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, 1999

                          Commission file number 0-6994


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


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


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


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

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


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

 Common Stock, $0.50 par value: 1,623,289 shares outstanding at January 31, 2000

<PAGE>

                            MEXCO ENERGY CORPORATION
                                Table of Contents

                                                                            Page
PART I.  FINANCIAL INFORMATION

  Consolidated Balance Sheets as of December 31, 1999 (Unaudited)
  and March 31, 1999                                                          3

  Consolidated Statements of Operations (Unaudited) for the three
  and nine month periods ended December 31, 1999 and December 31, 1998        4

  Consolidated Statements of Cash Flows (Unaudited) for the nine
  month periods ended December 31, 1999 and December 31, 1998                 6

  Notes to Unaudited Consolidated Financial Statements                        7

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

  Quantitative and Qualitative Disclosures About Market Risk                 12


PART II.  OTHER INFORMATION                                                  13
---------------------------

SIGNATURES                                                                   14
----------
                                     Page 2
<PAGE>

                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                                   December 31,      March 31,
                                                       1999            1999
                                                   ------------    ------------
                                                    (Unaudited)
ASSETS
Current assets:
   Cash and cash equivalents                       $    134,799    $     96,198
   Accounts receivable:
      Oil and gas sales                                 230,348         179,269
      Trade                                               1,958            --
      Related parties                                     9,587           3,780
   Prepaid expenses                                      19,870          14,368
                                                   ------------    ------------
      Total current assets                              396,562         293,615

Property and equipment, at cost:
   Oil and gas properties and equipment,
      using full cost method, pledged                10,371,389      10,495,391
   Office and computer equipment and software            21,874          21,874
                                                   ------------    ------------
                                                     10,393,263      10,517,265
   Less accumulated depreciation, depletion
      and amortization                                7,072,763       6,767,865
                                                   ------------    ------------
      Property and equipment, net                     3,320,500       3,749,400
                                                   ------------    ------------
Total assets                                       $  3,717,062    $  4,043,015
                                                   ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt               $       --      $    516,000
   Accounts payable and accrued expenses                140,844          85,434
                                                   ------------    ------------
      Total current liabilities                         140,844         601,434

Long-term debt                                        1,200,000       1,268,000

Stockholders' equity:
   Preferred stock, par value $1 per share;
      10,000,000 shares authorized; none issued            --              --
   Common stock, par value $0.50 per share;
      40,000,000 shares authorized;
      1,623,289 shares issued and outstanding           811,644         811,644
   Additional paid in capital                         2,875,399       2,875,399
   Retained earnings (deficit)                       (1,310,825)     (1,513,462)
                                                   ------------    ------------
      Total stockholders' equity                      2,376,218       2,173,581
                                                   ------------    ------------
Total liabilities and stockholders' equity         $  3,717,062    $  4,043,015
                                                   ============    ============

                    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 Months ended December 31, 1999 and 1998
                                   (Unaudited)

                                                        1999            1998
                                                    -----------     -----------
Operating revenue:
   Oil and gas sales                                $   429,744     $   329,541
   Property operator fees                                 1,723           1,043
   Other                                                   --                77
                                                    -----------     -----------
      Total operating revenue                           431,467         330,661

Operating costs and expenses:
   Oil and gas production                               115,227         154,809
   Depreciation, depletion and amortization              98,650         174,428
   General and administrative                            45,495          47,451
                                                    -----------     -----------
      Total operating costs and expenses                259,372         376,688

Other income and (expenses):
   Interest income                                          845           1,740
   Interest expense                                     (26,899)        (36,961)
                                                    -----------     -----------
      Net other income and expenses                     (26,054)        (35,221)
                                                    -----------     -----------
Income (loss) before income taxes                       146,041         (81,248)

Income tax expense                                         --              --
                                                    -----------     -----------
Net income (loss)                                   $   146,041     $   (81,248)
                                                    ===========     ===========

