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, 2001 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 (ss.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 22, 2001, the aggregate market value of the  registrant's  common
stock  held by  non-affiliates  (using  the  closing  bid  price of  $4.00)  was
approximately $1,924,540.

     The number of shares outstanding of the registrant's common stock as of May
31, 2001 was 1,610,133.

                       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  27,  2001.  Such  Information  Statement  will be filed  with the
Commission not later than July 30, 2001.
<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.............  8

                                     PART II

Item 5.     Market for the Registrant's Common Equity and Related
            Stockholder Matters.............................................  9
Item 6.     Selected Financial Data......................................... 10
Item 7.     Selected Quarterly Financial Data............................... 10
Item 8.     Management's Discussion and Analysis of Financial
            Condition and Results of Operations............................. 10
Item 9.     Quantitative and Qualitative Disclosures About Market Risk...... 14
Item 10.    Financial Statements and Supplementary Data..................... 15
Item 11.    Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosures............................ 30

                                    PART III

Item 12.    Directors and Executive Officers of the Registrant.............. 30
Item 13.    Executive Compensation.......................................... 30
Item 14.    Security Ownership of Certain Beneficial Owners and Management.. 30
Item 15.    Certain Relationships and Related Transactions.................. 30

                                     PART IV

Item 16.    Exhibits, Financial Statement Schedules and Reports on Form 8-K. 31
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, 2001,  gas reserves  constituted  approximately  82% of the
Company's total proved reserves and approximately 83% of the Company's  revenues
for fiscal  2001.  Revenues  from oil and gas royalty  interests  accounted  for
approximately 16% of the Company's revenues for fiscal 2001.

     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 20% of the Company's  discounted future net cash flows from proved
reserves  as of March  31,  2001,  and for  fiscal  2001,  approximately  38% of
revenues and 29% 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 17% of the Company's  discounted future net cash flows from proved
reserves  as of March  31,  2001,  and for  fiscal  2001,  approximately  14% of
revenues and 10% of production costs.

                                       3
<PAGE>
     The Company  owns  interests  in and  operates 17  producing  wells and two
shut-in  wells.  The Company  owns  partial  interests  in an  additional  1,461
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
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)
    ----                                        ---------    --------
    2001......................................     18,545     503,773
    2000......................................     19,334     540,793
    1999......................................     49,573     482,948
    1998......................................     63,800     432,343
    1997......................................     39,363     236,034

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:

                                                    2001     2000     1999
                                                    ----     ----     ----
   Sid Richardson Energy Services, Co.
     (formerly Koch Midstream Services Company)      39%      35%      30%
   Navajo Crude Oil Marketing Company                  -        -      25%

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.

                                       4
<PAGE>
     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.

     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, 2001,  the Company had two  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.

                                       5
<PAGE>
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.

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, 2001, 2000 and 1999 are based on evaluations  prepared
by Joe C. Neal and Associates, Petroleum Consultants. 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, 2001,  average prices of $24.42 per
barrel for oil and $5.43 per mcf (thousand 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,
                                         ---------------------------------------
                                             2001          2000          1999
                                         -----------   -----------   -----------
Oil (Bbls):
  Proved developed - Producing               145,954       138,839       193,970
  Proved developed - Non-producing            88,700          --            --
  Proved undeveloped                            --            --            --
                                         -----------   -----------   -----------
      Total                                  234,654       138,839       193,970
                                         ===========   ===========   ===========
Natural gas (Mcf):
  Proved developed - Producing             4,447,379     4,165,396     3,182,342
  Proved developed - Non-producing         1,889,833       589,951     1,011,971
  Proved undeveloped                           8,234          --            --
                                         -----------   -----------   -----------
      Total                                6,345,446     4,755,347     4,194,313
                                         ===========   ===========   ===========
Present value of estimated future
  net revenues before income taxes       $15,988,820   $ 6,144,644   $ 3,485,196
                                         ===========   ===========   ===========

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

                                       6
<PAGE>
     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
     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, 2001:

                                                        Gross     Net
                                                        -----    -----
  Oil ............................................      1,259       12
  Gas ............................................        220        7
                                                        -----    -----
      Total Productive Wells .....................      1,479       19
                                                        =====    =====

     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, 2001 the only material undeveloped acreage
the Company owned was  approximately  4,283 gross and 543 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, 2001.

                                                        Developed Acres
                                                  -------------------------
                                                   Gross              Net
                                                  -------           -------
     Texas ............................            84,691             2,465
     New Mexico .......................            16,554               145
     North Dakota .....................            23,999                18
     Louisiana ........................            21,961                28
     Oklahoma .........................            36,162               123
     Montana ..........................             7,189                 4
     Kansas ...........................             7,240                21
     Wyoming ..........................             1,798                 4
     Colorado .........................             1,040                 1
     Alabama ..........................               320                 1
     Arkansas .........................               320              --
                                                  -------           -------
     Total ............................           201,274             2,810
                                                  =======           =======
                                       7
<PAGE>
Drilling Activities

     The following table sets forth the drilling activity of the Company for the
years ended March 31, 2001, 2000 and 1999.

