UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2005

                                       Or

                Transition Report Pursuant to Section 13 or 15(d)
                     Of the Securities Exchange Act of 1934

                        For the transition period from to

                           Commission File No. 0-6994

                            MEXCO ENERGY CORPORATION
             (Exact name of registrant as specified in its charter)


         Colorado                                            84-0627918
(State or other jurisdiction                                (IRS Employer
       of incorporation)                               Identification Number)


             214 West Texas Avenue, Suite 1101, Midland, Texas 79701
                    (Address of principal executive offices)


                                 (432) 682-1119
              (Registrant's telephone number, including area code)


      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES [X]  NO [_]

      Indicate by check mark whether the registrant is an accelerated  filer (as
defined in Exchange Act Rule 12b-2). YES [_] NO [X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

      State the number of shares  outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

                         Common Stock, $0.50 par value:
                 1,733,041 shares outstanding at August 11, 2005


                                     page 1
<PAGE>


                            MEXCO ENERGY CORPORATION


                                Table of Contents

                                                                          Page
                                                                          ----

PART I.  FINANCIAL INFORMATION
------------------------------

       Item 1.  Consolidated Balance Sheets as of June 30, 2005
                (Unaudited) and March 31, 2005                             3

                Consolidated Statements of Operations (Unaudited) for
                the three months ended June 30, 2005 and June 30, 2004     4

                Consolidated Statements of Cash Flows (Unaudited) for
                the three months ended June 30, 2005 and June 30, 2004     5

                Notes to Consolidated Financial Statements (Unaudited)     6

       Item 2.  Management's Discussion and Analysis of Financial
                Condition and Results of Operations                        9

       Item 3.  Quantitative and Qualitative Disclosures About
                Market Risk                                                11

       Item 4.  Controls and Procedures                                    11


PART II.  OTHER INFORMATION                                                12
---------------------------

       Item 1.  Legal Proceedings
       Item 2.  Unregistered Sales of Equity Securities and
                Use of Proceeds
       Item 3.  Defaults upon Senior Securities
       Item 4.  Submission of Matters to a Vote of Security Holders
       Item 5.  Other Information
       Item 6.  Exhibits and Reports on Form 8-K


SIGNATURES                                                                 12
----------

CERTIFICATIONS                                                             13
--------------


                                     page 2
<PAGE>


<TABLE>
<CAPTION>
                    Mexco Energy Corporation and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                                                               June 30,         March 31,
                                                                2005              2005
                                                             ------------    ------------
                                                             (Unaudited)
<S>                                                          <C>             <C>
ASSETS
     Current assets
       Cash and cash equivalents                             $     89,024    $     85,209
       Accounts receivable:
         Oil and gas sales                                        419,410         418,348
         Trade                                                      7,286          23,258
         Related parties                                            1,275           2,103
       Prepaid costs and expenses                                  35,215           7,362
                                                             ------------    ------------
           Total current assets                                   552,210         536,280

     Investment in GazTex, LLC                                    282,126         282,126

     Property and equipment, at cost
       Oil and gas properties, using the full cost method
         ($965,018 and $983,680 excluded from amortization
         as of June 30, 2005 and 2004, respectively)           18,547,694      18,376,974
       Other                                                       36,855          36,855
                                                             ------------    ------------
                                                               18,584,549      18,413,829
       Less accumulated depreciation,
         depletion, and amortization                           10,067,765       9,929,086
                                                             ------------    ------------
           Property and equipment, net                          8,516,784       8,484,743
                                                             ------------    ------------
                                                             $  9,351,120    $  9,303,149
                                                             ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities
       Accounts payable - trade                              $    121,535    $    111,675
       Income tax payable                                          74,278          48,127
       Current portion of long-term debt                        1,815,000              --
                                                             ------------    ------------
         Total current liabilities                              2,010,813         159,802

     Long-term debt                                                    --       1,990,000
     Asset retirement obligation                                  364,884         374,506
     Deferred income tax liability                                740,713         715,284
     Minority interest                                             25,362          25,362
     Commitments and contingencies

     Stockholders' equity
       Preferred stock - $1.00 par value;
         10,000,000 shares authorized; none outstanding                --              --
       Common stock - $0.50 par value;
         40,000,000 shares authorized;
         1,766,566 shares issued                                  883,283         883,283
       Additional paid-in capital                               3,836,827       3,826,592
       Retained earnings                                        1,634,813       1,473,895
       Treasury stock, at cost (33,525 shares)                   (145,575)       (145,575)
                                                             ------------    ------------
Total stockholders' equity                                      6,209,348       6,038,195
                                                             ------------    ------------
                                                             $  9,351,120    $  9,303,149
                                                             ============    ============
</TABLE>

                 The accompanying notes are an integral part of
                     the consolidated financial statements.


