What changed in this filing

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Item 1. Business

2026-06-29 compared with 2025-06-27 · 227 added, 255 removed, 99 unchanged (83% of the section changed)

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and production of crude oil and natural gas properties located in the United States.

Incorporated in April 1972 under the name Miller

Oil Company, the Company changed its name to Mexco Energy Corporation effective April 30, 1980.

At that time, the shareholders of the

Company also approved amendments to the Articles of Incorporation resulting in a one-for-fifty reverse stock split of the Company’s

common stock.

Incorporated in April 1972 as Miller Oil Company,

the Company changed its name to Mexco Energy Corporation effective April 30, 1980.

At that time, the Company’s shareholders also

approved amendments to the Articles of Incorporation, resulting in a one-for-fifty reverse stock split of the Company’s common

total estimated proved reserves at March 31, 2026 were approximately 1.437 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.

which 46% was oil and 54% was natural gas, and our estimated present value of proved reserves was approximately $21 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.

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strategy and daily operations.

our inception, we have been engaged in acquiring and developing oil and gas properties and the exploration for and production of natural

gas, crude oil, condensate and natural gas liquids (“NGLs”) within the United States.

We especially seek to acquire proved

reserves that fit well with existing operations or in areas where Mexco has established production.

Acquisitions preferably will contain

most of their value in producing wells, behind pipe reserves and high quality proved undeveloped locations.

Competition for the purchase

of proved reserves is intense.

Sellers often utilize a bid process to sell properties.

This process usually intensifies the competition

and makes it extremely difficult to acquire reserves without assuming significant price and production risks.

We actively search for

opportunities to acquire proved oil and gas properties.

However, because the competition is intense, we cannot give any assurance that

we will be successful in our efforts during fiscal 2026.

our inception, we have been engaged in acquiring and developing oil and gas properties and the exploration for and production of

crude oil, natural gas, condensate and natural gas liquids (“NGLs”) within the United States.

We especially seek to

acquire proved reserves that fit well with existing operations or in areas where Mexco has established production.

Acquisitions will

preferably contain most of their value in producing wells, behind-pipe reserves, and high-quality proved undeveloped locations.

Competition for the purchase of proved reserves is intense.

Sellers often utilize a bidding process to sell properties.

This process intensifies the competition and makes it difficult to acquire reserves without assuming significant price and

production risks.

We actively seek opportunities to acquire proved oil and gas properties.

However, given the intense

competition, we cannot give any assurance that we will be successful in our efforts during fiscal 2027.

we own oil and gas properties in other states, the majority of our activities are centered in West Texas and Southeastern New Mexico.

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In recent years, we have placed primary emphasis

on the evaluation and purchase of producing oil and gas properties, including working, royalty and mineral interests, and prospects that

could have a potentially meaningful impact on our reserves.

on evaluating and purchasing producing oil and gas properties, including working, royalty, and mineral interests, as well as prospects

that could meaningfully impact on our reserves.

All of the Company’s oil and gas interests are operated by others.

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in producing oil and gas properties, including the following most significant acquisitions:

1990-1994 Royalty

interests with an aggregate purchase price of approximately $501,000, covering multiple wells

in the Gomez (Ellenberger) Field of Pecos County, Texas.

1993-2014 Tabbs

Bay Oil Company and Thompson Brothers Lumber Company, which were dissolved in 1957 and 1947,

respectively.

Purchase covering thousands of acres located in 27 counties in Texas, 3 parishes

in Louisiana, and one county in Arkansas, consisting of various mineral, royalty, and overriding

royalty interests.

aggregate purchase price of approximately $501,000 covering multiple wells in the Gomez (Ellenberger) Field of Pecos County, Texas.

Tabbs Bay Oil Company and

Thompson Brothers Lumber Company, respectively dissolved in 1957 and 1947.

Purchase covering thousands of acres located respectively

in 19 counties of Texas, 3 parishes of Louisiana and one county in Arkansas and 8 counties of Texas, respectively consisting of various

mineral, royalty and overriding royalty interests.

