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, 2001

                          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:
                1,607,900 shares outstanding at January 31, 2002

<PAGE>
                            MEXCO ENERGY CORPORATION

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

                                                                            Page
                                                                            ----

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

       Consolidated Balance Sheets as of December 31, 2001
       (Unaudited) and March 31, 2001                                          3

       Consolidated  Statements of Operations (Unaudited)
       for the three and nine month periods ended December
       31, 2001 and December 31, 2000                                          4

       Consolidated  Statements of Cash Flows (Unaudited)
       for the nine month periods ended December 31, 2001
       and December 31, 2000                                                   5

       Notes to Unaudited Consolidated Financial Statements                    6

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

       Quantitative and Qualitative Disclosures About Market Risk             11


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


SIGNATURES                                                                    12
----------

                                     Page 2
<PAGE>

                     MEXCO ENERGY CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS


                                                 December 31,        March 31,
                                                     2001              2001
                                                 ------------      ------------
                                                 (Unaudited)
ASSETS
------
Current assets:
Cash and cash equivalents                        $     73,000      $    379,000
Accounts receivable:
  Oil and gas sales                                   186,000           489,000
  Trade                                                28,000             1,000
  Related parties                                       1,000             8,000
Prepaid expenses                                       47,000            74,000
                                                 ------------      ------------
    Total current assets                              335,000           951,000

Property and equipment, at cost:
Oil and gas properties and equipment,
  using full cost method, pledged                  13,550,000        11,558,000
Office and computer equipment
  and software                                         28,000            24,000
                                                 ------------      ------------
                                                   13,578,000        11,582,000
Less accumulated depreciation,
  depletion and amortization                        7,884,000         7,572,000
                                                 ------------      ------------
    Property and equipment, net                     5,694,000         4,010,000
                                                 ------------      ------------
Total assets                                     $  6,029,000      $  4,961,000
                                                 ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable and accrued expenses            $    143,000      $     78,000
Income taxes payable                                       --            52,000
                                                 ------------      ------------
    Total current liabilities                         143,000           130,000

Long-term debt                                      1,400,000           600,000

Deferred income tax liability                         261,000           185,000

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; 1,607,900
  shares issued December 31, 2001
  (1,621,387 shares issued March 31,2001)             804,000           811,000
Additional paid in capital                          2,874,000         2,900,000
Retained earnings                                     547,000           407,000
Treasury stock, at cost                                                 (72,000)
                                                 ------------      ------------
    Total stockholders' equity                      4,225,000         4,046,000
                                                 ------------      ------------
Total liabilities and stockholders'
  equity                                         $  6,029,000      $  4,961,000
                                                 ============      ============

                    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, 2001 and 2000
                                   (Unaudited)

<TABLE>
<CAPTION>
                                             Three Months Ended                Nine Months Ended
                                                 December 31                       December 31
                                        -----------------------------     -----------------------------
                                            2001             2000             2001             2000
                                        ------------     ------------     ------------     ------------
Operating revenue:
<S>                                     <C>              <C>              <C>              <C>
  Oil and gas sales                     $    330,000     $    798,000     $  1,360,000     $  2,103,000
  Other                                        1,000            2,000            5,000            6,000
                                        ------------     ------------     ------------     ------------

     Total operating revenue                 331,000          800,000        1,365,000        2,109,000

Operating costs and expenses:
  Oil and gas production                     131,000          135,000          502,000          376,000
  Depreciation, depletion
   and amortization                          106,000           59,000          312,000          274,000
  General and administrative                 120,000           74,000          310,000          238,000
                                        ------------     ------------     ------------     ------------

     Total operating costs
      and expenses                           357,000          268,000        1,124,000          888,000
                                        ------------     ------------     ------------     ------------

 Operating income                            (26,000)         532,000          241,000        1,221,000

Other income and (expenses):
  Interest income                              1,000                0            2,000            2,000
  Interest expense                           (16,000)         (24,000)         (39,000)         (80,000)
                                        ------------     ------------     ------------     ------------

     Net other income and expenses           (15,000)         (24,000)         (37,000)         (78,000)
                                        ------------     ------------     ------------     ------------

Income (loss) before income taxes            (41,000)         508,000          204,000        1,143,000

Income tax expense:
   Current                                        --            4,000          (12,000)           4,000
   Deferred                                   (9,000)          95,000           76,000           95,000
                                        ------------     ------------     ------------     ------------

                                              (9,000)          99,000           64,000           99,000
                                        ------------     ------------     ------------     ------------

Net income (loss)                       $    (32,000)    $    409,000     $    140,000     $  1,044,000
                                        ============     ============     ============     ============

Net income (loss) per share:
  Basic                                       ($0.02)    $       0.25     $       0.09     $       0.64
  Diluted                                     ($0.02)    $       0.25     $       0.09     $       0.64

