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 December 31, 1998

                          Commission file number 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)


                                 (915) 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

                      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: 1,623,289 shares outstanding at February 1, 1999

<PAGE>
                            MEXCO ENERGY CORPORATION




                                Table of Contents

                                                                            Page


PART I.  FINANCIAL INFORMATION


Consolidated Balance Sheets as of December 31, 1998 (Unaudited)
and March 31, 1998 ........................................................    3

Consolidated Statements of Operations (Unaudited) for the three and nine
month periods ended December 31, 1998 and December 31, 1997 ...............    4

Consolidated Statements of Cash Flows (Unaudited) for the nine month
periods ended December 31, 1998 and December 31, 1997 .....................    6

Note to Unaudited Consolidated Financial Statements .......................    7

Management's Discussion and Analysis of Financial Condition
and Results of Operations .................................................    8



PART II.  OTHER INFORMATION ...............................................   11



SIGNATURES ................................................................   12



                                     Page 2
<PAGE>
                    MEXCO ENERGY CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                                   December 31,      March 31,
                                                       1998            1998 
                                                   ------------    ------------
                                                   (Unaudited)
ASSETS
Current assets:
  Cash and cash equivalents ....................   $    129,085    $    241,348
  Accounts receivable:
    Oil and gas sales ..........................        153,571         199,427
    Related parties ............................          2,575           8,473
  Prepaid Expenses .............................         17,625          15,185
                                                   ------------    ------------
    Total current assets .......................        302,856         464,433

Property and equipment, at cost:
  Oil and gas properties and equipment,
    using full cost method, pledged ............     10,348,231       9,915,701
  Office and computer equipment and software ...         21,874          20,252
                                                   ------------    ------------
                                                     10,370,105       9,935,953
  Less accumulated depreciation, depletion
    and amortization ...........................      6,697,137       5,857,900
                                                   ------------    ------------
    Property and equipment, net ................      3,672,968       4,078,053
                                                   ------------    ------------
Total assets ...................................   $  3,975,824    $  4,542,486
                                                   ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt ............   $    425,000    $    322,000
  Accounts payable and accrued expenses ........         40,675         121,131
                                                   ------------    ------------
    Total current liabilities ..................        465,675         443,131

Long-term debt .................................      1,397,000       1,500,000

Stockholders' equity:
  Preferred stock, par value $1 per share;
    10,000,000 shares authorized; none issued ..           --              --
  Common stock, par value $0.50 per share;
    40,000,000 shares authorized;
    1,623,289 shares issued and outstanding ....        811,644         811,644
  Additional paid in capital ...................      2,875,399       2,875,399
  Retained earnings (deficit) ..................     (1,573,894)     (1,087,688)
                                                   ------------    ------------
    Total stockholders' equity .................      2,113,149       2,599,355
                                                   ------------    ------------
Total liabilities and stockholders' equity .....   $  3,975,824    $  4,542,486
                                                   ============    ============
 
                    The accompanying note is an integral part
                    of the consolidated financial statements.

                                     Page 3
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                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Three Months ended December 31, 1998 and 1997
                                   (Unaudited)

                                                        1998            1997
                                                    -----------     -----------
Operating revenue:
  Oil and gas sales ............................    $   329,541     $   733,812
  Property operator fees .......................          1,043           1,278
  Other ........................................             77           9,819
                                                    -----------     -----------
    Total operating revenue ....................        330,661         744,909

Operating costs and expenses:
  Oil and gas production .......................        154,809         226,649
  Depreciation, depletion and amortization .....        174,428         268,052
  General and administrative ...................         47,451          41,434
                                                    -----------     -----------
    Total operating costs and expenses .........        376,688         536,135

Other income and (expenses):
  Interest income ..............................          1,740              42
  Interest expense .............................        (36,961)        (39,468)
                                                    -----------     -----------
    Net other income and expenses ..............        (35,221)        (39,426)
                                                    -----------     -----------
Income before income taxes .....................        (81,248)        169,348

Income tax expense .............................           --            58,379
                                                    -----------     -----------
Net income .....................................    $   (81,248)    $   110,969
                                                    ===========     ===========

Net income per share:
  Basic ........................................    $     (0.05)    $      0.07
  Diluted ......................................    $     (0.05)    $      0.07

Weighted average shares outstanding:
  Basic ........................................      1,623,289       1,623,229
  Diluted ......................................      1,623,289       1,623,229

                    The accompanying note is an integral part
                    of the consolidated financial statements.