Forman Energy

Corporation, purchase price of $1,591,000 consisting primarily of working interests in approximately 634 wells located in 12 states.

Royalty interests, purchase

price $304,000 covering 37 producing wells in the Cotton Valley formation in Limestone County, Texas and the Lower Cotton Valley

formation in Jackson Parish, Louisiana.

This acreage also contains additional potential undrilled locations.

Royalty interests, purchase

price $500,000 covering 4 producing gas units in Freestone County, Texas containing 33 producing wells and additional potential undeveloped

locations in the Cotton Valley formation.

Royalty interests, purchase

price $550,000 covering 75 producing wells and additional potential undeveloped locations in the Cotton Valley formation of Freestone

and Limestone Counties, Texas.

Non-operated working interests,

purchase price $425,000 covering 2 properties in Lea County, New Mexico.

Royalty (mineral) acreage,

purchase price $1,850,000 covering 122 mineral acres in the Newark East (Barnett Shale) Field of Tarrant County, Texas amounting

to approximately 21.45% royalty interest.

Royalty (mineral) acreage,

purchase price $429,000 covering 522 mineral acres in the Newark East (Barnett Shale) Field of Tarrant County, Texas containing 6

producing natural gas wells and additional potential undeveloped well locations.

In March 2009, purchased additional interests, $49,000.

Southwest Texas

Disposal Corporation, purchase price $478,000 consisting of royalty interests in over 300 wells located in 60 counties and parishes

royalty interests, purchase price $1,650,000 covering 5,120 gross acres over 8 sections in the Haynesville trend area of DeSoto Parish,

Energy Corporation, purchase price of $1,591,000, consisting primarily of working interests

in approximately 634 wells located in 12 states.

2004-2005 Royalty

interests, purchase price of $1,354,000, covering 145 producing wells in the Cotton Valley

formation in Freestone and Limestone Counties, Texas, and Jackson Parish, Louisiana.

acreage also contains additional potential undeveloped locations.

2007-2008 Non-operated

working interests, purchase price of $425,000, covering 2 properties in Lea County, New Mexico.

(mineral) acreage, purchase price of $2,279,000, consisting of 122 mineral acres in the Newark East Field (Barnett Shale) of Tarrant

County, Texas representing an approximate 21.45% royalty interest, and 522 additional mineral acres in the same field containing 6 producing

natural gas wells and additional undeveloped drilling locations.

Purchased additional interests in March 2009 for $49,000.

2010-2012 Southwest

Texas Disposal Corporation, purchase price of $478,000, consisting of royalty interests in

over 300 wells located in 60 counties and parishes of 6 states.

royalty interests, purchase price of $1,650,000, covering 5,120 gross acres over 8 sections in the Haynesville trend area of DeSoto Parish,

Louisiana, containing 6 horizontal producing wells and additional potential undeveloped drill sites.

The Company paid $1.46 million

in cash and the remainder was paid as 26,833 shares of its common stock issued from treasury shares.

The Company paid $1.46 million in

cash and the remainder was paid as 26,833 shares of its common stock issued from treasury shares.

Non-operating

working interests, purchase price $670,000 covering 160 gross acres in the Fuhrman-Mascho Field of Andrews County, Texas containing

working interests, purchase price of $670,000, covering 160 gross acres in the Fuhrman-Mascho Field of Andrews County, Texas containing

5 producing wells in the Grayburg and San Andres formations and additional potential drill sites.

In March 2012, purchased additional

working interests, $275,000.

TBO Oil and Gas, LLC, purchase

price of $1,150,000 consisting of working interests in approximately 280 wells located in 16 counties of 3 states.

Royalty interests, purchase

price $200,000 covering 43 wells in 12 counties of 8 states, primarily in Texas.

Royalty interests, purchase

price $580,000 covering 580 wells in 87 counties of 8 states.

Approximately 90% of the net revenue from these royalties is produced

by 157 wells located in the Barnett Shale of the Fort Worth Basin of Texas.

Royalty and mineral interests,

purchase price $1,000,000 covering approximately 1,800 wells in 27 counties of Texas.

