Mexco Energy Corporation (MXC): Business Model Canvas [11-2024 Updated]

In the dynamic world of energy, Mexco Energy Corporation (MXC) stands out with its robust business model that emphasizes strategic partnerships and operational efficiency. This model is built on key elements such as oil and gas exploration, long-term customer relationships, and a commitment to sustainability. By leveraging its resources and expertise, Mexco aims to provide high-quality oil and gas while maintaining competitive pricing. Dive deeper into the intricacies of Mexco's business model canvas to discover how it navigates the challenges of the energy sector.

Mexco Energy Corporation (MXC) - Business Model: Key Partnerships

Collaborations with oil and gas operators

Mexco Energy Corporation maintains strategic collaborations with major oil and gas operators such as Anadarko Petroleum Corporation, Marathon Oil, and Cimarex Energy Company. In April 2024, Mexco acquired royalty interests in 21 producing wells operated by Anadarko for $158,000. Additionally, in August 2024, Mexco acquired interests in 6 wells operated by Marathon Oil in Karnes County, Texas for $50,000. These partnerships enhance Mexco's production capabilities and revenue streams, contributing to a reported revenue from oil and gas sales of $3,383,909 for the six months ended September 30, 2024, marking a 9% increase from $3,095,800 in the prior year.

Partnerships with drilling and completion service providers

Mexco Energy collaborates with various drilling and completion service providers to enhance operational efficiency. The company plans to drill and complete 30 horizontal wells at an estimated cost of approximately $2,000,000 for the fiscal year ending March 31, 2025. This includes participation in the drilling of five horizontal wells in the Bone Spring formation, which cost around $80,000 in April 2024, followed by an additional $127,000 for completion in October 2024. Such collaborations are crucial for managing costs and ensuring timely project execution, as the production costs for the six months ended September 30, 2024, amounted to $850,825, a 15% increase from $742,081 in the previous period.

Joint ventures for exploration projects

Mexco Energy engages in joint ventures to explore and develop new oil and gas reserves. The company is currently reviewing additional projects for potential participation. In October 2022, Mexco made a $2,000,000 equity investment commitment in a limited liability company aimed at purchasing mineral interests in Ohio. This investment has yielded a return of $137,076, representing 11% of the total investment to date. The strategic focus on joint ventures allows Mexco to mitigate risks associated with exploration while leveraging shared expertise and resources.

Partnership Type	Partner	Investment/Cost	Wells Involved	Location
Royalty Acquisition	Anadarko Petroleum	$158,000	21	Reeves County, Texas
Royalty Acquisition	Marathon Oil	$50,000	6	Karnes County, Texas
Drilling Participation	Multiple Service Providers	$80,000	5	Bone Spring Formation, Lea County, New Mexico
Joint Venture	Limited Liability Company	$2,000,000	N/A	Ohio

Mexco Energy Corporation (MXC) - Business Model: Key Activities

Oil and gas exploration and production

The core of Mexco Energy Corporation's operations lies in the exploration and production of oil and gas. For the six months ended September 30, 2024, the total revenue from oil and gas sales reached $3,383,909, reflecting a 9% increase compared to $3,095,800 during the same period in the previous fiscal year. This revenue growth is attributed to an increase in oil production and rising oil prices, despite a decrease in natural gas prices due to various market factors.

Year	Oil Revenue	Gas Revenue	Total Revenue
2024	$3,031,922	$351,987	$3,383,909
2023	$2,529,484	$566,316	$3,095,800

Drilling new wells in key regions

Mexco Energy plans to drill and complete 30 horizontal wells in fiscal year 2025, with an estimated cost of approximately $2,000,000. The majority of these wells (26) are located in the Delaware Basin within Lea and Eddy Counties, New Mexico, while the remaining four will be in Reagan County, Texas. Recent expenditures include approximately $80,000 for the drilling of five horizontal wells in April 2024, followed by $127,000 for their completion in October 2024.

Managing production costs and operational efficiency

Efficient management of production costs is critical for Mexco Energy's sustainability. For the six months ended September 30, 2024, production costs amounted to $850,825, which is a 15% increase from $742,081 in the same period of the previous year. This increase was primarily due to rising production taxes and marketing charges linked to higher oil and gas revenues.

Additionally, the depreciation, depletion, and amortization expenses rose to $1,123,985, a significant 29% increase from $868,366 in the prior year, mainly due to an increase in the amortization base associated with oil and gas production. General and administrative expenses also saw a rise to $701,570, up 9% from $646,512 due to higher accounting fees and engineering services costs.

