<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20539
                                   Form 10-Q

(Mark One)

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

For quarterly period ended            September 30, 1997
                           -------------------------------------------

                                      OR

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

For the transition period from ____________________  to ________________________

For Quarter Ended    September 30, 1997          Commission File No. 0-6994
                  -----------------------                            ------

                           MEXCO ENERGY CORPORATION
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)
                                        
       Colorado                                            84-0627918
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

   214 W. Texas, Suite 1101, Midland, TX                               79701
--------------------------------------------------------------------------------
   (Address of principal executive offices)                         (Zip Code)

                (915) 682-1119
--------------------------------------------------
Registrant's telephone number, including area code

                                     NONE
--------------------------------------------------------------------------------
(Former Name, Former Address & Former Fiscal Year if changed since last report)

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

       Class                                  Outstanding at September 30, 1997
-------------------------------               ---------------------------------
Common stock, $.50 par value                            1,623,229

                                       1
<PAGE>
 
                           MEXCO ENERGY CORPORATION

                                     Index
                                     
<TABLE> 
<CAPTION>    
                                                                      Page
<S>                                                                   <C> 
Part I.  Financial information:
 
               Consolidated Balance Sheets as of             
               September 30, 1997 and March 31, 1997                    3
                                                             
               Consolidated Statements of Operations         
               for the three months ended                    
               September 30, 1997 and 1996                              4
                                                             
               Consolidated Statements of Operations         
               for the six months ended                      
               September 30, 1997 and 1996                              5
                                                             
               Consolidated Statements of Cash Flows         
               for the six months ended September 30,        
               1997 and 1996                                            6
                                                             
               Notes to consolidated Financial Statements               7
                                                             
               Management's Discussion and Analysis          
               of Financial Condition and Results            
               of Operations                                            8
 

Part II.  Other information: Not Applicable
</TABLE> 

                                       2
<PAGE>
 
                           MEXCO ENERGY CORPORATION

                          CONSOLIDATED BALANCE SHEETS

                     September 30, 1997 and March 31, 1997

<TABLE> 
<CAPTION>
                                                                     September 30,        March 31,  
     ASSETS                                                              1997               1997     
     ------                                                          -------------        ---------- 
                                                                      (Unaudited)                    
<S>                                                                  <C>                  <C>        
CURRENT ASSETS                                                                                       
  Cash and cash equivalents                                          $   134,065          $    40,813
  Accounts receivable                                                    219,977              291,254
  Prepaid assets                                                           2,490                    -
                                                                     -----------          -----------
    Total current assets                                                 356,532              332,067
                                                                                                     
PROPERTY AND EQUIPMENT                                                                               
  Oil and gas properties-accounted for under the                                                     
    full cost method                                                   9,402,998            7,819,986
  Office furniture and fixtures                                           19,950                6,293
                                                                     -----------          -----------
                                                                       9,422,948            7,826,279
    Less accumulated depreciation, depletion and amortization         (3,451,177)          (3,049,147)
                                                                     -----------          -----------
        Net property and equipment                                     5,971,771            4,777,132
                                                                     -----------          -----------
                                                                                                     
        TOTAL ASSETS                                                 $ 6,328,303          $ 5,109,199
                                                                     ===========          ===========
                                                                                                     
          LIABILITIES AND STOCKHOLDERS' EQUITY                                                       
          ------------------------------------                                  
                                                                                                    
CURRENT LIABILITIES                                                                                  
  Accounts payable-trade                                             $   140,990          $   167,913
  Income taxes payable                                                     1,935               40,093
                                                                     -----------          -----------
    Total current liabilities                                            142,925              208,006
                                                                                                     
BANK LINE OF CREDIT                                                    1,822,000            1,637,000
                                                                                                     
DEFERRED INCOME TAXES                                                    371,813              341,181
                                                                     -----------          -----------
    Total liabilities                                                  2,336,738            2,186,187
                                                                                                     