                                     Page 4
<PAGE>
                    MEXCO ENERGY CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Nine Months ended December 31, 1998 and 1997
                                   (Unaudited)

                                                        1998            1997 
                                                    -----------     -----------
Operating revenue:
  Oil and gas sales ............................    $ 1,155,638     $ 1,688,051
  Property operator fees .......................          3,130           3,834
  Other ........................................          2,273          11,104
                                                    -----------     -----------
    Total operating revenue ....................      1,161,041       1,702,989

Operating costs and expenses:
  Oil and gas production .......................        523,251         521,019
  Depreciation, depletion and amortization .....        839,237         670,082
  General and administrative ...................        173,659         159,431
                                                    -----------     -----------
    Total operating costs and expenses .........      1,536,147       1,350,532

Other income and (expenses):
  Interest income ..............................          4,880             942
  Interest expense .............................       (115,980)        (98,292)
                                                    -----------     -----------
    Net other income and expenses ..............       (111,100)        (97,350)
                                                    -----------     -----------
Income before income tax expense ...............       (486,206)        255,107

Income tax expense .............................           --            75,584
                                                    -----------     -----------
Net income .....................................    $  (486,206)    $   179,523
                                                    ===========     ===========

Net income per share:
  Basic ........................................    $     (0.30)    $      0.11
  Diluted ......................................    $     (0.30)    $      0.11

Weighted average shares outstanding:
  Basic ........................................      1,623,289       1,585,411
  Diluted ......................................      1,623,289       1,585,411

                    The accompanying note is an integral part
                    of the consolidated financial statements.

                                     Page 5
<PAGE>
                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Nine Months ended December 31, 1998 and 1997
                                   (Unaudited)

                                                         1998           1997 
                                                     -----------    -----------
Cash flows from operating activities:
  Net income (loss) ..............................   $  (486,206)   $   179,523
  Adjustments to reconcile net income (loss) to
    net cash provided by operating activities:
      Deferred income taxes ......................          --           74,663
      Depreciation, depletion and amortization ...       839,237        670,082
      (Increase) decrease in accounts receivable .        51,754        (22,287)
      Decrease in accounts payable ...............        (1,657)       (65,947)
      Increase in prepaid assets .................        (2,440)        (1,245)
      Decrease in income taxes payable ...........          --          (23,810)
                                                     -----------    -----------
        Net cash provided by operating activities        400,688        810,979

Cash flows from investing activities:
  Additions to property and equipment ............      (512,951)    (1,890,401)
                                                     -----------    -----------
        Net cash used in investing activities ....      (512,951)    (1,890,401)

Cash flows from financing activities:
  Proceeds from issuance of common stock .........          --        1,000,000
  Long-term borrowings ...........................          --          685,000
  Principal payments on long-term debt ...........          --         (500,000)
                                                     -----------    -----------
        Net cash provided by financing activities           --        1,185,000

Net increase (decrease) in cash ..................      (112,263)       105,578
Cash, beginning of the period ....................       241,348         40,813
                                                     -----------    -----------
Cash, end of period ..............................   $   129,085    $   146,391
                                                     ===========    ===========

Interest paid ....................................   $   103,285    $    97,897
Income taxes paid ................................   $      --      $    24,731

Non-cash investing and financing activities:
Included  in trade  accounts  payable at December  31,  1998 are  capital  costs
attributable  to oil and gas  properties of $4,251.  Included in trade  accounts
payable  at March 31,  1998 are  purchases  of oil and gas  properties  totaling
$83,050.

                    The accompanying note is an integral part
                    of the consolidated financial statements.