Expense Type	Q2 2025	Q2 2024
Production Costs	$413,405	$392,674
Depreciation, Depletion, and Amortization	$584,288	$382,180
General and Administrative Expenses	$334,525	$305,543

Mexco Energy Corporation (MXC) - Business Model: Key Resources

Oil and gas reserves in various regions

Mexco Energy Corporation holds significant oil and gas reserves, particularly in the Delaware Basin, which is part of the larger Permian Basin. As of September 30, 2024, the company reported revenues from oil and gas sales totaling $3,383,909 for the six months ended September 30, 2024, reflecting a 9% increase compared to $3,095,800 for the same period in the previous fiscal year.

The breakdown of oil and gas revenues for the six months ended September 30, 2024, is as follows:

Product	Revenue ($)	Volume	Average Price
Oil	3,031,922	39,234 bbls	$77.28 per bbl
Gas	351,987	270,291 mcf	$1.30 per mcf

Technical expertise in drilling and operations

Mexco Energy demonstrates technical expertise in drilling operations, particularly in horizontal drilling within the Bone Spring and Wolfcamp formations. The company participated in the completion of 19 horizontal wells during fiscal 2024 at an expenditure of approximately $300,000. Additionally, Mexco's working interest in various wells has resulted in substantial production rates:

• Initial average production rates of 1,402 barrels of oil per day from two horizontal wells in the Bone Spring Sand formation.
• Initial production rate of 964 barrels of oil per day from a horizontal well in the Penn Shale formation.

These production figures underscore the company's capability and operational efficiency in extracting resources from its reserves.

Financial resources for investment in projects

From a financial perspective, Mexco Energy has demonstrated robust cash flow management, with $2,006,405 generated from operating activities for the six months ended September 30, 2024. The company's financial resources are allocated towards acquisitions and development projects, including:

• Acquisition of royalty interests in 21 producing wells for $158,000 in April 2024.
• Participation in drilling of 30 horizontal wells estimated at $2,000,000 for fiscal year ending March 31, 2025.

As of September 30, 2024, Mexco reported working capital of $1,974,033, a decrease from $3,259,200 at March 31, 2024. This indicates the company's ongoing investment in operational and exploratory activities while maintaining a stable financial base.

Mexco Energy Corporation (MXC) - Business Model: Value Propositions

Access to high-quality oil and gas reserves

Mexco Energy Corporation focuses on acquiring and developing oil and gas properties that offer significant production potential. As of September 30, 2024, the company's total oil and gas properties, using the full cost method, were valued at $50,288,295. This robust asset base allows Mexco to tap into high-quality reserves, particularly in the Delaware Basin, where they are actively participating in the drilling of horizontal wells.

In fiscal year 2025, Mexco plans to participate in the drilling and completion of 30 horizontal wells at an estimated cost of approximately $2,000,000. The company’s strategy of focusing on non-operated properties in areas with significant development potential enhances its ability to maintain a reliable supply of oil and gas.

Competitive pricing and reliable supply

Mexco Energy Corporation has demonstrated its capability to generate competitive pricing through strategic operational efficiencies. For the six months ended September 30, 2024, the company reported oil revenues of $3,031,922, an increase of 19.9% from the previous year. The average price received for oil during this period was $77.28 per barrel, which reflects effective pricing strategies amid fluctuating market conditions.

Additionally, for the second quarter of fiscal 2025, Mexco achieved oil sales of $1,521,618, with a production volume of 20,325 barrels, showcasing an increase of 48.8% in volume compared to the same quarter in the previous year. This increase in production volume contributes to a reliable supply chain that meets market demands.

Commitment to sustainable practices in production

Mexco Energy Corporation is committed to sustainable practices in its production processes. The company is actively focused on minimizing its environmental impact while maximizing resource extraction efficiency. As of the latest reports, Mexco has implemented various practices to reduce waste and enhance the efficiency of its operations. This includes the adoption of advanced technologies in drilling and production.

Moreover, the company has been involved in acquisition activities to expand its portfolio sustainably. For instance, during the six months ended September 30, 2024, Mexco incurred approximately $900,000 in acquisition costs to acquire royalty interests in approximately 300 wells. Such strategic investments not only support growth but also align with the increasing industry focus on sustainability.

