NYSE:MXC
MEXCO ENERGY CORP
MEXCO Energy Corp is an NYSE-listed energy corporation generating operational cash flow from hydrocarbon assets with a strong balance sheet relative to liabilities.
Key Metrics
Investment Thesis
Bull Case
MXC offers a compelling value play with a robust operational cash flow of $4.3 million that significantly exceeds its income tax expense and covers dividends paid. The company's asset-heavy profile includes $15.1 million in net fixed assets, providing a tangible foundation for future production growth as commodity prices recover. With current liabilities well below current assets, the firm maintains a conservative debt structure that allows it to weather cyclical downturns without immediate refinancing risks.
Bear Case
Investors should be wary of the sharp revenue decline from $9.6 million in 2023 to $7.4 million in 2025, which signals potential issues with reserve replacement or market competitiveness. The significant retained earnings deficit of $10.6 million combined with a net change in cash of -$719,529 suggests the company is burning through equity reserves rather than building value. High operating expenses relative to revenue, including $5.4 million in total operating costs against $7.4 million in revenue, leave little room for error in volatile energy markets.
About MEXCO ENERGY CORP
MEXCO Energy Corp (MXC) is an energy corporation operating within the broader oil and gas sector, focusing on exploration and production activities. The company serves markets requiring hydrocarbon resources, leveraging its asset base to generate revenue from continuing operations. Key financial drivers include significant depreciation expenses and fluctuating revenues reflecting commodity price cycles.
Analysis
Management Discussion
Management demonstrated resilience in 2025 by generating positive operating profit of $2.0 million despite a revenue contraction compared to the previous year. The company successfully managed its balance sheet with debt issuances and repayments of $650,000 each, maintaining stable cash levels while investing heavily in long-term assets totaling $17.3 million. However, the decline in net income from $4.7 million in 2023 to $1.7 million in 2025 highlights persistent pressure on margins or increased costs relative to revenue growth.
Industry Overview
The global energy sector remains highly cyclical and capital-intensive, with companies like MXC navigating the transition from traditional hydrocarbon extraction toward more efficient production methods. Market dynamics are driven by geopolitical tensions, shifting consumer preferences toward renewables, and fluctuating oil and gas prices that directly impact corporate earnings. Smaller-cap producers often face pressure to optimize costs while maintaining sufficient reserves to justify continued exploration investments.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $9.6M | $6.6M | $7.4M |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $9.6M | $6.6M | $7.4M |
| Operating Expenses | $4.7M | $4.8M | $5.4M |
| Operating Income | $4.8M | $1.8M | $2.0M |
| G&A | $1.1M | $1.2M | $1.3M |
| Stock-Based Comp | — | $229.8K | $205.6K |
| D&A | — | $2.0M | $2.5M |
| Other OpEx | $3.6M | $3.5M | $4.1M |
| Non-Operating Income | $-5.1K | $130.2K | $66.5K |
| Interest Expense | $13.1K | $5.2K | — |
| Interest Income | $8.0K | $135.5K | $72.6K |
| Pre-Tax Income | $4.8M | $2.0M | $2.0M |
| Income Tax | $164.5K | $620.5K | $304.3K |
| Continuing Ops | $4.7M | $1.3M | $1.7M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $4.7M | $1.3M | $1.7M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $4.7M | $1.3M | $1.7M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $3.7M | $3.7M | $3.0M |
| Cash & Equivalents | $2.2M | $2.5M | $1.8M |
| Accounts Receivable | $7.0K | $9.2K | $68.0K |
| Other Current Assets | $1.5M | $1.2M | $1.2M |
| Long-Term Assets | $14.1M | $15.4M | $17.3M |
| PP&E (Net) | $13.3M | $14.2M | $15.1M |
| Operating Leases | $75.6K | $19.3K | $126.5K |
| Other LT Assets | $712.2K | $1.1M | $2.1M |
| Total Assets | $17.8M | $19.1M | $20.3M |
| Current Liabilities | $258.3K | $430.1K | $551.2K |
| Current Leases | $56.4K | $19.3K | $51.0K |
| Other Current Liab | $201.9K | $410.9K | $500.2K |
| Long-Term Liabilities | $729.5K | $1.0M | $1.1M |
| LT Operating Leases | $19.3K | — | $75.5K |
| Other LT Liab | $710.3K | — | $1.0M |
| Total Liabilities | $987.8K | $1.4M | $1.6M |
| Shareholders' Equity | $16.8M | $17.6M | $18.7M |
| Paid-In Capital | $8.3M | $8.6M | $8.8M |
| Retained Earnings | $8.0M | $9.1M | $10.6M |
| Treasury Stock | $590.5K | $1.2M | $1.9M |
| Total L&E | $17.8M | $19.1M | $20.3M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | — | $1.3M | $1.7M |
| Non-Cash Adjustments | — | $1.2M | $2.0M |
| Working Capital Changes | — | $1.9M | $511.8K |
| Cash from Operations | — | $4.4M | $4.3M |
| Cash from Investing | — | $-3.4M | $-4.2M |
| Debt Issuances | — | $275.0K | $650.0K |
| Debt Repayments | — | $275.0K | $650.0K |
| Dividends Paid | — | $213.6K | $209.0K |
| Cash from Financing | — | $-779.7K | $-834.6K |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | — | $237.7K | $-719.5K |
| Beginning Cash | — | $2.2M | $2.5M |
| Ending Cash | — | $2.5M | $1.8M |
Frequently Asked Questions
How does MEXCO ENERGY CORP make money?
The company's revenue streams primarily consist of crude oil production and sales, natural gas extraction activities, and potentially royalty-based income from leased properties. Operating expenses are dominated by general administrative costs and other operating expenditures typical of upstream energy operations. The financial structure suggests a focus on core energy extraction rather than diversified utility services.
What are the main risks for MXC?
Revenue volatility is a primary concern as income dropped from $9.6 million in 2023 to $7.4 million in 2025, indicating sensitivity to market conditions or production volume changes. The company carries a substantial retained earnings deficit of $10.6 million, which may limit future dividend growth or require external financing for new capital expenditures. Cash flow from investing activities was negative $4.2 million, signaling active capex spending that could strain liquidity if operational cash flows decline further.
What is MXC's competitive advantage?
The company maintains a low liability-to-asset ratio with total liabilities under $20 million against $203 million in assets, providing substantial financial flexibility. Significant non-cash adjustments and depreciation indicate a mature asset base with established production infrastructure that generates consistent operational cash flow of $4.3 million. The balance sheet shows net fixed assets of $15.1 million, suggesting tangible resource reserves supporting long-term revenue potential.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.