                                             Years ended March 31,
                                   ------------------------------------------
                                       2001          2000          1999
                                   ------------   ------------   ------------
                                   Gross   Net    Gross   Net    Gross   Net
                                   -----  -----   -----  -----   -----  -----
Exploratory Wells
  Productive                          1     .08      1     .01      -      -
  Nonproductive                       2     .48      -      -       -      -
                                   -----  -----   -----  -----   -----  -----
    Total                             3     .56      1     .01      -      -
                                   =====  =====   =====  =====   =====  =====
Development Wells
  Productive                          1     .02      1     .60      8    1.90
  Nonproductive                       -      -       -      -       -      -
                                   -----  -----   -----  -----   -----  -----
    Total                             1     .02      1     .60      8    1.90
                                   =====  =====   =====  =====   =====  =====

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, 2001, 2000 and 1999.

                                                    Year Ended March 31,
                                            ------------------------------------
                                               2001         2000         1999
                                            ----------   ----------   ----------
Oil (a):
  Production (Bbls)                             18,545       19,334       49,573
  Revenue                                   $  531,751   $  416,405   $  600,285
  Average Bbls per day                              51           53          136
  Average sales price per Bbl               $    28.67   $    21.54   $    12.11
Gas (b):
  Production (Mcf)                             503,773      540,793      482,948
  Revenue                                   $2,560,459   $1,262,556   $  903,338
  Average Mcf per day                            1,380        1,478        1,323
  Average sales price per Mcf               $     5.08   $     2.33   $     1.87
Production cost:
  Production cost                           $  526,032   $  542,789   $  644,563
  Equivalent Bbls (c)                          102,507      109,466      130,064
  Production cost per equivalent Bbl        $     5.13   $     4.96   $     4.96
  Production cost per sales dollar          $     0.17   $     0.32   $     0.43
Total oil and gas revenues                  $3,092,210   $1,678,961   $1,503,623

(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
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, 2001.
                                       8
<PAGE>
Executive Officers of the Registrant

     The following table sets forth certain information concerning the executive
officers of the Company as of March 31, 2001.


Name                  Age     Position
------------------    ---     ---------------------------------------------
Nicholas C. Taylor     63     President and Chief Executive Officer
Donna Gail Yanko       57     Vice President and Corporate Secretary
Linda J. Crass         46     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 served as Chairman of the
three member State Securities Board through January 2001.

     Donna Gail Yanko 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. She 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 was 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  on the  over-the-counter  market
bulletin  board under the symbol  MEXC.  The  registrar  and  transfer  agent is
Computershare Investor Services,  Inc., P.O. Box 1596, Denver,  Colorado,  80201
(Tel: 303-984-4100).  As of March 31, 2001 the Company had 1,402 shareholders of
record and 1,610,133 shares outstanding.

                           PRICE RANGE OF COMMON STOCK

                                                   Bid Price
                                           -------------------------
                                             High              Low
                                           -------           -------
     2001:(1)
          April - June 2000                4 7/8             4 3/8
          July - September 2000            4 9/16            4 1/2
          October - December 2000          6 3/8             4 9/16
          January - March 2001             6 3/4             3 1/2
     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

(1)  Reflects  high and low bid  information  received  from  Pink  Sheets  LLC,
     formerly 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 22, 2001, the bid price was $4.00.

                                       9
<PAGE>
     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,
                              -----------------------------------------------------------------------
                                  2001           2000           1999           1998           1997
                              -----------------------------------------------------------------------
<S>                           <C>            <C>            <C>            <C>            <C>
Statement of Operations:
Operating revenues            $ 3,099,966    $ 1,686,266    $ 1,510,005    $ 2,106,338    $ 1,458,741
Operating income (loss)         1,881,776        498,384       (281,099)    (1,558,335)       521,123
Other income (expense)            (92,160)      (104,737)      (144,675)      (134,891)        (5,621)
Net income (loss)             $ 1,539,458    $   393,647    $  (425,774)   $(1,323,657)   $   377,867
Net income (loss) per
  share - basic               $      0.95    $      0.24    $     (0.26)   $     (0.83)   $      0.27
Net Income (loss) per
  share - diluted             $      0.95    $      0.24    $     (0.26)   $     (0.83)   $      0.27
Weighted average shares
  outstanding - basic           1,622,568      1,623,289      1,623,289      1,594,752      1,423,229
Weighted average shares
  outstanding - diluted         1,625,003      1,623,289      1,623,289      1,594,752      1,423,229

