UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-K
              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

       For the Fiscal Year Ended March 31, 2000 Commission File No. 0-6694

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

            Colorado                                      84-0627918
  (State or other jurisdiction of                      (I.R.S. Employer
  incorporation or organization)                      Identification No.)

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

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

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

     Title of Each Class              Name of Exchange on Which Registered
Common Stock, $0.50 par value                       None

     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  twelve (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 ninety (90) days. Yes X       No

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K ((S)229.405 of this chapter) is not contained herein,  and
will not be  contained,  to the best of  registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or an amendment to this Form 10-K. [ ]

     As of May 30, 2000, the aggregate market value of the  registrant's  common
stock  held by  non-affiliates  (using  the  closing  bid price of  $4.375)  was
approximately $989,857.

     The number of shares outstanding of the registrant's common stock as of May
30, 2000 was 1,623,293.

     DOCUMENTS INCORPORATED BY REFERENCE Part III of this Report is incorporated
by reference from the Registrant's  Information Statement relating to its Annual
Meeting of  Stockholders  to be held on  September  29, 2000.  Such  Information
Statement will be filed with the Commission not later than July 31, 2000.
<PAGE>
                                TABLE OF CONTENTS


                                     PART 1

Item 1.  Business .........................................................   3
Item 2.  Properties........................................................   6
Item 3.  Legal Proceedings.................................................   8
Item 4.  Submission of Matters to a Vote of Security Holders...............   9

                                     PART II

Item 5.  Market for the Registrant's Common Equity and Related
         Stockholder Matters...............................................   9
Item 6.  Selected Financial Data...........................................  10
Item 7.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations...............................  11
Item 8.  Financial Statements and Supplementary Data.......................  15
Item 9.  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosures..............................  30

                                    PART III

Item 10. Directors and Executive Officers of the Registrant................  30
Item 11. Executive Compensation............................................  30
Item 12. Security Ownership of Certain Beneficial Owners and Management....  30
Item 13. Certain Relationships and Related Transactions....................  30

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K...  30
Signatures    ...............................................................32


                                       2
<PAGE>
                                     PART I

ITEM 1. BUSINESS

General

     Mexco Energy Corporation,  a Colorado  corporation,  (the "Company",  which
reference shall include the Company's wholly-owned subsidiary) is an independent
oil and gas company engaged in the  acquisition,  exploration and development of
oil and gas properties located in the United States.  Incorporated in April 1972
under the name Miller Oil Company,  the Company changed its name to Mexco Energy
Corporation  effective  April 30, 1980. At that time,  the  shareholders  of the
Company also approved amendments to the Articles of Incorporation resulting in a
one-for-fifty reverse stock split of the Company's common stock.

     On February  25, 1997 Mexco Energy  Corporation  acquired all of the issued
and outstanding stock of Forman Energy Corporation,  a New York corporation also
engaged in oil and gas exploration and development.

     Since  its  inception,  the  Company  has been  engaged  in  acquiring  and
developing oil and gas properties and the  exploration for and production of oil
and gas  within  the  United  States.  The  Company  continues  to  focus on the
exploration for and development of natural gas and crude oil resources,  as well
as increased profit margins through reductions in operating costs. The Company's
long-term strategy is to increase  production and profits,  while increasing its
concentration on gas reserves.

     While the Company owns oil and gas properties in other states, the majority
of its activities are centered in West Texas. The Company acquires  interests in
producing and  non-producing oil and gas leases from landowners and leaseholders
in areas  considered  favorable  for oil and gas  exploration,  development  and
production.  In  addition,  the Company may  acquire  oil and gas  interests  by
joining  in oil and gas  drilling  prospects  generated  by third  parties.  The
Company may employ a  combination  of the above  methods of obtaining  producing
acreage and prospects.  In recent years, the Company has placed primary emphasis
on the  evaluation and purchase of producing oil and gas properties and re-entry
prospects.

Oil and Gas Operations

     As of March 31, 2000,  gas reserves  constituted  approximately  85% of the
Company's total proved reserves and approximately 75% of the Company's  revenues
for fiscal  2000.  Revenues  from oil and gas royalty  interests  accounted  for
approximately 16% of the Company's revenues for fiscal 2000.

     VIEJOS GAS FIELD properties, encompassing 2,583 gross acres, 156 net acres,
18  gross  wells  and  1.27  net  wells in  Pecos  County,  Texas,  account  for
approximately 24% of the Company's  discounted future net cash flows from proved
reserves  as of March  31,  2000,  and for  fiscal  2000,  approximately  34% of
revenues and 21% of production costs.

     GOMEZ GAS FIELD properties,  encompassing 13,847 gross acres, 73 net acres,
24  gross  wells  and  .11  net  wells  in  Pecos  County,  Texas,  account  for
approximately 18% of the Company's  discounted future net cash flows from proved
reserves  as of March  31,  2000,  and for  fiscal  2000,  approximately  13% of
revenues and 7% of production costs.

     The Company  owns  interests  in and  operates 10  producing  wells and one
shut-in  well.  The  Company  owns  partial  interests  in an  additional  1,395
producing wells located in the states of Texas, New Mexico, Oklahoma, Louisiana,
Arkansas,   Wyoming,  Kansas,  Colorado,  Alabama,  Montana  and  North  Dakota.
Additional  information concerning these properties and the oil and gas reserves
                                       3
<PAGE>
of the Company is provided below.

     The following  table indicates the Company's oil and gas production in each
of the last five years, all of which is located within the United States:

      Year                                    Oil(Bbls)        Gas(MCF)
      ----                                    ---------        --------
      2000...................................    19,334         540,793
      1999...................................    49,573         482,948
      1998...................................    63,800         432,343
      1997...................................    39,363         236,034
      1996...................................    29,058         186,419

Competition

     The oil and gas industry is a highly competitive business.  Competition for
oil and gas reserve  acquisitions is  significant.  The Company may compete with
major  oil and gas  companies,  other  independent  oil  and gas  companies  and
individual producers and operators with significantly larger financial and other
resources.  Competitive  factors include price,  contract  terms,  and types and
quality of service,  including pipeline distribution.  The price for oil and gas
is widely followed and is generally subject to worldwide market factors.

Major Customers

     The Company had sales to the  following  companies  that amounted to 10% or
more of revenues for the year ended March 31:

                                            2000         1999          1998
                                            ----         ----          ----
     Koch Midstream Services Company         35%          30%            -
     Navajo Crude Oil Marketing Company       -           25%           33%
     Aquila Southwest Pipeline Corporation    -            -            15%

Regulation

     The Company's exploration, development, production and marketing operations
are subject to  extensive  rules and  regulations  by  federal,  state and local
authorities.  Numerous  federal,  state and local  departments and agencies have
issued rules and regulations, binding on the oil and gas industry, some of which
carry substantial  penalties for  noncompliance.  State statutes and regulations
require  permits  for  drilling   operations,   bonds  and  reports   concerning
operations.   Most  states  also  have   statutes  and   regulations   governing
conservation  and safety  matters,  including the unitization and pooling of oil
and gas properties,  the  establishment  of maximum rates of production from oil
and gas wells and the spacing of such wells.  Such statutes and  regulations may
limit  the rate at  which  oil and gas  otherwise  could  be  produced  from the
Company's  properties.  The  regulatory  burden  on the  oil  and  gas  industry
increases   its  cost  of  doing   business  and,   consequently,   affects  its
profitability.

     Currently there are no laws that regulate the price for sales of production
by the Company.  However,  the rates  charged and terms and  conditions  for the
movement of gas in interstate commerce through certain intrastate  pipelines and
production area hubs are subject to regulation  under the Natural Gas Policy Act
of 1978  ("NGPA").  The  construction  of  pipelines  and hubs are, to a limited
extent,  also subject to  regulation  under the Natural Gas Act of 1938 ("NGA").
The NGA also  establishes  comprehensive  controls  over  interstate  pipelines,
including the transportation in interstate commerce. While these NGA controls do
not apply  directly to the  Company,  their effect on natural gas markets can be
significant in terms of competition  and cost of  transportation  services.  The
Federal Energy Regulatory Commission ("FERC") administers the NGA and NGPA.
                                       4
<PAGE>
     FERC has  taken  significant  steps to  increase  competition  in the sale,
purchase,  storage and transportation of natural gas. FERC's regulatory programs
generally  allow more accurate and timely price signals from the consumer to the
producer.  Nonetheless, the ability to respond to market forces can and does add
to  price  volatility,  inter-fuel  competition  and  pressure  on the  value of
transportation and other services.

     Additional  proposals  and  proceedings  that might  affect the natural gas
industry are considered from time to time by Congress,  FERC,  state  regulatory
bodies and the  courts.  Several  proposals  that might  affect the  natural gas
industry are pending before FERC. The Company cannot predict when or if any such
proposals  will become  effective  and their  effect,  if any, on the  Company's
operations.  Historically,  the natural gas industry has been heavily  regulated
and there is no assurance that the less stringent  regulatory  approach recently
pursued by FERC,  Congress and the states will  continue  indefinitely  into the
future.

