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 September 30, 2003

                          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)

                                 (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 [ ]

                      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:
                1,736,041 shares outstanding at November 11, 2003

<PAGE>

                            MEXCO ENERGY CORPORATION

                                Table of Contents
                                -----------------
                                                                            Page
                                                                            ----
PART I. FINANCIAL INFORMATION
-----------------------------

     Item 1.   Consolidated Balance Sheets as of September 30, 2003
               (Unaudited) and March 31, 2003                                  3

               Consolidated Statements of Operations (Unaudited) for
               the three and six months ended September 30, 2003 and
               September 30, 2002                                              4

               Consolidated Statements of Cash Flows (Unaudited) for
               the six months ended September 30, 2003 and
               September 30, 2002                                              5

               Notes to Unaudited Consolidated Financial Statements            6

     Item 2.   Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                      10

     Item 3.   Quantitative and Qualitative Disclosures About Market Risk     13

     Item 4.   Controls and Procedures                                        13

PART II. OTHER INFORMATION 14
-----------------------------

     Item 1.   Legal Proceedings
     Item 2.   Changes in 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                                                                    15
----------

                                     Page 2
<PAGE>

                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                                  September 30       March 31,
                                                      2003             2003
                                                  ------------     ------------
                                                  (Unaudited)
ASSETS
------
Current assets:
   Cash and cash equivalents                      $     72,428     $     68,547
   Accounts receivable:
      Oil and gas sales                                383,159          560,297
      Trade                                             45,657           17,617
      Related parties                                       --            3,475
      Prepaid expenses                                  37,247           10,043
                                                  ------------     ------------
        Total current assets                           538,491          659,979

   Property and equipment, at cost:
   Oil and gas properties and equipment,
      using full cost method, pledged               16,361,940       15,656,928
   Office and computer equipment
      and software                                      34,542           33,708
                                                  ------------     ------------
                                                    16,396,482       15,690,636
   Less accumulated depreciation,
      depletion and amortization                     9,050,289        8,661,977
                                                  ------------     ------------
        Property and equipment, net                  7,346,193        7,028,659
                                                  ------------     ------------
   Total assets                                   $  7,884,684     $  7,688,638
                                                  ============     ============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
   Current liabilities:
   Accounts payable and accrued expenses          $    122,349     $     93,434
   Current portion of long-term debt                        --          116,280
   Obligations under capital leases                     18,418           61,086
                                                  ------------     ------------
   Total current liabilities                           140,767          270,800

   Long-term debt                                    1,750,000        2,033,720
   Asset retirement obligation                         375,529               --
   Deferred income tax liability                       474,435          427,730

   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; 1,766,566
      shares issued                                    883,283          883,283
   Additional paid in capital                        3,755,110        3,734,119
   Retained earnings                                   634,481          466,522
   Treasury stock, at cost (30,525 and
      30,244 shares, respectively)                    (128,921)        (127,536)
                                                  ------------     ------------
      Total stockholders' equity                     5,143,953        4,956,388
                                                  ------------     ------------
   Total liabilities and stockholders'
      equity                                      $  7,884,684     $  7,688,638
                                                  ============     ============


                    THE ACCOMPANYING NOTE IS AN INTEGRAL PART
                    OF THE CONSOLIDATED FINANCIAL STATEMENTS.

                                     Page 3
<PAGE>

                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
         For the Three and Six Months ended September 30, 2003 and 2002
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                  Three Months Ended                 Six Months Ended
                                                     September 30                      September 30
                                                 2003             2002             2003             2002
                                             -----------------------------     -----------------------------
Operating revenue:
<S>                                          <C>              <C>              <C>              <C>
   Oil and gas sales                         $    768,852     $    512,180     $  1,535,912     $  1,056,830
   Other                                            1,859            2,838            3,125            9,452
                                             ------------     ------------     ------------     ------------
       Total operating revenue                    770,711          515,018        1,539,037        1,066,282