Balance Sheet:
Property and equipment, net   $ 4,009,852    $ 3,459,522    $ 3,749,400    $ 4,078,053    $ 4,777,132
Total assets                    4,961,360      3,853,319      4,043,015      4,542,486      5,109,199
Total debt                        600,000      1,200,000      1,784,000      1,822,000      1,637,000
Stockholders' equity          $ 4,046,452    $ 2,567,228    $ 2,173,581    $ 2,599,355    $ 2,923,012

Cash Flow:
Cash provided by operations   $ 1,903,345    $   722,088    $   532,171    $ 1,118,566    $   866,931

EBITDA(1)                     $ 2,263,376    $   927,326    $   635,260    $ 1,252,539    $ 1,006,119
<FN>
(1)  EBITDA (as used herein) represents earnings before interest expense, income
     taxes, depreciation, depletion and amortization.  Management of the Company
     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.
</FN>
</TABLE>

ITEM 7. SELECTED QUARTERLY FINANCIAL DATA

                                                     FISCAL 2001
                                      -----------------------------------------
                                       4TH QTR    3RD QTR    2ND QTR    1ST QTR
                                      --------   --------   --------   --------
Net sales                             $989,050   $798,110   $712,243   $592,807
Gross profit (loss)                   $839,481   $662,781   $562,402   $501,514
Net income (loss)                     $495,205   $408,516   $357,301   $278,436
Net income (loss) per share-basic     $   0.31   $   0.25   $   0.22   $   0.17
Net income (loss) per share-diluted   $   0.31   $   0.25   $   0.22   $   0.17

                                                     FISCAL 2000
                                      -----------------------------------------
                                       4TH QTR    3RD QTR    2ND QTR    1ST QTR
                                      --------   --------   --------   --------
Net sales                             $513,576   $429,744   $403,139   $332,502
Gross profit (loss)                   $389,465   $314,517   $274,797   $157,393
Net income (loss)                     $191,010   $146,041   $ 92,519   $(35,923)
Net income (loss) per share-basic     $   0.11   $   0.09   $   0.06   $  (0.02)
Net income (loss) per share-diluted   $   0.11   $   0.09   $   0.06   $  (0.02)

ITEM 8. 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 10 of this report.

                                       10
<PAGE>
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 2001,  the Company  primarily  used cash  provided by  operations
($1,903,345)  to  fund  oil  and  gas  property   acquisitions  and  development
($936,293),  repayments of bank debt ($600,000) and increased  working  capital.
Working capital as of March 31, 2001 was $822,095.

     In fiscal  2001,  the board of directors  authorized  the purchase of up to
25,000 shares of the Company's common stock, and the Company  repurchased 13,160
shares, at an aggregate cost of $84,934. For fiscal 2002, the board of directors
has authorized  the use of up to $250,000 to repurchase  shares of the Company's
common stock. No shares have been repurchased to date during fiscal 2002.

     During  fiscal  2000,  the Company  entered into an  exploration  agreement
relating to non-producing  acreage in Pecos County,  Texas.  Approximately 3,795
gross acres and 432 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
$155,000.  Two test wells were drilled on this acreage. The first test well will
be  completed as a producer at a cost to the Company of  approximately  $80,000.
The second test well has been  drilled,  plugged and  abandoned at a cost to the
Company of approximately $44,000.  Pending further evaluation of the information
gathered from these wells,  additional  wells may be drilled on these prospects.
The Company owns approximate  working  interests in these prospects ranging from
10.41% to 15.51% and a third party conducts  operations.

     Effective   September  1,  2000,  the  Company   acquired  three  producing
properties in Pecos County,  Texas for $198,000 cash,  adjusted for revenues and
expenses  through  September  28,  2000,  the date of closing.  The Company owns
working  interests ranging from 97% to 99% and, as operator of the six producing
wells on these properties, is evaluating the workover, recompletion and re-entry
potential of these  properties.  Operating  cash flow from these  properties was
approximately  $88,000 for the six months ended March 31,  2001.  In January and
again in May 2001,  workovers  were performed on two of these  producing  wells,
increasing production at a total cost to the Company of approximately $60,000.

     Effective  September 1, 2000,  the Company  leased 159 gross  non-producing
acres in Pecos County,  Texas, in which it retained a 98% working interest, at a
cost of approximately  $27,500.  The Company plans to re-enter an abandoned well
on this  acreage as soon as a rig  becomes  available  at an  estimated  cost of
$60,000.

     On  September  5, 2000,  the  Company  acquired a 50%  working  interest in
approximately  107  gross  non-producing   acres  in  Coke  County,   Texas  for
approximately $10,000. The recompletion of the well on this acreage, which began
on January 31, 2001, was unsuccessful and the well has been abandoned, at a cost
to the Company to date of  approximately  $34,400.

     On October 31, 2000, the Company  acquired a 12.5% working  interest in 400
gross  non-producing  acres in Nolan County,  Texas for $11,750. An oil well was
completed on this acreage in May 2001 at a cost to the Company of  approximately
$73,000.  Drilling costs of $43,167 were prepaid in December 2000. An additional
well may be drilled on this acreage pending the results of the first well.

