of February 15, 2002, with any resulting fractional share dividends to be rounded up or down to the nearest whole number of shares and issued the stock dividend accordingly. The payable date for this dividend will be February 28, 2002. Item 6. Exhibits and Reports on Form 8-K -------------------------------- No reports on Form 8-K were filed by the Company during the quarter ended December 31, 2001. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MEXCO ENERGY CORPORATION (Registrant) Dated: February 12, 2002 /s/ Nicholas C. Taylor ---------------------------------- Nicholas C. Taylor President Dated: February 12, 2002 /s/ Tamala L. McComic ---------------------------------- Tamala L. McComic Treasurer, Controller and Assistant Secretary Page 12 -----END PRIVACY-ENHANCED MESSAGE-----