Executive Summary

Q2 FY2026 delivered steady profitability despite commodity headwinds: operating revenues were $1.73M and net income was $0.32M ($0.16 diluted EPS), slightly above the prior-year quarter’s $0.32M ($0.15 EPS) as higher volumes and better gas pricing offset lower oil prices .
Mix and macro drivers: management cited a 17% decline in average oil prices over the six-month period as a headwind, while gas prices and volumes improved; oil comprised 76% of first-half FY26 operating revenues .
Capital program pivot: FY26 plan updated to participate in the drilling and completion of 46 horizontal wells and 1 vertical well at ~$1.0M (aggregate) vs prior plan of 35 drills/17 completions at ~$1.2M, indicating higher activity at lower cost-to-participate guidance .
No earnings call transcript was available for Q2 FY2026; no S&P Global consensus EPS/revenue estimates were available for MXC for the quarter, so estimate comparisons are not presented .

What Went Well and What Went Wrong

What Went Well

Volumes and gas pricing supported results: management highlighted increased oil and natural gas production volumes and an increase in average gas prices across the six months through Q2 FY26, helping offset oil price declines .
Profitability held year over year: Q2 FY26 net income of $323,506 ($0.16 EPS) modestly exceeded the prior-year quarter’s $317,198 ($0.15 EPS), showing resilience despite commodity pressure .
Cost discipline/capital efficiency: updated FY26 plan calls for participation in 46 horizontal + 1 vertical well at ~$1.0M aggregate cost, down from a prior ~$1.2M aggregate despite more total well participations, suggesting improved capital efficiency .

What Went Wrong

Oil price headwind: “Although oil production volumes increased during the six-month period, the 17% decline in average oil prices has adversely impacted overall revenues.” — Tammy L. McComic, President & CFO .
Mix exposure: Oil remained the dominant revenue driver (76% of H1 FY26 operating revenues), magnifying exposure to oil price volatility .
Limited external datapoints: No earnings call transcript and no S&P Global EPS/revenue consensus made it harder for investors to benchmark results vs expectations in real time .

Financial Results

Quarterly P&L progression (oldest → newest)

Metric	Q3 FY2025	Q1 FY2026	Q2 FY2026
Operating Revenues ($)	$1,891,265	$1,814,176	$1,734,743
Net Income ($)	$469,133	$241,951	$323,506
Diluted EPS ($)	$0.22	$0.12	$0.16
Net Income Margin (%)	24.8% (calc. from )	13.3% (calc. from )	18.6% (calc. from )

Notes: Margins are calculated from reported operating revenues and net income in the cited press releases .

Q2 FY2026 vs Prior Year and vs Estimates

Metric	Q2 FY2025 (YoY Comp)	Q2 FY2026 Actual	YoY Change	Consensus (S&P Global)	vs Consensus
Operating Revenues ($)	N/A	$1,734,743	N/A	N/A (no published consensus)	N/A
Net Income ($)	$317,198	$323,506	+$6,308	N/A	N/A
Diluted EPS ($)	$0.15	$0.16	+$0.01	N/A	N/A

No S&P Global quarterly EPS or revenue consensus was available for MXC for Q2 FY2026; therefore, estimate comparisons are not presented .

KPIs and Mix

Oil % of operating revenues: 76% in the first six months of FY2026 .
Q1 FY2026 contextual mix: oil accounted for ~80% of gross oil and natural gas sales in the quarter .
Volume/price dynamics: Q1 FY2026 oil production volumes +16% YoY; gas production volumes +25% YoY; average gas price +62% YoY; average oil price -21% YoY .
Six-month context through Q2: increased oil and gas production volumes and higher average gas prices, partially offset by lower average oil prices (oil prices -17% over the six-month period) .

Guidance Changes

Metric	Period	Previous Guidance (As of Q1 FY2026)	Current Guidance (As of Q2 FY2026)	Change
Participation – Drilling	FY2026	Drill 35 wells; complete 17; aggregate ~$1.2M; ~$350k spent to date	Participate in drilling and completion of 46 horizontal wells and 1 vertical well; aggregate ~$1.0M; ~$300k spent to date	Activity higher; aggregate cost guidance lower
Royalty/Mineral Acquisitions (to date)	FY2026 to date	Not specified in Q1 release	~$450k for interests in 63 producing wells (locations across CO, LA, NM, TX)	New disclosure

Dividend context: the Board declared a regular annual cash dividend of $0.10 per share on May 13, 2025 (paid June 16, 2025); no new dividend action disclosed in Q2 FY2026 materials .