                                       11
<PAGE>
     Effective  December 1, 2000, the Company acquired a 1.345% royalty interest
in proved acreage in Limestone County,  Texas for cash of $33,000. A replacement
well was  successfully  completed on this acreage in February  2001.

     Effective January 1, 2001, the Company acquired royalty interests  totaling
0.209%  in  producing  acreage  in Ward  County,  Texas for  $65,760.  There are
presently two  producing gas wells on this acreage.

     On April 30, 2001,  the Company  acquired a 0.0164%  royalty  interest in a
producing  gas unit  containing  9,538  acres in Reagan and Upton  Counties  for
$12,500.

     In April 2001, the Company acquired  additional joint venture  interests in
properties  located in various  counties and states for  $174,000,  adjusted for
revenues and expenses from January 1, 2001,  the effective  date,  through April
29, 2001, date of closing.

     In May 2001, the Company  acquired a 12.5% working  interest and 9.375% net
revenue  interest  in 8,934 acres in Edwards  County,  Texas for  $125,000.  The
initial test well to be drilled on this acreage will  commence  drilling as soon
as a rig is available.  Estimated  drilling costs to the Company of $85,667 were
prepaid in May 2001 and completion costs are estimated at $39,300.

     In June 2001,  the Company  assumed  operations and acquired an approximate
88.35%  working  interest and 62.7285% net revenue  interest in a producing  gas
well in Hutchinson County, Texas for $36,860, adjusted for revenues and expenses
from April 1, 2001, the effective  date. The Company also acquired  non-operated
working  interests,  ranging  from  .8512% to 3.75% with net  revenue  interests
ranging from .6816% to 3.267%, in 21 producing and 7 inactive wells in Limestone
and Freestone Counties,  Texas for $200,000,  adjusted for revenues and expenses
from April 1, 2001, the effective date.

     The  Company  is  reviewing   several  other   projects  in  which  it  may
participate.  The cost 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"),  which  provides  for a credit  facility of  $3,000,000,  subject to a
borrowing base  determination.  Effective September 15, 2000, the borrowing base
was increased to $2,500,000,  with scheduled monthly reductions of the available
borrowing base of $32,000 per month beginning  October 5, 2000, and the maturity
date was extended to August 15, 2002.  As of March 31,  2001,  debt  outstanding
under this  agreement was $600,000 and the  borrowing  base was  $2,308,000.  No
required principal payments are anticipated for the next twelve months. A letter
of credit  for  $50,000,  in lieu of a  plugging  bond  with the Texas  Railroad
Commission  covering the properties the Company  operates,  is also  outstanding
under the facility. The borrowing base is subject to redetermination on or about
August 1, of each year. Amounts borrowed under this agreement are collateralized
by the common stock of Forman and the Company's oil and gas properties. Interest
under this  agreement  is payable  monthly at prime rate (9% and 8% at March 31,
2000 and 2001,  respectively).  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.
                                       12
<PAGE>
     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.  A  shortage  of
available  workover rigs in recent  months has impeded the Company's  ability to
increase or sustain  production on a number of  properties  in a timely  manner.
However, management believes the Company can maintain adequate liquidity for the
next fiscal year.

Results of Operations

Fiscal 2001 Compared to Fiscal 2000

     Oil and gas sales  increased from $1,678,961 in 2000 to $3,092,210 in 2001,
an increase of $1,413,249 or 84%.  This increase was primarily  attributable  to
the increase in oil and gas prices during the year,  offset in part by decreased
production.  The average oil price  increased  from $21.54 in 2000 to $28.67 per
bbl in 2001,  an  increase  of  $7.13  per bbl or 33%.  The  average  gas  price
increased  from $2.33 in 2000 to $5.08 per mcf in 2001, an increase of $2.75 per
mcf or 118%. Oil production decreased from 19,334 bbls in 2000 to 18,545 bbls in
2001, a decrease of 789 bbls or 4%. Gas production decreased from 540,793 mcf in
2000 to 503,773 mcf in 2001, a decrease of 37,020 mcf or 7%.

     Production  costs  decreased  from  $542,789 in 2000 to $526,032 in 2001, a
decrease of $16,757 or 3%.

     Depreciation, depletion and amortization decreased from $426,102 in 2000 to
$377,761  in 2001,  a decrease of $48,341 or 11%,  due  primarily  to  increased
reserves attributable to higher gas prices and property acquisitions.  There was
no impairment of oil and gas properties in fiscal 2000 or 2001.

     General and  administrative  expenses  increased  from  $218,991 in 2000 to
$314,397 in 2001,  an increase of $95,406 or 44%.  This  increase was  primarily
attributable to increased salaries and benefits ($40,700),  compensation related
to stock options  granted to consultants  ($24,700),  engineering and geological
costs ($15,100), franchise taxes ($4,900) and a bad debt ($5,000).