                                     page 3
<PAGE>


                    Mexco Energy Corporation and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       For the Three Months Ended June 30,
                                   (Unaudited)

                                                     2005              2004
                                                -------------    -------------
Operating revenues:
    Oil and gas                                 $     802,720    $     674,995
    Other                                                 372            2,008
                                                -------------    -------------
       Total operating revenues                       803,092          677,003

Operating expenses:
    Production                                        176,445          191,738
    Accretion of asset retirement obligation            5,785            6,820
    Depreciation, depletion, and amortization         138,679          152,772
    General and administrative                        195,403          164,419
                                                -------------    -------------
       Total operating expenses                       516,312          515,749
                                                -------------    -------------

Operating profit                                      286,780          161,254

Other income (expense):
    Interest income                                       167               53
    Interest expense                                  (29,982)         (16,843)
                                                -------------    -------------

       Net other expense                              (29,815)         (16,790)

Minority interest in loss of subsidiary                 3,824               --
                                                -------------    -------------

Earnings before income taxes                          260,789          144,464

Income tax expense:
    Current                                            74,442           43,425
    Deferred                                           25,429           (1,663)
                                                -------------    -------------
                                                       99,871           41,762
                                                -------------    -------------

Net income                                      $     160,918    $     102,702
                                                =============    =============

Net income per common share:

Basic:                                          $        0.09    $        0.06
Diluted:                                        $        0.09    $        0.06


                 The accompanying notes are an integral part of
                     the consolidated financial statements.


                                     page 4
<PAGE>


                    Mexco Energy Corporation and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       For the Three Months Ended June 30,
                                   (Unaudited)

                                                         2005          2004
                                                       ---------    ---------
Cash flows from operating activities:
   Net income                                          $ 160,918    $ 102,702
   Adjustments to reconcile net income
     to net cash provided by operating
     activities:
       Increase (decrease) in deferred income taxes       25,429       (1,663)
       Stock-based compensation                           10,235       12,827
       Depreciation, depletion, and amortization         138,679      152,772
       Accretion of asset retirement obligations           5,785        6,820
       Minority interest in loss of GazTex, LLC           (3,824)          --
       (Increase) decrease in accounts receivable         15,738      (53,750)
       Increase in prepaid expenses                      (27,853)      (9,507)
       Increase in income taxes payable                   26,151       27,223
       Increase in accounts payable
         and accrued expenses                                790       67,154
                                                       ---------    ---------

         Net cash provided by operating activities       352,048      304,578

Cash flows from investing activities:
   Additions to oil and gas properties                  (191,590)    (237,113)
   Proceeds from sale of oil and gas properties
        and equipment                                     14,533           --
                                                       ---------    ---------

         Net cash used in investing activities          (177,057)    (237,113)

Cash flows from financing activities:
   Reduction of long-term debt                          (175,000)    (100,000)
   Minority interest contributions                         3,824           --
                                                       ---------    ---------
         Net cash used in financing activities          (171,176)    (100,000)
                                                       ---------    ---------

Net increase (decrease) in cash and cash equivalents       3,815      (32,535)

Cash and cash equivalents at beginning of year            85,209       92,795
                                                       ---------    ---------

Cash and cash equivalents at end of year               $  89,024    $  60,260
                                                       =========    =========

   Interest paid                                       $  29,017    $  16,754
   Income taxes paid                                   $  51,164    $      --

                 The accompanying notes are an integral part of
                     the consolidated financial statements.


