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, 2002

                          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:
                1,736,822 shares outstanding at January 31, 2003

<PAGE>

                            MEXCO ENERGY CORPORATION

                                Table of Contents
                                -----------------
                                                                            Page
                                                                            ----

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

     Item 1.  Consolidated Balance Sheets as of December 31, 2002
              (Unaudited) and March 31, 2002                                   3

              Consolidated Statements of Operations (Unaudited) for
              the three and nine months ended December 31, 2002 and
              December 31, 2001                                                4

              Consolidated Statements of Cash Flows (Unaudited) for
              the nine months ended December 31, 2002 and
              December 31, 2001                                                5

              Notes to Unaudited Consolidated Financial Statements             6

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

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk      13

     Item 4.  Controls and Procedures                                         14

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
----------

CERTIFICATIONS                                                                16
--------------

                                     Page 2
<PAGE>

                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                                   December 31,      March 31,
                                                       2002            2002
                                                   ------------    ------------
                                                   (Unaudited)
ASSETS
------
Current assets:
   Cash and cash equivalents                       $     72,181    $     44,958
   Accounts receivable:
      Oil and gas sales                                 373,721         229,257
      Trade                                              32,549          49,644
      Related parties                                     1,475             523
      Income taxes receivable                                --         104,030
   Prepaid expenses                                      29,985          24,124
                                                   ------------    ------------
         Total current assets                           509,911         452,536

   Property and equipment, at cost:
   Oil and gas properties and equipment,
      using full cost method, pledged                15,512,401      13,886,798
   Office and computer equipment
      and software                                       31,762          28,781
                                                   ------------    ------------
                                                     15,544,163      13,915,579
   Less accumulated depreciation,
      depletion and amortization                      8,403,436       8,020,150
                                                   ------------    ------------
         Property and equipment, net                  7,140,727       5,895,429
                                                   ------------    ------------
   Total assets                                    $  7,650,638    $  6,347,965
                                                   ============    ============

   LIABILITIES AND STOCKHOLDERS' EQUITY
   ------------------------------------
   Current liabilities:
   Accounts payable and accrued expenses           $    119,442    $    105,332
   Current portion of long-term debt                    343,838              --
   Obligations under capital leases                      50,863              --
                                                   ------------    ------------
Total current liabilities                               514,143         105,332

   Long-term debt                                     2,126,162       1,710,000

   Deferred income tax liability                        401,102         256,591

   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 December 31, 2002 and
      March 31,2002                                     883,283         883,283
   Additional paid in capital                         3,719,053       3,599,045
   Retained earnings                                    129,281        (206,286)
   Treasury stock, at cost (29,244 shares)             (122,386)             --
                                                   ------------    ------------
         Total stockholders' equity                   4,609,231       4,276,042
                                                   ------------    ------------
   Total liabilities and stockholders'
      equity                                       $  7,650,638    $  6,347,965
                                                   ============    ============

                    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 Nine Months ended December 31, 2002 and 2001
                                   (Unaudited)

<TABLE>
<CAPTION>
                                           Three Months Ended             Nine Months Ended
                                               December 31                   December 31
                                           2002           2001           2002           2001
                                       -----------    -----------    -----------    -----------
<S>                                    <C>            <C>            <C>            <C>
Operating revenue:
   Oil and gas sales                   $   668,039    $   329,953    $ 1,724,869    $ 1,359,502
   Other                                   256,440          1,133        265,891          5,564
                                       -----------    -----------    -----------    -----------

      Total operating revenue              924,479        331,086      1,990,760      1,365,066

Operating costs and expenses:
   Oil and gas production                  233,077        130,547        622,286        501,652

   Depreciation, depletion
      and amortization                     136,788        106,337        383,286        312,167
   General and administrative              203,623        119,666        450,387        309,970
                                       -----------    -----------    -----------    -----------

      Total operating costs
         and expenses                      573,488        356,550      1,455,959      1,123,789
                                       -----------    -----------    -----------    -----------

                                           350,991        (25,464)       534,801        241,277

Other income and (expenses):
   Interest income                              89            676            333          2,346
   Interest expense                        (24,932)       (16,251)       (68,078)       (38,964)
                                       -----------    -----------    -----------    -----------

      Net other income and expenses        (24,843)       (15,575)       (67,745)       (36,618)
                                       -----------    -----------    -----------    -----------