     Interest  expense  decreased  from  $107,577 in 2000 to $95,999 in 2001, an
increase  of $11,578 or 11%.  This  decrease  was  primarily  attributable  to a
reduction in amounts borrowed during 2001.

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 accounted 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  accounted 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.
                                       13
<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.

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
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.

ITEM 9. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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 $6,000.

                                              Year ended March 31,
                                       ----------------------------------
                                         2001         2002         2003
                                       --------     --------     --------
          Variable rate bank debt      $   --       $   --       $600,000


     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,  2001,  the
Company's  largest credit risk associated with any single purchaser was $95,110.
The Company has not experienced any significant credit losses.

                                       14
<PAGE>
     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 2001, the Company's  pretax income would have changed
by $185. If the average gas price had increased or decreased by one cent per mcf
for fiscal 2001, the Company's pretax income would have changed by $5,038.

     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
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 availability, or lack thereof, of workover and drilling
rigs,  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 10. 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,  2001 and 2000,  and the  related
consolidated statements of operations,  stockholders' equity, and cash flows for
each of the three years in the period  ended  March 31,  2001.  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 auditing standards generally accepted
in the  United  States of  America.  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, 2001 and 2000, and the consolidated
results of their  operations and their  consolidated  cash flows for each of the
three years in the period  ended March 31, 2001 in  conformity  with  accounting
principles generally accepted in the United States of America.






GRANT THORNTON LLP

Oklahoma City, Oklahoma
May 11, 2001

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

                                                  2001            2000
                                              ------------    ------------
ASSETS
  Current assets
    Cash and cash equivalents                 $    378,816    $     97,712
    Accounts receivable:
    Oil and gas sales                              489,217         255,121
      Trade                                          1,074           2,070
      Related parties                                8,059          18,105
      Other                                           --             5,000
    Prepaid costs and expenses                      74,342          15,789
                                              ------------    ------------
        Total current assets                       951,508         393,797

  Property and equipment, at cost
    Oil and gas properties, using
      the full cost method                      11,557,980      10,630,903
    Other                                           23,600          22,586
                                              ------------    ------------
                                                11,581,580      10,653,489
    Less accumulated depreciation,
      depletion, and amortization                7,571,728       7,193,967
                                              ------------    ------------
         Property and equipment, net             4,009,852       3,459,522
                                              ------------    ------------
                                              $  4,961,360    $  3,853,319
                                              ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities
    Accounts payable - trade                  $     77,776    $     86,091
    Income taxes payable                            51,637            --
                                              ------------    ------------
       Total current liabilities                   129,413          86,091

  Long-term debt                                   600,000       1,200,000

  Deferred income tax liability                    185,495            --

  Stockholders' equity
    Preferred stock - $1.00 par value;
      10,000,000 shares authorized                    --              --
    Common stock - $0.50 par value;
      40,000,000 shares authorized;
      1,621,387 and 1,623,289 shares
      issued at March 31, 2001 and
      2000, respectively                           810,693         811,644
    Additional paid-in capital                   2,900,097       2,875,399
    Retained earnings (accumulated deficit)        407,254      (1,119,815)
    Treasury stock, at cost                        (71,592)           --
                                              ------------    ------------
        Total stockholders' equity               4,046,452       2,567,228
                                              ------------    ------------
                                              $  4,961,360    $  3,853,319
                                              ============    ============

         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,

                                          2001           2000           1999
                                      -----------    -----------    ------------
Operating revenues:
  Oil and gas                         $ 3,092,210    $ 1,678,961    $ 1,503,623
  Other                                     7,756          7,305          6,382
                                      -----------    -----------    -----------
      Total operating revenues          3,099,966      1,686,266      1,510,005

Operating expenses:
  Production                              526,032        542,789        644,563
  Depreciation, depletion
     and amortization                     377,761        426,102        909,965
  General and administrative              314,397        218,991        236,576
                                      -----------    -----------    -----------
       Total operating expenses         1,218,190      1,187,882      1,791,104
                                      -----------    -----------    -----------
                                        1,881,776        498,384       (281,099)

Other income (expense):
  Interest income                           3,839          2,840          6,394
  Interest expense                        (95,999)      (107,577)      (151,069)
                                      -----------    -----------    -----------
       Net other expense                  (92,160)      (104,737)      (144,675)
                                      -----------    -----------    -----------
Earnings (loss) before income taxes     1,789,616        393,647       (425,774)

Income tax expense:
  Current                                  64,663           --             --
  Deferred                                185,495           --             --
                                      -----------    -----------    -----------
                                          250,158           --             --
                                      -----------    -----------    -----------
Net earnings (loss)                   $ 1,539,458    $   393,647    $  (425,774)
                                      ===========    ===========    ===========

