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:

| ,,For the Nine Months Ended December 31,,,,,,,,,, |

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 The Company made several acquisitions of royalty interests in producing wells located in Texas, Colorado, Wyoming, New Mexico, Louisiana, and other states during the nine months ended December 31, 2024 for a total purchase price of $1,649,000.

Other Projects The Company is participating in other projects and is reviewing projects in which it 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 for $202,500.

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. 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.

Contractual Obligations The Company has no off-balance sheet debt or unrecorded obligations and has not guaranteed the debt of any other party. The table below summarizes the Company’s future payments based on agreements in place as of December 31, 2024:

| ,,,,,,Payments due in:,,,,,,,,,,, |

(1) The lease amount represents the monthly rent amount for the Company’s principal office space in Midland, Texas under a 36-month lease agreement expiring July 31, 2027. Of this total obligation, the Company’s 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.

Oil and gas sales revenue 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.

Other operating 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 and an increase in income from one of the Company’s limited liability company investments.

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 due to using the corporate funds for property acquisitions.

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 due to an increase in production taxes, marketing charges, and lease operating expenses.

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 an increase in oil reserves.

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, primarily due to an increase in contract services.

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.

Results of Operations – Nine Months Ended December 31, 2024 and 2023 For the nine months ended December 31, 2024, there was a net income of $1,077,370 compared to net income of $1,080,657 for the nine months ended December 31, 2023. This was a result of an increase in operating revenues due to an increase in oil and gas production volumes partially offset by a decrease in oil and gas prices and an increase in operating expenses.

Oil and gas sales revenue was $5,212,313 for the nine months ended December 31, 2024, an 11% increase from $4,706,395 for the same period of fiscal 2024. This resulted from an increase in oil and natural gas production partially offset by a decrease in oil and natural gas prices.

Other operating revenues increased to $156,014 for the nine months ended December 31, 2024, from $105,077 for the nine months ended December 31, 2023 due to a settlement in a class action lawsuit and an increase in income from one of the Company’s limited liability company investments.

Interest income on corporate funds decreased to $50,891 for the nine months ended December 31, 2024, from $86,995 for the nine months ended December 31, 2023 due to using the corporate funds for property acquisitions and purchase of treasury stock.

Production costs were $1,311,066 for the nine months ended December 31, 2024, a 15% increase from $1,143,116 for the nine months ended December 31, 2023 due to an increase in production taxes, marketing charges, and lease operating expenses.

Depreciation, depletion and amortization expense was $1,760,409 for the nine months ended December 31, 2024, a 39% increase from $1,268,703 for the nine months ended December 31, 2023, 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 an increase in oil reserves.

General and administrative expenses were $1,042,084 for the nine months ended December 31, 2024, a 6% increase from $981,664 for the nine months ended December 31, 2023, primarily due to an increase in contract and engineering services partially offset by a decrease in salaries and stock option compensation.

Income taxes for the nine months ended December 31, 2024 was $200,034 compared to $398,971 for the nine months ended December 31, 2023, primarily due to a decrease in state income taxes and a decrease in the deferred tax provision.