Based on the provided financial report articles, I generated the title for the article: "Quarterly Financial Report for Q3 2025: MXC Corporation" Please note that the title may not be exact, as the provided text does not contain a clear title. However, based on the information provided, I inferred the title to be related to the quarterly financial report for MXC Corporation, specifically for the third quarter of 2025.

Cash Flows

Changes in the net funds provided by or (used in) each of our operating, investing and financing activities are set forth in the table below:

Cash Flow Provided by Operating Activities Cash flow from operating activities is primarily derived from the production of our crude oil and natural gas reserves and changes in the balances of non-cash accounts, receivables, payables or other non-energy property asset account balances. Cash flow provided by our operating activities for the nine months ended December 31, 2024 was $2,941,115 in comparison to $3,374,717 for the nine months ended December 31, 2023. This decrease of $433,602 in our cash flow operating activities consisted of an increase in our accounts receivable of $529,751; an increase of $106,391 of our accounts payable and accrued expenses and income tax payable; and, a decrease in our net income for the current nine months of $3,287. Variations in cash flow from operating activities may impact our level of exploration and development expenditures.

Our expenditures in operating activities consist primarily of drilling expenses, production expenses and engineering services. Our expenses also consist of employee compensation, accounting, insurance and other general and administrative expenses that we have incurred in order to address normal and necessary business activities of a public company in the crude oil and natural gas production industry.

Cash Flow Used in Investing Activities Cash flow from investing activities is derived from changes in oil and gas property balances. For the nine months ended December 31, 2024, we had net cash of $3,670,019 used for additions to oil and gas properties compared to $1,365,030 for the nine months ended December 31, 2023.

Cash Flow Provided by Financing Activities Cash flow from financing activities is derived from our changes in long-term debt and in equity account balances. Net cash flow used in our financing activities was $834,575 for the nine months ended December 31, 2024 compared to cash flow used in our financing activities of $666,520 for the nine months ended December 31, 2023. During the nine months ended December 31, 2024, we expended $209,000 to pay the regular annual dividend and $703,216 to purchase 57,766 shares of our stock for the treasury account and received $77,641 from the exercise of stock options.

Accordingly, net cash decreased $1,563,479, leaving cash and cash equivalents on hand of $910,005 as of December 31, 2024.

Oil and Natural Gas Property Development

New Participations in Fiscal 2025 The Company currently plans to participate in the drilling and completion of 28 horizontal wells at an estimated cost of approximately $1,500,000 for the fiscal year ending March 31, 2025. Twenty-five of these wells are in the Delaware Basin located in the western portion of the Permian Basin in Lea and Eddy Counties, New Mexico. The remaining 3 wells are in Grady County, Oklahoma.

During the first nine months of fiscal 2025, Mexco expended approximately $207,000 to participate in the drilling of five horizontal wells in the Bone Spring formation of the Delaware Basin in Lea County, New Mexico. In November 2024, these wells were completed with initial average production rates of 1,106 barrels of oil, 2,583 barrels of water and 1,165,000 cubic feet of gas per day, or 1,300 BOE per day.

During the first nine months of fiscal 2025, Mexco expended approximately $293,000 to drill and complete four horizontal wells in the Wolfcamp Sand formation of the Delaware Basin in Lea County, New Mexico. In November 2024, these wells were completed with initial average production rates of 1,089 barrels of oil, 4,716 barrels of water and 3,601,000 cubic feet of gas per day, or 1,689 BOE per day.

In October 2024, the Company expended approximately $74,000 for the drilling of two horizontal wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico. Mexco’s working interest in these wells is .5%. Subsequently, in January 2025, the Company expended approximately $43,000 to complete these wells.

In November 2024, the Company expended approximately $78,000 for the drilling of two horizontal wells in the Penn Shale formation of the Delaware Basin in Lea County, New Mexico. Mexco’s average working interest in these wells is .5%.

In October 2022, the Company made an approximately 2% equity investment commitment in a limited liability company amounting to $2,000,000 of which $1,600,000 has been funded as of December 31, 2024. The limited liability company is capitalized at approximately $100 million to purchase mineral interests in the Utica and Marcellus areas in the state of Ohio. To date, this LLC has returned $182,767 or 11% of the total investment.