Net income (loss) per share:
      Basic                                         $      0.09     $     (0.05)
      Diluted                                       $      0.09     $     (0.05)

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

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

                                     Page 4
<PAGE>

                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Nine Months ended December 31, 1999 and 1998
                                   (Unaudited)

                                                        1999            1998
                                                    -----------     -----------
Operating revenue:
   Oil and gas sales                                $ 1,165,385     $ 1,155,638
   Property operator fees                                 4,521           3,130
   Other                                                  1,018           2,273
                                                    -----------     -----------
      Total operating revenue                         1,170,924       1,161,041

Operating costs and expenses:
   Oil and gas production                               418,678         523,251
   Depreciation, depletion and amortization             304,898         839,237
   General and administrative                           164,991         173,659
                                                    -----------     -----------
      Total operating costs and expenses                888,567       1,536,147

Other income and (expenses):
   Interest income                                        1,524           4,880
   Interest expense                                     (81,244)       (115,980)
                                                    -----------     -----------
      Net other income and expenses                     (79,720)       (111,100)
                                                    -----------     -----------
Income (loss) before income taxes                       202,637        (486,206)

Income tax expense                                         --              --
                                                    -----------     -----------
Net income (loss)                                   $   202,637     $  (486,206)
                                                    ===========     ===========

Net income (loss) per share:
   Basic                                            $      0.12     $     (0.30)
   Diluted                                          $      0.12     $     (0.30)

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

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

                                     Page 5
<PAGE>

                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Nine Months ended December 31, 1999 and 1998
                                   (Unaudited)

                                                            1999         1998
                                                         ---------    ---------
Cash flows from operating activities:
   Net income (loss) $                                     202,637    $(486,206)
   Adjustments to reconcile net loss to
      net cash provided by operating activities:
         Depreciation, depletion and amortization          304,898      839,237
         (Increase) decrease in accounts receivable        (58,844)      51,754
          Decrease in accounts payable                      (6,552)      (1,657)
          Increase in prepaid assets                        (5,502)      (2,440)
                                                         ---------    ---------
   Net cash provided by operating activities               436,637      400,688

Cash flows from investing activities:
   Additions to property and equipment                    (467,817)    (512,951)
   Sale of property and equipment                          653,781         --
                                                         ---------    ---------
   Net cash provided by (used in) investing activities     185,964     (512,951)

Cash flows from financing activities:
   Long-term borrowings                                    248,174         --
   Principal payments on long-term debt                   (832,174)        --
                                                         ---------    ---------
   Net cash used in financing activities                  (584,000)        --
                                                         ---------    ---------
Net increase (decrease) in cash                             38,601     (112,263)

Cash, beginning of the period                               96,198      241,348
                                                         ---------    ---------
Cash, end of period                                      $ 134,799    $ 129,085
                                                         =========    =========

Interest paid                                            $  83,202    $ 103,285
Income taxes paid                                        $    --      $    --

Non-cash investing and financing activities:
Included  in trade  accounts  payable at December  31,  1999 are  capital  costs
attributable to oil and gas properties of $87,003.

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

                                     Page 6
<PAGE>

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

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

   Organization and Basis of Presentation
   --------------------------------------

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

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

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

     In the  opinion of  management,  the  accompanying  unaudited  consolidated
financial  statements  contain all  adjustments  necessary to present fairly the
financial position of the Company and its wholly owned subsidiary as of December
31,  1999,  and the  results of its  operations  and cash flows for the  interim
periods  ended  December 31, 1999 and 1998.  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.