Income (loss) before income taxes          326,148        (41,039)       467,056        204,659

Income tax benefit - current               (13,026)            --        (13,026)       (10,977)
Income tax expense - deferred              101,105         (8,501)       144,511         75,333
                                       -----------    -----------    -----------    -----------

Net income (loss)                      $   238,069    ($   32,538)   $   335,571    $   140,303
                                       ===========    ===========    ===========    ===========

Net income (loss) per share:
   Basic                               $      0.14    ($     0.02)   $      0.19    $      0.08
   Diluted                             $      0.14    ($     0.02)   $      0.19    $      0.08

Weighted average shares outstanding:
   Basic                                 1,737,322      1,763,471      1,742,955      1,768,569
   Diluted                               1,737,322      1,763,471      1,746,057      1,769,326
</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 Nine Months ended December 31, 2002 and 2001
                                   (Unaudited)

                                                       2002            2001
                                                   ------------    ------------
Cash flows from operating activities:
   Net income                                      $    335,571    $    140,303
   Adjustments to reconcile net income
      to net cash provided by operating
      activities:
      Increase in deferred income taxes                 144,511          75,333
      Stock-based compensation                           46,457          38,348
      Depreciation, depletion and
         amortization                                   383,286         312,167
      (Increase) decrease in
         accounts receivable                            (23,209)        283,669
      Increase in accounts payable
         and accrued expenses                             7,704         (15,213)
      (Increase)decrease in prepaid expenses             (5,861)         27,246
      Increase(decrease)in income taxes payable              --         (51,637)
                                                   ------------    ------------
      Net cash provided by operating
         activities                                     888,459         810,216

Cash flows from investing activities:
   Additions to property and equipment               (1,491,700)     (1,833,497)
                                                   ------------    ------------
      Net cash used in investing
         activities                                  (1,491,700)     (1,833,497)

Cash flows from financing activities:
   Acquisition of treasury stock                       (122,386)        (82,396)
   Payments of capital lease obligations                 (7,150)             --
   Principal payments on long-term debt                (150,000)        (50,000)
   Principal borrowings on
      long-term debt                                    910,000         850,000
                                                   ------------    ------------
   Net cash provided by financing activities            630,464         717,604
                                                   ------------    ------------

Net increase (decrease) in cash                          27,223        (305,677)

Cash, beginning of the period                            44,958         378,816
                                                   ------------    ------------

Cash, end of period                                $     72,181    $     73,139
                                                   ============    ============

Interest paid                                      $     66,033    $     37,839
Income taxes paid                                  $         --    $     79,672

Supplemental Disclosure of Non-Cash Investing
   and financing activities
Fair value of warrants issued for
   Oil and gas properties                          $     73,551
Acquisition of equipment under capital leases      $     56,930
Issuance of common stock in exchange for
   Oil and gas properties                                          $     82,800

                    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)  necessary to present fairly the financial  position of the
Company and its wholly owned subsidiary as of December 31, 2002, and the results
of its operations and cash flows for the interim periods ended December 31, 2002
and  2001.  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.

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.

Earnings Per Share
------------------

     Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding during the period.  Diluted earnings
per share is computed by dividing net income by the weighted  average  number of
common shares and dilutive  potential common shares (stock options and warrants)
outstanding  during the period.  The following is a reconciliation of the number
of shares  used in the  calculation  of basic  earnings  per  share and  diluted
earnings per share for the three and nine-month  periods ended December 31, 2002
and 2001.

                                     Page 6
<PAGE>

                                     Three Months Ended      Nine Months Ended
                                        December 31             December 31
                                   ---------------------   ---------------------
                                      2002        2001        2002        2001
                                      ----        ----        ----        ----
Weighted average number of
   common shares outstanding       1,737,322   1,763,471   1,742,955   1,768,569
Incremental shares from the
   assumed exercise of dilutive
   stock options and warrants             --          --       3,102         757
                                   ---------   ---------   ---------   ---------
Dilutive potential common shares   1,737,322   1,763,471   1,746,057   1,769,326

     Options and warrants to purchase 388,500 and 200,000 shares  outstanding at
December 31, 2002 and December 31, 2001, respectively,  were not included in the
computation  of diluted  net income per share  because  either (i) the  exercise
price of the options and warrants  was greater than the average  market price of
the  common  stock of the  Company,  or (ii)  the  Company  had a net loss  from
continuing operations and, therefore, the effect would be antidilutive.