                                     page 5
<PAGE>


                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.  Nature of Operations

Mexco Energy Corporation (a Colorado Corporation),  its wholly owned subsidiary,
Forman Energy Corporation,  and its 90% owned subsidiary,  OBTX, LLC (a Delaware
Limited  Liability  Company)  (collectively,  the  "Company") are engaged in the
exploration,  development  and production of natural gas, crude oil,  condensate
and natural gas liquids  (NGLs).  OBTX,  LLC was formed on April 8, 2004, and is
included in the consolidated  financial  statements since its date of formation.
Although most of the Company's oil and gas interests are centered in West Texas,
the Company owns  producing  properties and  undeveloped  acreage in ten states.
Although most of the Company's oil and gas interests are operated by others, the
Company operates several properties in which it owns an interest.

In the opinion of management,  the accompanying unaudited consolidated financial
statements  contain  all  adjustments   (consisting  only  of  normal  recurring
accruals)  necessary to present fairly the financial  position of the Company as
of June 30,  2005,  and the  results  of its  operations  and cash flows for the
interim  periods ended June 30, 2005 and 2004. The results of operations for the
periods  presented are not necessarily  indicative of the results to be expected
for a full year. The accounting  policies  followed by the Company are set forth
in more detail in Note A of the "Notes to Consolidated  Financial Statements" in
the Company's  annual report on Form 10-K filed with the Securities and Exchange
Commission  ("SEC").  Certain  information  and  footnote  disclosures  normally
included  in  financial   statements  prepared  in  accordance  with  accounting
principles  generally  accepted  in the  United  States  of  America  have  been
condensed or omitted in this Form 10-Q pursuant to the rules and  regulations of
the Securities and Exchange  Commission.  However,  the  disclosures  herein are
adequate to make the information presented not misleading.  It is suggested that
these financial  statements be read in conjunction with the financial statements
and notes thereto included in the Form 10-K.

2.  Summary of Significant Accounting Policies

Principles of Consolidation.  The consolidated  financial statements include the
accounts of Mexco Energy  Corporation  and its wholly  owned and majority  owned
subsidiaries.  All significant  intercompany balances and transactions have been
eliminated.

Use  of  Estimates.   In  preparing  financial  statements  in  conformity  with
accounting  principles  generally  accepted  in the  United  States of  America,
management is required to make informed  judgments and estimates that affect the
reported  amounts  of assets  and  liabilities  as of the date of the  financial
statements and affect the reported  amounts of revenues and expenses  during the
reporting period. Although management believes its estimates and assumptions are
reasonable,   actual  results  may  differ   materially  from  those  estimates.
Significant estimates affecting these financial statements include the estimated
quantities  of  proved  oil and gas  reserves,  the  related  present  value  of
estimated future net cash flows and the future  development,  dismantlement  and
abandonment costs.

Stock-based Compensation.  The Company accounts for employee stock option grants
in accordance  with Accounting  Principles  Board Opinion No. 25 "Accounting for
Stock  Issued to  Employees"  ("APB  25"),  as amended by  Financial  Accounting
Standards  Board  ("FASB")   Interpretation  No.  44,  "Accounting  for  Certain
Transactions involving Stock Compensation," an interpretation of APB Opinion No.
25. The  Company  applies  the  intrinsic  value  method in  accounting  for its
employee  stock options and records no  compensation  costs for its stock option
awards to employees.  The Company recognizes  compensation cost related to stock
options awarded to independent consultants based on fair value of the options at
date of grant.

For the quarter ending June 30, 2005, the Company  recognized $10,235 related to
these stock options for independent consultants.

The  following  pro forma  information,  as required by  Statement  of Financial
Accounting  Standards No. 123 "Accounting for Stock-Based  Compensation"  ("SFAS
123"), as amended by Statement of Financial  Accounting Standards No. 148 ("SFAS
148"),  presents  net income and earnings  per share  information  as if expense
relating to stock options issued had been determined  based on the fair value at
the grant dates for all employee awards under the plan:


                                     page 6
<PAGE>


                                                   Three Months Ended
                                                       June 30,
                                                 2005               2004
                                           ---------------    ---------------
Net income, as reported                    $       160,918    $       102,702
Deduct: Stock-based employee
compensation expense determined
under fair value based method
(SFAS 123), net of tax                     $       (29,098)   $       (22,341)
                                           ---------------    ---------------

Net income, pro forma                      $       131,820    $        80,361
                                           ===============    ===============

Basic earnings per share:

As reported                                $          0.09    $          0.06
Pro forma                                  $          0.08    $          0.05

Diluted earnings per share:

As reported                                $          0.09    $          0.06
Pro forma                                  $          0.07    $          0.04


Asset Retirement Obligations. The Company's asset retirement obligations relate
to the plugging and abandonment of oil and gas properties. The fair value of a
liability for an asset retirement obligation is required to be recorded in the
period in which it is incurred with a corresponding increase in the carrying
amount of the related long-lived asset.