Of these oil and gas reserves, approximately

60% is natural gas and 40% oil.

Non-Operated working interests,

purchase price $840,000 in 70 Natural gas producing wells located in 5 counties of Oklahoma.

Non-Operated working interests,

purchase price $200,000 covering 80 wells located in Hockley and Pecos Counties, Texas.

Non-Operated working interests,

purchase price $450,000 covering 43 wells in Webster Parish, Louisiana;

Eddy County, New Mexico;

and, Nolan and Smith Counties, Texas.

Royalty interest investment,

$300,000 for a less than 1% investment commitment in a limited liability company, capitalized at approximately $50 million to purchase

royalty interests consisting of minerals located in the Marcellus and Utica areas of Ohio.

Purchased additional working interests

in March 2012 for $275,000.

Oil and Gas, LLC, purchase price of $1,150,000, consisting of working interests in approximately 280 wells located in 16 counties of

interests, purchase price of $1,780,000, covering approximately 2,400 wells in eight states,

primarily in Texas.

working interests, purchase price of $1,490,000, covering 193 producing wells located in 11 counties across Louisiana, Oklahoma, New

Mexico, and Texas.

interest investment of $300,000 for a less than 1% investment commitment in a limited liability

company (“LLC”), capitalized at approximately $50 million to purchase royalty interests consisting

of minerals located in the Marcellus and Utica areas of Ohio.

This LLC has returned 115%

of the total investment since inception in fiscal 2020.

royalty interests, purchase price of $567,000 covering 53 producing wells and several additional potential locations for development

in Atascosa and Karnes Counties, Texas.

Royalty interests, purchase

price of $939,000 covering 22 producing wells and several additional potential locations for development in the Eagleford area of

Dimmit County, Texas.

Royalty interest investment,

$2,000,000 for an approximate 2% investment commitment in a limited liability company, capitalized at approximately $100 million

to purchase royalty interests consisting of minerals located in the Marcellus and Utica areas of Ohio.

As of the date of this report,

$1,800,000 of the commitment has been expended and 14% of the investment has been returned.

Royalty interests, purchase

price of $117,200 covering 28 producing wells in 6 counties in the Haynesville trend area of Louisiana and 5 counties in Texas.

Royalty interests, purchase

price of $455,000 covering 8 producing wells and additional potential locations for development in Reeves County, Texas.

Royalty interests,

purchase price of $367,500 covering 84 producing wells and additional potential locations for development in 6 counties in Texas.

Royalty interest, purchase

price of $575,600 covering 9 producing wells with additional potential locations for development and 4 producing wellbores in Weld

County, Colorado.

Royalty interests, purchase

price of $390,300 covering 255 producing wells in the Haynesville trend area of Caddo Parish, Louisiana.

Royalty interests, purchase

price of $568,000 covering 30 producing wells and additional potential locations for development in Adams, Broomfield and Weld Counties,

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,

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

2022-2023 Royalty

and overriding royalty interests, purchase price of $1,623,000, covering 103 producing wells

and several additional undeveloped locations in the Eagle Ford Shale area of Dimmit County,

Texas, the Haynesville Shale trend across Louisiana and Texas, and in Atascosa and Karnes

Counties, Texas.

interest investment of $2,000,000 for an approximate 2% investment commitment in a limited liability company, capitalized at approximately

$100 million to purchase royalty interests consisting of minerals located in the Marcellus and Utica areas of Ohio.

During 2025, an additional

$227,429 was expended to participate in a voluntary optional cash call and acquire its proportionate share of the resulting non-consenting

interests, increasing its capitalized investment.

As of the date of this report, this investment is fully funded, and 25% of the investment

has been returned.

2023-2024 Royalty

interests, purchase price of $1,788,400, covering 360 producing wells and additional potential

locations for development in Weld County, Colorado, Caddo Parish, Louisiana, and multiple

counties throughout Texas.

2024-2025 Royalty

interests, purchase price of $1,972,000, covering approximately 750 producing wells and additional

undeveloped drilling locations across multiple counties in Colorado, Louisiana, Montana,

New Mexico, Nebraska, North Dakota, South Dakota, Texas, and Wyoming.