     Weighted average number of common shares outstanding and earnings per share
have been  adjusted  to reflect the 10% stock  dividend  effected on February 1,
2002.

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

     The  current  income  tax  benefit of $13,026  for the three  months  ended
December 31, 2002  represents a refund  received from prior income taxes paid in
1997.  There is no additional  current  income tax expense for the three or nine
months ended December 31, 2002 due to a tax loss  carryforward of  approximately
$283,000 from the year ending March 31, 2002.  During the quarter ended December
31, 2002,  the  Company's  tax  provisions  were less than expected at statutory
rates because of the effect of graduated rates.

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

Through the end of December 2002,  the Company paid $122,386 to purchase  29,244
shares of its common stock for treasury.

Exploration Agreement
---------------------

On December 5, 2002,  the Company  entered into an  exploration  agreement  with
Falcon Bay Operating,  LLC. Pursuant to such agreement, the Company has obtained
the right to  purchase  and  inventory  seismic  data and acreage in the shallow
water areas of Texas and  Louisiana.  In  consideration  for the right to obtain
four such prospects,  the Company has issued warrants to purchase 107,500 shares
of common  stock at an  exercise  price of $5.00 per share.  Such  warrants  are
exercisable for a period of two years from date of grant.  Additional  warrants,
exercisable at the same exercise price and exercisable  for two years,  would be
issued  covering  322,500  shares  upon  exercise of the  Registrant's  right to
participate in a total of four prospects.  This information is contained in Form
8-K filed on December 6, 2002.

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

On November 15, 2002,  the Company's  revolving  credit  agreement  with Bank of
America,  N.A.  ("Bank"),  which  originally  matured  on August 15,  2003,  was
extended  for one year.  The  financial  statements  were  prepared  using  this
extended maturity date of August 15, 2004.

Current Lease Obligations
-------------------------

During the third quarter,  the Company began leasing two 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 and was $56,930 on December 31, 2002. Amortization of assets under
capital leases is

                                     Page 7
<PAGE>

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
current lease  obligation  associated  with these two compressors was $50,863 on
December 31, 2002.

Lawsuit Settlement
------------------

During the third  quarter,  the Company  received  proceeds of $254,862 from the
settlement of a class action lawsuit against a gas purchaser  involving contract
price disputes.

Recently Issued Accounting Pronouncements
-----------------------------------------

In June 2001, the FASB issued Statement No. 143 "Accounting for Asset Retirement
Obligations"  which establishes  requirements for the accounting of removal-type
costs  associated with asset  retirements.  The standard is effective for fiscal
years beginning after June 15, 2002, with earlier application encouraged.  As of
December  31,  2002,  the  Company is  evaluating  the  impact to its  financial
statements upon adoption.

On  October 3, 2001,  the FASB  issued  Statement  No. 144  "Accounting  for the
Impairment or Disposal of Long-Lived Assets". This pronouncement  supercedes FAS
121  "Accounting  for the  Impairment  of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed"  and  eliminates  the  requirement  of  Statement  121 to
allocate  goodwill to long-lived  assets to be tested for impairment.  Statement
144 also describes a probability-weighted  cash flow estimation approach to deal
with situations in which  alternative  courses of action to recover the carrying
amount of a long-lived asset are under consideration or a range is estimated for
the amount of possible  future cash flows.  The  statement  also  establishes  a
"primary-asset"  approach to  determine  the cash flow  estimation  period for a
group of assets and  liabilities  that  represents  the unit of accounting for a
long-lived  asset to be held and used.  The  provisions  of this  Statement  are
effective  for  financial  statements  issued for fiscal years  beginning  after
December 15, 2001,  and interim  periods  within those fiscal years,  with early
adoption  encouraged.  There is no  current  impact to the  Company's  financial
statements from the adoption of this pronouncement.

In April 2002, the FASB issued Statement No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections."  SFAS No. 145, which is effective for fiscal years beginning after
May 15, 2002, most  significantly,  eliminates the requirement under Statement 4
to aggregate all gains and losses from extinguishments of debt, and if material,
be  classified  as an  extraordinary  item.  As a result,  gains and losses from
extinguishments of debt should be classified as extraordinary items only if they
meet the  criteria in Opinion 30.  Applying  the  provisions  of Opinion 30 will
distinguish  transactions that are part of an entity's recurring operations from
those  that  are  unusual  or   infrequent   or  that  meet  the   criteria  for
classification  as an  extraordinary  item.  There is no  current  impact to the
Company's financial statements from the adoption of this pronouncement.