Operating costs and expenses:
   Oil and gas production                         241,168          232,605          509,860          389,209
   Accretion expense                                5,912               --           11,736               --
   Depreciation, depletion
      and amortization                            170,695          122,975          336,914          246,498
   General and administrative                     156,644          107,755          272,622          246,763
                                             ------------     ------------     ------------     ------------
       Total operating costs
           and expenses                           574,419          463,335        1,131,132          882,470
                                             ------------     ------------     ------------     ------------
                                                  202,204           51,683          419,641          183,812
Other income and (expenses):
   Interest income                                     55              118              117              244
   Interest expense                               (20,860)         (22,297)         (45,140)         (43,146)
                                             ------------     ------------     ------------     ------------
       Net other income and expenses              (20,805)         (22,179)         (45,023)         (42,902)
                                             ------------     ------------     ------------     ------------

Income before income taxes                        175,487           29,504          362,882          140,910
Income tax expense (deferred)                      57,017            9,146           92,652           43,406
                                             ------------     ------------     ------------     ------------
Income before cumulative effect
   of accounting change                           118,470           20,358          270,230           97,504
Cumulative effect of accounting
   change, net of tax                                  --               --         (102,267)              --
                                             ------------     ------------     ------------     ------------
      Net income                             $    118,470     $     20,358     $    167,963     $     97,504
                                             ============     ============     ============     ============

Net income (loss) per common share:
Basic:
   Income before cumulative effect
    of accounting change                     $       0.07     $       0.01     $       0.16     $       0.06
   Cumulative effect, net of tax             $         --     $         --     $      (0.06)    $         --
  Net income                                 $       0.07     $       0.01     $       0.10     $       0.06

Diluted:
   Income before cumulative effect
    of accounting change                     $       0.06     $       0.01     $       0.15     $       0.06
   Cumulative effect, net of tax             $         --     $         --     $      (0.06)    $         --
  Net income                                 $       0.06     $       0.01     $       0.09     $       0.06

Pro forma amounts assuming, the new
method of accounting for asset retirement
obligations is applied retroactively:
   Net Income                                $    118,470     $     15,074     $    270,230     $     86,936
      Basic earnings per share               $       0.07     $       0.01     $       0.16     $       0.05
      Diluted earnings per share             $       0.06     $       0.01     $       0.15     $       0.05
</TABLE>

                    THE ACCOMPANYING NOTE IS AN INTEGRAL PART
                    OF THE CONSOLIDATED FINANCIAL STATEMENTS.

                                     Page 4
<PAGE>

                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Six Months ended September 30, 2003 and 2002
                                   (Unaudited)


                                                       2003            2002
                                                   ------------    ------------
Cash flows from operating activities:
   Net income                                      $    167,963    $     97,504
     Cumulative effect of accounting change,
        net of tax                                      102,267              --
   Adjustments to reconcile net income
        to net cash provided by operating
        activities:
     Increase in deferred income taxes                   92,651          43,406
        Stock-based compensation                         20,991          29,325
        Depreciation, depletion and
             amortization                               336,914         246,498
       Accretion of asset retirement obligations         11,736              --
        (Increase) decrease in
             accounts receivable                        152,572         (20,462)
       Increase in prepaid expenses                     (27,204)         (9,325)
        Increase in accounts payable
             and accrued expenses                        20,253          95,556
                                                   ------------    ------------
        Net cash provided by operating
             activities                                 878,143         482,502


Cash flows from investing activities:
   Additions to property and equipment                 (430,209)       (687,533)
                                                   ------------    ------------
        Net cash used in investing
             activities                                (430,209)       (687,533)

Cash flows from financing activities:
     Acquisition of treasury stock                       (1,385)       (122,386)
     Reduction of capital lease obligations             (42,668)             --
     Reduction in long-term debt                       (400,000)             --
     Proceeds from long-term debt                            --         320,000
                                                   ------------    ------------
   Net cash (used in) provided by
     financing activities                              (444,053)        197,614
                                                   ------------    ------------

Net increase(decrease) in cash                            3,881          (7,417)

Cash, beginning of the period                            68,547          44,958

Cash, end of period                                $     72,428    $     37,541
                                                   ============    ============

Interest paid                                      $     47,138    $     42,239
Income taxes paid                                  $         --    $         --

                    THE ACCOMPANYING NOTE IS AN INTEGRAL PART
                    OF THE CONSOLIDATED FINANCIAL STATEMENTS.