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 FY2026; themes are drawn from company press releases.

Topic	Previous Mentions (Q3 FY2025, Q1 FY2026)	Current Period (Q2 FY2026)	Trend
Commodity Prices (Oil/Gas)	Q3 FY2025: Natural gas prices low due to Permian pipeline constraints . Q1 FY2026: Avg gas price +62% YoY; avg oil price -21% YoY .	Oil prices -17% over six months; gas price increase cited as positive .	Oil headwind persists; gas improves.
Production Volumes	Q3 FY2025: Production volumes increased . Q1 FY2026: Oil +16% YoY; Gas +25% YoY .	Increased oil and gas volumes through six months .	Up YoY, aiding revenue offset.
Capital Program/Costs	Q3 FY2025: Plan 28 drills/19 completions at ~$1.8M . Q1 FY2026: Plan 35 drills/17 completions at ~$1.2M .	Participate in 46 horizontal + 1 vertical at ~$1.0M .	More wells, lower aggregate cost guidance.
Royalty/Mineral Acquisitions	Q3 FY2025: ~$2.0M across ~700 wells YTD . FY2025: ~$2.0M across 840 wells for the year .	~$450k across 63 producing wells YTD FY2026 .	Continued but at smaller scale vs FY2025 pace.
Liquidity/Leverage	FY2025: ~$2.2M cash, no bank debt .	No specific update in Q2 release.	Stable prior positioning; monitor updates.

Management Commentary

“Although oil production volumes increased during the six-month period, the 17% decline in average oil prices has adversely impacted overall revenues.” — Tammy L. McComic, President & CFO .
“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% for the comparable period. Oil accounts for 80% of our gross oil and natural gas sales.” — Tammy L. McComic .
FY2025 liquidity context: “We have approximately $2.2 million cash on hand, no outstanding indebtedness on our bank line of credit and are actively seeking opportunities.” — Tammy L. McComic .

Q&A Highlights

The company did not publish an earnings call transcript for Q2 FY2026; no Q&A disclosures were available in filings/press releases .

Estimates Context

S&P Global consensus estimates for Q2 FY2026 EPS and revenue were not available for MXC; therefore, we do not present estimate comparisons or beats/misses for the quarter .
Implication: In the absence of formal consensus, investors should anchor on sequential and YoY trends and management’s commodity commentary when assessing trajectory and valuation .

Key Takeaways for Investors

Resilient profitability: EPS of $0.16 and net income of $0.32M ticked up YoY despite oil price headwinds; higher volumes and improved gas pricing provided offsets .
Mix risk remains: Oil still dominates revenue (76% for H1 FY2026), keeping results sensitive to oil price volatility .
Capital efficiency: FY2026 plan shows higher well participation with a lower aggregate cost (~$1.0M vs prior ~$1.2M), pointing to tighter capital management and potentially better project selection/terms .
Watch gas differentials/infrastructure: Earlier commentary cited Permian pipeline constraints weighing on gas pricing; recent gas price improvement helped in Q1/Q2—sustainability of this tailwind is a key swing factor .
Limited external signals: No call transcript and no S&P Global consensus reduce benchmarking clarity; focus on quarterly cadence and disclosed capex/well participation as leading indicators .
Near-term trading lens: Stability in EPS YoY with lower aggregate capex guidance could be viewed favorably if oil stabilizes; conversely, renewed oil price weakness would likely pressure revenues given the 76% oil mix .
Medium-term thesis: Continued participation in horizontal wells and royalty/mineral acquisitions at disciplined spend levels supports incremental growth; balance sheet context from FY2025 (cash, no bank debt) provides optionality if maintained .

Sources: Q2 FY2026 press release and 8-K (Nov 12, 2025) ; Q1 FY2026 press release and 8-K (Aug 12, 2025) ; Q3 FY2025 press release and 8-K (Feb 7, 2025) ; FY2025 press release and 8-K (June 27, 2025) .

MEXCO ENERGY CORP (MXC)·Q2 2026 Earnings Summary