In June  2002,  the  FASB  issued  Statement  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal Activities." The standard requires companies to
recognize  costs  associated  with  exit or  disposal  activities  when they are
incurred  rather than at the date of a commitment  to an exit or disposal  plan.
Statement  146 is to be applied  prospectively  to exit or  disposal  activities
initiated  after  December  31,  2002.  The  Company  expects  no  impact to its
financial  statements as the Company does not anticipate exiting or disposing of
any of its activities.

In December 2002, the FASB issued  Statement of Financial  Accounting  Standards
No. 148, "Accounting for Stock-Based  Compensation-Transition  and Disclosure-an
amendment of FAS 123 ("SFAS 148").  This statement amends Statement of Financial
Accounting Standards No. 123,  "Accounting for Stock-Based  Compensation" ("SFAS
123"), to provide  alternative  methods of transition for a voluntary  change to
the fair value based method of

                                     Page 8
<PAGE>

accounting  for  stock-based  employee  compensation  and amends the  disclosure
requirements  to SFAS 123 to require  prominent  disclosures  in both annual and
interim  financial  statements  about the method of accounting  for  stock-based
employee compensation and the effect of the method used on reported results. The
transition  and  annual  disclosure  provisions  of SFAS 148 are  effective  for
interim  periods  beginning  after December 15, 2002. The Company will adopt the
disclosure requirements of SFAS 148 on January 1, 2003.

                     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 our
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 nine months of fiscal 2003, cash flow from operations was $888,459
compared to $810,215  for the first nine  months of fiscal  2002.  The cash flow
from operations for the first nine months of fiscal 2003 included the effects of
an increase in deferred income taxes,  prepaid expenses and accounts receivable.
Cash of $1,491,700  was used for additions to property and equipment and cash of
$122,386  was used to  acquire  treasury  stock,  of which  $910,000  came  from
borrowings. Accordingly, net cash increased $27,223. Non cash items included the
fair value of the 107,500  warrants issued for oil and gas properties  described
further in the Form 8-K filed on December 6, 2002.  Non cash items also included
the acquisition of equipment under capital  leases.  This equipment  consists of
two gas compressors,  which have been connected to two of the company's operated
leases in Pecos County, Texas.

In fiscal 2002,  the board of directors  authorized the use of up to $250,000 to
repurchase  shares of the  Company's  stock.  During  fiscal  2002,  the Company
repurchased  22,533  shares,  at an aggregate  cost of $91,231.  Of these shares
18,400 were reissued in exchange for oil and gas lease rights  representing  368
net mineral acres valued at  approximately  $83,000.  The remaining 4,133 shares
were cancelled. For fiscal 2003, the

                                     Page 9
<PAGE>

board of directors has authorized the use of up to $250,000 to repurchase shares
of the Company's  common stock of which,  through the end of January  2003,  the
Company has used  $124,961 and  purchased  29,744 shares of its common stock for
treasury.

In March 2002,  the Company  acquired  867 gross  acres,  605 net acres in Pecos
County, Texas for approximately  $107,000. The Company had possible 5 re-entries
and 4 proven  undeveloped  drilling  locations on this acreage.  An  engineering
study by reservoir engineers estimated  significant proven undeveloped  reserves
on this acreage.  Development of these  properties has begun in fiscal 2003 with
the re-entry of 4 abandoned wellbores. The total cost to the Company for these 4
re-entries was approximately  $506,000 and the current combined production rates
are 9 barrels of oil ("bbls") per day and 40 thousand  cubic feet of gas ("mcf")
per day. Additional opportunities are being evaluated in this area.

On December 5, 2002,  the Company  entered into a  participation  agreement with
Falcon Bay  Exploration,  LLC  exercising  its right to purchase at an aggregate
cash price of $597,301  the  acreage and seismic  data on the first of four such
prospects  referred  to in the  exploration  agreement  between  the Company and
Falcon Bay Exploration,  LLC. This information is contained in Form 8-K filed by
the Company on December 6, 2002.