The asset  retirement  obligations  are  recorded  at fair  value and  accretion
expense,  recognized  over the life of the property,  increases the liability to
its  expected  settlement  value.  If the  fair  value  of the  estimated  asset
retirement  obligation  changes,  an  adjustment  is recorded for both the asset
retirement obligation and the asset retirement cost.

The following table provides a rollforward of the asset  retirement  obligations
for the current period:

Carrying amount of asset retirement obligations
     as of April 1, 2005                                  $       395,046
Liabilities incurred                                                   --
Liabilities settled                                               (15,407)
Accretion expense                                                   5,785
Revisions in estimated liabilities                                     --
Carrying amount of asset retirement obligations
                                                          ---------------
     as of June 30, 2005                                  $       385,424
                                                          ===============

The asset retirement  obligation,  which is included on the consolidated balance
sheet,  was  $385,424  at June  30,  2005.  The  current  portion  of the  asset
retirement  obligation  as of June 30, 2005,  was $20,540 and is included on the
consolidated  balance  sheet in  accounts  payable and other  accrued  expenses.
Accretion  expense  was  $5,785  and  $6,820  as of  June  30,  2005  and  2004,
respectively.

Oil and Gas Costs.  The cost of certain  oil and gas leases that the Company has
acquired,  but not evaluated has been excluded in computing  amortization of the
full cost pool.  The Company will begin to amortize  these  properties  when the
projects are  evaluated,  which is currently  estimated to be within this fiscal
year. Costs excluded from  amortization at June 30, 2005 total $965,018 for U.S.
properties.

Earnings Per Share.  Basic earnings per share is computed by dividing net income
by the weighted average number of common shares  outstanding  during the period.
Diluted  earnings  per share is computed by dividing  net income by the weighted
average  number of common  shares and dilutive  potential  common  shares (stock
options  and  warrants)  outstanding  during  the  period.  The  following  is a
reconciliation of the number of shares used in the calculation of basic earnings
per share and diluted  earnings per share for the three month periods ended June
30, 2005 and 2004.


                                     page 7
<PAGE>

                                                      Three Months Ended
                                                           June 30
                                                     2005             2004
                                                -------------   -------------
Weighted average number of
     common shares outstanding                      1,733,041       1,736,041
Incremental shares from the
     assumed exercise of dilutive
     stock options and warrants                       143,662         120,938
                                                -------------   -------------
Dilutive potential common shares                    1,876,703       1,856,979

Options and warrants to purchase  70,000 shares at an average  exercise price of
$7.54  outstanding  at June 30,  2004 were not  included in the  computation  of
diluted  net income per share  because  the  exercise  price of the  options and
warrants  was greater  than the average  market price of the common stock of the
Company and, therefore, the effect would be antidilutive. No options outstanding
at June 30,  2005 were  excluded  in the  computation  of diluted net income per
share.

Income Taxes.  The Company  recognizes  deferred tax assets and  liabilities for
future tax consequences of temporary differences between the carrying amounts of
assets and liabilities and their  respective tax bases.  Deferred tax assets and
liabilities  are measured  using  enacted tax rates  applicable  to the years in
which those  differences are expected to be settled.  The effect on deferred tax
assets and  liabilities  of a change in tax rates is recognized in net income in
the period that includes the enactment  date. The effective  income tax rate for
the three months  ended June 30, 2005,  was 38%.  This  increased  rate over the
statutory rate is a result of a revision of an estimate of statutory depletion.