Environmental

     The Company, by nature of its oil and gas operations,  is subject extensive
federal,  state and  local  environmental  laws and  regulations  governing  the
protection of the  environment.  The Company is in  compliance,  in all material
respects,   with   applicable   environmental   requirements.   Although  future
environmental  obligations  are not  expected  to have a material  impact on the
results of  operations  or financial  condition of the Company,  there can be no
assurance that future developments, such as increasingly stringent environmental
laws or  enforcement  thereof,  will not cause  the  Company  to incur  material
environmental liabilities or costs.

Insurance

     The Company is subject to all the risks  inherent in the  exploration  for,
and  development  and  production of oil and gas including  blowouts,  fires and
other  casualties.  The  Company  maintains  insurance  coverage  customary  for
operations of a similar  nature,  but losses could arise from uninsured risks or
in amounts in excess of existing insurance coverage.

Employees

     As of March 31, 2000,  the Company had one  full-time  and three  part-time
employees.  The  Company  believes  that  relations  with  these  employees  are
generally  satisfactory.  The Company's  employees are not covered by collective
bargaining arrangements. From time to time, the Company utilizes the services of
independent contractors to perform various field and other services. Experienced
personnel are available in all  disciplines  should the need to hire  additional
staff arise.

Office Facilities

     The Company  maintains its principal  offices at 214 W. Texas,  Suite 1101,
Midland, Texas pursuant to a month to month lease.

Title to Oil and Gas Properties

     The  Company  believes  that  its  methods  of  investigating  title to its
properties are consistent with practices  customary in the oil and gas industry,
and that such  practices  are  adequately  designed to enable it to acquire good
title to such properties. The Company's properties may be subject to one or more
royalty, overriding royalty, carried and other similar interests and contractual
arrangements  customary  in the  industry.  Substantially  all of the  Company's
properties  are  currently  mortgaged  under a deed of trust to  secure  funding
through a revolving line of credit.
                                       5
<PAGE>
ITEM 2. PROPERTIES

Oil and Natural Gas Reserves

     The  estimates  of the  Company's  proved oil and gas  reserves,  which are
located entirely within the United States,  were prepared in accordance with the
guidelines  established by the SEC and Financial Accounting Standards Board. The
estimates as of March 31, 2000 and 1999 are based on evaluations prepared by Joe
C. Neal and  Associates,  Petroleum  Consultants.  The estimates as of March 31,
1998 are based on evaluations prepared by T. Scott Hickman and Associates, Inc.,
Petroleum  Engineers.  For information  concerning costs incurred by the Company
for oil and gas operations, net revenues from oil and gas production,  estimated
future net revenues attributable to the Company's oil and gas reserves,  present
value of future net revenues discounted at 10% and changes therein, see Notes to
the Company's  consolidated  financial  statements.  The Company emphasizes that
reserve  estimates are  inherently  imprecise and there can be no assurance that
the reserves set forth below will be ultimately realized.

     In estimating  reserves as of March 31, 2000,  average prices of $27.74 per
barrel for oil and $2.47 per mcf (million  cubic feet) for gas were used,  which
were the average actual prices in effect for the Company's production.

     The Company has not filed any oil or gas reserve  estimates or included any
such estimates in reports to any other federal or foreign governmental authority
or agency within the past twelve months.

     The  estimated  proved oil and gas reserves and present  value of estimated
future net  revenues  from  proved oil and gas  reserves  for the Company in the
periods ended March 31 are summarized below.

                                 PROVED RESERVES
                                                          March 31,
                                             -----------------------------------
                                               2000         1999         1998
                                            ----------   ----------   ----------
Oil (Bbls):
  Proved developed - Producing ..........      138,839      193,970      213,939
  Proved developed - Non-producing ......         --           --          5,176
  Proved undeveloped ....................         --           --         26,745
                                            ----------   ----------   ----------
    Total ...............................      138,839      193,970      245,860
                                            ==========   ==========   ==========
Natural gas (Mcf):
  Proved developed - Producing ..........    4,165,396    3,182,342    2,769,794
  Proved developed - Non-producing ......      589,951    1,011,971      170,738
  Proved undeveloped ....................         --           --        256,062
                                            ----------   ----------   ----------
    Total ...............................    4,755,347    4,194,313    3,196,594
                                            ==========   ==========   ==========
Present value of estimated future
  net revenues before income taxes ......   $6,144,644   $3,485,196   $3,892,533
                                            ==========   ==========   ==========

     The  preceding  tables  should  be read in  connection  with the  following
definitions:

     Proved Reserves. Estimated quantities of oil and gas, based on geologic and
engineering   data,   appear  with  reasonable   certainty  to  be  economically
recoverable in future years from known  reservoirs  under existing  economic and
operating conditions.

     Proved  Developed  Reserves.  Proved oil and gas  reserves  expected  to be
                                       6
<PAGE>
recovered through existing wells with existing  equipment and operating methods.
Developed reserves include both producing and non-producing reserves.  Producing
reserves are those reserves  expected to be recovered  from existing  completion
intervals producing as of the date of the reserve report. Non-producing reserves
are currently shut-in awaiting a pipeline connection or in reservoirs behind the
casing or at minor depths above or below the producing  zone and are  considered
recoverable  by  production  either  from  wells  in the  field,  by  successful
drill-stem  tests,  or by core  analysis.  Non-producing  reserves  require only
moderate expense for recovery.

     Proved  Undeveloped  Reserves.  Proved oil and gas reserves  expected to be
recovered from additional wells yet to be drilled or from existing wells where a
relatively major expenditure is required for completion.

Productive wells and acreage

     Productive   wells  consist  of  producing   wells  and  wells  capable  of
production,  including gas wells awaiting pipeline  connections.  Wells that are
completed in more than one producing zone are counted as one well. The following
table indicates the Company's productive wells as of March 31, 2000:

                                                      Gross        Net
                                                      -----       -----
       Oil........................................    1,248          11
       Gas........................................      199           4
                                                      -----       -----
           Total Productive Wells.................    1,447          15
                                                      =====       =====

     Undeveloped  acreage  includes  leased  acres on which  wells have not been
drilled or completed to a point that would permit the  production  of commercial
quantities of oil and gas,  regardless  of whether or not such acreage  contains
proved  reserves.  A gross acre is an acre in which an interest is owned.  A net
acre is deemed to exist when the sum of fractional  ownership interests in gross
acres equals one. The number of net acres is the sum of the fractional interests
owned in gross acres. As of March 31, 2000 the only material undeveloped acreage
the Company owned was  approximately  1,128 gross and 355 net acres in the state
of Texas.

     The following table sets forth the approximate  developed  acreage in which
the Company held a leasehold mineral or other interest at March 31, 2000.

                                                           Developed Acres
                                                     ---------------------------
                                                      Gross                Net
                                                     -------             -------
Texas ..................................              82,870               1,828
New Mexico .............................              16,554                 145
North Dakota ...........................              23,999                  16
Louisiana ..............................              21,961                  28
Oklahoma ...............................              36,161                 122
Montana ................................               7,189                   4
Kansas .................................               7,240                  21
Wyoming ................................               1,798                   4
Colorado ...............................               1,040                   1
Alabama ................................                 640                   1
Arkansas ...............................                 320                --
                                                     -------             -------
Total ..................................             199,772               2,170
                                                     =======             =======

                                       7
<PAGE>
Drilling Activities

     The following table sets forth the drilling activity of the Company for the
years ended March 31, 2000, 1999 and 1998.

                                         Years ended March 31,
                     -----------------------------------------------------------
                           2000                  1999                  1998
                     ----------------      ----------------     ----------------
                     Gross       Net       Gross       Net      Gross       Net
                     -----      -----      -----      -----     -----      -----
Exploratory Wells
  Productive             1        .01          -          -         -          -
  Nonproductive          -          -          -          -         -          -
                     -----      -----      -----      -----     -----      -----
    Total                1        .01          -          -         -          -
                     =====      =====      =====      =====     =====      =====
Development Wells
  Productive             1         .6          8        1.9         7        2.6
  Nonproductive          -          -          -          -         1         .9
                     -----      -----      -----      -----     -----      -----
    Total                1         .6          8        1.9         8        3.5
                     =====      =====      =====      =====     =====      =====

Net Production, Unit Prices and Costs

     The following  table  summarizes the net oil and natural gas production for
the  Company,  the average  sales price per barrel of oil and per mcf of natural
gas produced and the average  production  (lifting)  cost per unit of production
for the years ended March 31, 2000, 1999 and 1998.
                                                    Year Ended March 31,
                                            ------------------------------------
                                               2000         1999         1998
                                            ----------   ----------   ----------
Oil (a):
  Production (Bbls) .....................       19,334       49,573       63,800
  Revenue ...............................   $  416,405   $  600,285   $1,129,331
  Average Bbls per day ..................           53          136          175
  Average sales price per Bbl ...........   $    21.54   $    12.11   $    17.70
Gas (b):
  Production (Mcf) ......................      540,793      482,948      432,343
  Revenue ...............................   $1,262,556   $  903,338   $  960,786
  Average Mcf per day ...................        1,478        1,323        1,185
  Average sales price per Mcf ...........   $     2.33   $     1.87   $     2.22
Production cost:
  Production cost .......................   $  542,789   $  644,563   $  663,525
  Equivalent Bbls (c) ...................      109,466      130,064      135,857
  Production cost per equivalent Bbl ....   $     4.96   $     4.96   $     4.88
  Production cost per sales dollar ......   $     0.32   $     0.43   $     0.32
Total oil and gas revenues ..............   $1,678,961   $1,503,623   $2,090,117

(a) Includes condensate.
(b) Includes natural gas products.
(c) Gas production is converted to equivalent bbls at the rate of 6 mcf per bbl,
    representing the estimated relative energy content of natural gas to oil.