During the second quarter the Company  participated in the drilling of two wells
by outside operators.  One well is an offset to a well the Company currently has
an interest in,  located in Nolan  County.  The well has been  completed  and is
currently  on  production.  The  combined  production  of the two wells in Nolan
County  is  currently  50 bbls of oil  per day and 100 mcf of gas per  day.  The
Company has a 12.5%  working  interest and a 9.75% net revenue  interest in each
well.  The  approximate  cost to the Company for the new well was  $21,000.  The
Company has committed to  participate  in the drilling of an  additional  offset
well in Nolan County,  with an approximate cost to the Company of $50,000.  This
well should be drilled in late February 2003. The second well, in Reeves County,
is a sidetrack  from an existing  wellbore.  The well is completed and currently
producing approximately 1 million cubic feet ("mmcf") per day. The Company has a
4% working  interest and a 3% net revenue interest in this well. The approximate
cost to the Company was $35,000.

During the third quarter the Company committed to participate in the drilling of
a new well in Callahan County. Anticipated spud date is early February 2003 with
a completed cost to the Company of approximately $27,000.

During the third quarter the Company  acquired three gas  compressors  which are
connected  to three  different  operated  leases in Pecos  County.  Two of these
compressors  were acquired  under  capital  leases for $56,930 and the other was
acquired from cash flow from  operations  for  approximately  $24,000.  Combined
production   on  these  leases  with  the  added   compressors   has   increased
approximately 6 barrels of oil per day and 82 thousand cubic feet of gas ("mcf")
per day.

The Company has acquired and also is reviewing several other 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
remainder may be funded through borrowings on the bank credit facility discussed
below.

At December 31, 2002, the Company had a working capital deficit of approximately
$4,232 compared to working capital of approximately  $347,204 at March 31, 2002,
a decrease  of  $351,436.  This is  primarily  the result of an  increase in the
Company's  current  liabilities,  including  obligations under capital leases of
$50,863 and the current portion of the Company's line of credit of $343,838. The
borrowing base on the Company's line of credit is currently  reducing at $30,814
per month,  which will result in required  principal  reductions  by the Company
over the next 12 months or until such time the borrowing base is  re-determined.
The total balance on this line of credit as of February 4, 2003 is $2,400,000.

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

                                    Page 10
<PAGE>

determination.  The borrowing base was originally decreased to $2,200,000,  with
scheduled  monthly  reductions  of the available  borrowing  base of $25,581 per
month beginning  September 5, 2002, and the maturity date was originally  August
15,  2003.  The  borrowing  base was  re-determined  on  September  10, 2002 and
increased  to  $2,586,000  with monthly  commitment  reductions  of $33,150.  On
November 15,  2002,  the  maturity  date was  extended to August 15,  2004.  The
borrowing  base was  re-determined  on this date and reduced to $2,526,744  with
monthly  commitment  reductions of $30,814  beginning on December 5, 2002. As of
December 31, 2002, the balance  outstanding under this agreement was $2,470,000.
Principal payments are anticipated to be required for fiscal 2003 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 (4.25% at December 31,  2002).  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 December 31, 2002 and 2001
---------------------------------------------------------------------

Net income  increased  from a net loss of $32,538 for the quarter ended December
31,  2001 to a profit of $238,069  for the  quarter  ended  December  31,  2002.
Individual categories of income and expense are discussed below.

Oil and gas sales  increased  from $329,953 for the third quarter of fiscal 2002
to  $668,039  for the same  period  of fiscal  2003.  This  increase  of 102% or
$338,086  resulted  from  higher oil and gas prices  and  increased  oil and gas
production.  Average  gas  prices  increased  from  $2.05  per mcf for the third
quarter  of  fiscal  2002 to $3.69 per mcf for the same  period of fiscal  2003,
while average oil prices  increased from $18.15 per bbl for the third quarter of
fiscal 2002 to $26.48 for the same period of fiscal 2003. Oil and gas production
quantities were 5,034 barrels  ("bbls") and 116,319  thousand cubic feet ("mcf")
for the third quarter of fiscal 2002 and 5,712 bbls and 139,882 mcf for the same
period of fiscal 2003, an increase of 13% and 20%, respectively.

Other  income  increased  from  $1,133 for the third  quarter of fiscal  2002 to
$256,440  for the  same  period  of  fiscal  2003.  This was the  result  of the
settlement of a class action lawsuit against a gas purchaser  involving contract
price disputes. The net proceeds to the Company for settlement were $254,862.