Investment  in  GazTex,  LLC.  The  Company's  long-term  assets  consist  of an
investment in GazTex,  LLC, a Russian company owned 50% by OBTX, LLC,  accounted
for by the equity method.  OBTX, LLC is a Delaware limited  liability company in
which Mexco owns 90% of the interest,  with the  remaining  10% divided  equally
among three individuals, one of whom is Arden Grover, a director of Mexco Energy
Corporation. All geological and geophysical costs associated with the evaluation
of Russian  properties have been paid 90% by Mexco Energy Corporation and 10% by
the other three owners of OBTX, LLC.  GazTex,  LLC was formed during fiscal 2005
and through June 30, 2005 has no operations other than the evaluation  activity.
Through  June 30,  2005,  the Company  has  $282,126  classified  as a long-term
investment  in GazTex,  LLC.  The 10%  interest in OBTX,  LLC is included in the
Company's  financial  statements as a minority  interest.  OBTX,  LLC,  plans to
participate in any Russian venture entered into and own a 50% interest.  For the
quarter ended June 30, 2005, the Company has expensed  approximately  $38,000 in
consulting  costs for the evaluation of projects.  No costs were expensed during
the first quarter of fiscal 2005.

Long Term  Liabilities.  Long term debt consists of a revolving credit agreement
with Bank of America,  N.A.  ("Bank"),  which provides for a credit  facility of
$5,000,000,  subject to a borrowing  base  determination.  On July 29, 2004, the
borrowing base was redetermined and set at $2,500,000.  As of June 30, 2005, the
balance  outstanding under this agreement was $1,815,000 and matures on April 1,
2006. The borrowing base is currently being  re-evaluated and upon completion of
the evaluation the note will be extended.  Amounts borrowed under this agreement
are  collateralized by the common stock of the Company's wholly owned subsidiary
and all oil and gas properties.

Recent  Accounting  Pronouncements.  Share based payment - In December 2004, the
Financial   Accounting   Standards   Board  ("FASB")  issued  SFAS  No.  123(R),
Share-Based Payment, which establishes accounting standards for all transactions
in which an entity exchanges its equity instruments for goods and services. SFAS
No. 123(R) focuses primarily on accounting for transactions with employees,  and
carries forward  without change to prior guidance for  share-based  payments for
transactions with non employees.

SFAS No. 123(R)  eliminates  the intrinsic  value  measurement  objective in APB
Opinion 25 and  generally  requires  the Company to measure the cost of employee
services  received in exchange for an award of equity  instruments  based on the
fair value of the award on the date of the grant.  The standard  requires  grant
date fair value to be estimated  using either an  option-pricing  model which is
consistent  with the terms of the award or a market  observed  price,  if such a
price  exists.  Such cost must be  recognized  over the period  during  which an
employee  is required to provide  service in  exchange  for the award  (which is
usually the vesting period).  The standard also requires the Company to estimate

                                     page 8
<PAGE>

the number of instruments that will ultimately be issued, rather than accounting
for forfeitures as they occur.

The Company is required to apply SFAS No. 123(R) to all awards granted, modified
or settled in our first annual  reporting period under U.S. GAAP beginning after
June 15,  2005.  The Company  will adopt SFAS No.  123(R) on April 1, 2006.  The
Company has not yet completed the analysis of the impact of SFAS No. 123(R).

FASB  Statement No. 154 - In May 2005,  the FASB issued FASB  Statement No. 154,
Accounting  Changes  and Error  Corrections  ("Statement  154").  Statement  154
requires  companies  to recognize  changes in  accounting  principle,  including
changes required by a new accounting  pronouncement  when the pronouncement does
not include specific  transition  provisions,  retrospectively to prior periods'
financial  statements.  Statement  154 is effective for  accounting  changes and
corrections  of errors made in fiscal years  beginning  after December 15, 2005.
The Company  does not believe  that the  adoption of  Statement  154 will have a
material effect on its financial position or results of operations.