Metrics	Six Months Ended September 30, 2024	Six Months Ended September 30, 2023	% Change
Oil Revenue	$3,031,922	$2,529,484	19.9%
Gas Revenue	$351,987	$566,316	(37.8%)
Total Revenue	$3,477,062	$3,155,029	10.2%
Average Oil Price (per bbl)	$77.28	$76.21	1.4%
Average Gas Price (per mcf)	$1.30	$2.27	(42.7%)

Mexco Energy Corporation (MXC) - Business Model: Customer Relationships

Long-term contracts with buyers

Mexco Energy Corporation focuses on establishing long-term contracts to ensure stable revenue streams. In fiscal 2024, the company reported total oil and gas sales of $3,383,909, reflecting a 9% increase from the previous year. This increase is attributed to enhanced production capabilities and favorable pricing conditions for oil. The company typically engages in multi-year contracts with buyers to secure consistent demand for its products, minimizing price volatility risks.

Direct engagement with key industry players

The company maintains direct relationships with major industry players and buyers, enhancing its market presence and negotiating power. As of September 30, 2024, Mexco's largest credit risk associated with any single purchaser was $529,614, which accounted for 58% of its total oil and gas receivables. Engaging directly with such significant buyers allows Mexco to align its production schedules and pricing strategies with market demands, ensuring a reliable customer base.

Transparent communication regarding production and pricing

Mexco Energy Corporation emphasizes transparent communication with its stakeholders concerning production levels and pricing strategies. The average price for oil during the six months ended September 30, 2024, was $77.28 per barrel, a modest increase from $76.21 per barrel in the previous year. For natural gas, the average price dropped to $1.30 per mcf, down from $2.27 per mcf. The company actively informs its customers about market trends and price fluctuations, fostering trust and long-term relationships.

Metrics	FY 2024	FY 2023	% Change
Total Oil and Gas Sales	$3,383,909	$3,095,800	9%
Average Price (Oil per bbl)	$77.28	$76.21	1.4%
Average Price (Gas per mcf)	$1.30	$2.27	(42.7%)
Largest Single Purchaser Credit Risk	$529,614	N/A	N/A

Mexco Energy Corporation (MXC) - Business Model: Channels

Direct sales to refineries and energy companies

Mexco Energy Corporation primarily engages in direct sales of oil and natural gas to refineries and energy companies. For the six months ended September 30, 2024, the company reported revenues from oil sales of $3,031,922, reflecting a 19.9% increase from $2,529,484 in the same period of the previous year. The volume of oil sold during this period was 39,234 barrels, with an average price of $77.28 per barrel. Natural gas revenues decreased to $351,987, down 37.8% from $566,316, with a volume of 270,291 thousand cubic feet (mcf) sold at an average price of $1.30 per mcf.

Online platforms for investor relations and information

Mexco Energy utilizes online platforms to facilitate communication with investors and stakeholders. The company maintains a robust investor relations section on its website, which provides access to financial reports, press releases, and other relevant information. As of September 30, 2024, Mexco had $1,578,357 in cash and cash equivalents, indicating a strong liquidity position that supports ongoing investor engagement.

Industry conferences and networking events

Participation in industry conferences and networking events is a critical channel for Mexco Energy. These events allow the company to establish connections with potential partners and customers within the oil and gas sector. Such engagement is vital for exploring new business opportunities and expanding the company's market presence. The company’s strategic focus on developing relationships in the industry aligns with its operational objectives and enhances its visibility among key stakeholders.

Channel	Revenue (6 months ending Sept 30, 2024)	Volume Sold (bbls/mcf)	Average Price
Direct Sales to Refineries	$3,031,922	39,234 bbls	$77.28/bbl
Natural Gas Sales	$351,987	270,291 mcf	$1.30/mcf
Cash and Cash Equivalents	$1,578,357	N/A	N/A

Mexco Energy Corporation (MXC) - Business Model: Customer Segments

Oil Refineries and Processing Companies

Mexco Energy Corporation primarily serves oil refineries and processing companies by supplying crude oil and natural gas. In the fiscal year ending September 30, 2024, the company reported oil revenue of $3,031,922, representing a 19.9% increase compared to the previous year, driven by an 18.2% increase in production volume to 39,234 barrels .

Mexco's average price per barrel was $77.28, indicating strong demand and pricing power in this segment . The company’s ability to meet the needs of refineries is crucial for maintaining long-term contracts, which are vital for revenue stability.

Energy-Focused Investment Firms

Mexco Energy Corporation attracts energy-focused investment firms interested in the oil and gas sector. During the first half of fiscal 2025, the company generated total revenues of $3,383,909, marking a 9% increase from $3,095,800 in the same period of the prior year . This growth reflects the operational efficiency that appeals to investors looking for profitable ventures in energy.

The company's strategy includes expanding its asset base through acquisitions, such as the $900,000 spent on acquiring various royalty interests across multiple states, which enhances its portfolio attractiveness to investment firms .