                                     Page 5
<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,  a Colorado  corporation,  was  organized in 1972 and
maintains its  principal  office in Midland,  Texas.  The Company and its wholly
owned   subsidiary,   Forman  Energy   Corporation,   a  New  York  corporation,
(collectively  the  "Company")  are  engaged  in the  acquisition,  exploration,
development  and  production  of oil and gas.  While the Company owns  producing
properties  and  undeveloped  acreage  in eleven  states,  the  majority  of its
activities are centered in the Permian Basin of West Texas. Although most of the
Company's oil and gas interests are operated by others,  the Company  operates a
number of 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
except for the cumulative  effect of a change in accounting  principle in fiscal
2004) necessary to present fairly the financial  position of the Company and its
wholly  owned  subsidiary  as of  September  30,  2003,  and the  results of its
operations and cash flows for the interim  periods ended  September 30, 2003 and
2002.  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 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.

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

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

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  estimates  and  assumptions  that  affect the  amounts  reported  in these
financial statements. 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  and the  related  present  value of
estimated future net cash flows.

                                     Page 6
<PAGE>

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 September 30, 2003, the Company  recognized $9,011 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 the stock
options  issued had been  determined  based on the fair value at the grant dates
for all employee awards under the plan:

<TABLE>
<CAPTION>
                                      Three Months Ended             Six Months Ended
                                         September 30                  September 30
                                   -------------------------     -------------------------
                                      2003           2002           2003           2002
                                   ----------     ----------     ----------     ----------
<S>                                <C>            <C>            <C>            <C>
Net income, as reported            $  118,470     $   20,358     $  167,963     $   97,504
Deduct: Stock-based employee
compensation expense determined
under fair value based method
(SFAS 123), net of tax             $  (25,667)    $  (20,194)    $  (40,066)    $  (31,923)
                                   ----------     ----------     ----------     ----------
Net income, pro forma              $   92,803     $      164     $  127,897     $   65,581
                                   ==========     ==========     ==========     ==========
Basic earnings per share:

     As reported                   $     0.07     $     0.01     $     0.16     $     0.06
     Pro forma                     $     0.05     $     0.00     $     0.07     $     0.04

Diluted earnings per share:

     As reported                   $     0.06     $     0.01     $     0.15     $     0.06
     Pro forma                     $     0.05     $     0.00     $     0.07     $     0.04
</TABLE>

Asset Retirement Obligations
----------------------------

The  Company's  asset  retirement   obligations   relate  to  the  plugging  and
abandonment of oil and gas properties. The Company adopted SFAS No. 143 on April
1,  2003.  SFAS No. 143  requires  the fair  value of a  liability  for an asset
retirement obligation to be recorded in the period in which it is incurred and a
corresponding  increase in the carrying amount of the related  long-lived asset.
The change  resulted in a cumulative  effect to net income of ($102,267)  net of
tax,  or  ($0.06)  per  share.  Additionally,  the  Company  recorded  an  asset
retirement  obligation  liability of $358,419 and an increase to net  properties
and equipment and other assets of $210,206 upon adoption of SFAS No. 143.

The asset retirement  obligation,  which is included on the Consolidated Balance
Sheet was $375,529 at September 30, 2003. Accretion expense during the first six
months of fiscal 2004 was $11,736.