                     MEXCO ENERGY CORPORATION AND SUBSIDIARY

Item 2. Management's Discussion and Analysis of Financial Condition and Results
                                 of Operations

Cautionary  Statements  Regarding   Forward-Looking   Statements.   Management's
Discussion  and  Analysis  of  Financial  Condition  and  Results of  Operations
("MD&A") contains "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended (the  "Securities  Act"),  and Section
21E of the  Securities  Exchange Act of 1934, as amended (the  "Exchange  Act").
Forward-looking  statements  can be  identified  with words and phrases  such as
"believes," "expects," "anticipates," "should," "estimates," "foresees" or other
words  and  phrases  of  similar  meaning.   Forward-looking  statements  appear
throughout  this Form  10-Q and  include  statements  regarding  Company  plans,
beliefs  or  current   expectations   with  respect  to,  among  other   things:
profitability,   planned  capital   expenditures;   estimates  of  oil  and  gas
production,  estimates  of future oil and gas prices;  estimates  of oil and gas
reserves;  future  financial  condition or results of  operations;  and business
strategy and other plans and objectives for future  operations.  Forward-looking
statements  involve known and unknown risks and  uncertainties  that could cause
actual results to differ materially from those contained in any  forward-looking
statement.  While  the  Company  has  made  assumptions  that  it  believes  are
reasonable,  the  assumptions  that support its  forward-looking  statements are
based upon information that is currently available and is subject to change. All
forward-looking  statements in the Form 10-Q are qualified in their  entirety by
the  cautionary  statement  contained  in this  section.  The  Company  does not
undertake to update, revise or correct any of the forward-looking information.

Unless the context  otherwise  requires,  references to the 'Company",  "Mexco",
"we",  "us"  or  "our"  mean  Mexco  Energy  Corporation  and  its  consolidated
subsidiaries.

Liquidity and Capital Resources.  Historically, the Company's sources of funding
have been from operating activities and bank financing.

The Company's  focus is on increasing  profit  margins  while  concentrating  on
obtaining  gas reserves with low cost  operations  by acquiring  and  developing
primarily gas properties with potential for long-lived production.

For the first  three  months  of fiscal  2006,  cash  flow from  operations  was
$352,048  compared to $304,578 for the first three  months of fiscal  2005.  The
increase  was  primarily  due to an increase  in net income.  The cash flow from
operations  for the first three months of fiscal 2006  included the effects of a
decrease in accounts  receivable and an increase in accounts payable and accrued
expenses.  Cash of $191,590 was used for additions to property and equipment and
cash of $175,000  was used to pay on the line of credit.  Accordingly,  net cash
increased $3,815.

Through June 30, 2005, we have reviewed a number of possible projects in Russia.
We  established a long-term  investment in GazTex,  LLC for our capital costs of
these  projects of $282,126.  Any projects  reviewed that we have decided not to
continue  studying or develop  have been  expensed.  We  expensed  approximately
$38,000 for the first  quarter of fiscal 2006  related to Russian  projects.  No
costs were expensed during the first quarter of fiscal 2005.


                                     page 9
<PAGE>


In February  2005,  we purchased a mineral  interest in Devon's  Aycock Gas Unit
containing  160 acres for  approximately  $56,000.  The unit  currently  has one
producing  well with plans to drill two additional  wells in 2006.  This unit is
located in Freestone County, Texas where the Company has purchased other royalty
interests.

Effective February 2005, we purchased for $550,000  partially  developed royalty
interests  primarily  located in Freestone  and  Limestone  Counties,  Texas and
operated by Anadarko Petroleum,  XTO, and Devon Energy. These properties contain
75 producing wells and an additional nine permitted and/or drilling wells in the
Cotton  Valley  formation.  This  acreage  contains  approximately  83 potential
undeveloped locations, which are principally Cotton Valley infill wells.

We continue to focus our efforts on the  acquisition  of royalties in areas with
significant development potential.

We are reviewing several other projects in which we may participate. The cost of
such  projects  would be funded,  to the extent  possible,  from  existing  cash
balances and cash flow from  operations.  The  remainder  may be funded  through
borrowings on the credit facility discussed below.

At June 30, 2005,  the Company had a working  capital  deficit of  approximately
$1,458,603 compared to a working capital of approximately  $376,478 at March 31,
2005,  a  decrease  of  $1,835,081  due to  the  current  classification  of the
long-term debt.