Completion of Wells Drilled in Fiscal 2024 The Company expended approximately $300,000 for the completion of 19 horizontal wells in which the Company participated during fiscal 2024.

The Company expended approximately $107,000 for the completion costs of two horizontal wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico that the Company participated in drilling during fiscal 2024. Mexco’s working interest in these wells is .53%. In July 2024, these wells were completed with initial average production rates of 1,402 barrels of oil, 2,009 barrels of water and 2,168,000 cubic feet of gas per day, or 1,763 BOE per day.

Five horizontal wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico in which the Company participated during fiscal 2024 were completed in April 2024 with initial average production rates of 732 barrels of oil, 1,481 barrels of water and 657,000 cubic feet of gas per day, or 842 of oil equivalent per day. Mexco’s working interest in these wells is approximately 1.16%.

A horizontal well in the Penn Shale formation of the Delaware Basin in Lea County, New Mexico was completed in May 2024 with the initial production rate of 964 barrels of oil, 2,441 barrels of water and 626,000 cubic feet of gas per day, or 1,068 of oil equivalent per day. Mexco’s working interest in this well is .165%.

The Company expended approximately $207,000 for the completion costs of four horizontial wells in the Bone Spring Sand formation of the Delaware Basin in Lea County, New Mexico that the Company participated in drilling during fiscal 2024. Mexco’s working interest in these wells is .45%. In October 2024, these wells were completed with initial average production rates of 893 barrels of oil, 2,990 barrels of water and 1,161,000 cubic feet of gas per day, or 1,087 BOE per day.

Acquisitions In April 2024, the Company acquired royalty interests in 21 producing wells operated by Anadarko Petroleum Corporation and Cimarex Energy Company and located in Reeves County, Texas for a purchase price of $158,000.

In August 2024, the Company acquired royalty interests in 6 producing wells operated by Marathon Oil and located in Karnes County, Texas for a purchase price of $50,000. This acquisition was effective August 1, 2024.

In August 2024, the Company acquired royalty interests in 15 producing wells operated by Anadarko Petroleum Corporation and located in Weld County, Colorado for a purchase price of $118,000; and, royalty interests in approximately 250 producing wells operated by Samson Exploration, EOG Resources and others in Laramie County, Wyoming and Adams and Weld Counties, Colorado for a purchase price of $483,000. All of these acquisitions were effective September 1, 2024.

In September 2024, the Company acquired royalty interests in 20 producing wells operated by Marathon Oil and Murphy Exploration and located in Karnes County, Texas for a purchase price of $90,000 and effective August 1, 2024.

In October 2024, the Company acquired a .3% royalty interest in 15 producing wells operated by Civitas Resources, Inc. and located in Broomfield and Adams Counties, Colorado for a purchase price of $450,000. This acquisition was effective November 1, 2024.

In October 2024, the Company acquired a .5% royalty interest in 3 producing wells operated by Mewbourne Oil Company and located in Eddy County, New Mexico for a purchase price of $260,000. This acquisition was effective November 1, 2024 and includes acreage for further development.

In October 2024, the Company acquired royalty interests in 8 producing wells operated by Marathon Oil and located in Live Oak County, Texas for a purchase price of $20,000; royalty interests in 6 producing wells operated by SWN Production Company, LLC and located in DeSoto Parish, Louisiana for a purchase price of $25,000; royalty interests in 10 producing wells operated by Ovintiv, Inc. and located in Upton County, Texas for a purchase price of $65,000; and, royalty interests in 12 producing wells operated by Pioneer Natural Resources and located in Reagan and Upton Counties, Texas for a purchase price of $65,000. All of these acquisitions were effective November 1, 2024.

Also in October 2024 and effective November 1, 2024, the Company acquired various small royalty interests in over 300 producing wells operated by Petro-Hunt Corporation, Hess Bakken Investments II, LLC, Marathon Oil, WPX Energy and others in multiple counties throughout the states of Nebraska, North Dakota, South Dakota and Montana for a purchase price of $185,000.

Other Projects We are participating in other projects and are reviewing projects in which we may participate. The cost of such projects would be funded, to the extent possible, from existing cash balances and cash flow from operations. The remainder may be funded through borrowings on the credit facility and, if appropriate, sales of non-core properties.