ITEM 3. LEGAL PROCEEDINGS

     The  Company  is a  plaintiff  in two class  action  lawsuits  against  gas
purchasers  involving  contract price disputes.  The Company does not expect any
expenses of a material  nature to arise from these class  action  claims.  While

                                       8
<PAGE>
recoveries  from these lawsuits could be  substantial,  the ultimate  outcome is
uncertain.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters  submitted to a vote of security  holders  during the
fourth quarter ended March 31, 2000.

Executive Officers of the Registrant

     The following table sets forth certain information concerning the executive
officers of the Company as of March 31, 2000.

Name                      Age     Position
------------------        ---     ---------------------------------------------
Nicholas C. Taylor         62     President and Chief Executive Officer
Donna Gail Yanko           56     Vice President and Corporate Secretary
Linda J. Crass             45     Treasurer, Controller and Assistant Secretary

     Set forth  below is a  description  of the  backgrounds  of each  executive
officer of the Company,  including employment history for at least the last five
years.

     Nicholas C. Taylor was elected  President,  Treasurer  and  Director of the
Company in April 1983 and continues to serve as President and Director on a part
time basis,  as required.  Mr. Taylor served as Treasurer until March 1999. From
July 1993 to the  present,  Mr.  Taylor  has been  involved  in the  independent
practice of law and other business activities. For more than the prior 19 years,
he was a director and  shareholder of the law firm of Stubbeman,  McRae,  Sealy,
Laughlin & Browder, Inc., Midland, Texas, and a partner of the predecessor firm.
In 1995, he was appointed by the Governor of Texas and serves as Chairman of the
three member State Securities Board.

     Donna Gail Yanko has worked as  part-time  administrative  assistant to the
Chief  Executive  Officer and as Assistant  Secretary of the Company  until June
1992 when she was appointed Corporate Secretary. Mrs. Yanko was appointed to the
position of Vice  President and elected to the Board of Directors of the Company
in 1990.

     Linda J. Crass has been  Controller  for the Company  since July 1998.  Ms.
Crass was  appointed  Assistant  Secretary  of the  Company  in August  1998 and
Treasurer  in March  1999.  From 1996 to 1998 Ms.  Crass was  employed  by Titan
Exploration,  Inc. in various accounting positions. From 1989 to 1996, Ms. Crass
served as Controller for Midland Resources, Inc.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's common stock is traded in the  over-the-counter  market under
the symbol  MEXC.  The  registrar  and  transfer  agent is  American  Securities
Transfer & Trust, P.O. Box 1596, Denver, Colorado, 80201 (Tel: 303-986-5400). As
of March 31,  2000 the Company had 1,404  shareholders  of record and  1,623,289
shares outstanding.


                                       9
<PAGE>
                           PRICE RANGE OF COMMON STOCK

                                                     Bid Price
                                           -----------------------------
                                            High                   Low
                                           -------               -------
  2000: (1)
        April - June 1999                  7 11/16                7 5/8
        July - September 1999              7 1/2                  5 1/2
        October - December 1999            5 1/2                  5
        January - March 2000               5                      4 7/8
  1999: (1)
        April - June 1998                  7 3/4                  7 3/4
        July - September 1998              7 3/4                  7 3/4
        October - December 1998            7 3/4                  7 1/2
        January - March 1999               7 11/16                7 1/2

(1)  Reflects high and low bid  information  received  from  National  Quotation
     Bureau, LLC.
(2)  These bid  quotations  represent  prices  between  dealers,  without retail
     markup, markdown or commissions, and do not reflect actual transactions.
(3)  On May 30, 2000, the bid price was 4 3/8.

     The Company has not paid any dividends on its common  stock,  and it is the
present  policy of the  Company  not to do so,  but to retain its  earnings  for
future  growth and business  activities.  The Company is also subject to certain
loan covenants including restrictions on payment of dividends.

ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
                                                        Years Ended March 31,
                              -----------------------------------------------------------------------
                                  2000           1999           1998           1997           1996
                              -----------------------------------------------------------------------
<S>                           <C>            <C>            <C>            <C>            <C>
Statement of Operations:
Operating revenues            $ 1,686,266    $ 1,510,005    $ 2,106,338    $ 1,458,741    $   816,788
Operating income (loss)           498,384       (281,099)    (1,558,335)       521,123        195,020
Other income (expense)           (104,737)      (144,675)      (134,891)        (5,621)        17,285
Net income (loss)                 393,647       (425,774)    (1,323,657)       377,867        200,606
Net Income (loss) per
 share - basic                       0.24          (0.26)         (0.83)          0.27           0.15
Net Income (loss) per
 share - diluted                     0.24          (0.26)         (0.83)          0.27           0.15
Weighted average shares
 outstanding                    1,623,289      1,623,289      1,594,752      1,423,229      1,342,628

Balance Sheet:
Property and equipment, net   $ 3,459,522    $ 3,749,400    $ 4,078,053    $ 4,777,132    $ 2,331,344
Total assets                    3,853,319      4,043,015      4,542,486      5,109,199      2,612,039
Total debt                      1,200,000      1,784,000      1,822,000      1,637,000           --
Stockholders' equity            2,567,228      2,173,581      2,599,355      2,923,012      2,545,145

Cash Flow:
Cash provided by operations   $   722,088    $   532,171    $ 1,118,566    $   866,931    $   396,409

EBITDA(1)                     $   927,326    $   635,260    $ 1,252,539    $ 1,006,119    $   474,697
</TABLE>
(1)  EBITDA (as used herein) represents earnings before interest expense, income
     taxes, depreciation, depletion and amortization.  Management of the Company

                                       10
<PAGE>
     believes that EBITDA may provide additional information about the Company's
     ability  to  meet  its  future  requirements  for  debt  service,   capital
     expenditures  and working capital.  EBITDA is a financial  measure commonly
     used in the oil and gas industry and should not be  considered in isolation
     or as a  substitute  for net  income,  operating  income,  cash  flows from
     operating  activities  or  any  other  measure  of  financial   performance
     presented in accordance with generally accepted accounting principles or as
     a measure of the Company's profitability or liquidity.

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The  following   information   should  be  read  in  conjunction  with  the
information  contained in the  Consolidated  Financial  Statements and the notes
thereto included in Item 8 of this report.

Liquidity and Capital Resources and Commitments

     Historically,   the  Company  has  funded  its  operations,   acquisitions,
exploration  and  development  expenditures  from cash  generated  by  operating
activities, bank borrowings and issuance of common stock.

     In  fiscal  2000,  the  Company  used cash  provided  by  operations,  bank
borrowings  and  existing  cash  balances  to fund  its  oil  and  gas  property
acquisitions and development. Working capital as of March 31, 2000 was $307,706.

     In April 1999,  as part of the Company's  focus on  increasing  profits and
concentrating on gas reserves with lower cost  operations,  the Company sold all
of its oil and gas  interests  in Lazy JL  field  properties  located  in  Garza
County,  Texas for $600,000  cash,  adjusted for revenues and expenses  from the
effective  date of  February  1, 1999  through  the date of  closing.  The sales
proceeds  were used to reduce the  Company's  outstanding  debt under its credit
facility with the Bank.

     In April and July 1999, the Company acquired interests in non-producing and
producing  acreage  and  assumed  operations  of  two  producing  gas  wells  in
Schleicher  County,  Texas at a cost to the Company of  approximately  $204,000.
Funds for these  acquisitions  were  provided by the credit  facility  discussed
below. In September  1999, the Company  re-worked one of the producing wells and
increased the Company's  average daily  production  from this well from 5 mcf to
239 mcf at a cost to the Company of approximately $15,000. In February 2000, the
Company, as operator,  successfully completed the re-entry of a gas well on this
acreage at a cost to the Company of approximately $189,000.  Funds were provided
out of cash flow from  operations and existing cash  balances.  The Company owns
approximate  working interests in these wells ranging from 67% to 97%. Operating
cash flow from these wells was  approximately  $88,000 for the nine months ended
March 31, 2000.

     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 the credit facility discussed below.
Operating  cash  flow from this  well was  approximately  $10,000  for the eight
months ended March 31, 2000.

     The  Company  has  entered  into  an  exploration   agreement  relating  to
non-producing  acreage in Pecos County,  Texas.  Approximately 3,689 gross acres
and 306 net acres have been leased and a 3-D seismic  survey  covering 23 square
miles has been completed at a cost to the Company of  approximately  $146,000 as
of May 31, 2000. Two test wells will be drilled on this acreage.  The first test
well is planned  within the next sixty days at an estimated  cost to the Company

                                       11
<PAGE>
of $60,000.  Depending on the results of the wells drilled,  as many as 21 wells
may be drilled on this prospect.  The Company owns approximate working interests
in this prospect  ranging from 10% to 16% and a third party has assumed property
operations.  Funds to date for this project have been provided by cash flow from
operations.