Production  costs  increased  79% from  $130,547 for the third quarter of fiscal
2002 to  $233,077  for the same  period of fiscal  2003.  This was the result of
increased  production,  sales,  and a number of repairs to operated wells during
the quarter.

General and  administrative  expenses  increased 70% from $119,666 for the third
quarter of fiscal 2002 to $203,623 for the same period of fiscal  2003.  This is
primarily the result of an increase in consulting  services incurred in relation
to the lawsuit  settlement during the quarter.  The Company also had an increase
in engineering, land and geological services during the quarter.

Depreciation,  depletion and amortization  based on production and other methods
increased  29%,  from  $106,337 for the third quarter of fiscal 2002 to $136,788
for the same period of fiscal 2003 primarily due to a greater amount of reserves
attributable to proved undeveloped properties with significant development costs
and increased production during the third quarter of 2003.

                                    Page 11
<PAGE>

Interest expense increased 53% from $16,251 for the third quarter of fiscal 2002
to $24,932 for the same period of fiscal 2003, due to increased borrowings.

Results of  Operations  - Nine Months  Ended  December 31, 2002 and December 31,
--------------------------------------------------------------------------------
2001
----

Net income  increased  139% from a net profit of  $140,303  for the nine  months
ended  December  31, 2001 to a net profit of $335,571  for the nine months ended
December 31, 2002.  Individual  categories  of income and expense are  discussed
below.

Oil and gas  sales  increased  27% from  $1,359,502  for the nine  months  ended
December 31, 2001 to  $1,724,869  for the same period of fiscal 2003,  primarily
because  of  increased  production  and  increased  prices.  Average  gas prices
increased  from $3.04 per mcf for the first nine  months of fiscal 2002 to $3.19
per mcf for fiscal 2003,  and average oil prices  increased  from $22.51 per bbl
for the first nine months of fiscal 2002 to $25.46 for fiscal 2003.  Oil and gas
production quantities were 14,600 bbls and 339,418 mcf for the first nine months
of fiscal 2002 and 16,979 bbls and 405,179 for fiscal  2003,  an increase of 16%
and 19%, respectively.

Production  costs increased 24% from $501,652 for the nine months ended December
31, 2001 to $622,286 for the same period of fiscal 2003.  This was the result of
increased  production  and sales,  as well as an increased  number of repairs to
operated wells during fiscal 2003.

Depreciation,  depletion and amortization  based on production and other methods
increased  23%,  from  $312,167  for the first  nine  months  of fiscal  2002 to
$383,286 for the same period of fiscal 2003 primarily due to a greater amount of
reserves   attributable  to  proved  undeveloped   properties  with  significant
development costs and increased production for the year.

Interest expense  increased 75% from $38,964 for the first nine months of fiscal
2002 to $68,078 for the same period of fiscal 2003, due to increased borrowings.

Recently Issued Accounting Pronouncements
-----------------------------------------

In June 2001, the FASB issued Statement No. 143 "Accounting for Asset Retirement
Obligations"  which establishes  requirements for the accounting of removal-type
costs  associated with asset  retirements.  The standard is effective for fiscal
years beginning after June 15, 2002, with earlier application encouraged.  As of
December  31,  2002,  the  Company is  evaluating  the  impact to its  financial
statements upon adoption.

On  October 3, 2001,  the FASB  issued  Statement  No. 144  "Accounting  for the
Impairment or Disposal of Long-Lived Assets". This pronouncement  supercedes FAS
121  "Accounting  for the  Impairment  of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed"  and  eliminates  the  requirement  of  Statement  121 to
allocate  goodwill to long-lived  assets to be tested for impairment.  Statement
144 also describes a probability-weighted  cash flow estimation approach to deal
with situations in which  alternative  courses of action to recover the carrying
amount of a long-lived asset are under consideration or a range is estimated for
the amount of possible  future cash flows.  The  statement  also  establishes  a
"primary-asset"  approach to  determine  the cash flow  estimation  period for a
group of assets and  liabilities  that  represents  the unit of accounting for a
long-lived  asset to be held and used.  The  provisions  of this  Statement  are
effective  for  financial  statements  issued for fiscal years  beginning  after
December 15, 2001,  and interim  periods  within those fiscal years,  with early
adoption  encouraged.  There is no  current  impact to the  Company's  financial
statements from the adoption of this pronouncement.