                                     Page 6
<PAGE>
                    MEXCO ENERGY CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note A.    Organization and Significant Accounting Policies
-------    ------------------------------------------------

Organization and Basis of Presentation
--------------------------------------
 
     Mexco Energy  Corporation  (the  "Company"),  a Colorado  corporation,  was
organized in 1972 and  maintains  its principal  office in Midland,  Texas.  The
Company and Forman Energy Corporation  ("Forman"),  its wholly owned subsidiary,
are engaged in the acquisition,  exploration,  development and production of oil
and gas. While the Company owns producing  properties and undeveloped acreage in
twelve states,  the majority of its activities are centered in the Permian Basin
of West Texas.

Principles of Consolidation
---------------------------

     The  accompanying  consolidated  balance sheets include the accounts of the
Company and its wholly owned subsidiary.  All significant inter-company accounts
and transactions have been eliminated in consolidation.

     In the  opinion of  management,  the  accompanying  unaudited  consolidated
financial  statements  contain all  adjustments  necessary to present fairly the
financial position of the Company and its wholly owned subsidiary as of December
31,  1998,  and the  results of its  operations  and cash flows for the  interim
periods  ended  December 31, 1998 and 1997.  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.  Certain information and footnote  disclosures  normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles  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.

Income (loss) Per Common Share
------------------------------

     Net income (loss) per common share is based on the weighted  average number
of shares outstanding  during the periods presented.  There were no common stock
equivalents  outstanding  as of December  31,  1997.  Common  stock  equivalents
(options) are excluded at December 31, 1998, since their inclusion would have an
antidilutive effect on loss per share.

     The Financial  Accounting  Standards  Board (FASB) has issued  Statement of
Financial  Accounting  Standards No. 128 (SFAS 128),  "Earnings Per Share" which
requires  changes in the computation  and reporting of earnings per share.  This
pronouncement,  which becomes  effective for periods  ending after  December 15,
1997,  provides  for the  presentation  of basic  earnings  per share,  computed
without regard to options,  warrants,  and other stock equivalents,  and diluted
earnings per share, which gives effect to these potential dilutive common shares
when they have a dilutive effect on earnings per share.

                                     Page 7
<PAGE>
                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
        Management's Discussion and Analysis of Financial Condition and
                             Results of Operations

Forward-Looking Statements
--------------------------

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations ("MDA") 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").  All  statements,  other than  statements of  historical  fact
included  in  MD&A,  including  statements  regarding  the  Company's  operating
strategy,  plans,  objectives and beliefs of management  for future  operations,
planned capital  expenditures and acquisitions are  forward-looking  statements.
Although   the  Company   believes   that  the   assumptions   upon  which  such
forward-looking  statements are based are  reasonable,  it can give no assurance
that such assumptions will prove to be correct.

Liquidity and Capital Resources
-------------------------------

Historically,  the  Company's  sources  of  funding  have  been  from  operating
activities, bank financing and the issuance of common stock.

For the first  nine  months  of fiscal  1999,  cash  flow  from  operations  was
$400,688,  which  included  the  positive  effect of a  decrease  of  $51,754 in
accounts receivable, and net cash flow was a negative $112,263. Cash of $512,951
was used for additions to property and equipment.

During the fourth  quarter of fiscal 1998 and the first  quarter of fiscal 1999,
the Company  participated  in the drilling and  completion  of five wells in the
Viejos  Field,  Pecos  County,   Texas  at  a  total  cost  to  the  Company  of
approximately  $280,000,  with an  approximate  10%  working  and 8% net revenue
interest.  Expenditures  attributable to these wells were approximately $180,000
during fiscal 1999. In September  1998, one of the producing  wells was proposed
as a water injection well at an estimated future cost to the Company of $10,000.

In September 1998, the Company, as operator,  successfully re-entered a gas well
in Pecos  County,  Texas at a cost to the  Company  of  approximately  $109,000.
Additional  capital costs associated with this well of approximately  $3,000 are
anticipated  during the fourth  quarter of fiscal  1999.  Funds for this project
were provided out of cash flow from  operations  and existing cash  balances.  A
pipeline  connection  was made on January  29,  1999.  The  Company  owns a 100%
working  interest  and an  approximate  75% net  revenue  interest in this well.
Although there have been  favorable  initial  production  tests of the well, the
Company will be unable to  determine  the  production  capacity of this gas well
until further production history is available.