2025-2026 Royalty

interests, purchase price of $817,700, covering approximately 262 producing wells, additional

interests in 19 previously owned wells with additional development potential across counties

in Colorado, Louisiana, and Texas, and 40 undeveloped net leasehold in Eddy County, New Mexico.

Environment and Outlook

commodity price environment was challenging in fiscal 2025.

The war in Ukraine and the Israel-Hamas war, rising interest rates, global

supply chain disruptions, concerns about a potential economic downturn or recession and measures to combat persistent inflation and instability

in the financial sector have contributed to recent economic and pricing volatility and may continue to impact pricing throughout fiscal

In light of these challenges facing our industry and in response to the continued challenging environment, our primary business

strategies for fiscal 2026 will continue to include:

(1) optimizing cash flows through operating efficiencies and cost reductions, (2)

divesting of non-core assets, and (3) working to balance capital spending with cash flows to minimize borrowings and maintain ample liquidity.

prices remained volatile during fiscal 2026 due to shifting global supply-and-demand fundamentals, OPEC+ production decisions, geopolitical

tensions, inflationary pressures, interest rate uncertainty, and concerns regarding the pace of global economic growth.

fluctuations in oil and natural gas prices, evolving trade policies, and continued uncertainty in the broader economic environment may

continue to impact our industry and operating results.

In light of these challenges and the ongoing volatility in commodity markets,

our primary business strategies for fiscal 2027 will continue to include:

(1) optimizing cash flows through operating efficiencies and

cost reductions, (2) divesting non-core assets, and (3) working to balance capital spending with cash flows to minimize borrowings and

maintain ample liquidity.

Part II, Item 7.

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Revenues from oil and gas royalty interests accounted for approximately 49% of our total operating revenues

for fiscal 2025.

are two primary areas in which the Company is focused, 1) the Delaware Basin located in the Western portion of the Permian Basin including

Lea and Eddy Counties, New Mexico and Reeves and Loving Counties, Texas and 2) the Midland Basin located in the Eastern portion of the

and income from investments in LLCs for fiscal 2026.

Company is primarily focused on two areas:

1) the Delaware Basin located in the Western portion of the Permian Basin, including Lea

and Eddy Counties, New Mexico and Reeves and Loving Counties, Texas, and 2) the Midland Basin located in the Eastern portion of the

Permian Basin, including Reagan, Upton, Midland, Martin, Howard, and Glasscock Counties, Texas.

The Permian Basin in total accounts for

80% of our discounted future net cash flows from proved reserves and 80% of our gross revenues.

Permian Basin is one of the oldest and most prolific producing basins in North America which has been a significant source of oil production

The Permian Basin in total accounts

for 75% of our discounted future net cash flows from proved reserves and 76% of our operating revenues.

The Permian Basin is one of the oldest and most prolific producing basins in North America and has been a significant source of oil production

since the 1920s.

The Permian Basin is known to have a number of zones of oil and natural gas bearing rock throughout.

Delaware Basin properties, encompassing 39,850 gross acres, 211 net acres, 751 gross producing wells or 4 net wells account for approximately

67% of our discounted future net cash flows from proved reserves as of March 31, 2025.

For fiscal 2025, these properties accounted for

65% of our gross revenues.

Of these discounted future net cash flows from proved reserves, approximately 27% are attributable to proven

undeveloped reserves which would be developed through new drilling.

Midland Basin properties, encompassing 114,077 gross acres, 232 net acres, 1,652 gross producing wells or 4 net wells account for approximately

12% of our discounted future net cash flows from proved reserves as of March 31, 2025.

For fiscal 2025, these properties accounted for

14% of our gross revenues.

Of these discounted future net cash flows from proved reserves, approximately 3% are attributable to proven

undeveloped reserves which would be developed through new drilling.

believes its most important properties for future development by horizontal drilling and hydraulic fracturing area are located in Lea

The Permian Basin contains numerous oil and gas-bearing formations that have supported commercial production for decades.

