Thanks to an increase in natural gas prices, Mexco Energy Corporation was able to post an increase in net income for the third quarter of the 2021 fiscal year as compared to what it accomplished a year ago.
The company reported a net income of $80,497 as compared to the prior year in which a net income of $35,196 for the quarter ending Dec. 31, 2019. Operating revenues were $699,894 for the third quarter of fiscal 2021 compared to $769,778 in the second quarter of fiscal 2020. It was the result of a 13% increase In oil production and 8% increase in gas production. Gas prices increased 29% to offset a 28% decrease in oil prices, GlobeNewswire reported.
For the fiscal year ending in March 31, the company is participating in the drilling of 20 horizontal wells. Eight of the wells are completed and producing while the remaining 12 are in various stages of drilling or completion. Furthermore, the company participated in the drilling of 22 horizontal wells during fiscal 2020 in Eddy and Lea counties in New Mexico. The cost for Mexco was $270,000. Of the wells drilled, 13 were completed in the first six months of fiscal 2021. Four more wells were completed this past December with an initial production of 1,171 barrels per day, 4,004 barrels of water and 2,517,000 cubic feet of gas per day which has an equivalent of 1,591 barrels of oil. Mexco retains a .36% interest in the four wells. Three more wells were completed in December 2020 and the other two wells were finished last month.
“Based on our progress in completing the 22 wells drilled but uncompleted in fiscal 2020 and eight of the 20 wells drilled this fiscal year, we expect to continue to increase volumes of oil and gas produced. Also, we are pleased with the increases in oil and gas prices in the current quarter,” Tammy L. McComic, president and chief financial officer of the company said.