Executive Summary

Q1 FY2026 delivered modest top-line growth but weaker profitability: total operating revenues rose 5% year over year to $1.81M, while diluted EPS fell to $0.12 from $0.14 on higher DD&A and G&A; EBIT margin compressed to 18.3% from 21.8% in Q1 FY2025 .
Volume growth was strong (oil +16%, gas +25%), but realized oil prices fell 21% year over year; natural gas prices improved 62%, partially offsetting oil price headwinds .
Management increased planned drilling activity for FY2026 (35 horizontal wells vs. 27 previously) with an unchanged ~$1.2M aggregate cost, highlighting continued development in the Delaware Basin; completions from FY2025 wells are ongoing .
Liquidity strengthened: cash rose to $2.55M with no debt drawn; cash from operations improved year over year to $1.36M, aiding self-funded capex and dividend capacity .
Near-term stock reaction catalysts: trajectory of Permian takeaway constraints (impacting gas realizations), execution on increased drilling/completions, and commodity price volatility; microcap status implies limited sell-side estimate coverage.

What Went Well and What Went Wrong

What Went Well

Production growth: “volumes of the Company’s average production of oil and gas increased 21%” YoY; oil volumes +16%, gas volumes +25% .
Gas price recovery: average realized gas price rose 62% YoY ($2.11/mcf vs. $1.30/mcf), boosting gas revenue +102% .
Liquidity and cash generation: cash from operations increased to $1.36M in Q1, up $0.28M YoY; period-end cash and equivalents rose to $2.55M, with $1.5M undrawn availability on the credit facility .
Strategic activity: increased FY2026 drilling plan (35 wells) and continued completions in Delaware Basin; management emphasizing low-cost reserve additions via non-operated interests .

What Went Wrong

Oil price headwinds: realized oil prices dropped 21% YoY ($63.42/bbl vs. $79.87/bbl), dragging oil revenue down 7.6% despite higher volumes .
Margin compression: EBIT margin fell to 18.3% (from 21.8%) and net margin to 13.3% (from 16.8%) YoY on higher DD&A (+25%) and G&A (+7%) .
Permian takeaway constraints: management cited pipeline capacity/maintenance widening WaHa-Henry Hub differentials; environment drove higher marketing/other charges and contributes to gas price volatility .
EPS decline: diluted EPS down to $0.12 (from $0.14) on higher operating expenses and DD&A despite revenue growth .

Financial Results

Metric	Q1 2025	Q3 2025	Q4 2025	Q1 2026
Total Operating Revenues ($USD)	$1,727,835	$1,891,265	$1,989,739*	$1,814,176
Net Income ($USD)	$291,039	$469,133	$634,998	$241,951
Diluted EPS ($USD)	$0.14	$0.22	$0.30	$0.12
Operating Income ($USD)	$375,962	$446,381	$718,680*	$331,726
EBITDA ($USD)	$923,370*	$1,078,725*	$1,405,667*	$1,002,644*
EBIT Margin (%)	21.8%*	23.6%*	36.1%*	18.3%*
Net Income Margin (%)	16.8%*	24.8%*	31.9%*	13.3%*
Cash from Operations ($USD)	$1,078,614	$934,710*	$1,328,506*	$1,363,277
Cash and Equivalents ($USD)	$2,514,715	$910,005	$1,753,955	$2,546,722

Notes: Asterisked values retrieved from S&P Global.

Revenue composition and KPIs (Q1 FY2026 vs. Q1 FY2025):

Metric	Q1 2025	Q1 2026
Oil Revenue ($USD)	$1,510,304	$1,395,937
Gas Revenue ($USD)	$177,752	$358,797
Other Revenue ($USD)	$39,779	$59,442
Oil Volume (bbls)	18,909	22,010
Oil Avg Price ($/bbl)	$79.87	$63.42
Gas Volume (mcf)	136,307	169,905
Gas Avg Price ($/mcf)	$1.30	$2.11

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Horizontal wells to be drilled	FY2026	27 wells	35 wells	Raised
Horizontal wells to be completed	FY2026	17 wells	17 wells	Maintained
Aggregate drilling+completion cost	FY2026	~$1.2M (expended ~$300k)	~$1.2M (expended ~$350k)	Maintained cost; higher YTD spend
Completions for FY2025 drilled wells	FY2026	N/A	~$150k	New detail
Dividend	FY2026	$0.10 annual (declared Apr 30, 2024, paid Jun 4, 2024)	$0.10 annual (declared May 13, 2025, paid Jun 16, 2025)	Maintained

Earnings Call Themes & Trends

No Q1 FY2026 earnings call transcript was available for MXC.