The Delaware Basin properties, encompassing 39,129 gross acres, 209 net acres, 769 gross producing wells, or 4 net wells, account for

approximately 53% of our discounted future net cash flows from proved reserves as of March 31, 2026.

For fiscal 2026, these properties

accounted for 54% of our operating revenues.

Of these discounted future net cash flows from proved reserves, approximately 14% are attributable

to proven undeveloped reserves, which would be developed through new drilling.

The Midland Basin properties, encompassing 115,077 gross acres, 232 net acres, 1,786 gross producing wells, or 4 net wells, account for

approximately 21% of our discounted future net cash flows from proved reserves as of March 31, 2026.

For fiscal 2026, these properties

accounted for 21% of our operating revenues.

Mexco believes its most important properties for future development by horizontal drilling and hydraulic fracturing are located in Lea

and Eddy Counties, New Mexico of the Delaware Basin and the Midland Basin in Midland, Reagan and Upton Counties, Texas.

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following table indicates our oil and gas production in each of the last five years:

oil and gas industry is a highly competitive business.

Competition for oil and gas reserve acquisitions is significant.

We may compete

with major oil and gas companies, other independent oil and gas companies and individual producers and operators, some of which have

financial and personnel resources substantially in excess of those available to us.

oil and gas industry is highly competitive.

We compete with major integrated oil and gas companies, other independent oil and gas companies,

private equity-backed operators and individual producers, many of which have financial, technical and personnel resources substantially

greater than our own.

As a result, we may be placed at a competitive disadvantage.

Competitive factors include price, contract terms and types and quality of service, including pipeline distribution.

The price for oil

and gas is widely followed and is generally subject to worldwide market factors.

Competitive factors include commodity prices, acquisition

costs, contract terms, access to capital, operational expertise and the quality and availability of service providers, including drilling,

completion and transportation services.

for oil and gas reserve acquisitions and development opportunities is significant.

Our ability to acquire and develop additional properties

in the future will depend upon our ability to evaluate and select suitable properties and to consummate transactions in this highly competitive

environment in a timely manner.

addition, the oil and gas industry as a whole also competes with other industries in supplying the energy and fuel requirements of industrial,

commercial and individual consumers.

The price and availability of alternative energy sources could adversely affect our revenue.

factors affect the quantities of oil and natural gas production and the price we can obtain for the production from our oil and natural

gas properties.

Such factors include:

the extent of domestic production;

the level of imports of foreign oil and natural gas;

level of market demand on a regional, national and worldwide basis;

domestic and foreign economic conditions that determine levels of

industrial production;

political events in foreign oil-producing regions;

and variations in governmental regulations including environmental,

energy conservation and tax laws or the imposition of new regulatory requirements upon the oil and natural gas industry.

market for our oil, gas and natural gas liquids production depends on factors beyond our control including:

domestic and foreign political

the overall level of supply of and demand for oil, gas and natural gas liquids;

the price of imports of oil and gas;

the price and availability of alternative fuels;

the proximity and capacity of gas pipelines and other transportation facilities;

and overall economic conditions.

made sales that amounted to 10% or more of operating revenues as follows for the years ended March 31:

will depend on our ability to identify, evaluate, and consummate transactions in a timely manner in a highly competitive marketplace.

addition, the oil and gas industry competes with other energy sources to meet the energy requirements of industrial, commercial, and

residential consumers.

Advances in alternative energy technologies and changes in consumer preferences and governmental policies

promoting alternative energy sources may affect demand for oil and natural gas and could adversely impact our revenues and results

of operations.

and Major Customers

a non-operator, we depend on third-party operators to conduct exploration, development, and production activities on our behalf.

operators generally determine drilling schedules, development activities, production levels, and operating practices.

Accordingly, our

production volumes, operating results, and costs are influenced by the decisions and performance of such operators, over which we have

limited control.

factors affect both the quantities of oil, natural gas and natural gas liquids production and the prices received for such production.