                                     Page 7
<PAGE>

The following table provides a rollforward of the asset  retirement  obligations
for the six months ended September 30, 2003:

Carrying amount of asset retirement obligations as of
   April 1, 2003                                                     $  358,419
Liabilities incurred                                                 $   15,347
Liabilities settled                                                  $   (9,973)
Accretion expense                                                    $   11,736
Revisions in estimated cash flows                                    $        0
                                                                     ----------
Carrying amount of asset retirement obligations as of
   September 30, 2003                                                $  375,529
                                                                     ==========

Oil and Gas Costs
-----------------

The cost of a certain oil and gas lease 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  this  property  when the project is  evaluated,
which is currently  estimated to be within this fiscal year. Costs excluded from
amortization at September 30, 2003 total $673,890. No impairment exists for this
property at September 30, 2003.

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)  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 and six-month periods ended September 30, 2003 and 2002.

<TABLE>
<CAPTION>
                                       Three Months Ended           Six Months Ended
                                          September 30                September 30
                                     -----------------------     -----------------------
                                       2003          2002          2003          2002
                                     ---------     ---------     ---------     ---------
<S>                                  <C>           <C>           <C>           <C>
Weighted average number of
  common shares outstanding          1,736,041     1,737,329     1,736,054     1,745,787
Incremental shares from the
  assumed exercise of dilutive
  stock options                         98,006         2,571        67,102         4,653
                                     ---------     ---------     ---------     ---------
Dilutive potential common shares     1,834,047     1,739,900     1,803,156     1,750,440
</TABLE>

Options to  purchase  70,000  shares at an average  exercise  price of $7.61 and
200,000 shares at an average  exercise  price of $6.45  outstanding at September
30,  2003  and  September  30,  2002,  respectively,  were not  included  in the
computation  of diluted net income per share  because the exercise  price of the
options was greater  than the average  market  price of the common  stock of the
Company.

Income Taxes
------------

There is no  current  income  tax  expense  for the  three or six  months  ended
September 30, 2003 due to a tax loss carryforward of approximately $139,000 from
the year ending March 31, 2003. There is no current income tax expense for the

                                     Page 8
<PAGE>

three or six months  ended  September  30, 2002 due a tax loss  carryforward  of
approximately $283,000 from the year ending March 31, 2002.

Stockholders' Equity
--------------------

During the six month period ended September 30, 2003, the Company paid $1,385 to
purchase 281 shares of its common stock for treasury.

Long Term Liabilities
---------------------

On  October 1, 2003,  the  Company's  revolving  credit  agreement  with Bank of
America,  N.A. ("Bank"),  with an original maturity date of August 15, 2004, was
extended for four months to December 15, 2004.  The  financial  statements  were
prepared using this extended date of maturity, December 15, 2004.

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  based  determination.  On November 15, 2002,  the borrowing  base was
re-determined  and reduced to $2,526,744 with monthly  commitment  reductions of
$30,814  beginning on December 5, 2002.  As of September  30, 2003,  the balance
outstanding  under this  agreement  was  $1,750,000.  No principal  payments are
required  through  September  30,  2004 to comply  with the  monthly  commitment
reductions.  Amounts  borrowed  under this agreement are  collateralized  by the
common  stock  of the  Company's  wholly  owned  subsidiary  and all oil and gas
properties.

The asset retirement  obligation as of September 30, 2003 represents the present
value of the Company's estimated asset retirement obligations under SFAS 143.

Capital Lease Obligations
-------------------------

During  fiscal 2003,  the Company  began  leasing  three gas  compressors  under
separate  agreements  that are  classified  as capital  leases.  The cost of the
equipment  under the capital leases is included in the balance sheet as property
and equipment with a balance of $81,182 and  accumulated  amortization of $8,544
on September 30, 2003.  Amortization  of assets under capital leases is included
in  depreciation  expense.  The lease  agreements are each for a 12-month period
with equal monthly  payments.  At the end of the term,  the Company will receive
title to the  compressor  under a  bargain  purchase  option  of $1.  The  lease
obligation  associated with these three compressors was $18,418 on September 30,
2003, all of which is a current  liability.  Total  payments  required for these
three leases will be $19,343, of which $925 represents interest.