In April 2002, the FASB issued Statement No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections."  SFAS No. 145, which is effective for fiscal years beginning after
May 15, 2002, most significantly eliminates the requirement under Statement 4 to
aggregate all gains and

                                    Page 12
<PAGE>

losses from  extinguishments  of debt,  and if  material,  be  classified  as an
extraordinary item. As a result,  gains and losses from  extinguishments of debt
should be  classified as  extraordinary  items only if they meet the criteria in
Opinion 30. Applying the provisions of Opinion 30 will distinguish  transactions
that are part of an entity's recurring operations from those that are unusual or
infrequent  or that meet the criteria  for  classification  as an  extraordinary
item. There is no current impact to the Company's financial  statements from the
adoption of this pronouncement.

In June  2002,  the  FASB  issued  Statement  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal Activities." The standard requires companies to
recognize  costs  associated  with  exit or  disposal  activities  when they are
incurred  rather than at the date of a commitment  to an exit or disposal  plan.
Statement  146 is to be applied  prospectively  to exit or  disposal  activities
initiated  after  December  31,  2002.  The  Company  expects  no  impact to its
financial  statements as the Company does not anticipate exiting or disposing of
any of its activities.

In December 2002, the FASB issued  Statement of Financial  Accounting  Standards
No. 148, "Accounting for Stock-Based  Compensation-Transition  and Disclosure-an
amendment of FAS 123 ("SFAS 148").  This statement amends Statement of Financial
Accounting Standards No. 123,  "Accounting for Stock-Based  Compensation" ("SFAS
123"), to provide  alternative  methods of transition for a voluntary  change to
the fair value based method of accounting for stock-based employee  compensation
and  amends  the  disclosure  requirements  to  SFAS  123 to  require  prominent
disclosures in both annual and interim financial  statements about the method of
accounting for stock-based  employee  compensation  and the effect of the method
used on reported  results.  The transition and annual  disclosure  provisions of
SFAS 148 are effective for interim  periods  beginning  after December 15, 2002.
The Company  will adopt the  disclosure  requirements  of SFAS 148 on January 1,
2003.

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 December  31, 2002,  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 December 31, 2002, the Company had an outstanding  loan balance of $2,470,000
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 $24,700, 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 December 31, 2002, the Company's
largest  credit risk  associated  with any single  purchaser was  $143,942.  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

                                    Page 13
<PAGE>

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
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 of matters to a vote of security holders
          ---------------------------------------------------

               None.

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

               None.

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

               a)   Exhibits

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

               99.2 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 -  Current  report  on Form  8-K  dated
                    December  5,  2002  was  filed   regarding  the  Falcon  Bay
                    Exploration Agreement.

                                    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: February 10, 2003                /s/ Nicholas C. Taylor
                                        -----------------------------------
                                        Nicholas C. Taylor
                                        President

Dated: February 10, 2003                /s/ Tamala L. McComic
                                        -----------------------------------
                                        Tamala L. McComic
                                        Treasurer, Controller and
                                        Assistant Secretary

                                    Page 15
<PAGE>

                                 CERTIFICATIONS

I,  Nicholas C. Taylor,  President and Chief  Executive  Officer of Mexco Energy
Corporation, certify that:

     1.   I have  reviewed  this  quarterly  report on Form 10-Q of Mexco Energy
          Corporation;

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  registrant
          and we have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of this Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing the equivalent function):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

     6.   The registrant's other certifying officers and I have indicated in the
          quarterly  report  whether  or not there were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

February 10, 2003                       /s/ Nicholas C. Taylor
                                        -----------------------------------
                                        Nicholas C. Taylor
                                        President and Director

                                    Page 16
<PAGE>

I, Tamala L. McComic, certify that:

     1.   I have  reviewed  this  quarterly  report on Form 10-Q of Mexco Energy
          Corporation;

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The registrant's  other certifying  officers and I are responsible for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the  registrant
          and we have:

          a.   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b.   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c.   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of this Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing the equivalent function):

          a.   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b.   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

     6.   The registrant's other certifying officers and I have indicated in the
          quarterly  report  whether  or not there were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

February 10, 2003                       /s/ Tamala L. McComic
                                        -----------------------------------
                                        Tamala L. McComic
                                        Treasurer, Controller and
                                        Assistant Secretary

                                    Page 17
<PAGE>