                                     Page 7
<PAGE>

                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                    Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

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

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations ("MDA") contains  "forward-looking  statements" within the meaning of
Section 27A of the  Securities Act of 1933, as amended (the  "Securities  Act"),
and  Section  21E of the  Securities  Exchange  Act of  1934,  as  amended  (the
"Exchange  Act").  All  statements,  other than  statements of  historical  fact
included  in  MD&A,  including  statements  regarding  the  Company's  operating
strategy,  plans,  objectives and beliefs of management  for future  operations,
planned capital  expenditures and acquisitions are  forward-looking  statements.
Although   the  Company   believes   that  the   assumptions   upon  which  such
forward-looking  statements are based are  reasonable,  it can give no assurance
that such assumptions will prove to be correct.

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

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

For the first  nine  months  of fiscal  2000,  cash  flow  from  operations  was
$436,637, which included the effects of an increase in accounts receivable and a
decrease in accounts  payable.  Net cash flow was $38,601.  Cash of $467,817 was
used  for  additions  to  property  and  equipment.  Sales  of the Lazy JL Field
properties, other oil and gas interests and salvaged equipment provided funds of
$653,781. Net cash of $584,000 reduced bank debt.

In  September  1998,  the Company,  as operator,  re-entered a gas well in Pecos
County, Texas at a cost of approximately  $111,000.  Funds for this project were
provided out of cash flow from operations and existing cash balances. A pipeline
connection  was made on  January  29,  1999.  The  Company  owns a 100%  working
interest and a 75.375% net revenue  interest in this well.  Operating  cash flow
from this well was  approximately  $20,000  for the first nine  months of fiscal
2000 and $52,000 since the well was completed.

In March 1999, the Company,  as operator,  re-entered a second gas well in Pecos
County, Texas at a cost to the Company of approximately  $79,000. Funds for this
project  were  provided  out of cash  flow from  operations  and  existing  cash
balances.  A pipeline  connection was made on April 20, 1999. The Company owns a
97% working interest and a 70.325% net revenue interest in this well.  Operating
cash flow from this well was approximately  $12,500 for the first nine months of
fiscal 2000.

As part of the Company's focus on increasing profit margins and concentrating on
gas reserves with low cost  operations,  the Company closed the sale of its Lazy
JL oil field properties in April 1999 for  approximately  $581,000.  The Company
used the sales proceeds to reduce its debt under the credit  facility  discussed
below.

In April 1999,  the  Company  acquired  interests  in  non-producing  acreage in
Schleicher County,  Texas at a cost of approximately  $66,000. In November 1999,
the  Company,  as  operator,  began  operations  to  re-enter a gas well on this
acreage in which the Company has an approximate  before-payout  working interest
of 97.247%  and net  revenue  interest of  76.029%.  The well was  completed  in
January  2000 and is awaiting a pipeline  connection.  As of  December  31, 1999
costs  associated  with the re-entry of this well were  approximately  $124,000.
Funds are being  provided out of cash flow from  operations  and  existing  cash
balances.

                                     Page 8
<PAGE>

In June 1999,  the Company  abandoned  the Inez Fasken lease in Midland  County,
Texas. Plugging costs, net of salvage,  were approximately  $11,000. The Company
sold equipment salvaged from this lease for approximately $28,000.

In July 1999, the Company acquired royalty  interests in a producing gas well in
Winkler County, Texas at a cost to the Company of approximately  $94,000.  Funds
for this  acquisition  were  provided by its credit  facility  discussed  below.
Operating cash flow from this well was approximately $6,000 for the period ended
December 31, 1999.

In July 1999, the Company acquired working  interests in and assumed  operations
of two producing gas wells in Schleicher County,  Texas at a cost to the Company
of  approximately  $138,000.  Funds for this  acquisition  were  provided by its
credit  facility   discussed  below.  The  Company  owns  working  interests  of
approximately 95% and 67.444% and net revenue interests of approximately 70.015%
and 54.682%,  respectively,  in these wells.  For the months of July and August,
the Company's  average daily production from these wells was approximately 7 mcf
and 57 mcf, respectively. In September, the Company re-worked one of these wells
and increased its average daily production from 7 mcf to approximately  232 mcf,
which will decline as the reservoir is depleted over time.  Operating  cash flow
from these wells was  approximately  $65,000 for the period  ended  December 31,
1999.