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

     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  the  available  borrowing  base  of  $28,000
beginning September 5, 1999, and to extend the maturity date to August 15, 2001.
As of March 31, 2000, the borrowing base was $1,954,000. The balance outstanding
under this credit  facility was  $1,200,000 and $1,784,000 at March 31, 2000 and
1999, respectively. The borrowing base is subject to redetermination on or about
August 1, each year.  Interest under this agreement is payable  monthly at prime
rate (9% at  March  31,  2000 and  7.75% at  March  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 credit facility
is secured by substantially  all of the Company's oil and gas properties and the
common stock of its subsidiary.

     The Company also has a letter of credit  outstanding  under the Bank credit
facility discussed above, which provides for borrowings up to $50,000 in lieu of
a plugging bond with the Railroad Commission covering properties operated by the
Company.

     Crude oil and natural gas prices 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
believes the Company can maintain adequate liquidity for the next fiscal year.

Results of Operations

Fiscal 2000 Compared to Fiscal 1999

     Oil and gas sales  increased from $1,503,623 in 1999 to $1,678,961 in 2000,
an increase of $175,338 or 12%. This increase was primarily due to increased oil
and gas prices and increased  production from the acquisition and development of
gas properties,  offset in part by the sale of the Lazy JL properties and normal
production declines.  The sale of the Lazy JL properties accounts for a decrease
for fiscal  2000 as  compared  to fiscal  1999 of $335,532 in oil and gas sales,
26,673 bbls and 4,345 mcf. The average oil price  increased  from $12.11 in 1999
to $21.54 per bbl in 2000,  an increase of $9.43 per bbl or 78%. The average gas
price  increased  from $1.87 in 1999 to $2.33 per mcf in 2000,  an  increase  of
$0.46 per mcf or 25%.  Oil  production  decreased  from  49,573  bbls in 1999 to
19,334 bbls in 2000, a decrease of 30,239 bbls or 61%. Gas production  increased
from  482,948 mcf in 1999 to 540,793  mcf in 2000,  an increase of 57,845 mcf or
12%.

     Production  costs  decreased  from  $644,563 in 1999 to $542,789 in 2000, a
decrease of $101,774 or 16%. The sale of the Lazy JL  properties  accounts for a
reduction  in  production  costs for fiscal  2000 as  compared to fiscal 1999 of
$238,072,  while property  acquisitions  and  development,  and remedial repairs
increased production costs.

                                       12
<PAGE>
     Depreciation, depletion and amortization decreased from $909,965 in 1999 to
$426,102 in 2000, a decrease of $483,863 or 53%, due  primarily to an impairment
of oil and gas properties in the first quarter of fiscal 1999 of $288,393.

     General and  administrative  expenses  decreased  from  $236,576 in 1999 to
$218,991 in 2000, a decrease of $17,585 or 7%.

     Interest  expense  decreased  from  $151,069 in 1999 to $107,577 in 2000, a
decrease  of $43,492 or 29%.  This  decrease  was  primarily  attributable  to a
reduction in amounts borrowed during 2000.

Fiscal 1999 Compared to Fiscal 1998

     Oil and gas sales  decreased from $2,090,117 in 1998 to $1,503,623 in 1999,
a decrease of $586,494 or 28%. This decrease was primarily  attributable  to the
decline in oil and gas prices and oil production during the year, offset in part
by increased gas production  from the acquisition and development of oil and gas
properties.  The average oil price  decreased  from $17.70 in 1998 to $12.11 per
bbl in 1999, a decrease of $5.59 per bbl or 32%. The average gas price decreased
from $2.22 in 1998 to $1.87 per mcf in 1999, a decrease of $0.35 per mcf or 16%.
Oil  production  decreased  from 63,800  bbls in 1998 to 49,573 bbls in 1999,  a
decrease of 14,227 bbls or 22%.  Gas  production  increased  from 432,343 mcf in
1998 to 482,948 mcf in 1999, an increase of 50,605 mcf or 12%.

     Other revenues decreased from $16,221 in 1998 to $6,382 in 1999, a decrease
of $9,839 or 61%, primarily due to the recovery of a bad debt in 1998. There was
no such item in 1999.

     Production  costs  decreased  from  $663,525 in 1998 to $644,563 in 1999, a
decrease of $18,962 or 3%.

     Depreciation,  depletion and amortization decreased from $2,808,753 in 1998
to $909,965 in 1999,  a decrease  of  $1,898,788  or 68%,  due  primarily  to an
impairment  of oil  and gas  properties  in 1998  of  $1,742,386.  There  was an
additional  impairment of oil and gas  properties in the first quarter of fiscal
1999 of $288,393.

     General and  administrative  expenses  increased  from  $192,395 in 1998 to
$236,576 in 1999,  an increase of $44,181 or 23%.  This  increase was  primarily
attributable  to  increased  salaries and benefits  ($55,402),  franchise  taxes
($14,328),  engineering and geological costs ($11,186), officers' and directors'
insurance ($6,708),  and director fees ($6,700),  offset in part by decreases in
legal fees ($22,671), accounting fees ($16,625) and contract services ($12,407).

     Interest  expense  increased  from $137,012 in 1998 to $151,069 in 1999, an
increase  of  $14,057  or 10%.  This  increase  was  attributable  to  increased
borrowing during 1999, offset in part by lower interest rates.

Other Matters

Forward Looking Statements

     Certain  statements in this Form 10-K may be deemed to be  "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 facts, included in this Form 10-K that address activities,  events
or developments that the Company expects, projects, believes or anticipates will
or may occur in the  future,  including  such  matters as oil and gas  reserves,
future  drilling and  operations,  future  production of oil and gas, future net
cash  flows,   future  capital   expenditures   and  other  such  matters,   are
forward-looking  statements.  These statements are based on certain  assumptions
                                       13
<PAGE>
and analysis made by management  of the Company in light of its  experience  and
its  perception  of  historical  trends,  current  conditions,  expected  future
developments and other factors it believes are appropriate in the circumstances.
Such statements are subject to a number of assumptions, risks and uncertainties,
including general economic and business  conditions,  prices of oil and gas, the
business opportunities (or lack thereof) that may be presented to and pursued by
the Company, changes in laws or regulations and other factors, many of which are
beyond the control of the Company.

Risk Factors

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

     Interest  Rate Risk.  The following  table  summarizes  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 change by $12,000.

                                               Year ended March 31,
                                     ----------------------------------------
                                       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  counter-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  are  generally  not  collateralized.  At March 31,  2000,  the
Company's  largest credit risk associated with any single purchaser was $38,640.
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 had increased or decreased by one
cent per barrel for fiscal 2000, the Company's  pretax income would have changed
by $193. If the average gas price had increased or decreased by one cent per mcf
for fiscal 2000, the Company's pretax income would have changed by $5,408.

     Uncertainty  of  Reserve  Information  and Future  Net  Revenue  Estimates.
Estimates  of oil and gas  reserves,  by  necessity,  are  projections  based on
engineering data, and there are uncertainties  inherent in the interpretation of
such data as well as the projection of future rates of production and the timing
of development  expenditures.  Reserve  engineering  is a subjective  process of
estimating  underground  accumulations  of oil and gas  that  are  difficult  to
measure.  Estimates  of  economically  recoverable  oil and gas  reserves and of
future net cash flows depend upon a number of variable  factors and assumptions,
such as future  production,  oil and gas prices,  operating  costs,  development
                                       14
<PAGE>
costs  and  remedial  costs,  all of which  may vary  considerably  from  actual
results. As a result,  estimates of the economically  recoverable  quantities of
oil  and  gas  and  of  future  net  cash  flows  expected  therefrom  may  vary
substantially.  Moreover,  there can be no assurance that the Company's reserves
will ultimately be produced or that any undeveloped reserves will be developed.

     Reserve  Replacement  Risk. The Company's  future success  depends upon its
ability to find, develop or acquire additional, economically recoverable oil and
gas  reserves.  The proved  reserves of the Company  will  generally  decline as
reserves  are  depleted,  except to the extent the Company can find,  develop or
acquire replacement reserves.

     Drilling and Operating Risks. Drilling and operating activities are subject
to many risks,  including well  blowouts,  cratering,  fires,  releases of toxic
gases and other  environmental  hazards and risks,  any of which could result in
substantial losses to the Company. In addition, the Company incurs the risk that
no  commercially  productive  reservoirs  will be  encountered  and  there is no
assurance  that the Company will recover all or any portion of its investment in
wells drilled or re-entered.

     Marketability of Production.  The marketability of the Company's production
depends in part on the  availability,  proximity  and  capacity  of natural  gas
gathering  systems,  pipelines  and  processing  facilities.  Federal  and state
regulation  of oil  and  gas  production  and  transportation,  tax  and  energy
policies, changes in supply and demand and general economic conditions could all
affect the Company's ability to produce and market its oil and gas.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

     Report of Independent Certified Public Accountants..................... 16
     Consolidated Balance Sheets............................................ 17
     Consolidated Statements of Operations.................................. 18
     Consolidated Statements of Stockholders' Equity........................ 19
     Consolidated Statements of Cash Flows.................................. 20
     Notes to Consolidated Financial Statements............................. 21

                                       15
<PAGE>

               Report of Independent Certified Public Accountants


Board of Directors
Mexco Energy Corporation

We have audited the  accompanying  consolidated  balance  sheets of Mexco Energy
Corporation  and  Subsidiary,  as of March 31,  2000 and 1999,  and the  related
consolidated statements of operations,  stockholders' equity, and cash flows for
each of the three years in the period  ended  March 31,  2000.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position of Mexco Energy
Corporation and Subsidiary,  as of March 31, 2000 and 1999, and the consolidated
results of their  operations and their  consolidated  cash flows for each of the
three  years in the period  ended March 31, 2000 in  conformity  with  generally
accepted accounting principles.