Net earnings (loss) per share:
  Basic                               $      0.95    $      0.24    $     (0.26)
  Diluted                             $      0.95    $      0.24    $     (0.26)

Weighted average outstanding shares:
  Basic                                 1,622,568      1,623,289      1,623,289
  Diluted                               1,625,003      1,623,289      1,623,289


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

                                       18
<PAGE>
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                              Year ended March 31,


                                              2001         2000         1999
                                          -----------  -----------  -----------
Common stock issued:
  Balance at beginning of year            $   811,644  $   811,644  $   811,644
  Issuance of 4 shares                              2         --           --
  Retirement of 1906 shares                      (953)        --           --
                                          -----------  -----------  -----------
  Balance at end of year:
    1,623,289 shares at March 31, 1999
    1,623,289 shares at March 31, 2000
    1,621,387 shares at March 31, 2001    $   810,693  $   811,644  $   811,644

Additional paid-in capital:
  Balance at beginning of year            $ 2,875,399  $ 2,875,399  $ 2,875,399
  Stock-based compensation                     24,700         --           --
  Issuance of 4 shares                             (2)        --           --
                                          -----------  -----------  -----------
  Balance at end of year                  $ 2,900,097  $ 2,875,399  $ 2,875,399

Retained earnings (accumulated deficit):
  Balance at beginning of year            $(1,119,815) $(1,513,462) $(1,087,688)
  Retirement of 1906 shares                   (12,389)        --           --
  Net earnings (loss)                       1,539,458      393,647     (425,774)
                                          -----------  -----------  -----------
  Balance at end of year                  $   407,254  $(1,119,815) $(1,513,462)

Treasury stock:
  Balance at beginning of year            $      --    $      --    $      --
  Purchases of 11,254 shares                  (71,592)        --           --
                                          -----------  -----------  -----------
  Balance at end of year:
    11,254 shares at March 31, 2001       $   (71,592) $      --    $      --
                                          -----------  -----------  -----------
Total shareholders' equity                $ 4,046,452  $ 2,567,228  $ 2,173,581
                                          ===========  ===========  ===========


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

                                       19
<PAGE>
<TABLE>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              Year ended March 31,
<CAPTION>
                                                    2001          2000          1999
                                                -----------   -----------   -----------
<S>                                             <C>           <C>           <C>
Cash flows from operating activities:
  Net earnings (loss)                           $ 1,539,458   $   393,647   $  (425,774)
  Adjustments to reconcile net earnings
  (loss) to net cash provided by
  operating activities:
    Deferred income taxes                           185,495          --            --
    Stock-based compensation                         24,700          --            --
    Depreciation, depletion and amortization        377,761       426,102       909,965
    (Increase) decrease in accounts receivable     (218,054)      (97,247)       24,851
    Increase (decrease) in accounts payable             901         1,007        22,312
    (Increase) decrease in prepaid assets           (58,553)       (1,421)          817
    Increase in income taxes payable                 51,637          --            --
                                                -----------   -----------   -----------
      Net cash provided by operating activities   1,903,345       722,088       532,171

Cash flows from investing activities:
  Additions to oil and gas properties              (936,293)     (803,554)     (643,377)
  Proceeds from sale of assets                         --         667,692         5,678
  Additions to other property and equipment          (1,014)         (712)       (1,622)
                                                -----------   -----------   -----------
      Net cash used in investing activities        (937,307)     (136,574)     (639,321)

Cash flows from financing activities:
  Borrowings                                           --         248,174          --
  Principal payments on long-term debt             (600,000)     (832,174)      (38,000)
  Purchases and retirements of common stock         (84,934)         --            --
                                                -----------   -----------   -----------
      Net cash used in financing activities        (684,934)     (584,000)      (38,000)
                                                -----------   -----------   -----------
Net increase (decrease) in cash
  and cash equivalents                              281,104         1,514      (145,150)
Cash and cash equivalents
  at beginning of year                               97,712        96,198       241,348
                                                -----------   -----------   -----------
Cash and cash equivalents
  at end of year                                $   378,816   $    97,712   $    96,198
                                                ===========   ===========   ===========


Interest paid                                   $    99,044   $   109,255   $   138,586
Income taxes paid                               $      --     $      --     $      --

<FN>
         The accompanying notes to the consolidated financial statements
                    are an integral part of these statements.
</FN>
</TABLE>
                                       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.

                                       21
<PAGE>
     Earnings  (Loss)  Per  Common  Share.  Basic  earnings  (loss) per share is
     computed by dividing net earnings (loss) by the weighted  average number of
     shares outstanding during the period.  Diluted earnings (loss) per share is
     computed by dividing net earnings (loss) by the weighted  average number of
     common  shares  and  dilutive   potential  common  shares  (stock  options)
     outstanding  during the period.  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.   The
     following  is a  reconciliation  of  the  number  of  shares  used  in  the
     calculation of basic earnings per share and diluted  earnings per share for
     the period ended March 31, 2001.