These factors include the level of domestic and international production;

imports and exports of crude oil and natural gas;

regional supply and demand balances;

domestic and foreign economic conditions;

geopolitical events;

trade policies and tariffs;

production decisions;

weather conditions;

transportation and pipeline capacity;

and governmental regulations, including environmental,

energy conservation, climate-related, and tax laws.

market for our oil, natural gas, and natural gas liquids production depends on numerous factors beyond our control, including commodity

price volatility, domestic and foreign political and economic conditions, and the availability and cost of alternative energy sources.

third-party operators market and sell production from properties in which we own a working or royalty interest.

Proceeds attributable

to our interest are collected and remitted to us either by the operator or by the purchaser, depending on their contractual arrangements.

The counterparties, or payors, that remit such proceeds to us represent the sources of our operating revenues and income from investments

Sales attributable to payors that amounted to 10% or more for the years ended March 31 were as follows:

BTA Oil Producers, LLC

ExxonMobil Corporation

Historically,

the Company has not experienced significant credit losses on our oil and gas accounts and management is of the opinion that significant

the Company has not experienced significant credit losses on its oil and gas accounts, and management is of the opinion that significant

credit risk does not exist.

Because a ready market exists for oil and gas production, we do not believe the loss of any individual purchaser

would have a material adverse effect on our financial position or results of operations.

Because there is a ready market for oil and gas production, we do not believe the loss of any individual

payor would have a material adverse effect on our financial position or results of operations.

Environmental

oil and gas industry is extensively regulated at the federal, state, and local levels.

Regulations affecting elements of the energy sector

are under constant review for amendment or expansion and frequently more stringent requirements are imposed.

Various federal and state

agencies, including the Texas Railroad Commission, the Bureau of Land Management (the “BLM”), an agency of the U.S Department

of the Interior (“DOI”), the Federal Energy Regulatory Commission (“FERC”), the U.S.

Environmental Protection

Agency (the “EPA”), the Department of Transportation (“DOT”) and the U.S.

Occupational Safety and Health Administration

(“OSHA”), have legal and regulatory authority and oversight over the operations on the properties in which the Company owns

certain environmental laws and regulations, the operators of the Company properties could be subject to strict, joint and several liability

for the removal or remediation of property contamination, whether at a drill site or a waste disposal facility, even when the operators

did not cause the contamination or their activities were in compliance with all applicable laws at the time the actions were taken.

Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), also known as the “superfund”

law, for example, imposes liability, regardless of fault or the legality of the original conduct, on certain classes of persons for releases

into the environment of a “hazardous substance.” Liable persons may include the current or previous owner and operator of

a site where a hazardous substance has been disposed and persons who arranged for the disposal of a hazardous substance at a site.

CERCLA and similar statutes, government authorities or private parties may take actions in response to threats to the public health or

the environment or sue responsible persons for the associated costs.

In the course of operations, the working interest owner and/or the

operator of the Company properties may have generated and may generate materials that could trigger cleanup liabilities.

the Company properties have produced oil and/or natural gas for many years, and previous operators may have disposed or released hydrocarbons,

wastes or hazardous substances at the Company properties.

The operator of the Company properties or the working interest owners may be

responsible for all or part of the costs to clean up any such contamination.

Although the Company is not the operator of such properties,

its ownership of the properties could cause it to be responsible for all or part of such costs to the extent CERCLA or any similar statute

imposes responsibility on such parties as “owners.”

state governments and regional organizations comprising state governments already have enacted legislation and promulgated rules restricting

greenhouse gases (“GHGs”) emissions or promoting the use of renewable energy, and additional such measures are frequently

under consideration.

Although it is not possible at this time to estimate how potential future requirements addressing GHG emissions

would impact operations on the Company properties and revenue, either directly or indirectly, any future federal, state or local laws

or implementing regulations that may be adopted to address GHG emissions could require the operators of our properties to incur new or

increased costs to obtain permits, operate and maintain equipment and facilities, install new emission controls, acquire allowances to

authorize GHG emissions, pay taxes related to GHG emissions or administer a GHG emissions program.

Regulation of GHGs could also result

in a reduction in demand for and production of oil and natural gas.