Open Disclosure Issues with the Securities and Exchange Commission
------------------------------------------------------------------

The Company is aware that the Staff of the SEC, in  consultation  with the Staff
of  the  Financial   Accounting   Standards   Board,   is  considering   certain
implementation issues in the application of provisions of Statement of Financial
Accounting Standards No. 141, Business Combinations,  and Statement of Financial
Accounting  Standards No. 142,  Goodwill and Other  Intangible  Assets (SFAS No.
142),  to  companies  in  the  extractive  industries,  including  oil  and  gas
companies.  The Staff of the SEC is  considering  whether  SFAS No. 142 requires
registrants to reclassify costs  associated with mineral rights,  including both
proved and unproved  leasehold  acquisition  costs, as intangible  assets in the
balance  sheet,  apart  from  other  capitalized  oil  and gas  property  costs.
Historically,  the Company and all other oil and gas companies have included the
cost of these oil and gas leasehold interests as part of oil and gas properties.
The Staff is also  considering  whether  SFAS No. 142  requires  registrants  to
provide the additional

                                     Page 9
<PAGE>

disclosures  prescribed  by  SFAS  No.  142  for  intangible  assets  for  costs
associated with mineral rights.

The  reclassification of these amounts would not affect the method in which such
costs are  amortized or the manner in which the Company  assesses  impairment of
capitalized  costs.  As a  result,  net  income  would  not be  affected  by the
reclassification.

                     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.

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

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

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 six months of fiscal 2004,  cash flow from operations was $878,143
compared to $482,502 for the first six months of fiscal 2003.  This increase was
primarily  due to higher net income,  principally  as a result of higher oil and
gas  prices.  The cash flow from  operations  for the first six months of fiscal
2004  included  the  effects of an  increase  in  accounts  payable  and accrued
expenses  and a decrease in accounts  receivable.  Cash of $430,209 was used for
additions  to property  and  equipment  and cash of $400,000  was used to reduce
long-term debt. Accordingly, net cash increased $3,881.

The  Company  has  acquired  and  is  reviewing   several  projects  for  future
participation. The cost of such projects would be funded to the extent possible,
with existing cash balances and cash flow from operations.  The remaining may be
funded through borrowings on the bank credit facility discussed below.

                                    Page 10
<PAGE>

At September 30, 2003, the Company had working capital of approximately $397,724
compared to working  capital of  approximately  $389,179 at March 31,  2003,  an
increase of $8,545.

The Company's  revolving credit agreement with Bank of America,  N.A.  ("Bank"),
was  amended  to  provide  for a credit  facility  of  $5,000,000,  subject to a
borrowing  base  determination.  On November 15, 2002, the maturity date of this
credit  agreement,  which was  originally  August 15, 2003, was extended for one
year.  The borrowing base was  re-determined  on this date and set at $2,526,744
with monthly commitment  reductions of $30,814 beginning on December 5, 2002. On
October 1, 2003 the credit  agreement  was extended to December 15, 2004.  As of
September 30, 2003, the balance outstanding under this agreement was $1,750,000.
No principal  payments are  anticipated to be required for fiscal 2004 to comply
with the monthly commitment reductions.  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. 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 (4.00% at September  30,  2003).  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 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 September 30, 2003 and 2002
----------------------------------------------------------------------

Net  income  increased  from a net  profit  of  $20,358  for the  quarter  ended
September 30, 2002 to a net profit of $118,470 for the quarter  ended  September
30, 2003. Individual categories of income and expense are discussed below.

Oil and gas sales  increased from $512,180 for the second quarter of fiscal 2003
to $768,852 for the same period of fiscal 2004. This increase of 50% or $256,672
resulted primarily from higher oil and gas prices.  Average gas prices increased
from  $2.89 per mcf for the second  quarter of fiscal  2003 to $4.73 per mcf for
the same period of fiscal 2004,  while average oil prices  increased from $26.15
per bbl for the first  quarter of fiscal  2003 to $28.66 for the same  period of
fiscal 2004. Oil and gas production  quantities were 5,295 barrels  ("bbls") and
129,428  thousand  cubic feet ("mcf") for the second  quarter of fiscal 2003 and
5,627 bbls and 128,560 mcf for the same period of fiscal 2004, an increase of 6%
in oil production and a decrease of 1% in gas production.

