Since 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.
While we own oil and gas properties in other states, the majority of our activities
are centered in the Permian Basin of West Texas. The Company also owns producing
properties and undeveloped acreage in thirteen states. We acquire interests
in producing and non-producing oil and gas leases from landowners and leaseholders
in areas considered favorable for oil and gas exploration, development and production.
In addition, we may acquire oil and gas interests by joining in oil and gas
drilling prospects generated by third parties. We may also employ a combination
of the above methods of obtaining producing acreage and prospects. In recent
years, we have placed primary emphasis on the evaluation and purchase of producing
oil and gas properties, both working and royalty interests, and prospects that
could have a potentially meaningful impact on our reserves. Most of the Company’s
oil and gas interests are operated by others, however the Company operates several
properties in which it owns an interest.
There are two primary areas in which the Company is focused, 1) the Midland
Basin located in the Eastern portion of the Permian Basin including Reagan,
Upton, Midland, Martin, Howard and Glasscock Counties, Texas and 2) the Delaware
Basin located in the Western portion of the Permian Basin including Lea and
Eddy Counties, New Mexico and Loving County, Texas. The Permian Basin in total
accounts for 71% of our discounted future net cash flows from proved reserves
and 55% of our net revenues.
The Midland Basin properties, encompassing 83,074 gross acres, 283 net acres,
587 gross producing wells and 3 net wells account for approximately 51% of our
discounted future net cash flows from proved reserves as of March 31, 2017.
Of these discounted future net cash flows from proved reserves, approximately
44% are attributable to proven undeveloped reserves which will be developed
through new drilling. For fiscal 2017, these properties accounted for 23% of
our gross revenues and 24% of our net revenues.
The Delaware Basin properties, encompassing 31,718 gross acres, 624 net acres,
468 gross producing wells and 5 net wells account for approximately 20% of our
discounted future net cash flows from proved reserves as of March 31, 2017.
Of these discounted future net cash flows from proved reserves, approximately
5% are attributable to proven undeveloped reserves which will be developed through
new drilling. For fiscal 2017, these properties accounted for 28% of our gross
revenues and 31% of our net revenues.
Gomez Gas Field properties, encompassing 13,058 gross acres, 72 net acres,
26 gross wells and .13 net wells in Pecos County, Texas, account for approximately
2% of our discounted future net cash flows from proved reserves as of March
31, 2017. For fiscal 2017, these properties accounted for 3% of our gross revenues
and 4% of our net revenues. All of these properties, except for one, are royalty
interests. There is a potential for development of the horizontal Wolfcamp on
these interests.
0.44% 
323.94 %