Mexco Energy (MXC) risk factors, FY2025 10-K

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

1. 01Volatility of oil and gas prices significantly affects our results and profitability
2. 02Our results of operations may be negatively impacted by current global events, including the imposition of tariffs
3. 03Changes in environmental laws could increase our operators’ costs and adversely impact our business, financial condition and cash flows
4. 04Lower oil and gas prices and other factors may cause us to record ceiling test writedowns
5. 05We must replace reserves we produce
6. 06Approximately 28% and 33% of our total estimated net proved reserves at March 31, 2025 and 2024, respectively, were undeveloped, and those reserves may not ultimately be developed
7. 07Information concerning our reserves and future net revenues estimates is inherently uncertain
8. 08An increase in the differential between NYMEX and the reference or regional index price used to price our oil and gas would reduce our cash flow from operations
9. 09Drilling and operating activities are high risk activities that subject us to a variety of factors that we cannot control
10. 10We may not be able to fund the capital expenditures that will be required for us to increase reserves and production
11. 11Our identified drilling locations are scheduled out over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling
12. 12Our business depends on oil and natural gas transportation facilities which are owned by others
13. 13We own non-operating interests in properties developed and operated by third parties and, as a result, we are unable to control the operation and profitability of such properties
14. 14Acquiring reserves in the oil and gas industry is highly competitive
15. 15We may not be insured against all of the operating hazards to which our business is exposed
16. 16Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: changes in the valuation of our deferred tax assets and liabilities; tax effects of stock-based compensation; or changes in tax laws, regulations or interpretations thereof
17. 17Our reliance on information technology, including those hosted by third parties, exposes us to cyber security risks that could affect our business, financial condition or reputation
18. 18The loss of our chief executive officer or president could adversely impact our ability to execute our business strategy
19. 19We may be affected by one substantial shareholder

RISKS RELATED TO OUR COMMON STOCK

1. 20We may issue additional shares of common stock in the future, which could cause dilution to all shareholders
2. 21Control by our executive officers and directors may limit your ability to influence the outcome of matters requiring stockholder approval and could discourage our potential acquisition by third parties
3. 22The price of our common stock has been volatile and could continue to fluctuate substantially