GRANT THORNTON LLP

Oklahoma City, Oklahoma
May 12, 2000




                                       16
<PAGE>
                     Mexco Energy Corporation and Subsidiary
                           CONSOLIDATED BALANCE SHEETS
                                 As of March 31,

                                                       2000            1999
                                                   ------------    ------------
ASSETS
  Current assets
    Cash and cash equivalents                      $     97,712    $     96,198
    Accounts receivable:
      Oil and gas sales                                 255,121         179,269
        Trade                                             2,070            --
        Related parties                                  18,105           3,780
        Other                                             5,000            --
      Prepaid expenses                                   15,789          14,368
                                                   ------------    ------------
          Total current assets                          393,797         293,615

  Property and equipment, at cost
    Oil and gas properties, using
      the full cost method                           10,630,903      10,495,391
    Other                                                22,586          21,874
                                                   ------------    ------------
                                                     10,653,489      10,517,265
    Less accumulated depreciation,
      depletion, and amortization                     7,193,967       6,767,865
                                                   ------------    ------------
        Property and equipment, net                   3,459,522       3,749,400
                                                   ------------    ------------
                                                   $  3,853,319    $  4,043,015
                                                   ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities
    Accounts payable - trade                       $     86,091    $     85,434
    Current maturities of long-term debt                   --           516,000
                                                   ------------    ------------
        Total current liabilities                        86,091         601,434

  Long-term debt                                      1,200,000       1,268,000
                                                   ------------    ------------
        Total liabilities                             1,286,091       1,869,434

  Stockholders' equity
    Common stock - $0.50 par value;
      40,000,000 shares authorized;
      1,623,289 shares issued and outstanding           811,644         811,644
    Preferred stock - $1.00 par value;
      10,000,000 shares authorized                         --              --
    Additional paid-in capital                        2,875,399       2,875,399
    Accumulated deficit                              (1,119,815)     (1,513,462)
                                                   ------------    ------------
        Total stockholders' equity                    2,567,228       2,173,581
                                                   ------------    ------------
                                                   $  3,853,319    $  4,043,015
                                                   ============    ============

         The accompanying notes to the consolidated financial statements
                    are an integral part of these statements.
                                       17
<PAGE>
                     Mexco Energy Corporation and Subsidiary
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                              Year ended March 31,


                                          2000           1999           1998
                                      -----------    -----------    -----------
Operating revenues:
  Oil and gas                         $ 1,678,961    $ 1,503,623    $ 2,090,117
  Other                                     7,305          6,382         16,221
                                      -----------    -----------    -----------
      Total operating revenues          1,686,266      1,510,005      2,106,338

Operating expenses:
  Production                              542,789        644,563        663,525
  Depreciation, depletion
    and amortization                      426,102        909,965      2,808,753
  General and administrative              218,991        236,576        192,395
                                      -----------    -----------    -----------
      Total operating expenses          1,187,882      1,791,104      3,664,673
                                      -----------    -----------    -----------
                                          498,384       (281,099)    (1,558,335)
Other income (expense):
  Interest income                           2,840          6,394          2,121
  Interest expense                       (107,577)      (151,069)      (137,012)
                                      -----------    -----------    -----------
      Net other expense                  (104,737)      (144,675)      (134,891)
                                      -----------    -----------    -----------
Earnings (loss) before income taxes       393,647       (425,774)    (1,693,226)

Income tax expense (benefit)                 --             --         (369,569)
                                      -----------    -----------    -----------
Net earnings (loss)                   $   393,647    $  (425,774)   $(1,323,657)
                                      ===========    ===========    ===========

Basic and diluted
  earnings (loss) per share           $      0.24    $     (0.26)   $     (0.83)
                                      ===========    ===========    ===========
Weighted average outstanding shares,
  basic and diluted                     1,623,289      1,623,289      1,594,752
                                      ===========    ===========    ===========


         The accompanying notes to the consolidated financial statements
                    are an integral part of these statements.
                                       18
<PAGE>
                     Mexco Energy Corporation and Subsidiary
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                   Years ended March 31, 2000, 1999, and 1998


<TABLE>
<CAPTION>
                                                                          Retained
                                                           Additional     earnings        Total
                                    Common stock            paid-in     (accumulated   Stockholders'
                                Shares        Amount        capital        deficit)       equity
                              ---------    -----------    -----------   ------------   ------------
<S>                           <C>          <C>            <C>           <C>            <C>
Balance at April 1, 1997      1,423,229    $   711,614    $ 1,975,429   $    235,969   $  2,923,012

Net loss                           --             --             --       (1,323,657)    (1,323,657)

Issuance of common stock        200,060        100,030        899,970           --        1,000,000
                              ---------    -----------    -----------   ------------   ------------
Balance at March 31, 1998     1,623,289        811,644      2,875,399     (1,087,688)     2,599,355

Net loss                           --             --             --         (425,774)      (425,774)
                              ---------    -----------    -----------   ------------   ------------
Balance at March 31, 1999     1,623,289        811,644      2,875,399     (1,513,462)     2,173,581

Net earnings                       --             --             --          393,647        393,647
                              ---------    -----------    -----------   ------------   ------------
Balance at March 31, 2000     1,623,289    $   811,644    $ 2,875,399   $ (1,119,815)  $  2,567,228
                              =========    ===========    ===========   ============   ============
</TABLE>






         The accompanying notes to the consolidated financial statements
                    are an integral part of these statements.
                                       19
<PAGE>
                     Mexco Energy Corporation and Subsidiary
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              Year ended March 31,
<TABLE>
<CAPTION>
                                                        2000           1999           1998
                                                    -----------    -----------    -----------
<S>                                                 <C>            <C>            <C>
Cash flows from operating activities:
  Net earnings (loss)                               $   393,647    $  (425,774)   $(1,323,657)
  Adjustments to reconcile net earnings
    (loss) to net cash provided by
    operating activities:
      Deferred income taxes                                --             --         (341,181)
      Depreciation, depletion and amortization          426,102        909,965      2,808,753
      (Increase) decrease in accounts receivable        (97,247)        24,851         83,354
      Increase (decrease) in accounts payable             1,007         22,312        (53,425)
      (Increase) decrease in prepaid assets              (1,421)           817        (15,185)
      Decrease in income taxes payable                     --             --          (40,093)
                                                    -----------    -----------    -----------
        Net cash provided by operating activities       722,088        532,171      1,118,566

Cash flows from investing activities:
  Additions to oil and gas properties                  (803,554)      (643,377)    (2,089,136)
  Proceeds from sale of assets                          667,692          5,678             64
  Additions to other property and equipment                (712)        (1,622)       (13,959)
                                                    -----------    -----------    -----------
        Net cash used in investing activities          (136,574)      (639,321)    (2,103,031)

Cash flows from financing activities:
  Borrowings                                            248,174           --          685,000
  Principal payments on long-term debt                 (832,174)       (38,000)      (500,000)
  Proceeds from issuance of common stock                   --             --        1,000,000
                                                    -----------    -----------    -----------
        Net cash (used in) provided by
          financing activities                         (584,000)       (38,000)     1,185,000
                                                    -----------    -----------    -----------
Net increase (decrease) in cash
  and cash equivalents                                    1,514       (145,150)       200,535

Cash and cash equivalents
  at beginning of year                                   96,198        241,348         40,813
                                                    -----------    -----------    -----------
Cash and cash equivalents
  at end of year                                    $    97,712    $    96,198    $   241,348
                                                    ===========    ===========    ===========


  Interest paid                                     $   109,255    $   138,586    $   140,272
  Income taxes paid                                 $      --      $      --      $    24,731

Non-cash investing and financing activities:
Included in trade accounts payable at March 31:
Acquisition and development costs of oil and
  gas properties                                    $    24,691    $    25,041    $    83,050
</TABLE>

         The accompanying notes to the consolidated financial statements
                    are an integral part of these statements.
                                       20
<PAGE>
                     Mexco Energy Corporation and Subsidiary
                   Notes to Consolidated Financial Statements


NOTE A - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

          Mexco  Energy  Corporation  and its  wholly-owned  subsidiary,  Forman
     Energy  Corporation  (collectively,  the  "Company")  are  engaged  in  the
     acquisition,  exploration,  development  and production of domestic oil and
     gas and owns producing properties and undeveloped acreage in eleven states.
     The  majority  of the  Company's  activities  are  centered  in West Texas.
     Although  most of the  Company's  oil and gas  interests  are  operated  by
     others,  the  Company  operates  several  properties  in  which  it owns an
     interest.

SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation.  The consolidated financial statements include
     the accounts of Mexco Energy  Corporation and its wholly-owned  subsidiary.
     All  significant   inter-company   balances  and  transactions   have  been
     eliminated in consolidation.

     Cash and Cash  Equivalents.  The Company  considers  all highly liquid debt
     instruments  purchased  with  maturities  of three months or less and money
     market funds to be cash equivalents. The Company maintains its cash in bank
     deposit  accounts and money market  funds,  some of which are not federally
     insured.  The Company has not  experienced  any losses in such accounts and
     believes it is not exposed to any significant credit risk.