Long-Term  Debt.  The  Company  has a revolving  credit  agreement  with Bank of
America,  N.A.  ("Bank"),  which  provides for a credit  facility of $5,000,000,
subject to a borrowing base determination. Effective August 15, 2004, the credit
agreement  was amended with a maturity  date of April 1, 2006. On July 29, 2004,
the  borrowing  base was  redetermined  and set at  $2,500,000  with no  monthly
commitment  reductions.  As of June 30, 2005, the balance outstanding under this
agreement was $1,815,000. The borrowing base is currently being re-evaluated and
upon  completion of the evaluation the note is expected to be extended.  Amounts
borrowed  under this  agreement  are  collateralized  by the common stock of the
Company's  wholly owned  subsidiary and all oil and gas properties.  A letter of
credit  for  $50,000,  in  lieu of a  plugging  bond  with  the  Texas  Railroad
Commission  covering the properties the Company  operates,  is also  outstanding
under the facility.  Interest under this  agreement is payable  monthly at prime
rate (6.00% and 4.00% at June 30, 2005 and 2004,  respectively).  This agreement
generally  restricts the Company's  ability to transfer assets or control of the
Company, incur debt, extend credit, change the nature of the Company's business,
substantially  change  management  personnel or pay cash dividends.  The balance
outstanding on the line of credit as of August 1, 2005 was $1,775,000.

The prices of natural gas and crude oil have fluctuated  significantly in recent
years as well as in recent  months.  Fluctuations  in price  have a  significant
impact on the Company's financial condition and liquidity.  However,  management
is of the  opinion  that cash  flow from  operations  and funds  available  from
financing will be sufficient to provide for its working capital requirements and
capital expenditures for the current fiscal year.

Results of  Operations - Three  Months Ended June 30, 2005 and 2004.  Net income
increased  from $102,702 for the quarter ended June 30, 2004 to $160,918 for the
quarter ended June 30, 2005, an increase of $58,216 or 57%.

Oil and gas sales  increased  from $674,995 for the first quarter of fiscal 2005
to $802,720 for the same period of fiscal 2006. This increase of 19% or $127,725
resulted  from an increase in oil  production  and increases in both oil and gas
prices  offset  partially  by a decrease in gas  production.  Average gas prices
increased  from $5.08 per mcf for the first  quarter of fiscal 2005 to $6.24 per
mcf for the same period of fiscal 2006,  while average oil prices increased from
$36.19  per bbl for the  first  quarter  of fiscal  2005 to $48.37  for the same
period of fiscal 2006.  Oil and gas  production  quantities  were 3,867  barrels
("bbls") and 105,347 thousand cubic feet ("mcf") for the first quarter of fiscal
2005 and 4,250  bbls and  95,722  mcf for the same  period of  fiscal  2006,  an
increase of 10% in oil production,  partially due to the addition of certain oil
producing  interests  acquired  during the fourth  quarter of fiscal  2005.  Gas
production decreased 9% as a result of natural decline.

Production costs decreased from $191,738 for the first quarter of fiscal 2005 to
$176,445  for the same period of fiscal  2006.  This was the result of decreased
repairs to operated  wells  during the  quarter  partially  offset by  increased
production taxes due to the increase in oil and gas sales.


                                    page 10
<PAGE>


General and  administrative  expenses  increased 19% from $164,419 for the first
quarter of fiscal 2005 to $195,403 for the same period of fiscal  2006.  This is
primarily  the  result of an  increase  in  consulting  services  related to our
Russian activities. These expenses were approximately $38,000 for the quarter.

Depreciation,  depletion and amortization  based on production and other methods
decreased 9%, from $152,772 for the first quarter of fiscal 2005 to $138,679 for
the same period of fiscal 2006 primarily due to a decrease in production.

Interest expense increased 78% from $16,843 for the first quarter of fiscal 2005
to $29,982 for the same period of fiscal 2006,  due to increased  borrowings and
increased interest rates.

       Item 3. Quantitative and Qualitative Disclosures About Market Risk

The  primary  sources of market  risk for the Company  include  fluctuations  in
commodity prices and interest rate  fluctuations.  At June 30, 2005, the Company
had  not  entered  into  any  hedge  arrangements,  commodity  swap  agreements,
commodity futures, options or other similar agreements relating to crude oil and
natural gas.

