Mexco Energy Corporation Reports Profitable First Quarter and Property Developments

MIDLAND, Texas, Aug. 6, 2014

Operating revenues in the first quarter of fiscal 2015 were $1,017,834, a 2% increase from $996,525 for the first quarter of fiscal 2014. 

The average sales price for the quarter ending June 30, 2014 was $7.83 per Mcfe compared to $7.23 per Mcfe for the quarter ending June 30, 2013, an increase of 8%.  Oil and gas production decreased .3% and 8%, respectively, during the first quarter of fiscal 2015 as compared to the first quarter of fiscal 2014.

Mexco also announced it has participated in the drilling, completion and installation of submersible pumps of three wells in Reagan County, Texas in the "B" bench of the Wolfcamp formation.  After the testing results of these wells become available, Mexco will make a further announcement.  These three wells are the first of seven wells to be drilled to a vertical depth of 8,000 feet and a horizontal distance of approximately 7,150 feet with a 50 stage zipper fracture treatment.  Mexco's interest in these wells is 1.45% working interest (1.25% net revenue interest).  Mexco has expended approximately $400,000 on these wells to date.

Mexco participated in the drilling of six horizontal wells in the Wolfcamp formation of the Lin field of Reagan County, Texas.  All six of these wells have been completed and are currently producing. The unit, operated by EOG Resources, Inc., contains approximately 500 acres.  Mexco's working interest in these wells is .8086% (.6064% net revenue interest).  Mexco's share of the costs to drill, complete and fracture these wells was approximately $350,000.  EOG has drilled and is in the process of completing a seventh well in this unit involving an approximately 8,000 foot vertical and 9,000 foot horizontal depth.

Mexco participated in a horizontal well located in Lea County, New Mexico flowing at the rate of 1,699 barrels of oil equivalent which is 1,255 barrels of oil and 2,543,000 of natural gas per day with flowing tubing pressure of 575 pounds per square inch on 64/64 inch choke.  This well is located in Draper Mills Field.  Mexco's working interest in this well is approximately .56% (.42% net revenue interest).  This is the first of six wells scheduled to be drilled and operated by Concho Resources Inc.

In the next twelve months Mexco currently is scheduled to participate as a non-operator owner of various working interests in the drilling and completion of 22 horizontal wells involving an aggregate expenditure of approximately $1.2 million.  Of these 22 horizontal wells, four are located in Reagan and two in Winkler Counties, Texas, and fifteen in Lea and one in Eddy Counties, New Mexico.  Approximately one half of such $1.2 million expenditure will be in Reagan County, Texas.