MXCMEDIUM SIGNALFINANCIAL10-K

MXC reported improved profitability with net income growing 27% despite declining oil reserves and increased debt financing.

The company's proved reserves declined from 1.547 MMBOE to 1.401 MMBOE while estimated present value dropped from $29 million to $23 million, indicating resource depletion challenges. However, the company maintained strong operational performance with higher net income and reduced interest expenses, suggesting efficient capital allocation despite the reserve decline.

Comparing 2025-06-27 vs 2024-06-27View on EDGAR →
FINANCIAL ANALYSIS

MXC's financial position shows mixed signals with net income growing meaningfully to $1.7M while total debt increased notably to $1.2M from $757K. Cash declined from $2.5M to $1.8M and current assets dropped 18%, indicating the company is deploying capital into operations while relying more on debt financing. The overall picture suggests active capital deployment with maintained profitability despite a tighter liquidity position and higher leverage.

FINANCIAL STATEMENT CHANGES
Interest Expense
P&L
-60%
$13K→$5K

Interest expense declined — debt repayment or refinancing at lower rates improving earnings quality.

Total Debt
Balance Sheet
+52.5%
$757K→$1.2M

Debt increased 52.5% — substantial leverage increase; assess whether deployed for growth or covering losses.

Cash & Equivalents
Balance Sheet
-29.1%
$2.5M→$1.8M

Cash decreased 29.1% — monitor burn rate and upcoming capital needs.

Current Liabilities
Balance Sheet
+28.1%
$430K→$551K

Current liabilities rose 28.1% — increased short-term obligations, watch current ratio.

Net Income
P&L
+27.3%
$1.3M→$1.7M

Net income grew 27.3% — bottom-line growth signals improving overall business health.

Current Assets
Balance Sheet
-18.1%
$3.7M→$3.0M

Current assets declined 18.1% — monitor working capital adequacy and short-term liquidity.

Total Liabilities
Balance Sheet
+14.4%
$1.4M→$1.6M

Liabilities increased 14.4% — monitor debt-to-equity ratio and interest coverage.

LANGUAGE CHANGES
NEW — 2025-06-27
PRIOR — 2024-06-27
ADDED
There were 2,046,000 shares of the registrant s common stock outstanding as of June 27, 2025.
Our total estimated proved reserves at March 31, 2025 were approximately 1.401 million barrels of oil equivalent ( MMBOE ) of which 48% was oil and 52% was natural gas, and our estimated present value of proved reserves was approximately $23 million based on estimated future net revenues excluding taxes discounted at 10% per annum, pricing and other assumptions set forth in Item 2 Properties below.
Taylor beneficially owns approximately 46% of the outstanding shares of our common stock.
This LLC has returned $321,112 (107%) of the total investment since inception in fiscal 2020.
As of the date of this report, $1,800,000 of the commitment has been expended and 14% of the investment has been returned.
2024-2025 Royalty interests, purchase price of $568,000 covering 30 producing wells and additional potential locations for development in Adams, Broomfield and Weld Counties, Colorado.
Royalty interests, purchase price of $483,000 covering 240 producing wells in Laramie County, Wyoming and Adams and Weld Counties, Colorado.
Royalty interest, purchase price of $473,000 covering 84 producing wells in DeSoto Parish, Louisiana and Karnes, Live Oak, Reagan, Reeves and Upton Counties, Texas.
Royalty interests, purchase price of $260,000 covering 3 producing wells with additional potential locations for development in Eddy County, New Mexico.
Royalty interests, purchase price of $188,000 covering over 400 producing wells in multiple counties throughout the states of Nebraska, North Dakota, South Dakota and Montana.
REMOVED
There were 2,090,000 shares of the registrant s common stock outstanding as of June 27, 2024.
Our total estimated proved reserves at March 31, 2024 were approximately 1.547 million barrels of oil equivalent ( MMBOE ) of which 51% was oil and natural gas liquids and 49% was natural gas, and our estimated present value of proved reserves was approximately $29 million based on estimated future net revenues excluding taxes discounted at 10% per annum, pricing and other assumptions set forth in Item 2 Properties below.
Taylor beneficially owns approximately 45% of the outstanding shares of our common stock.
This LLC has returned $276,098 and 92% of the total investment since inception in fiscal 2020.
As of the date of this report, $1,000,000 of the commitment has been expended.
5 Industry Environment and Outlook The commodity price environment was challenging in fiscal 2024.
Oil and Gas Operations As of March 31, 2024, oil constituted approximately 83% of our oil and natural gas sales and approximately 51% of our total proved reserves volumes for fiscal 2024.
Revenues from oil and gas royalty interests accounted for approximately 28% of our total operating revenues for fiscal 2024.
The Delaware Basin properties, encompassing 39,112 gross acres, 213 net acres, 742 gross producing wells or 4 net wells account for approximately 70% of our discounted future net cash flows from proved reserves as of March 31, 2024.
For fiscal 2024, these properties accounted for 62% of our gross revenues.
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