At June 30, 2005,  the Company had an  outstanding  loan  balance of  $1,815,000
under its $5.0 million revolving credit  agreement,  which bears interest at the
prime  rate,  which  varies  from  time to  time.  If the  interest  rate on the
Company's  bank  debt  increases  or  decreases  by one  percentage  point,  the
Company's annual pretax income would change by $18,150, based on the outstanding
balance at June 30, 2005.

Credit Risk.  Credit risk is the risk of loss as a result of  nonperformance  by
other parties of their  contractual  obligations.  The Company's  primary credit
risk is related to oil and gas  production  sold to various  purchasers  and the
receivables  generally  are  uncollateralized.  At June 30, 2005,  the Company's
largest  credit risk  associated  with any single  purchaser  was  $68,592.  The
Company has not experienced any significant credit losses.

Volatility of Oil and Gas Prices. The Company's revenues,  operating results and
future rate of growth are highly dependent upon the prevailing market prices of,
and demand for, oil and natural gas. These commodity  prices are subject to wide
fluctuations  and market  uncertainties  due to a variety  of  factors  that are
beyond  our  control.  These  factors  include  the level of global  demand  for
petroleum  products,  foreign  supply of oil and gas, the  establishment  of and
compliance  with  production   quotas  by  oil  exporting   countries,   weather
conditions,  the  price and  availability  of  alternative  fuels,  and  overall
economic  conditions,  both foreign and  domestic.  The Company  cannot  predict
future oil and gas prices with any degree of  certainty.  Sustained  weakness in
oil and gas prices may adversely affect the Company's  ability to obtain capital
for the  Company's  exploration  and  development  activities  and may require a
reduction  in the  carrying  value  of the  Company's  oil and  gas  properties.
Similarly,  an improvement in oil and gas prices can have a favorable  impact on
the Company's financial condition, results of operations and capital resources.

                         Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that
information  required  to be  disclosed  by the  Company  in  reports  filed  or
submitted  under the  Securities  Exchange Act of 1934 is  recorded,  processed,
summarized and reported within the time periods  specified in the Securities and
Exchange  Commission  rules and forms.  At the end of the period covered by this
report,  the Company  carried out an evaluation,  under the supervision and with
the  participation  of the Company's  management,  including the Chief Executive
Officer and Chief  Financial  Officer,  of the  effectiveness  of the design and
operation  of the  Company's  disclosure  controls  and  procedures  pursuant to
Securities  Exchange Act Rule 13a-15(b).  Based upon that evaluation,  the Chief
Executive  Officer and Chief  Financial  Officer  concluded  that its disclosure
controls and procedures are effective.

No changes in the Company's  internal control over financial  reporting occurred
during the Current  Quarter that have  materially  affected,  or are  reasonably
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.


                                    page 11
<PAGE>

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings
         -----------------

         We are a defendant in a lawsuit that has arisen in the ordinary course
         of business related to the oil and gas leases on the Campbell 15-1 well
         in Hemphill County, Texas. While the outcome of this lawsuit cannot be
         predicted with certainty, management does not expect this lawsuit to
         have a material adverse effect on our consolidated financial condition
         or results of operations.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
         -----------------------------------------------------------
         None.

Item 3.  Defaults Upon Senior Securities
         -------------------------------
         None.

Item 4.  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------
         None.

Item 5.  Other Information
         -----------------
         None.

Item 6.  Exhibits and Reports on Form 8-K
         --------------------------------
         None.

Exhibits

31.1  Certification of the Chief Executive Officer of Mexco Energy Corporation

31.2  Certification of the Chief Financial Officer of Mexco Energy Corporation

32.1  Certification by the Chief Executive  Officer of Mexco Energy  Corporation
      pursuant to 18 U.S.C. ss.1350

32.2  Certification by the Chief Financial  Officer of Mexco Energy  Corporation
      pursuant to 18 U.S.C. ss.1350

                                   SIGNATURES

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                               MEXCO ENERGY CORPORATION
                               (Registrant)


Dated: August 11, 2005         /s/ Nicholas C. Taylor
                               ------------------------------------------------
                               Nicholas C. Taylor
                               President



Dated: August 11, 2005          /s/ Tamala L. McComic
                                ------------------------------------------------
                                Tamala L. McComic
                                Vice President, Treasurer and Assistant
                                Secretary


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