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

At December 31, 1999, the Company had working capital of approximately  $256,000
compared  to negative  working  capital of  approximately  $308,000 at March 31,
1999, an increase of $564,000. This is due primarily to the reduction in current
maturities of bank debt of $516,000 and higher oil and gas prices.

The  Company  has a  revolving  credit  agreement  with  Bank of  America,  N.A.
("Bank"), formerly NationsBank of Texas, which provides for a credit facility of
$3,000,000,  subject to a borrowing base determination.  The credit facility was
amended on August 15, 1999 to increase the borrowing  base to  $2,200,000,  with
scheduled monthly  reductions of $28,000 per month beginning  September 5, 1999,
and extend the maturity  date to August 15, 2001.  As of December 31, 1999,  the
balance  outstanding  under this agreement was $1,200,000 and the borrowing base
was $2,038,000.  No required  principal payments are anticipated for fiscal 2000
or 2001.  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 (8.5%
at December 31, 1999). This agreement  generally restricts the Company's ability
to transfer assets or control of the Company,  incur debt, extend credit, change
the nature of the Company's business,  substantially change management personnel
or pay dividends.

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

                                     Page 9
<PAGE>

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

The Year 2000 problem is the result of computer systems and other equipment with
embedded logic control  devices that were designed to use two digits rather than
four  digits to define a year.  As a result  these  systems  and  devices may be
unable to distinguish between the year 1900 and the year 2000. If not corrected,
such misinterpretations could result in systems failures or erroneous results.

The Company's desktop computer system is compliant,  and its accounting software
vendor  modified  its  software  to  accurately  handle the new  century,  at no
additional  cost to the Company.  The Company has had no problems or significant
expenditures associated with its own systems and devises.

The failure to correct,  on a timely  basis,  a material Year 2000 problem could
result in an  interruption in the Company's  operations or business  activities.
Such interruptions  could have a material adverse affect on Company's results of
operations,  liquidity and financial condition.  To mitigate or prevent the risk
related to the Company's  customers and suppliers,  formal  communications  were
initiated  with key third  parties in an attempt to ascertain  their  ability to
continue  to meet their  obligations  to the  Company.  The  Company  has had no
problems  with its customers  and  suppliers,  and there is no reason to believe
that they will not continue to be able to meet their obligations to the Company.
The Company cannot guarantee that all third parties of business  importance were
prepared for the Year 2000. Should future circumstances  warrant it, the Company
will  pursue  alternative  sources of supply and  markets.  Due to the  inherent
uncertainty  associated with the Year 2000 issue,  particularly as it relates to
third  party Year 2000  readiness,  the  Company  cannot  ascertain  whether the
consequences  of Year 2000 failures will have a material impact on the Company's
financial results, liquidity, condition or reporting.

The foregoing disclosure is based on the Company's current  expectations,  which
could ultimately prove to be inaccurate.  Factors, many of which are outside the
control  of  the  Company,   include  the  failure  of   customers,   suppliers,
governmental  entities  and others to achieve  compliance  and the  inability or
failure  to  identify  all  critical  Year 2000  issues or  develop  appropriate
contingency plans for all Year 2000 issues that may have arisen.

Results of Operations - Three Months Ended December 31, 1999 and 1998
---------------------------------------------------------------------

Net income for the quarter ended  December 31, 1999 was  $146,041.  The net loss
for the quarter ended  December 31, 1998 was $81,248.  Individual  categories of
income and expense are discussed below.