Production  costs  increased 4% from  $232,605 for the second  quarter of fiscal
2003 to $241,168 for the same period of fiscal 2004.  This was  primarily due to
the  effects  that  higher  oil and gas prices  had on  production  taxes and an
increase in repairs and maintenance to operated wells during the quarter.

General and  administrative  expenses increased 45% from $107,755 for the second
quarter of fiscal 2003 to $156,644 for the same period of fiscal  2004.  This is
primarily the result of an increase in financial  consulting and fees associated
with the Company's listing on the American Stock Exchange during the quarter.

                                    Page 11
<PAGE>

Depreciation,  depletion and amortization  based on production and other methods
increased  39%, from $122,975 for the second  quarter of fiscal 2003 to $170,695
for the same  period of fiscal  2004  primarily  due to a  decrease  in  company
reserves.

Interest expense decreased 6% from $22,297 for the second quarter of fiscal 2003
to $20,860  for the same period of fiscal  2004  primarily  as a result of lower
interest rates and lesser borrowings.

Results of  Operations - Six Months Ended  September  30, 2003 and September 30,
--------------------------------------------------------------------------------
2002
----

Net income  increased 72%, from a net profit of $97,504 for the six months ended
September  30,  2002 to a net  profit  of  $167,963  for the  six  months  ended
September  30, 2003.  Individual  categories of income and expense are discussed
below.

Oil and gas  sales  increased  45%  from  $1,056,830  for the six  months  ended
September 30, 2003 to $1,535,912  for the same period of fiscal 2004,  primarily
because of increased prices. Average gas prices increased from $2.92 per mcf for
the first  six  months of fiscal  2003 to $4.82  per mcf for  fiscal  2004,  and
average  oil prices  increased  from  $24.94 per bbl for the first six months of
fiscal 2003 to $27.79 for fiscal 2004.  Oil and gas production  quantities  were
11,267  bbls and  265,297 mcf for the first six months of fiscal 2003 and 11,141
bbls and 254,209 for fiscal 2004, a decrease of 1% and 4%, respectively.

Production  costs increased 31% from $389,209 for the six months ended September
30, 2003 to $509,860 for the same period of fiscal 2004.  This was primarily due
to the  effects  that higher oil and gas prices had on  production  taxes and an
increase  in repairs and  maintenance  to  operated  wells  during the first and
second quarters of fiscal 2004.

Depreciation,  depletion and amortization  based on production and other methods
increased 37%, from $246,498 for the first six months of fiscal 2003 to $336,914
for the same  period of fiscal  2004  primarily  due to a  decrease  in  company
reserves.

Interest  expense  increased  5% from $43,146 for the first six months of fiscal
2003 to $45,140 for the same period of fiscal 2004.

Asset Retirement Obligations
----------------------------

The  Company's  asset  retirement   obligations   relate  to  the  plugging  and
abandonment of oil and gas properties. The Company adopted SFAS No. 143 on April
1,  2003.  SFAS No. 143  requires  the fair  value of a  liability  for an asset
retirement obligation to be recorded in the period in which it is incurred and a
corresponding  increase in the carrying amount of the related  long-lived asset.
The change  resulted in a cumulative  effect to net income of ($102,267)  net of
tax,  or  ($0.06)  per  share.  Additionally,  the  Company  recorded  an  asset
retirement  obligation  liability of $358,419 and an increase to net  properties
and equipment and other assets of $210,206 upon adoption of SFAS No. 143.

The asset retirement  obligation,  which is included on the Consolidated Balance
Sheet was $375,529 at September 30, 2003. Accretion expense during the first six
months of fiscal 2004 was $11,736.