Sale of Properties In November 2024, the Company conveyed its working and royalty interests in 13.5 net acres in Ward County, Texas. The Company received $15,000 per acre in the total amount of $202,500. The Company retained an overriding royalty interest equal to the positive difference between 25% and any existing burdens of record as of the effective date. The divestitures of this non-core oil and gas asset did not result in a significant alteration of the relationship between the Company’s capitalized costs and proved reserves and, accordingly, the Company recorded the proceeds as sales proceeds, a reduction of its full cost pool, with no gain or loss recognized on the sale.

Pricing Crude oil and natural gas prices generally remained volatile during the last year. The volatility of the energy markets makes it extremely difficult to predict future oil and natural gas price movements with any certainty. For example, in the last twelve months, the NYMEX West Texas Intermediate (“WTI”) posted price for crude oil has ranged from a low of $61.73 per bbl in September 2024 to a high of $82.89 per bbl in April 2024. The Henry Hub Spot Market Price (“Henry Hub”) for natural gas has ranged from a low of $1.21 per MMBtu in November 2024 to a high of $3.40 per MMBtu in December 2024.

On December 31, 2024, the WTI posted price for crude oil was $67.70 and the Henry Hub spot price for natural gas was $3.40 per MMBtu. See Results of Operations below for realized prices. Pipeline capacity constraints and maintenance in the Permian Basin area has contributed to a wider difference between the WaHa Hub and the Henry Hub and at times prices were negative.

Contractual Obligations We have no off-balance sheet debt or unrecorded obligations and have not guaranteed the debt of any other party. The following table summarizes our future payments we are obligated to make based on agreements in place as of December 31, 2024:

(1) The lease amount represents the monthly rent amount for our principal office space in Midland, Texas under a 36-month lease agreement expiring July 31, 2027. Of this total obligation for the remainder of the lease, our majority shareholder will pay $10,175 less than 1 year and $16,110 1-3 years for his portion of the shared office space.

Results of Operations – Three Months Ended December 31, 2024 and 2023 For the quarter ended December 31, 2024, there was net income of $469,133 compared to $345,610 for the quarter ended December 31, 2023 as a result of an increase in operating revenues due to a increase in oil and gas production volumes partially offset by a decrease in oil and gas prices and an increase in operating expenses that is further explained below.

Oil and gas sales Revenue from oil and gas sales was $1,828,404 for the third quarter of fiscal 2025, a 14% increase from $1,610,595 for the same period of fiscal 2024. This resulted from an increase in oil and natural gas production volumes partially offset by a decrease in oil and natural gas prices. Natural gas prices have been negatively impacted by limited pipeline capacity in the Permian Basin.

Other operating revenues Other revenues increased to $62,861 for the three months ended December 31, 2024, from $45,848 for the three months ended December 31, 2023. This increase resulted from a settlement in a class action lawsuit from Contango Resources and an increase in income from one of our limited liability company investments.

Interest income Interest income on corporate funds decreased to $7,315 for the three months ended December 31, 2024, from $36,936 for the three months ended December 31, 2023. This decrease resulted from using the corporate funds for property acquisitions.

Production and exploration Production costs were $460,241 for the third quarter of fiscal 2025, a 15% increase from $401,035 for the same period of fiscal 2024. This is the result of an increase in production taxes due to an increase in oil revenues and an increase in marketing and other charges due to the current natural gas pricing environment from limited pipeline takeaway capacity in the Permian and an increase in lease operating expenses on new wells in which we own an interest.

Depreciation, depletion and amortization Depreciation, depletion and amortization expense was $636,424 for the third quarter of fiscal 2025, a 59% increase from $400,337 for the same period of fiscal 2024, primarily due to an increase in the full cost amortization base, an increase in oil and gas production and a decrease in gas reserves partially offset by a increase in oil reserves.

General and administrative expenses General and administrative expenses were $340,514 for the third quarter of fiscal 2025, a 2% increase from $335,152 for the same period of fiscal 2024. This was primarily due to an increase in contract services.

Income taxes There was an income tax benefit of $18,305 for the three months ended December 31, 2024 compared to an expense of $202,945 for the three months ended December 31, 2023, primarily due to a decrease in state income taxes and a decrease in the deferred tax provision. The effective tax rate for state and federal taxes combined for the three months ended December 31, 2024 and 2023 was (4%) and 37%, respectively. The decrease in the effective tax rate