Weighted average shares outstanding:
  Basic                                    1,603,155        1,623,293        1,607,790        1,623,293
  Diluted                                  1,603,155        1,634,827        1,608,478        1,627,138
</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, 2001 and 2000
                                   (Unaudited)


                                                      2001             2000
                                                  ------------     ------------
Cash flows from operating activities:
   Net income                                     $    140,000     $  1,044,000
   Adjustments to reconcile net income
      to net cash provided by operating
      activities:
      Increase in deferred income taxes                 76,000           96,000
      Stock-based compensation                          39,000           12,000
      Depreciation, depletion and
         Amortization                                  312,000          274,000
      (Increase) decrease in
         accounts receivable                           283,000         (244,000)
      Increase (decrease) in accounts
         payable and accrued expenses                  (15,000)          (5,000)
      Decrease (increase) in prepaid expenses           27,000          (47,000)
      Increase(decrease)in income taxes payable        (52,000)           4,000
                                                  ------------     ------------
      Net cash provided by operating
         activities                                    810,000        1,134,000

Cash flows from investing activities:
   Additions to property and equipment              (1,833,000)        (699,000)
                                                  ------------     ------------
      Net cash used in investing
         activities                                 (1,833,000)        (699,000)

Cash flows from financing activities:
    Repurchase of common stock                         (83,000)              --
    Principal payments on long-term debt               (50,000)        (300,000)
    Principal borrowings on
      long-term debt                                   850,000               --
                                                  ------------     ------------
    Net cash (used in) provided by
      financing activities                             717,000         (300,000)
                                                  ------------     ------------

Net increase (decrease) in cash                       (306,000)         135,000

Cash, beginning of the period                          379,000           98,000
                                                  ------------     ------------

Cash, end of period                               $     73,000     $    233,000
                                                  ============     ============


Interest paid                                     $     38,000     $     80,000
Income taxes paid                                 $     80,000     $         --


                    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 of normal  recurring
accruals)  necessary to present fairly the financial position of the Company and
its wholly owned  subsidiary  as of December  31,  2001,  and the results of its
operations  and cash flows for the interim  periods ended  December 31, 2001 and
2000.  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)  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 periods ended December 31, 2001 and 2000.

                                     Page 6
<PAGE>

<TABLE>
<CAPTION>
                                       Three Months Ended          Nine Months Ended
                                          December 31                 December 31
                                    ------------------------    ------------------------
                                       2001          2000          2001          2000
                                    ----------    ----------    ----------    ----------
<S>                                  <C>           <C>           <C>           <C>
Weighted average number of
  common shares outstanding          1,603,155     1,623,293     1,607,790     1,623,293
Incremental shares from the
  assumed exercise of dilutive
  stock options                              0        11,534           688         3,845
                                    ----------    ----------    ----------    ----------
Dilutive potential common shares     1,603,155     1,634,827     1,608,478     1,627,138
</TABLE>

     Options to purchase  200,000 and 90,000 shares  outstanding at December 31,
2001 and December 31, 2000,  respectively,  were not included in the computation
of diluted net income per share  because  either (i) the  exercise  price of the
options 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.

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

     The income tax provision in the  statements of operations for the three and
nine month periods ended  December 31, 2000 is less than the expected  statutory
rate primarily due to a decrease in valuation allowance.

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

     During  the  quarter  ended  December  31,  2001,  the  board of  directors
authorized the purchase of 23,333 shares of the Company's  common stock totaling
$93,000. Of these 23,333 purchased shares,  18,400 shares were exchanged for oil
and gas lease  rights  representing  368 net acres  valued at $83,000  and 2,700
shares  were  awarded  to  employees  and  consultants  valued at  $11,000.  The
remaining  2,233 shares  purchased along with the 11,254 shares of the Company's
stock held in the treasury were cancelled.

Related Party Transactions
--------------------------

     During the quarter ended  December 31, 2001,  the Company  entered into two
transactions with a Company director and employee.  In the first transaction the
Company  purchased oil and gas lease rights  representing 369 net acres for cash
consideration of $83,000. In the second transaction the Company exchanged 18,400
shares  of its  $.50  par  value  common  stock  for oil and  gas  lease  rights
representing  368 net acres with a value of $83,000.  Such  acreage is available
for exploration and production of oil and gas.

Subsequent Events
-----------------

     On February 1, 2002 the Company  unanimously  approved a 10% stock dividend
payable to all shareholders of record as of February 15, 2002.

                                     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 ("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").  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.