     Oil and Gas Properties.  Oil and gas properties are accounted for using the
     full cost method of  accounting.  Under this method,  all costs  associated
     with  the   acquisition,   exploration,   and   development  of  properties
     (successful or not), including leasehold acquisition costs,  geological and
     geophysical  costs, lease rentals,  exploratory and developmental  drilling
     and  equipment  costs,  are  capitalized.  Costs  are  amortized  using the
     units-of-production  method  based  upon  estimates  of proved  oil and gas
     reserves.  If unamortized costs, less related deferred income taxes, exceed
     the sum of the present  value,  discounted at 10%, of estimated  future net
     revenues from proved reserves,  less related income tax effects, the excess
     is charged to expense.  Generally, no gains or losses are recognized on the
     sale or disposition of oil and gas properties.

     Other  Property  and  Equipment.  Provisions  for  depreciation  of  office
     furniture and equipment are computed on the  straight-line  method based on
     estimated useful lives of five to ten years.

     Earnings  (Loss)  Per  Common  Share.  Basic  earnings  (loss) per share is
     computed using the weighted-average number of shares outstanding during the
     period.   Diluted  earnings  (loss)  per  share  is  determined  using  the
     weighted-average  number of common  shares  outstanding  during the period,
     adjusted for the dilutive effect of potential common shares,  consisting of
     shares  that might be issued  upon  exercise of common  stock  options.  In
     periods where losses are reported,  the  weighted-average  number of common
     shares  outstanding   excludes  potential  common  shares,   because  their
     inclusion  would be  anti-dilutive.  There were no potential  common stocks
     outstanding  for March 31, 1998.  Potential  common stocks are excluded for
     March 31, 1999, as their  inclusion would have an  anti-dilutive  effect on
     loss per share.  Potential  common  stocks are  excluded for March 31, 2000
     because the  exercise  price of the  options  was greater  than the average

                                       21
<PAGE>
     market  price of the common  shares  and,  therefore,  the effect  would be
     anti-dilutive.

     Income Taxes.  The Company  recognizes  deferred tax assets and liabilities
     for the  future tax  consequences  of  temporary  differences  between  the
     carrying  amounts of assets and liabilities and their respective tax bases.
     Deferred tax assets and  liabilities  are measured  using enacted tax rates
     applicable  to the years in which  those  differences  are  expected  to be
     settled.  The effect on deferred tax assets and  liabilities of a change in
     tax rates is  recognized  in net income in the  period  that  includes  the
     enactment date.

     Environmental. The Company is subject to extensive federal, state and local
     environmental  laws and  regulations.  These  laws,  which  are  constantly
     changing,  regulate the discharge of materials into the environment and may
     require the Company to remove or mitigate the environmental  effects of the
     disposal or release of petroleum or chemical  substances at various  sites.
     Environmental  expenditures are expensed or capitalized  depending on their
     future  economic  benefit.  Liabilities  for  expenditures of a non-capital
     nature are recorded when  environmental  assessment  and/or  remediation is
     probable  and  the  costs  can  be  reasonably  estimated.  There  were  no
     significant  environmental  expenditures or liabilities for the years ended
     March 31, 2000, 1999 or 1998.

     Use of Estimates.  In preparing  financial  statements  in conformity  with
     generally accepted  accounting  principles,  management is required to make
     estimates  and  assumptions  that affect the amounts  reported in the these
     financial  statements.  Although  Management  believes  its  estimates  and
     assumptions are reasonable, actual results may differ materially from those
     estimates.  Significant  estimates  affecting  these  financial  statements
     include the  estimated  quantities  of proved oil and gas  reserves and the
     related present value of estimated future net cash flows.

     Stock  Options.  The Company  accounts for employee  stock option grants in
     accordance  with  Accounting  Principles  Board  ("APB")  Opinion  No.  25,
     "Accounting for Stock Issued to Employees," whereby  compensation costs are
     recognized  only  in  situations  where  stock   compensatory  plans  award
     intrinsic  value to recipients at the date of grant. On March 31, 2000, the
     Financial  Accounting  Standards Board ("FASB") issued FASB  Interpretation
     No. 44, "Accounting for Certain Transactions  involving Stock Compensation"
     an  interpretation  of APB Opinion No. 25,  which  requires  the Company to
     recognize   compensation   costs  related  to  stock  options   granted  to
     independent   consultants  in  accordance  with  FASB  Statement  No.  123,
     "Accounting   for  Stock-Based   Compensation".   The  provisions  of  this
     Interpretation  are effective  July 1, 2000 and apply to new awards granted
     after December 15, 1998. The effects of applying this  Interpretation  will
     be recognized  only on a  prospective  basis for those  previous  awards to
     independent consultants,  and accordingly, no adjustments will be made upon
     initial  application  to financial  statements for periods prior to July 1,
     2000.  Compensation  cost measured upon application of this  Interpretation
     that is  attributable  to  periods  subsequent  to July  1,  2000,  will be
     recognized.

     Financial  Instruments.  Cash and money market funds,  stated at cost,  are
     available upon demand and approximate fair value. Interest rates associated
     with the Company's  long-term debt are linked to current market rates. As a
     result,  management believes that the carrying amount approximates the fair
     value of the Company's  credit  facilities.  All financial  instruments are
     held for purposes other than trading.

                                       22
<PAGE>
NOTE B - DEBT

          The  Company has a revolving  credit  agreement  with Bank of America,
     N.A.,  formerly  NationsBank  of Texas,  N.A.,  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 the available
     borrowing  base of $28,000  beginning  September 5, 1999, and to extend the
     maturity date to August 15, 2001. At March 31, 2000, the borrowing base was
     $1,954,000.  The borrowing base is subject to  redetermination  on or about
     August 1, each year. There are no current amounts due under the facility at
     March 31, 2000.  Interest under this agreement is payable  monthly at prime
     rate (9% at March  31,  2000 and  7.75% at March  31,  1999).  The  balance
     outstanding  under this credit  facility was  $1,200,000  and $1,784,000 at
     March 31, 2000 and 1999,  respectively.  A letter of credit for $50,000, in
     lieu of a  plugging  bond  with  the  Texas  Railroad  Commission  covering
     properties operated by the Company, is also outstanding under the facility.

          Amounts borrowed under this agreement are secured by substantially all
     of the  Company's  oil  and gas  properties  and the  common  stock  of its
     subsidiary.  The 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 or pay dividends.

NOTE C - INCOME TAXES

          Components  of income tax expense  (benefit)  for years ended March 31
     are as follows:
                                    2000            1999              1998
                                ------------    ------------      ------------
        Current:  Federal       $       -       $       -         $    (28,388)
                  State                 -               -                 -
                                ------------    ------------      ------------
                                        -               -              (28,388)
        Deferred: Federal               -               -             (301,814)
                  State                 -               -              (39,367)
                                ------------    ------------      ------------
                                        -               -             (341,181)
                                ------------    ------------      ------------
        Income tax benefit      $       -       $       -         $   (369,569)
                                ============    ============      ============

          Deferred tax assets,  valuation allowance, and liabilities at March 31
     are as follows:
                                                          2000           1999
                                                       ---------      ---------
     Deferred tax assets:
       Percentage depletion carryforwards              $ 213,365      $ 169,271
       Net operating loss carryforwards                  224,713        230,763
       Valuation allowance                              (196,469)      (271,818)
                                                       ---------      ---------
                                                         241,609        128,216
     Deferred tax liabilities:
       Excess financial accounting bases over
         tax bases of property and equipment            (241,609)      (128,216)
                                                       ---------      ---------
           Net deferred tax assets (liabilities)       $    --        $    --
                                                       =========      =========
     Increase (decrease) in valuation allowance
       for the year                                    $ (75,349)     $ 135,928
                                                       =========      =========
                                       23
<PAGE>
          As  of  March  31,   2000,   the  Company  has   statutory   depletion
     carryforwards of approximately $821,000, which do not expire, and operating
     loss carryforwards of approximately  $864,000,  which if not utilized begin
     to expire in 2018.

          A  reconciliation  of the  provision  for income taxes to income taxes
     computed using the federal statutory rate for years ended March 31 follows:

                                              2000         1999         1998
                                            ---------    ---------    ---------
Tax expense (benefit) at statutory rate     $ 133,840    $(144,763)   $(575,697)
Increase (decrease) in valuation allowance    (75,349)     135,928      135,890
State income taxes                               --           --           --
Prior year over accrual                          --           --        (28,388)
Effect of graduated rates                     (31,492)      34,062      130,450
Other                                         (26,999)     (25,227)     (31,824)
                                            ---------    ---------    ---------
                                            $    --      $    --      $(369,569)
                                            =========    =========    =========

NOTE D - MAJOR CUSTOMERS

          The  Company  operates  exclusively  within the United  States and its
     revenues and operating  income are derived  predominately  from the oil and
     gas industry.  Oil and gas production is sold to various purchasers and the
     receivables  are unsecured.  Historically,  the Company has not experienced
     significant  credit losses on its oil and gas accounts and management is of
     the opinion that significant  credit risk does not exist.  Management is of
     the opinion  that the loss of any one  purchaser  would not have an adverse
     effect on the ability of the Company to sell its oil and gas production.