Oil and gas sales  increased  from $329,541 for the third quarter of fiscal 1999
to $429,744 for the same period of fiscal 2000. This increase of $100,203 or 30%
resulted  primarily from higher oil and gas prices and increased gas production,
offset  in part by  decreased  oil  production.  The sale of Lazy JL  properties
accounts  for a decrease  for the third  quarter of fiscal  2000 as  compared to
fiscal  1999 of  $85,725 in oil and gas  sales,  7,250 bbls and 855 mcf.  Normal
production  declines,  down time due to remedial work and the abandonment of the
Inez Fasken lease are other factors that account for declines in production. Oil
and gas  production  quantities  were 4,633 bbls and  129,637  mcf for the third
quarter of fiscal  2000 and 12,367  bbls and  106,762  mcf for  fiscal  1999,  a
decrease of 7,734 bbls,  or 63%,  and an increase of 22,875 mcf, or 21%. The two
gas  re-entries  and  property  acquisitions  discussed  previously  account for
increases in gas  production of 32,711 mcf for the third quarter of fiscal 2000.
Average gas prices  increased from $1.74 per mcf for the third quarter of fiscal
1999 to $2.48 per mcf for fiscal 2000,  while average oil prices  increased from
$11.60 per bbl for fiscal 1999 to $23.33 per bbl for fiscal 2000.

                                    Page 10
<PAGE>

Production costs decreased from $154,809 for the third quarter of fiscal 1999 to
$115,227  for the same period of fiscal  2000, a decrease of $39,582 or 26%. The
sale of Lazy JL  properties  reduced  production  costs for the third quarter of
2000 as compared to fiscal 1999 by  $67,018,  while major  remedial  repairs and
costs associated with new wells increased production costs.

General and administrative expenses decreased from $47,451 for the third quarter
of fiscal  1999 to $45,495  for the same  period of fiscal  2000,  a decrease of
$1,956.

Depreciation,  depletion and amortization  based on production and other methods
decreased  from $174,428 for the third quarter of fiscal 1999 to $98,650 for the
same period of fiscal  2000,  a decrease of $75,778 or 43%.  This  decrease  was
primarily due a full cost ceiling write down of $288,393 in the first quarter of
fiscal 1999,  the sale of Lazy JL properties in the first quarter of fiscal 2000
and the acquisition of oil and gas properties discussed above.

Interest expense  decreased from $36,961 for the third quarter of fiscal 1999 to
$26,899 for the same period of fiscal  2000,  a decrease of $10,062 or 27%,  due
primarily to decreased borrowings outstanding.

Results of Operations - Nine Months Ended December 31, 1999 and 1998
--------------------------------------------------------------------

Net income for the nine months  ended  December 31, 1999 was  $202,637.  The net
loss for the nine months ended December 31, 1998 was $486,206,  which included a
full cost ceiling  write-down of $288,393.  Individual  categories of income and
expense are discussed below.

Oil and gas sales  increased from $1,155,638 for the first nine months of fiscal
1999 to  $1,165,385  for the same period of fiscal 2000;  an increase of $9,747.
The sale of Lazy JL properties accounts for a decrease for the first nine months
of fiscal  2000 as  compared  to fiscal  1999 of  $268,053 in oil and gas sales,
20,978 bbls and 4,036 mcf. Normal production declines, down time due to remedial
work and the abandonment of the Inez Fasken lease are other factors that account
for declines in production.  Oil and gas production  quantities were 13,323 bbls
and  394,982  mcf for the first nine  months of fiscal  2000 and 38,778 bbls and
350,578 mcf for fiscal 1999, a decrease of 25,455 bbls,  or 66%, and an increase
of  44,404  mcf,  or 13%.  The  two gas  re-entries  and  property  acquisitions
discussed  previously  account for increases in gas production of 65,641 mcf for
the first nine months of fiscal 2000.  Average gas prices  increased  from $1.94
per mcf for the first  nine  months of fiscal  1999 to $2.29 per mcf for  fiscal
2000,  while average oil prices increased from $12.27 per bbl for fiscal 1999 to
$19.70 per bbl for fiscal 2000.