Additionally, to the extent that unfavorable weather conditions are

exacerbated by global climate change or otherwise, the Company properties may be adversely affected to a greater degree than previously

oil and gas industry is subject to extensive regulation at the federal, state, and local levels.

Environmental and energy-related regulations

are subject to ongoing review and may be revised or made more stringent over time.

Various federal and state agencies, including the

Texas Railroad Commission, the Bureau of Land Management (the “BLM”), an agency of the U.S.

Department of the Interior (the

“DOI”), the Federal Energy Regulatory Commission (“FERC”), the U.S.

Environmental Protection Agency (the “EPA”),

the Department of Transportation (“DOT”), and the U.S.

Occupational Safety and Health Administration (“OSHA”),

as well as state environmental and natural resources agencies, have regulatory authority over aspects of the operations conducted on

properties in which the Company owns an interest.

certain environmental laws and regulations, including the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”),

operators and owners of properties may be subject to strict, joint and several liability for investigation, remediation, and removal

of contamination, regardless of fault or compliance with applicable laws at the time of the relevant activities.

CERCLA and similar statutes

may impose liability on current and former owners and operators of a site, as well as on persons who arranged for disposal or treatment

of hazardous substances.

As a result, government authorities or private parties may seek to recover cleanup costs or require remediation

of environmental conditions, including those arising from historical operations by prior operators.

Because the Company is a non-operating

working interest owner in certain properties, it may, in certain circumstances, be held responsible for a portion of such costs under

applicable law.

federal, state, and regional initiatives have been adopted or are under consideration to regulate greenhouse gas (“GHG”)

emissions, including through permitting requirements, emissions reporting obligations, or other regulatory or market-based mechanisms.

These regulations may result in increased compliance costs for operators of the Company’s properties, including costs associated

with monitoring, permitting, equipment upgrades, emissions controls, or the purchase of emissions allowances or credits.

such regulations could indirectly affect demand for oil and natural gas over time.

The extent and timing of future climate-related regulatory

developments and their potential impact on operations and financial results remain uncertain.

In addition, future climate-related regulations

or disclosure requirements, including those relating to emissions reporting or climate risk disclosure, may increase compliance costs

or require changes to the Company’s reporting practices.

did not incur any material capital expenditures for remediation or pollution control activities for the year ended March 31, 2026.

2 unchanged sentences

during fiscal 2027.

agencies with certain authority over the Company’s business include the Internal Revenue Service (the “IRS”), the SEC

Ensuring compliance with the rules, regulations and orders promulgated by such entities requires extensive effort and incremental

costs to comply, which affects the Company’s profitability.

Because public policy changes are commonplace, and existing laws and

regulations are frequently amended, the Company is unable to predict the future cost or impact of compliance.

However, the Company does

not expect that any of these laws and regulations will affect its operations materially differently than they would affect other companies

with similar operations, size and financial strength.

federal agencies with regulatory authority over the Company’s business include the Internal Revenue Service (the “IRS”),

Securities and Exchange Commission (the “SEC”), and national securities exchanges such as the NYSE, as applicable.

Compliance with applicable laws, regulations, and reporting requirements administered by these and other regulatory bodies requires ongoing

effort and may result in additional costs.

Because public policy, regulatory frameworks, and enforcement priorities may change over time,

the Company cannot predict the future cost or impact of compliance with such laws and regulations.

However, the Company does not expect

that these regulatory requirements will affect its operations in a manner materially different from similarly situated companies in the

to Properties

leasehold properties we own are subject to royalty, overriding royalty and other outstanding interests customary in the industry.

properties may be subject to burdens such as liens incident to operating agreements and current taxes, development obligations under

oil and gas leases and other encumbrances, easements and restrictions.

We do not believe any of these burdens will materially interfere

with the use of these properties.

to drilling of an oil and natural gas well, it is normal practice in our industry for the person or company acting as the operator of

the well to obtain a preliminary title review to ensure there are no obvious defects in title to the well.

Frequently, as a result of

such examinations, certain curative work must be done to correct defects in the marketability of the title, and such curative work entails

Our operators’ failure to cure any title defects may delay or prevent us from utilizing the associated mineral interest.