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 2002, cash flow from operations was $810,000
compared to $1,134,000  for the first nine months of fiscal 2001.  The cash flow
from operations for the first nine months of fiscal 2002 included the effects of
an increase in deferred income taxes and a decrease in both accounts  receivable
and prepaid expenses.  Cash of $1,833,000 was used for additions to property and
equipment,  of  which  $800,000  came  from  borrowings.  Accordingly,  net cash
decreased $306,000.

During the quarter ended  December 31, 2001,  the board of directors  authorized
the purchase of 23,333 shares of the Company's common stock totaling $93,000. Of
these 23,333  shares,  18,400 shares were exchanged for oil and gas lease rights
representing  386 net acres valued at $83,000,  and 2,700 shares were awarded to
employees  and  consultants  valued  at  $11,000.  The  remaining  2,233  shares
purchased  along  with the  11,254  shares of the  Company's  stock  held in the
treasury were retired.

As of September 1, 2000,  the Company  acquired  three  producing  properties in
Pecos County,  Texas for $198,000.  The Company owns working  interests  ranging
from 97% to 99%. Net operating cash flow from these properties was approximately
$101,000 for the twelve  months ended  December 31, 2001.  Since  January  2001,
workovers were performed on four of these producing wells, increasing production
at a total additional cost to the Company of approximately $197,000.

Effective September 1, 2000, the Company leased 159 gross non-producing acres in
Pecos County,  Texas, in which it retained a 96% working  interest.  The Company
re-entered a plugged well at an  approximate  cost of $165,000 and commenced gas
production in August 2001.

In April 2001,  the Company  acquired  additional  joint  venture  interests  in
properties

                                     Page 8
<PAGE>

located in various  counties and states for $174,000,  adjusted for revenues and
expenses from January 1, 2001, the effective date,  through April 29, 2001, date
of closing.

In May 2001, the Company  acquired a 12.5% working  interest (9.375% net revenue
interest) in 8,934 acres in Edwards County,  Texas for  approximately  $125,400.
The initial test well was drilled on this acreage and completed and fractured at
a cost to the Company of  approximately  $129,500.  The well is shut-in  pending
completion  of a pipeline  at an  estimated  cost of  $25,000  to the  Company's
interest. The well is expected to be on production by mid-February.  The Company
purchased a similar  interest in a second well,  which is also expected to begin
production in mid-February.  The Company participated in the drilling of another
well at an  approximate  cost to the Company of $56,000,  which is being plugged
and  abandoned.  The  Company  expects  to  participate  in the  drilling  of an
additional well in Edwards County in the next 60 to 90 days.

The Company  acquired  non-operated  working  interests,  ranging from .8512% to
3.75% with net revenue  interests ranging from .6816% to 3.267%, in 21 producing
and 7 inactive wells in Limestone and Freestone Counties,  Texas for $200,000 as
of April 1, 2001.

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, 2001, the Company had working capital of approximately  $192,000
compared  to working  capital of  approximately  $821,000 at March 31,  2001,  a
decrease of $629,000,  due primarily to acquisitions,  development of properties
and lower oil and gas prices.

The Company's  revolving credit agreement with Bank of America,  N.A.  ("Bank"),
was  amended  to  provide  for a credit  facility  of  $5,000,000,  subject to a
borrowing  base  determination.  The borrowing base was increased to $3,500,000,
with scheduled monthly reductions of the available borrowing base of $49,000 per
month beginning  September 5, 2001, and the maturity date was extended to August
15, 2003. As of December 31, 2001, the balance  outstanding under this agreement
was $1,400,000.  No principal payments are anticipated to be required for fiscal
2002. 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
(4.75% at December 31, 2001). 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, 2001 and 2000
---------------------------------------------------------------------

Net income decreased 108%, from $409,000 for the quarter ended December 31, 2000
to a loss of  $32,000  for the  quarter  ended  December  31,  2001.  Individual
categories of income and expense are discussed below.

                                     Page 9
<PAGE>

Oil and gas sales  decreased  from $798,000 for the third quarter of fiscal 2001
to  $330,000  for the same  period of fiscal  2002.  This  decrease  of $468,000
resulted from lower oil and gas prices.  Average gas prices decreased from $5.83
per mcf for the  third  quarter  of  fiscal  2001 to $2.05  per mcf for the same
period of fiscal 2002,  while average oil prices  decreased  from $31.45 per bbl
for the third  quarter of fiscal  2001 to $18.15  for the same  period of fiscal
2002. Oil and gas production  quantities were 4,391 barrels ("bbls") and 113,240
thousand  cubic feet ("mcf") for the third quarter of fiscal 2001 and 5,034 bbls
and 116,319 mcf for the same period of fiscal  2002,  an increase of 15% and 3%,
respectively.

Production costs decreased 3% from $135,000 for the third quarter of fiscal 2001
to $131,000 for the same period of fiscal 2002.