Production  costs  decreased  from  $523,251 for the first nine months of fiscal
1999 to $418,678  for the same period of fiscal  2000, a decrease of $104,573 or
20%. The sale of Lazy JL properties  reduced production costs for the first nine
months of fiscal  2000 as  compared  to fiscal  1999 by  $215,040,  while  major
remedial  repairs,  plugging costs and costs associated with new wells increased
production costs.

General and  administrative  expenses decreased from $173,659 for the first nine
months of fiscal 1999 to $164,991 for the same period of fiscal 2000, a decrease
of $8,668.

Depreciation,  depletion and amortization  based on production and other methods
decreased from $839,237 for the first nine months of fiscal 1999 to $304,898 for
the same period of fiscal 2000, a decrease of $534,339 or 64%. This decrease was
primarily due a full cost ceiling write down of $288,393 in the first quarter of
fiscal 1999,  the sale of Lazy JL properties in the first quarter of fiscal 2000
and the acquisition of oil and gas properties discussed above.

                                    Page 11
<PAGE>

Interest  expense  decreased  from  $115,980 for the first nine months of fiscal
1999 to $81,244  for the same  period of fiscal  2000,  a decrease of $34,736 or
30%, due primarily to decreased borrowings outstanding.

           Quantitative and Qualitative Disclosures About Market Risk
           ----------------------------------------------------------

     All of the  Company's  financial  instruments  are for purposes  other than
trading.

     Interest Rate Risk. The following table  summarizes  fiscal year maturities
for the Company's  variable rate bank debt,  which is tied to prime rate. If the
interest  rate  on  the  Company's  bank  debt  increases  or  decreases  by one
percentage  point, the Company's annual pretax income would decrease or increase
by $12,000.
                                             2000          2001          2002
                                         ----------    ----------     ----------

   Variable rate bank debt               $    --       $    --        $1,200,000

     Credit Risk.  Credit risk is the risk of loss as a result of nonperformance
by counterparties of their contractual obligations. The Company's primary credit
risk is related to oil and gas  production  sold to various  purchasers  and the
receivables are generally uncollateralized.  At December 31, 1999, the Company's
largest  credit risk  associated  with any single  purchaser  was  $46,221.  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  dependent  upon the prices  received  for oil and
gas. Historically, the markets for oil and gas have been volatile and are likely
to continue to be so in the future.  Various  factors  beyond the control of the
Company affect the price of oil and gas,  including but not limited to worldwide
and  domestic  supplies  of oil and  gas,  the  ability  of the  members  of the
Organization of Petroleum Exporting Countries to agree to and maintain oil price
and   production   controls,   political   instability   or  armed  conflict  in
oil-producing  regions,  the price and level of  foreign  imports,  the level of
consumer  demand,   the  price  and  availability  of  alternative   fuels,  the
availability  of pipeline  capacity,  weather  conditions,  domestic and foreign
governmental  regulation and the overall economic  environment.  Any significant
decline in prices would  adversely  affect the Company's  revenues and operating
income and may require a reduction in the carrying  value of the  Company's  oil
and gas properties. If the average oil price for the first nine months of fiscal
2000 had increased or decreased by one cent,  the Company's  pretax income would
have decreased or increased by $133. If the average gas price for the first nine
months of fiscal 2000 had  increased  or decreased  by one cent,  the  Company's
pretax income would have decreased or increased by $3,950.

                                    Page 12
<PAGE>

PART II - OTHER INFORMATION

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

         None.

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

         None.

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

         None.

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

         None.

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

         None.

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

         None.

                                    Page 13
<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 7, 2000           /s/ Nicholas C. Taylor
                                  ----------------------------------------------
                                      Nicholas C. Taylor
                                      President

Dated: February 7, 2000           /s/ Linda J. Crass
                                  ----------------------------------------------
                                      Linda J. Crass
                                      Treasurer, Controller, Assistant Secretary

                                    Page 14