STOCKHOLDERS' EQUITY                                                                                 
  Common Stock-$.50 par value, authorized-40,000,000,                                                
    issued and outstanding-1,623,229 at September 30, 1997                                           
    and 1,423,229 at March 31, 1997                                      811,614              711,614
  Preferred Stock-$1.00 par value, authorized-10,000,000,                                            
    none issued                                                                -                    -
  Paid in capital                                                      2,875,429            1,975,429
  Retained earnings                                                      304,522              235,969
                                                                     -----------          -----------
    Total stockholders' equity                                         3,991,565            2,923,012
                                                                     -----------          -----------
                                                                                                     
        TOTAL LIABILITIES & EQUITY                                   $ 6,328,303          $ 5,109,199
                                                                     ===========          ===========  
</TABLE>

   The accompanying notes are an integral part of these financial statements. 

                                       3
<PAGE>
 
                           MEXCO ENERGY CORPORATION
                                        
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                        
                        Three Months ended September 30
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                          1997        1996
                                                       ----------  ----------
<S>                                                    <C>         <C>
Revenues
  Oil and gas                                          $  499,536  $  333,873
  Administrative service charges and reimbursements         1,278       1,253
  Interest Income                                             629       1,738
  Other Income                                                722         599
                                                       ----------  ----------
    Total revenues                                        502,165     337,463
 
Costs and expenses
  Production costs                                        166,469      74,475
  Depreciation, depletion and amortization                210,658      91,414
  General and administrative                               45,625      20,566
  Interest                                                 27,259           -
                                                       ----------  ----------
    Total costs and expenses                              450,011     186,455
 
Income before income tax expense                           52,154     151,008
 
Income tax expense                                          8,233      21,243
                                                       ----------  ----------
 
NET INCOME                                             $   43,921  $  129,765
                                                       ==========  ==========
 
Net income per share                                   $      .03  $      .09
                                                       ==========  ==========
 
Weighted average common shares outstanding              1,623,229   1,423,229
                                                       ==========  ==========
</TABLE>

  The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>
 
                           MEXCO ENERGY CORPORATION
                                        
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                        
                         Six Months ended September 30
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                          1997        1996
                                                       ----------  ----------
<S>                                                    <C>         <C>
Revenues
  Oil and gas                                          $  954,239  $  600,887
  Administrative service charges and reimbursements         2,556       2,505
  Interest Income                                             900       3,909
  Other Income                                              1,285         607
                                                       ----------  ----------
    Total revenues                                        958,980     607,908
 
Costs and expenses
  Production costs                                        294,370     145,331
  Depreciation, depletion and amortization                402,030     161,659
  General and administrative                              117,997      55,734
  Interest                                                 58,824           -
                                                       ----------  ----------
    Total costs and expenses                              873,221     362,724
 
Income before income tax expense                           85,759     245,184
 
Income tax expense                                         17,205      45,619
                                                       ----------  ----------
 
NET INCOME                                             $   68,554  $  199,565
                                                       ==========  ==========
 
Net income per share                                   $      .04  $      .14
                                                       ==========  ==========
 
Weighted average common shares outstanding              1,566,398   1,423,229
                                                       ==========  ==========
</TABLE>

  The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>
 
                           MEXCO ENERGY CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                         Six Months ended September 30
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                              1997            1996
                                                              ----            ----
<S>                                                       <C>              <C>
Cash flows from operating activities:
------------------------------------
  Cash received from oil & gas operations                 $ 1,027,545      $ 568,010
  Cash paid for oil & gas operations                         (308,751)       (92,374)
  General & administrative expenses                          (136,953)       (52,273)
  Interest received                                               900          3,909
  Interest paid                                               (58,970)
  Other cash received                                           1,285            607
  Income taxes paid                                           (24,731)       ( 6,351)
                                                          -----------      ---------
    Net cash provided by operations                           500,325        421,528
 