Due to costly downhole  mechanical problems and low oil prices, a marginal well,
in which the Company owns a 100 percent  working  interest and is the  operator,
will be plugged in the fourth quarter of fiscal 1999. The cost to the Company is
estimated  at  $10,000,  net of  equipment  salvage.  This  well  was  producing
approximately 4 bbls of oil per day before it was shut in.

The  Company  is  reviewing  several  other  re-entry  projects  in which it may
participate.  The cost of such projects would be funded, to the extent possible,
with existing cash balances and cash flow from operations.  The remainder may be
funded through borrowings on its bank credit facility discussed below.

                                     Page 8
<PAGE>
At December  31,  1998,  the Company had  negative  working  capital of $162,819
compared  to working  capital of $21,302 at March 31,  1998,  a net  decrease of
$184,121. This is due primarily to additional current maturities of bank debt as
well as decreased revenue from lower oil and gas prices during fiscal 1999.

The Company has a revolving  credit  agreement with  NationsBank of Texas,  N.A.
("Bank")  which  provides  for a credit  facility  of  $3,000,000,  subject to a
borrowing base determination. The credit facility was amended on August 15, 1998
to increase the borrowing base to $2,085,000,  with scheduled monthly reductions
of $43,000 per month beginning September 5, 1998 and to extend the maturity date
to August 15, 2000. The borrowing base is subject to redetermination on or about
August 1, of each year. Amounts borrowed under this agreement are collateralized
by the common stock of Forman and the Company's oil and gas properties. Interest
under this  agreement  is payable  monthly at prime rate (7.75% at December  31,
1998).  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
dividends. As of December 31, 1998, the balance outstanding under this agreement
was $1,822,000.

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 foreseeable future.

Year 2000 Issue
---------------

The Company is in the process of conducting an assessment of the business  risks
associated with the new century.  These risks relate to the inability of certain
software and embedded logic control devices to distinguish between the year 1900
and the year 2000. If not corrected,  the year 2000 could cause such devices and
software to fail or create erroneous results.

The Company's accounting software vendor has modified its software to accurately
handle the new century,  at no additional  cost to the Company.  Therefore,  the
Company does not expect to incur any material  expense  associated  with its own
information systems.

To  mitigate  or  prevent  the  risk  related  to the  Company's  customers  and
suppliers,  formal  communications have been initiated with key third parties in
an attempt to ascertain  their ability to continue to meet their  obligations to
the Company and the potential  impact on the Company's  operations and financial
condition.  The  responses  received  are being  evaluated,  and the Company may
choose  to  use  alternative  sources  of  supply,   markets  or  develop  other
contingency  plans.  The process of evaluating  third party Year 2000  readiness
began in November 1998, is approximately 35 percent  complete,  and is scheduled
for completion by September 30, 1999.

The failure to correct,  on a timely  basis,  a material Year 2000 problem could
result in an  interruption in the Company's  operations or business  activities.
Such interruptions  could have a material adverse affect on Company's results of
operations,  liquidity and financial condition.  Due to the inherent uncertainty
associated  with the Year 2000 issue,  particularly as it relates to third party
Year 2000  readiness,  the Company  cannot  ascertain  at this time  whether the
consequences  of Year 2000 failures will have a material impact on the Company's
future financial results, liquidity, condition or reporting.

                                     Page 9
<PAGE>
Results of Operations - Three Months Ended December 31, 1998 and 1997
---------------------------------------------------------------------

Net income decreased from $110,969 for the three months ended December 31, 1997,
to a net  loss of  $81,248  for the  same  period  in  fiscal  1999.  Individual
categories of income and expense are discussed below.

Oil and gas sales  decreased  from $733,812 for the third quarter of fiscal 1998
to $329,541 for the same period of fiscal 1999. This decrease of $404,271 or 55%
resulted from decreased prices and decreased  production due primarily to normal
production  declines.  Oil and gas  production  quantities  were 12,367 bbls and
106,762 mcf for the third quarter of fiscal 1999 and 19,296 bbls and 126,186 mcf
for fiscal 1998, a decrease of 6,929 bbls, or 36%, and a decrease of 19,424 mcf,
or 15%. Average gas prices decreased from $2.98 per mcf for the third quarter of
fiscal 1998 to $1.74 per mcf for fiscal 1999, while average oil prices decreased
from $18.54 per bbl for fiscal 1998 to $11.60 per bbl for fiscal 1999.