Open Disclosure Issues with the Securities and Exchange Commission
------------------------------------------------------------------

The Company is aware that the Staff of the SEC, in  consultation  with the Staff
of  the  Financial   Accounting   Standards   Board,   is  considering   certain
implementation issues in the application of provisions of Statement of Financial
Accounting Standards No. 141, Business Combinations,  and Statement of Financial
Accounting  Standards No. 142,  Goodwill and Other  Intangible  Assets (SFAS No.
142),  to  companies  in  the  extractive  industries,  including  oil  and  gas
companies. The Staff of the SEC is considering whether SFAS No. 142 requires

                                    Page 12
<PAGE>

registrants to reclassify costs  associated with mineral rights,  including both
proved and unproved  leasehold  acquisition  costs, as intangible  assets in the
balance  sheet,  apart  from  other  capitalized  oil  and gas  property  costs.
Historically,  the Company and all other oil and gas companies have included the
cost of these oil and gas leasehold interests as part of oil and gas properties.
The Staff is also  considering  whether  SFAS No. 142  requires  registrants  to
provide the  additional  disclosures  prescribed by SFAS No. 142 for  intangible
assets for costs associated with mineral rights.

The  reclassification of these amounts would not affect the method in which such
costs are  amortized or the manner in which the Company  assesses  impairment of
capitalized  costs.  As a  result,  net  income  would  not be  affected  by the
reclassification.

       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 September  30, 2003,  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 September 30, 2003, the Company had an outstanding loan balance of $1,750,000
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 $17,500, based on the outstanding
balance.

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 September 30, 2003, the Company's
largest  credit risk  associated  with any single  purchaser  was  $65,121.  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 our ability to obtain  capital for our
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's Chief Executive Officer and Chief Financial Officer (its principal
executive officer and principal financial officer, respectively) have concluded,
based on  their  evaluation  as of a date  within  90 days  prior to the date of
filing of this  quarterly  report,  that the Company's  disclosure  controls and
procedures are effective to ensure that information  required to be disclosed by
it in reports  filed or  submitted  by it under the  Securities  Exchange Act of

                                    Page 13
<PAGE>

1934, as amended,  is recorded,  processed,  summarized and reported  within the
time periods  specified in the SEC's rules and forms, and includes  controls and
procedures designed to ensure that information required to be disclosed by it in
such  reports is  accumulated  and  communicated  to the  Company's  management,
including  its  Chief  Executive  Officer  and  Chief  Financial   Officer,   as
appropriate to allow timely decisions regarding required disclosure.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the evaluation.

PART II - OTHER INFORMATION

Item 1.   Legal proceedings
          -----------------

          None.

Item 2.   Changes in securities
          ---------------------

          Refer to Note A in Notes to Consolidated  Financial  Statements  under
          the heading Stockholders' Equity.

Item 3.   Defaults upon senior securities
          -------------------------------

          None.

Item 4.   Submission or matters to a vote of security holders
          ---------------------------------------------------

          None.

Item 5.   Other Information
          -----------------

          On  September  8, 2003,  the  Common  Stock,  $0.50 par value,  of the
          Company  was  listed  and  commenced  trading  on the  American  Stock
          Exchange under the ticker symbol MXC.

Item 6.   Exhibits and Reports on Form 8-K
          --------------------------------

          a)   Exhibits

          31.1 Certification Pursuant to 302 of the Sarbanes-Oxley Act of 2002.

          31.2 Certification Pursuant to 302 of the Sarbanes-Oxley Act of 2002.

          32.1 Certification  Pursuant  to 18 U.S.C.  Section  1350,  as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

          32.2 Certification  Pursuant  to 18 U.S.C.  Section  1350,  as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

          b)   Reports on Form 8-K - No  reports  on Form 8-K were filed  during
               the quarter ended September 30, 2003.

                                    Page 14
<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: November 12, 2003                /s/ Nicholas C. Taylor
                                        -------------------------------
                                        Nicholas C. Taylor
                                        President



Dated: November 12, 2003                /s/ Tamala L. McComic
                                        -------------------------------
                                        Tamala L. McComic
                                        Vice President, Treasurer, and
                                        Assistant Secretary

                                    Page 15
<PAGE>