Cash flows from investing activities:
------------------------------------
  Capital expenditures                                     (1,592,073)      (313,506)
                                                          -----------      --------- 
    Net cash used in investing activities                  (1,592,073)      (313,506)
                                                                                     
Cash flows from financing activities:                                                
------------------------------------                                                 
  Borrowings                                                  685,000              - 
  Principal payments on long-term debt                       (500,000)             - 
  Proceeds from issuance of common stock                    1,000,000              - 
                                                          -----------      --------- 
    Net cash provided by financing activities               1,185,000              - 
                                                                                     
Net increase in cash & cash equivalents                        93,252        108,022 
                                                                                     
Cash & cash equivalents at the beginning of the period         40,813        172,112 
                                                          -----------      --------- 
                                                                                     
Cash & cash equivalents at the end of the period          $   134,065      $ 280,134 
                                                          ===========      ========= 
                                                                                     
Reconciliation of net income to net cash                                             
----------------------------------------                                             
  provided by operating activities:                                                  
----------------------------------                                                   
Net income                                                $    68,554      $ 199,565 
                                                          -----------      --------- 
Adjustments to reconcile net income to                                               
  net cash provided by operating activities:                                         
    Depreciation, depletion and amortization                  402,030        161,659 
    Deferred income taxes                                      30,632              - 
    (Increase) decrease in accounts receivable                 71,277        (38,900)
    Increase (decrease) in accounts payable                   (31,520)        56,475 
    Increase in prepaid expenses                               (2,490)          (900)
    Increase (decrease) in income taxes payable               (38,158)        43,629 
                                                          -----------      --------- 
      Total adjustments                                       431,771        221,963 
                                                          -----------      --------- 
Net cash provided by operating activities                 $   500,325      $ 421,528 
                                                          ===========      =========  
</TABLE>

  The accompanying notes are an integral part of these financial statements.

                                       6
<PAGE>
 
                           MEXCO ENERGY CORPORATION

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          September 30, 1997 and 1996


NOTE A - BASIS OF PRESENTATION

In the opinion of the Company, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the financial position of
the Company as of September 30, 1997, the results of its operations for the
three-month and six-month periods ended September 30, 1997 and 1996. All
adjustments are of a normal and recurring nature.

The results of operations for the three-month and six-month periods ended
September 30, 1997 are not necessarily indicative of the results to be expected
for the full year.

The consolidated balance sheets as of March 31, 1997 have been prepared based
upon the Company's audited balance sheets as of that date.


NOTE B - ACQUISITION OF OIL AND GAS PROPERTIES

During the first quarter, the Company purchased approximately 1.5% in additional
mineral and royalty interests in a producing gas well located in the Gomez
field, Pecos County, Texas. This well is currently producing at the rate of
approximately six million cubic feet of gas per day.

During the second quarter, the Company purchased additional royalty interests in
the Gomez Field, Pecos County, Texas and additional working interests in the
Lazy JL Field, Garza County, Texas.

                                       7
<PAGE>
 
                     MANAGEMENT'S DISCUSSION AND ANALYSIS

                 OF THE CONSOLIDATED STATEMENTS OF OPERATIONS


Results of Operations - 3 Months Ended September 30, 1997
---------------------------------------------------------

Operating revenues increased $165,663 (50%) from the second quarter of fiscal
1996 due to increased oil and gas production from acquisitions and development
of oil and gas properties. Oil revenues increased $85,177 (40%) and gas revenues
increased $80,486 (65%). The average oil price for the second quarter of 1997
was $18.47 per barrel compared to $21.32 per barrel in the second quarter of
1996. The average gas price for the second quarter of 1997 was $2.09 per MCF
compared to $2.17 per MCF in the second quarter of 1996.

Production costs increased $91,994 (124%) due to increased production taxes and
lease operating expenses. Production taxes increased $13,292 (71%) in proportion
to increased revenues and lease operating costs increased $78,702 (141%) due to
acquisitions and development of working interests.