       Weighted average number of
         common shares outstanding                1,622,568
       Incremental shares from the assumed
         exercise of dilutive stock options           2,435
                                                  ---------
       Dilutive potential common shares           1,625,003
                                                  =========

     Outstanding options to purchase 90,000 and 180,000 shares at March 31, 1999
     and 2000, respectively, were not included in the computation of diluted net
     earnings per share  because the  exercise  price of the options was greater
     than the average  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, 2001, 2000 or 1999.

     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.

                                       22
<PAGE>
     Revenue  Recognition  and Gas  Balancing.  Oil and gas sales are recognized
     when the product is  transported  from the well site.  Gas  imbalances  are
     accounted for under the sales method whereby  revenues are recognized based
     on production sold. A liability is recorded when the Company's excess takes
     of natural gas volumes exceed its estimated remaining  recoverable reserves
     (over  produced).  No  receivables  are  recorded for those wells where the
     Company has taken less than its ownership  share of gas  production  (under
     produced). The Company has no significant gas imbalances.

     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,"  as amended by the  Financial
     Accounting Standards Board ("FASB")  Interpretation No. 44, "Accounting for
     Certain Transactions involving Stock Compensation" an interpretation of APB
     Opinion No. 25.

     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.

NOTE B - DEBT

          The  Company has a revolving  credit  agreement  with Bank of America,
     N.A. ("Bank"), which provides for a credit facility of $3,000,000,  subject
     to a borrowing  base  determination.  Effective  September  15,  2000,  the
     borrowing  base  was  increased  to  $2,500,000,   with  scheduled  monthly
     reductions of the available  borrowing base of $32,000 per month  beginning
     October 5, 2000,  and the maturity date was extended to August 15, 2002. As
     of March 31, 2001, debt  outstanding  under this agreement was $600,000 and
     the  borrowing  base was  $2,308,000.  No required  principal  payments are
     anticipated for the next twelve months. A letter of credit for $50,000,  in
     lieu of a plugging  bond with the Texas  Railroad  Commission  covering the
     properties the Company  operates,  is also outstanding  under the facility.
     The borrowing base is subject to  redetermination  on or about August 1, of
     each year.  Amounts borrowed under this agreement are collateralized by the
     common stock of Forman and the Company's oil and gas  properties.  Interest
     under this  agreement is payable  monthly at prime rate (9% and 8% at March
     31, 2000 and 2001,  respectively).  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.

                                       23
<PAGE>
NOTE C - INCOME TAXES

     Deferred tax assets,  valuation allowance,  and liabilities at March 31 are
     as follows:

                                                      2001           2000
                                                  -----------    -----------
       Deferred tax assets:
         Percentage depletion carryforwards       $   258,661    $   213,365
         Vacation accrual                               1,108            -
         Net operating loss carryforwards                 -          224,713
         Valuation allowance                              -         (196,469)
                                                  -----------    -----------
                                                      259,769        241,609
       Deferred tax liabilities:
         Excess financial accounting bases over
           tax bases of property and equipment       (445,264)      (241,609)
                                                  -----------    -----------
         Net deferred tax assets (liabilities)    $  (185,495)   $       -
                                                  ===========    ===========
       Increase (decrease) in valuation
         allowance for the year                   $  (196,469)   $   (75,349)
                                                  ===========    ===========


          As  of  March  31,   2001,   the  Company  has   statutory   depletion
     carryforwards of approximately $834,000, which do not expire.

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

                                                2001        2000        1999
                                              ---------   ---------   ---------
  Tax expense (benefit) at statutory rate     $ 608,469   $ 133,840   $(144,763)
  Increase (decrease) in valuation allowance   (196,469)    (75,349)    135,928
  Depletion in excess of basis                  (80,864)       --          --
  Effect of graduated rates                     (53,688)    (31,492)     34,062
  Other                                         (27,290)    (26,999)    (25,227)
                                              ---------   ---------   ---------
                                              $ 250,158   $    --     $    --
                                              =========   =========   =========
Effective tax rate                                   14%       --          --
                                              =========   =========   =========

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 2001, 2000 and 1999 one purchaser accounted for 39%, 35% and
     30%, respectively, of revenues. In fiscal 1999, another purchaser accounted
     for 25% of revenues.