          In fiscal 2000, one purchaser accounted for 35% of revenues. In fiscal
     1999, two purchasers accounted for 30% and 25%, respectively,  of revenues.
     In fiscal 1998, two purchasers accounted for 33% and 15%, respectively,  of
     revenues.

NOTE E - OIL AND GAS COSTS

          The costs  related to the oil and gas  activities  of the Company were
     incurred as follows:
                                                  Year ended March 31,
                                         --------------------------------------
                                            2000          1999          1998
                                         ----------    ----------    ----------
       Property acquisition costs        $  334,611    $  207,325    $  751,160
       Development costs                 $  468,943    $  436,052    $1,261,569

          The Company had the following aggregate  capitalized costs relating to
     the Company's oil and gas property activities at March 31:

                                            2000           1999          1998
                                         ----------     ----------    ----------
     Proved oil and gas properties      $10,531,259    $10,331,594    $9,854,099
     Unproved oil and gas properties         99,644        163,797        61,602
                                         ----------     ----------    ----------
                                         10,630,903     10,495,391     9,915,701
     Less accumulated depreciation,
       depletion, and amortization        7,181,648      6,759,416     5,853,458
                                         ----------     ----------    ----------
                                         $3,449,255     $3,735,975    $4,062,243
                                         ==========     ==========    ==========

                                       24
<PAGE>
          On April,  21, 1999, the Company sold all of its oil and gas interests
     in Lazy JL field  properties  located in Garza  County,  Texas for $600,000
     cash,  adjusted  for  revenues  and  expenses  from the  effective  date of
     February 1, 1999 through the date of closing.  The sales proceeds were used
     to reduce the Company's outstanding debt under its line of credit with Bank
     of America.

          Depreciation, depletion, and amortization expense included a full cost
     ceiling  write-down  of $288,393  for the first  quarter of fiscal 1999 and
     $1,742,386 for the fourth quarter of fiscal 1998 due to declines in oil and
     gas prices and the  related  downward  adjustment  of  estimated  reserves.
     Depreciation,  depletion,  and  amortization  amounted to $3.86,  $6.97 and
     $20.66 per  equivalent  barrel of production  for the years ended March 31,
     2000, 1999, and 1998, respectively.

NOTE F - STOCKHOLDERS' EQUITY

          In May 1997,  the  Company  completed a private  placement  of 200,000
     shares of common stock at $5.00 per share.  The proceeds of $1,000,000 were
     used to reduce debt and finance property acquisitions.

          In  September  1997,  the  shareholders  approved an  amendment to the
     Articles of Incorporation to increase the number of authorized  shares from
     5,000,000  shares of common stock to 40,000,000  shares of common stock and
     10,000,000 shares of preferred stock. The common stockholders  maintain the
     exclusive  right to vote for the  election of  directors  and for all other
     purposes. The preferred stock may be issued in a series with certain rights
     as determined by the Board of Directors.

NOTE G - EMPLOYEE BENEFIT PLAN

          The  Company  adopted  an  employee  incentive  stock  plan  effective
     September  15,  1997.  Under the plan,  350,000  shares are  available  for
     distribution.  Awards,  granted  at  the  discretion  of  the  compensation
     committee of the Board of  Directors,  include  stock options or restricted
     stock.  Stock  options may be an incentive  stock option or a  nonqualified
     stock option.  Options to purchase  common stock under the plan are granted
     at the fair market value of the common  stock at the date of grant,  become
     exercisable  to the  extent of 25% of the shares  optioned  on each of four
     anniversaries  of the date of  grant,  expire  ten  years  from the date of
     grant, and are subject to forfeiture if employment  terminates.  Restricted
     stock may be granted  with a  condition  to attain a  specified  goal.  The
     purchase  price will be at least $5.00 per share of restricted  stock.  The
     awards of restricted stock must be accepted within sixty days and will vest
     as determined by agreement.  Holders of restricted stock have all rights of
     a shareholder of the Company.

          During fiscal 2000,  options for 90,000 shares were granted.  Of these
     20,000 options were granted to contract consultants and 30,000 options were
     granted to outside  directors.  The exercise  price of all options  granted
     equaled or exceeded the market price of the stock on the date of grant.


                                       25
<PAGE>
          Additional  information  with  respect  to  the  Plan's  stock  option
     activity is as follows:
                                                                   Weighted
                                                   Number           Average
                                                 of Shares       Exercise Price
                                                 ---------       --------------
   Options outstanding, at March 31, 1998             -          $          -
     Granted                                       100,000                 7.63
     Exercised                                        -                     -
     Forfeited                                     (10,000)                7.75
                                                 ---------       --------------
   Options outstanding, at March 31, 1999           90,000                 7.61
     Granted                                        90,000                 5.25
     Exercised                                        -                     -
     Forfeited                                        -                     -
                                                 ---------       --------------
   Options outstanding, at March 31, 2000          180,000       $         6.43
                                                 =========       ==============

   Options exercisable at March 31, 1999              -          $          -
   Options exercisable at March 31, 2000            22,500       $         7.61

          Weighted average grant date fair value of stock options granted during
     fiscal 1999 and 2000 was $4.04 and $2.65, respectively.  These amounts were
     determined  using the  Black-Scholes  option-pricing  model,  which  values
     options  based on the stock price at the grant date,  the expected  life of
     the option,  the estimated  volatility of the stock, the expected  dividend
     payments,  and the  risk-free  interest  rate over the expected life of the
     option. The assumptions used in the Black-Scholes model were as follows for
     stock options granted in fiscal 1999 and 2000:

                                                     2000               1999
                                                   --------           --------
               Expected volatility                  29.40%             27.89%
               Expected dividend yield               0.00%              0.00%
               Risk-free rate of return              6.43%              5.72%
               Expected life of options            10 years           10 years

          The  Black-Scholes  option  valuation  model was  developed for use in
     estimating   the  fair  value  of  traded  options  that  have  no  vesting
     restrictions  and are fully  transferable.  In addition,  option  valuation
     models  require  the  input  of  highly  subjective  assumptions  including
     expected  stock price  volatility.  Because the  Company's  employee  stock
     options have characteristics  significantly  different from those of traded
     options,  and  because  changes in the  subjective  input  assumptions  can
     materially  affect the fair value estimate,  in management's  opinion,  the
     existing models do not necessarily provide a reliable single measure of the
     fair value of its employee stock options.

          The  following  tables  summarize   information  about  stock  options
     outstanding and exercisable at March 31, 2000:


                                       26
<PAGE>
                            Stock Options Outstanding

                                            Weighted Average
                             Number of          Remaining           Weighted
          Range of            Shares           Contractual           Average
       Exercise Prices      Outstanding       Life in Years       Exercise Price
       ---------------      -----------     ----------------      --------------
         $7.50-$7.75             90,000           8.56                $7.61
         $5.25                   90,000           9.97                $5.25
                            -----------
                                180,000
                            ===========

                            Stock Options Exercisable

                                       Number of         Weighted
                   Range of             Shares            Average
                Exercise Prices       Exercisable      Exercise Price
                ---------------       -----------      --------------
                  $7.50-$7.75            22,500             $7.61

          Since the Company applies the intrinsic value method in accounting for
     its stock option plan, it generally  records no  compensation  cost for its
     stock options (Note A). If compensation cost for the Company's stock option
     plan had been  determined  based on the fair  value at the grant  dates for
     awards  under the plan,  net earnings  (loss),  basic  earnings  (loss) per
     common share and diluted  earnings  (loss) per common share would have been
     as follows:
                                                  2000              1999
                                               ---------         ---------
           Net earnings (loss):
                As reported                    $ 393,647         $(425,774)
                Pro forma                      $ 291,027         $(477,189)

           Basic earnings (loss) per share:
                As reported                    $    0.24         $   (0.26)
                Pro forma                      $    0.18         $   (0.29)

           Diluted earnings (loss) per share:
                As reported                    $    0.24         $   (0.26)
                Pro forma                      $    0.18         $   (0.29)

NOTE H - RELATED PARTY TRANSACTIONS

          The Company  serves as operator of  properties  in which the  majority
     stockholder  has  interests  and bills the majority  stockholder  for lease
     operating  expenses on a monthly  basis  subject to usual trade terms.  The
     billings totaled $56,775, $21,981 and $50,097 for the years ended March 31,
     2000, 1999, and 1998, respectively.

          Effective  January 1, 2000, the Company entered into an agreement with
     the husband of an officer and director of the Company to provide geological
     consulting  services for one year. Amounts paid under this contract for the
     year ended March 31, 2000 totaled $8,386.

NOTE I - OIL AND GAS RESERVE DATA (UNAUDITED)

          The estimates of the Company's proved oil and gas reserves,  which are
     located entirely within the United States, were prepared in accordance with
     the guidelines  established  by the Securities and Exchange  Commission and
     Financial Accounting Standards Board. These guidelines require that reserve

                                       27
<PAGE>
     estimates be prepared  under  existing  economic and operating  conditions,
     with no  provision  for price and cost  escalators,  except by  contractual
     agreement.  The  estimates  as of March  31,  1999  and  2000 are  based on
     evaluations prepared by Joe C. Neal and Associates,  Petroleum Consultants.
     The estimates as of March 31, 1998 are based on evaluations  prepared by T.
     Scott Hickman and Associates, Inc., Petroleum Engineers.