Depreciation, depletion and amortization increased $119,244 (130%) as compared 
to the same quarter during the prior year due to the addition of oil and gas
properties.

General and administrative costs increased $25,059 (122%) primarily due to
increased accounting, engineering and legal costs associated with property
acquisitions and a private placement.

Interest income decreased $1,109 (64%) due to decreased funds invested in money
market accounts.

Interest expense relates to principal borrowings against the Company's line of
credit.

During the quarter, the Company participated in the successful drilling and
completion of two (2) producing wells (each with approximately 43% working
interest and 32% net revenue interest) in the Lazy JL Field, Garza County,
Texas. The Company also participated in the drilling of one (1) well in the same
field which will be used as a water injection well.

Results of Operations - 6 Months Ended September 30, 1997
---------------------------------------------------------

Operating revenues increased $353,352 (59%) from the first six months of fiscal
1996 due to increased oil and gas production. Oil and gas revenues increased
$186,218 (49%) and $167,134 (75%) respectively due to increased numbers of wells
from acquisitions and development of properties. The average oil price for the
first six months of 1997 was $18.31 per barrel compared to $21.09 per barrel in
the first six months of 1996. The average gas price for the first six months of
1997 was $2.00 per MCF compared to $2.15 per MCF in the first six months of
1996.

Production costs increased $149,039 (103%) due to increased production taxes and
lease operating expenses. Production taxes increased $25,704 (76%) in proportion
to increased revenues and lease operating costs increased $123,335 (111%) due to
acquisitions and development of working interests.

                                       8
<PAGE>
 
Depreciation, depletion and amortization increased $240,371 (149%) due to the
addition of oil and gas properties.

General and administrative costs increased $62,263 (112%) due primarily to
increased accounting, engineering and legal costs associated with property
acquisitions and a private placement.

Interest income decreased $3,009 (77%) due to decreased funds invested in money
market accounts.

Interest expense relates to principal borrowings against the Company's line of
credit.

During the six months, the Company participated in the successful drilling and
completion of six (6) producing wells (each with approximately 43% working
interest and 32% net revenue interest) in the Lazy JL Field, Garza County,
Texas. The Company also participated in the drilling of one (1) well which will
be used as a water injection well and one (1) well which is currently shut in
pending evaluation.

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

Working capital increased $89,546 from March 31, 1997 primarily due to increased
revenues. During the first quarter, the Company increased capital by $1,000,000
from the issuance of 200,000 shares of common stock at $5.00 per share through a
private placement.  $500,000 of these proceeds were used to reduce the principal
borrowings under the line of credit and the remaining proceeds were used for
property acquisitions and drilling activity.

The Company has a $3,000,000 revolving line of credit with a borrowing base of
$2,200,000 which is reduced by $50,000 each month throughout the term of the
loan. The loan is reviewed by the bank annually and matures on August 15, 1999.
The Company currently has outstanding borrowings of $1,822,000 against the line.
At the current level of borrowing no principal payments will be due during the
current fiscal year. The obligations under the loan agreement are secured by
substantially all of the oil and gas properties of the Company and its
subsidiary. The loan agreement contains certain covenants relating to the
financial condition of the Company. Interest is payable monthly at the prime
rate as established by the bank.

The Company also has a letter of credit with the same bank which provides for
unsecured borrowings up to $25,000 in lieu of a plugging bond with the Texas
Railroad Commission covering properties operated by the Company.

The Company believes that it will have sufficient capital available from
borrowings combined with cash flows from operations to fund future capital
expenditures and to meet its financial obligations for the next twelve months.

Management cannot specifically identify the effects of inflation and other price
changes on operations.

                                       9
<PAGE>
 
Signatures
----------

Pursuant to the requirements of the Securities 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
                               (A Colorado Corporation)
                                                            
                                   
                               /s/ Nicholas C. Taylor
                               --------------------------------------------
                               Nicholas C. Taylor,
                               President and Treasurer

Date: November 13, 1997

                                       10