Production costs decreased from $226,649 for the third quarter of fiscal 1998 to
$154,809 for the same period of fiscal 1999, a decrease of $71,840, or 32%. This
decrease was primarily due to the decline in production  taxes and remedial work
done.

General and administrative expenses were $47,451 for the third quarter of fiscal
1999 and $41,434 for the third quarter of fiscal 1998, an increase of $6,017, or
15%. This  increase was  primarily due to increased  salary and benefit costs of
$21,283,  offset in part by a reduction in contract services of $6,349 and legal
fees of $8,663.

Depreciation,  depletion and amortization  based on production and other methods
decreased from $268,052 for the third quarter of fiscal 1998 to $174,428 for the
same period of fiscal 1999, a decrease of $93,624 or 35%.  This decrease was due
to prior full cost ceiling write-downs of oil and gas properties, which resulted
from lower reserve  estimates,  and lower production  quantities.  Lower product
prices have had a significant  impact on the  determination  of reserve quantity
estimates.

Interest expense  decreased from $39,468 for the third quarter of fiscal 1998 to
$36,961 for the same period of fiscal  1999,  a decrease of $2,507 or 6%, due to
lower interest rates.

Results of Operations-Nine Months Ended December 31, 1998 and 1997
------------------------------------------------------------------

Net income  decreased  from $179,523 for the nine months ended December 31, 1997
to a net loss of  $486,206  for the  same  period  of  fiscal  1999.  Individual
categories of income and expenses are discussed below.

Oil and gas sales  decreased from $1,688,051 for the first nine months of fiscal
1998 to $1,155,638 for the same period of fiscal 1999. This decrease of $532,413
or 32% resulted from lower oil and gas prices and decreased oil  production  due
to normal production  declines,  offset in part by increased gas production from
wells drilled.  Oil and gas production  quantities  were 50,169 bbls and 320,405
mcf for the first nine months of fiscal 1998 and 38,778 bbls and 350,578 mcf for
fiscal  1999,  a decrease of 11,391 bbls or 23% and an increase of 30,173 mcf or
9%. Average gas prices decreased from $2.39 per mcf for the first nine months of
fiscal 1998 to $1.94 per mcf for fiscal 1999, while average oil prices decreased
from $18.40 per bbl for fiscal 1998 to $12.27 per bbl for fiscal 1999.

Production  costs remained  relatively  stable for these interim  periods,  with
$521,019  for the first nine  months of fiscal  1998 and  $523,251  for the same
period of fiscal 1999.

                                    Page 10
<PAGE>
General and  administrative  expenses increased from $159,431 for the first nine
months of fiscal  1998 to  $173,659  for the same  period  of  fiscal  1999,  an
increase of $14,228 or 9%. This increase was  primarily due to increased  salary
and benefit costs of $42,405,  franchise taxes of $13,354,  and director fees of
$6,100,  offset in part by a reduction in accounting  fees of $16,100,  contract
services of $12,080 and legal fees of $21,204.

Depreciation,  depletion and amortization  based on production and other methods
increased from $670,082 for the first nine months of fiscal 1998 to $839,237 for
the same period of fiscal 1999, an increase of $169,155 or 25%, due primarily to
a full cost ceiling  write-down  of $288,393.  Lower  product  prices have had a
significant impact on the determination of reserve quantity estimates.

Interest expense increased from $98,292 for the first nine months of fiscal 1998
to $115,980 for the same period of fiscal  1999,  an increase of $17,688 or 18%,
due to additional borrowings outstanding under the loan agreement.



PART II - OTHER INFORMATION
---------------------------

Item 1.  Legal proceedings

                  None.

Item 2  .Changes in securities

                  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.



                                    Page 11
<PAGE>
                                  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: February 11, 1999             Nicholas C. Taylor     
                                     -------------------------------------------
                                     Nicholas C. Taylor, President and Treasurer














                                    Page 12
<PAGE>