We believe the title to our properties is good and defensible in accordance with standards generally acceptable in the oil and gas industry

subject to such exceptions that, in the opinion of counsel employed in the various areas in which we have activities, are not so material

as to detract substantially from the use of such properties.

leasehold properties in which we own interests are subject to royalty, overriding royalty, and other burdens customary in the industry.

These properties may be subject to liens arising under operating agreements, current taxes, development obligations under oil and gas

leases, and other encumbrances, easements, and restrictions.

We do not believe any of these burdens will materially interfere with the

use or operation of such properties.

to drilling an oil and natural gas well, it is customary in our industry for the operator to conduct a preliminary title examination

to identify material defects affecting the leasehold or mineral interests.

In some cases, curative actions are required to address title

defects, which may result in additional expense or delay.

The failure to cure such defects could delay or prevent the development of

the associated mineral interests.

We believe the title to the properties in which we own an interest is generally good and defensible

in accordance with standards generally accepted in the oil and gas industry, subject to exceptions that are not expected to materially

impair the use or value of such properties.

Substantially

all of our properties are currently mortgaged under a deed of trust to secure funding through a credit facility.

operations are subject to all the risks inherent in the exploration for and development and production of oil and gas including blowouts,

all of our properties are currently subject to liens under a deed of trust securing obligations under our credit facility.

operations are subject to all the risks inherent in the exploration, development, and production of oil and gas, including blowouts,

fires, and other casualties.

We maintain insurance coverage customary for operations of a similar nature, but losses could arise from

uninsured risks or in amounts in excess of existing insurance coverage.

uninsured risks or in amounts exceeding existing insurance coverage.

following table sets forth certain information concerning the executive officers of the Company as of March 31, 2026.

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He served as Chief Executive Officer, President, and Director of the Company from 1983 to

From July 1993 to the present, Mr.

Since July 1993, Mr.

Taylor has been involved in the independent practice of law and other business activities.

November 2005 he was appointed by the Speaker of the House to the Texas Ethics Commission and served until February 2010.

November 2005, he was appointed by the Speaker of the House to the Texas Ethics Commission, where he served until February 2010.

McComic, a Certified Public Accountant and Chartered Global Management Accountant, became Controller for the Company in July 2001

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as Treasurer and Assistant Secretary of the Company.

Gail Yanko was appointed to the position of Vice President of the Company in 1990.

She also served as Corporate Secretary from 1992 to

2021 and from 1986 to 1992 was Assistant Secretary.

From 1986 to 2015, on a part-time basis, she assisted the Chairman of the Board of

the Company in his personal business activities.

Gail Yanko was appointed Vice President in 1990.

She also served as Corporate Secretary from 1992 to 2021 and, from 1986 to 1992, was

Assistant Secretary.

From 1986 to 2015, on a part-time basis, she assisted the Company’s Chairman of the Board with

his personal business activities.

Yanko also served as a director of the Company from 1990 to 2008.

Hardin joined the Company in 2006 and was elected Corporate Secretary of the Company in September 2021.

She has also served the Company

as Assistant Treasurer of the Company since 2010 and from 2006 to 2021 was Assistant Secretary.

Hardin joined the Company in 2006 and was elected Corporate Secretary in September 2021.

She has also served the Company as Assistant

Treasurer of the Company since 2010 and, from 2006 to 2021, as Assistant Secretary.

Prior thereto, Ms.

Hardin served as Assistant

of March 31, 2025, we had two full-time and three part-time employees.

Hardin served as Assistant Controller.

of March 31, 2026, we had two full-time and two part-time employees.

We believe that relations with these employees are generally satisfactory.

From time to time, we utilize the services of independent geological, land, and engineering consultants on a limited basis and expect

to continue to do so in the future.

to continue to do so.

principal offices are located at 415 W.

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posted on our website.

Any of these corporate documents as well as any of the SEC filed reports are available in print free of charge

Any of these corporate documents as well as any reports filed with the SEC are available in print free of charge

to any stockholder who requests them.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business