Topic	Previous Mentions (Q3 FY2025)	Previous Mentions (Q4 FY2025)	Current Period (Q1 FY2026)	Trend
Permian takeaway constraints	Highlighted wider WaHa-Henry Hub differentials impacting gas pricing and marketing costs	FY wrap reinforces volatility; continued pipeline constraints noted	Persisting constraints cited; natural gas realizations improved YoY but environment still volatile	Ongoing headwind; modest improvement in realizations
Delaware Basin drilling/completions	Active program; multiple Bone Spring/Wolfcamp completions with strong initial rates	FY2025: 35 wells participated, 17 to be completed in FY2026	Plans increased to 35 drills in FY2026; additional completions underway	Expanding activity
Mineral interests investment	~$2.0M LLC commitment with returns to date; ongoing funding	FY ending: ~15% of investment returned to date	Final $200k funded in July 2025; aggregate returns $303,164 (15%)	Continued deployment/returns
Pricing volatility (oil/gas)	WTI $61.73-$82.89; Henry Hub $1.21-$3.40; realized prices down YoY	FY2025 average oil $73.54/bbl; gas $1.70/mcf	WTI $61.09 and Henry Hub $3.26 at quarter-end; realized oil down, gas up YoY	Mixed: oil weaker, gas stronger
Capital allocation & liquidity	Cash down at Q3 FY2025 due to acquisitions; no debt drawn	Cash ~ $2.2M at FY-end; no debt drawn	Cash increased to $2.55M; $1.5M available on facility; operating cash up YoY	Strengthening liquidity

Management Commentary

“In the first quarter of fiscal 2026, volumes of the Company’s average production of oil and gas increased 21% over the comparable quarter in fiscal 2025. Prices of oil and gas per BOE decreased 14%… Oil accounts for 80% of our gross oil and natural gas sales.” — Tammy McComic, President & CFO .
“The Company currently expects to participate in the drilling of 35 and completion of 17 horizontal wells at an estimated aggregate cost of approximately $1.2 million for the fiscal year ending March 31, 2026.” .
Pricing risk and Permian constraints: management notes volatility and takeaway limitations; WTI ended quarter at $61.09/bbl and Henry Hub at $3.26/mmbtu; realized prices detailed in Results of Operations .
Liquidity commentary: no outstanding debt, $1.5M available on the facility; covenant thresholds disclosed (Senior Debt/EBITDA ≤4.0x; EBITDA/Interest ≥2.0x) .

Q&A Highlights

No Q1 FY2026 earnings call transcript available; no analyst Q&A to report.

Estimates Context

Wall Street consensus estimates for MXC were not available for EPS or revenue in Q1 FY2026; S&P Global shows actuals without consensus for small-cap coverage. As a result, no formal beat/miss determination can be made [GetEstimates].
Investors should anchor adjustments on internal drivers (volumes, realized pricing, DD&A/G&A trajectory) and commodity macro rather than sell-side revisions for this microcap.

Key Takeaways for Investors

Volumes are rising materially, but margin leverage is constrained by lower oil realizations and higher DD&A/G&A; EPS fell despite revenue growth .
Gas price improvement is a tangible tailwind; if Permian takeaway improves, further uplift to gas realizations and marketing costs is possible .
Increased drilling plan (35 wells) with low absolute spend (~$1.2M) keeps growth optionality while preserving balance sheet flexibility; watch completion pace and initial rates .
Liquidity is solid (cash $2.55M, undrawn facility), supporting dividend continuity and small-scale capex without external financing .
With limited analyst coverage, trading can be sensitive to operational updates and commodity moves; monitor quarterly operating expense trends (DD&A, G&A) for EPS trajectory .
The LLC mineral interest investment continues to return cash; incremental distributions could supplement operating cash flows .
Risk skew: commodity volatility and Permian constraints remain principal variables; hedging not permitted without lender approval, leaving earnings exposed to spot markets .