General and  administrative  expenses  increased  62% from $74,000 for the third
quarter of fiscal 2001 to $120,000 for the same period of fiscal  2002.  This is
primarily the result of an increase in financial consulting,  engineering,  land
and geological services during the quarter.

Depreciation,  depletion and amortization  based on production and other methods
increased 80%, from $59,000 for the third quarter of fiscal 2001 to $106,000 for
the same period of fiscal 2002 primarily due to increased  reserves added during
the third quarter of fiscal 2001.

Interest expense decreased 33% from $24,000 for the third quarter of fiscal 2001
to $16,000 for the same period of fiscal 2002, due to lower interest rates.

During the third  quarter of fiscal  2002,  the Company had a $9,000  income tax
benefit due to a reduction in the deferred tax liability account.

Results of Operations - Nine Months Ended December 31, 2001 and 2000
--------------------------------------------------------------------

Net income  decreased 87% from $1,044,000 for the nine months ended December 31,
2000 to  $140,000  for the nine  months  ended  December  31,  2001.  Individual
categories of income and expense are discussed below.

Oil and gas sales  decreased  35% from  $2,103,000  for the first nine months of
fiscal 2001 to $1,360,000 for the same period of fiscal 2002,  primarily because
of lower oil and gas prices and  decreased  gas  production.  Average gas prices
decreased  from $4.40 per mcf for the first nine  months of fiscal 2001 to $3.04
per mcf for the same period of fiscal  2002,  and  average oil prices  decreased
from  $29.56 per bbl for the first nine  months of fiscal 2001 to $22.51 per bbl
for the same  period of fiscal  2002.  Oil and gas  production  quantities  were
13,505  bbls and 387,145 mcf for the first nine months of fiscal 2001 and 14,600
bbls and 339,418 mcf for the same period of fiscal 2002, an increase of 8% and a
decrease of 12%, respectively.

Production costs increased 34% from $376,000 for the first nine months of fiscal
2001 to $502,000 for the same period of fiscal 2002.  Non-recurring  expenses on
acquired  properties  and other  operating  expenses to increase  production  on
producing properties primarily account for this increase.

General and  administrative  expenses  increased 30% from $238,000 for the first
nine  months of  fiscal  2001 to  $310,000  for the same  period of fiscal  2002
primarily due to increases in financial consulting fees,  engineering,  land and
geological  services,  and  compensation  related  to stock  options  granted to
consultants.

                                    Page 10
<PAGE>

Depreciation,  depletion and amortization, based on production and other methods
of depreciation, increased 14% from $274,000 for the first nine months of fiscal
2001 to $312,000  for the same period of fiscal 2002.  This is primarily  due to
increased costs for oil and gas interests.

Interest expense  decreased 51% from $80,000 for the first nine months of fiscal
2001 to $39,000  for the same  period of fiscal  2002,  due  primarily  to lower
interest rates.

           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, 2001,  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,  2001,  the Company had an  outstanding  loan  balance of
$1,400,000  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 $14,000, 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, 2001, the Company's
largest  credit risk  associated  with any single  purchaser  was  $27,000.  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.

PART II - OTHER INFORMATION

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

          On December 31, 2001 the Company exchanged 18,400 reacquired shares of
          its  Common  stock  having a par value of $0.50 per share in a private
          placement  under an exemption  from  registration  pursuant to Section
          4(2) of the Securities Act of 1933, as amended, being a transaction by
          an  issuer  not  involving  a public  offering,  with the  certificate
          representing such shares bearing a restrictive legend imposed upon the
          right of resale  pursuant  to such act.  The shares  were  issued to a
          trust.  The  consideration  for such issuance of stock was oil and gas
          lease rights  representing  368 net acres.  See Note A to Notes to the
          Consolidated Financial Statements.

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          On February 1, 2002, the Company's Board of Directors declared a stock
          dividend  consisting  of shares of par value $0.50 common stock of the
          Company in the amount of ten percent (10%) of the outstanding  shares,
          or 1 share for each 10 shares  held by all  stockholders  of record of
          the Company as of February 15,  2002,  with any  resulting  fractional
          share  dividends to be rounded up or down to the nearest  whole number
          of shares and issued the stock dividend accordingly.  The payable date
          for this dividend will be February 28, 2002.


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

          No reports on Form 8-K were filed by the  Company  during the  quarter
          ended December 31, 2001.

                                   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 12, 2002           /s/ Nicholas C. Taylor
                                   ----------------------------------
                                   Nicholas C. Taylor
                                   President


Dated: February 12, 2002           /s/ Tamala L. McComic
                                   ----------------------------------
                                   Tamala L. McComic
                                   Treasurer, Controller and Assistant Secretary

                                    Page 12
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