Institutional Investors Interested in Sustainable Energy

Mexco also targets institutional investors focused on sustainable energy investments. The company has been actively participating in projects that emphasize low-cost operations and long-term production potential . As of September 30, 2024, Mexco's working capital stood at $1,974,033, a decrease from $3,259,200, which reflects strategic reallocations toward sustainable projects .

Furthermore, Mexco’s commitment to sustainable practices is shown in its investments in mineral interests and royalty acquisitions, positioning it well to meet the demands of environmentally conscious investors .

Customer Segment	Key Metrics (2024)	Revenue Contribution	Growth Rate
Oil Refineries	$3,031,922 from oil sales	Approx. 89.5%	19.9%
Energy Investment Firms	$3,383,909 total revenue	100%	9%
Institutional Investors	$1,974,033 working capital	-	-

Mexco Energy Corporation (MXC) - Business Model: Cost Structure

Operational costs associated with drilling and production

For the six months ended September 30, 2024, Mexco Energy Corporation reported production costs of $850,825, which represented a 15% increase from $742,081 for the same period in 2023. This increase was attributed to higher production taxes and marketing charges linked to rising oil revenues and an increase in lease operating expenses due to new wells in which the company holds a working interest.

Administrative expenses for managing corporate operations

General and administrative expenses for the six months ended September 30, 2024, were $701,570, a 9% rise compared to $646,512 for the same period in 2023. The increase was primarily due to higher accounting fees and costs related to contract and engineering services.

Marketing and sales expenses to maintain customer relations

Marketing and sales expenses are typically embedded within the overall production and operational costs. However, specific figures for dedicated marketing expenses were not disclosed in the financial reports. The general operational costs include marketing charges that were part of the $850,825 production costs. Additionally, the company has reported a total operating revenue of $3,477,062 for the six months ended September 30, 2024, which reflects the effectiveness of their marketing strategies in relation to oil and gas sales.

Expense Category	Amount (2024)	Amount (2023)	% Change
Production Costs	$850,825	$742,081	15%
General and Administrative Expenses	$701,570	$646,512	9%
Total Operating Revenue	$3,477,062	$3,155,029	10%

Mexco Energy Corporation (MXC) - Business Model: Revenue Streams

Sales of crude oil and natural gas

The primary source of revenue for Mexco Energy Corporation comes from the sales of crude oil and natural gas. For the six months ended September 30, 2024, total revenue from oil and gas sales was $3,383,909, reflecting a 9% increase compared to $3,095,800 for the same period in fiscal 2023. The breakdown is as follows:

Product	Revenue (2024)	Revenue (2023)	% Difference
Oil Sales	$3,031,922	$2,529,484	19.9%
Natural Gas Sales	$351,987	$566,316	(37.8%)

For the quarter ended September 30, 2024, the revenue from oil sales was $1,521,618, up 38.4% from $1,099,806 in the same quarter of 2023. In contrast, natural gas sales decreased to $174,235 from $280,904, a drop of 38%.

Income from royalty interests in producing wells

Mexco Energy also generates revenue through royalty interests in producing wells. In fiscal 2024, the company acquired royalty interests in several producing wells for approximately $900,000. Notable acquisitions include:

• 21 producing wells operated by Anadarko Petroleum Corporation and Cimarex Energy Company for $158,000.
• 6 producing wells operated by Marathon Oil for $50,000.
• 15 producing wells operated by Anadarko Petroleum Corporation in Weld County, Colorado for $118,000.
• Approximately 250 producing wells in Laramie County, Wyoming, and Adams and Weld Counties, Colorado for $483,000.

These acquisitions are expected to enhance future revenue streams through ongoing production.

Potential revenue from joint ventures and partnerships

Potential revenue streams for Mexco Energy also include income derived from joint ventures and partnerships. The company is actively participating in drilling and completion projects. For fiscal 2025, Mexco plans to participate in drilling 30 horizontal wells, estimated at a cost of $2,000,000. This includes:

• 26 wells in the Delaware Basin, New Mexico.
• 4 wells in Reagan County, Texas.

In previous projects, Mexco reported initial production rates from completed wells indicating strong potential for future revenue. For example, in July 2024, completed wells showed average production rates of 1,763 BOE per day.

Updated on 16 Nov 2024

Resources:

1. Mexco Energy Corporation (MXC) Financial Statements – Access the full quarterly financial statements for Q2 2024 to get an in-depth view of Mexco Energy Corporation (MXC)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Mexco Energy Corporation (MXC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.