          Management  emphasizes that reserve estimates are inherently imprecise
     and are  expected to change as new  information  becomes  available  and as
     economic  conditions in the industry  change.  The  following  estimates of
     proved reserves quantities and related  standardized  measure of discounted
     net cash flow are estimates only, and do not purport to reflect  realizable
     values or fair market values of the Company's reserves.

CHANGES IN PROVED RESERVE QUANTITIES (UNAUDITED):
<TABLE>
<CAPTION>
                                                    2000                        1999                        1998
                                            ---------------------       ---------------------       ---------------------
                                              Bbls         Mcf           Bbls          Mcf            Bbls         Mcf
                                            -------     ---------       -------     ---------       -------     ---------
<S>                                         <C>         <C>             <C>         <C>             <C>         <C>
Proved reserves, beginning of year          194,000     4,194,000       246,000     3,197,000       436,000     2,956,000
Revision of previous estimates               13,000      (471,000)       (2,000)      348,000      (132,000)      268,000
Purchase of minerals in place                 3,000     1,403,000          --         939,000         6,000       405,000
Extensions and discoveries                    1,000       174,000          --         193,000          --            --
Production                                  (19,000)     (541,000)      (50,000)     (483,000)      (64,000)     (432,000)
Sales of minerals in place                  (53,000)       (4,000)         --            --            --            --
                                            -------     ---------       -------     ---------       -------     ---------
Proved reserves, end of year                139,000     4,755,000       194,000     4,194,000       246,000     3,197,000

PROVED DEVELOPED RESERVES (UNAUDITED):
Beginning of year                           194,000     4,194,000       219,000     2,941,000       281,000     2,400,000
End of year                                 139,000     4,755,000       194,000     4,194,000       219,000     2,941,000
</TABLE>

STANDARDIZED  MEASURE OF  DISCOUNTED  FUTURE NET CASH FLOWS  RELATING  TO PROVED
RESERVES (UNAUDITED):
                                                     March 31,
                                     -----------------------------------------
                                         2000           1999           1998
                                     -----------    -----------    -----------
Future cash inflows                  $15,590,000    $ 8,994,000    $ 9,794,000
Future production and
  development costs                   (4,414,000)    (2,989,000)    (3,791,000)
Future income taxes (a)               (2,249,000)      (715,000)      (612,000)
                                     -----------    -----------    -----------
Future net cash flows                  8,927,000      5,290,000      5,391,000
Annual 10% discount for
  estimated timing of cash flows      (4,019,000)    (2,220,000)    (1,896,000)
                                     -----------    -----------    -----------
Standardized measure of
  discounted future net cash flows   $ 4,908,000    $ 3,070,000    $ 3,495,000
                                     ===========    ===========    ===========

(a)  Future  income taxes are computed  using  effective tax rates on future net
     cash  flows  before  income  taxes  less  the tax  bases of the oil and gas
     properties.

                                       28
<PAGE>
CHANGES IN STANDARIZED  MEASURE OF DISCOUNTED  FUTURE NET CASH FLOWS FROM PROVED
RESERVES (UNAUDITED):
                                                  Year ended March 31,
                                        ---------------------------------------
                                            2000          1999          1998
                                        -----------   -----------   -----------
Sales of oil and gas produced,
  net of production costs               $(1,136,000)  $  (859,000)  $(1,427,000)
Net changes in price and
  production costs                        2,310,000    (1,255,000)     (519,000)
Changes in previously estimated
  development costs                          22,000       296,000          --
Revisions of quantity estimates            (281,000)      389,000      (428,000)
Net change due to purchases and
  sales of minerals in place              1,164,000       527,000       456,000
Extensions and discoveries,
  less related costs                        187,000        81,000          --
Net change in income taxes                 (821,000)      (18,000)      475,000
Accretion of discount                       349,000       389,000       532,000
Changes in timing of estimated
  cash flows and other                       44,000        25,000       (42,000)
                                        -----------   -----------   -----------
Changes in standardized measure           1,838,000      (425,000)     (953,000)

Standardized measure, beginning of year   3,070,000     3,495,000     4,448,000
                                        -----------   -----------   -----------
Standardized measure, end of year       $ 4,908,000   $ 3,070,000   $ 3,495,000
                                        ===========   ===========   ===========





                                       29
<PAGE>
ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURES

         None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

          The  information  required  regarding  Directors of the Registrant and
     compliance  with Section  16(a) of the  Securities  Exchange Act of 1934 is
     incorporated  by reference to the Company's  Information  Statement for its
     Annual Meeting of Stockholders, which will be filed with the Commission not
     later than July 31, 1999.

          Pursuant to Item 401(b) of Regulation S-K, the information required by
     this item with respect to executive officers of the Company is set forth in
     Part I of this report.

ITEM 11. EXECUTIVE COMPENSATION

          The  information  required in this item is  incorporated  by reference
     from  the  Company's  Information  Statement  for  its  Annual  Meeting  of
     Stockholders,  which will be filed with the  Commission not later than July
     31, 2000.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          The  information  required in this item is  incorporated  by reference
     from  the  Company's  Information  Statement  for  its  Annual  Meeting  of
     Stockholders,  which will be filed with the  Commission not later than July
     31, 2000.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          The  information  required in this item is  incorporated  by reference
     from  the  Company's  Information  Statement  for  its  Annual  Meeting  of
     Stockholders,  which will be filed with the  Commission not later than July
     31, 2000.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  1. and 2. Financial Statements and Schedules.

          See "Index to Consolidated  Financial  Statements" set forth in Item 8
     of this Form 10-K.

          No  schedules  are  required  to be filed  because  of the  absence of
     conditions  under  which they would be  required  or because  the  required
     information  is set  forth in the  financial  statements  or notes  thereto
     referred to above.

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<PAGE>
     (a)  3. Exhibits.

Exhibit
Number

 3.1 Articles of  Incorporation  (incorporated  by  reference  to the  Company's
     Annual Report on Form 10-K dated June 24, 1998).
 3.2 Bylaws  (incorporated  by reference to the Company's  Annual Report on Form
     10K dated June 23, 1995).
10.1 Stock Option Plan  (incorporated  by reference to the Amendment to Schedule
     14C Information Statement filed on August 13, 1997).
10.2 Bank Line of Credit  (incorporated  by  reference to the  Company's  Annual
     Report on Form 10-K dated June 24, 1998).
10.3 Partial  Assignment,  Bill of Sale  and  Conveyance  between  Mexco  Energy
     Corporation  and  Shenandoah  Petroleum  Corporation  dated  April 21, 1999
     (previously filed as exhibit 10.1 and incorporated by reference to Form 8-K
     dated April 21, 1999).
21   Subsidiaries  of the Company  (incorporated  by reference to the  Company's
     Annual Report on Form 10-K dated Jun 24, 1998).


     (b)  Reports on Form 8-K.

          No report  on Form 8-K was filed by the  Company  during  the  quarter
     ended March 31, 2000.




                                       31
<PAGE>
                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange  Act of 1934,  the  Company has duly caused this report to be signed on
behalf of the undersigned thereunto duly authorized.

                                           MEXCO ENERGY CORPORATION

                                           Registrant

                                           By: /s/ Nicholas C. Taylor
                                           -------------------------------------
                                           Nicholas C. Taylor
                                           President and Chief Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report has been signed below as of June 14, 2000,  by the  following  persons on
behalf of the Company and in the capacity indicated.

 /s/  Nicholas C. Taylor
 ---------------------------------------
      Nicholas C. Taylor
      President, Chief Executive Officer
      and Director

 /s/  Donna Gail Yanko
 ---------------------------------------
      Donna Gail Yanko
      Vice President, Operations
      and Director

 /s/  Linda J. Crass
 ---------------------------------------
      Linda J. Crass
      Controller, Treasurer
      and Assistant Secretary

 /s/  Thomas Graham, Jr.
 ---------------------------------------
      Thomas Graham, Jr.
      Chairman of the Board of Directors

 /s/  Thomas R. Craddick
 ---------------------------------------
      Thomas R. Craddick
      Director

 /s/  William G. Duncan, Jr.
 ---------------------------------------
      William G. Duncan, Jr.
      Director

 /s/  Jack D. Ladd
 ---------------------------------------
      Jack D. Ladd
      Director



                                       32
<PAGE>
                               INDEX TO EXHIBITS

 Exhibit
 Number       Exhibit                                                       Page
 -------      --------------------------------------------------------      ----
   3.1**      Articles of Incorporation.
   3.2*       Bylaws.
  10.1***     Stock Option Plan.
  10.2**      Bank Line of Credit.
  10.3****    Partial Assignment, Bill of Sale and Conveyance between
              Mexco Energy Corporation and Shenandoah Petroleum
              Corporation dated April 21, 1999.
  21**        Subsidiaries of the Company.



*    Incorporated by reference to the Company's Annual Report on Form 10-K dated
     June 23, 1995.
**   Incorporated by reference to the Company's Annual Report on Form 10-K dated
     June 24, 1998.
***  Incorporated  by  reference to the  Amendment  to Schedule 14C  Information
     Statement filed on August 13, 1998.
**** Previously  filed as exhibit 10.1 and incorporated by reference to Form 8-K
     dated April 21, 1999.




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