                                       24
<PAGE>
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,
                                      -----------------------------------------
                                          2001           2000           1999
                                      -----------    -----------    -----------
       Property acquisition costs     $   470,223    $   334,611    $   207,325
       Development costs              $   466,070    $   468,943    $   436,052

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

                                          2001           2000           1999
                                      -----------    -----------    -----------
     Proved oil and gas properties    $11,309,873    $10,531,259    $10,331,594
     Unproved oil and gas properties      248,107         99,644        163,797
                                      -----------    -----------    -----------
                                       11,557,980     10,630,903     10,495,391
     Less accumulated depreciation,
       depletion, and amortization      7,555,356      7,181,648      6,759,416
                                      -----------    -----------    -----------
                                      $ 4,002,624    $ 3,449,255    $ 3,735,975
                                      ===========    ===========    ===========

          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 due to
     declines  in oil and gas  prices and the  related  downward  adjustment  of
     estimated reserves.  Depreciation,  depletion, and amortization amounted to
     $3.65,  $3.86 and $6.97 per  equivalent  barrel of production for the years
     ended March 31, 2001, 2000 and 1999, respectively.

NOTE F - STOCKHOLDERS' EQUITY

          In fiscal 2001,  the board of directors  authorized the purchase of up
     to 25,000 shares of the Company's  common stock. For fiscal 2002, the board
     of directors has authorized the use of up to $250,000 to repurchase  shares
     of the Company's common stock.  During fiscal 2001, the Company repurchased
     13,160  shares,  at an  aggregate  cost of  $84,934.

                                       25
<PAGE>
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 2001,  options for 60,000 shares were granted.  Of these
     30,000 options were granted to contract consultants.  The exercise price of
     all options  granted  equaled or exceeded  the market price of the stock on
     the date of grant.

          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
     Granted                                       60,000               6.75
     Exercised                                       -                  -
     Forfeited                                       -                  -
                                             ------------     --------------
   Options outstanding, at March 31, 2001         240,000     $         6.51
                                             ============     ==============

   Options exercisable at March 31, 1999             -        $         -
   Options exercisable at March 31, 2000           22,500     $         7.61
   Options exercisable at March 31, 2001           67,500     $         6.82

                                       26
<PAGE>
          Weighted average grant date fair value of stock options granted during
     fiscal  2001 was  $2.33.  Weighted  average  grant date fair value of stock
     options   granted  during  fiscal  2000  and  1999  was  $2.65  and  $4.04,
     respectively.   The  value  for  2001  was  determined   using  a  Binomial
     option-pricing model, while amounts for 1999 and 2000 were determined using
     the Black-Scholes  option-pricing model. Both models value 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 Company
     considers the binomial model more accurate,  than the Black-Scholes  model,
     in that it recognizes  the ability to exercise  before  expiration  once an
     option is vested,  and began to the use the binomial  model in fiscal 2001.
     The  assumptions  used in the  Black-Scholes  and  Binomial  models were as
     follows for stock options granted in fiscal 2001, 2000 and 1999:

                                            2001        2000        1999
                                          --------    --------    --------
           Expected volatility              29.86%      29.40%     27.89%
           Expected dividend yield           0.00%       0.00%      0.00%
           Risk-free rate of return          5.25%       6.43%      5.72%
           Expected life of options       10 years    10 years    10 years

          The option  valuation  models were 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, 2001:

                            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            7.56               $7.61
      $6.75                    60,000            9.82               $6.75
      $5.25                    90,000            8.97               $5.25
                           -----------
                              240,000

                            Stock Options Exercisable

                               Number of Weighted
             Range of                Shares               Average
          Exercise Prices         Exercisable          Exercise Price
          ---------------      ------------------      --------------
            $7.50-$7.75              45,000                $7.61
            $5.25                    22,500                $5.25

                                       27
<PAGE>
          Since the Company applies the intrinsic value method in accounting for
     its employee stock options,  it generally  records no compensation cost for
     its stock option awards to employees.  Effective  July 1, 2000, the Company
     is required to recognize  prospectively  compensation cost related to stock
     options awarded to independent consultants. Total compensation cost related
     to these awards  recognized  for fiscal 2001 was $24,700.  If  compensation
     cost for the Company's stock option plan had been  determined  based on the
     fair value at the grant dates for all employee  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:

                                           2001           2000          1999
                                        ----------    -----------    ----------
Net earnings (loss):
  As reported                           $1,539,458    $   393,647    $ (425,774)
  Pro forma                             $1,424,064    $   291,027    $ (477,189)

Basic earnings (loss) per share:
  As reported                           $     0.95    $      0.24    $    (0.26)
  Pro forma                             $     0.88    $      0.18    $    (0.29)

Diluted earnings (loss) per share:
  As reported                           $     0.95    $      0.24    $    (0.26)
  Pro forma                             $     0.88    $      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 $37,884, $56,775 and $21,981 for the years ended March 31,
     2001, 2000 and 1999, 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.  Amounts  paid under this  contract  were $25,787 and
     $8,386 for the years ended March 31, 2001 and 2000, respectively.

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
     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, 2001,  2000 and 1999 are based on
     evaluations prepared by Joe C. Neal and Associates, Petroleum Consultants.

          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.

                                       28
<PAGE>
CHANGES IN PROVED RESERVE QUANTITIES (UNAUDITED):

                            2001                2000                1999
                     ------------------  ------------------  ------------------
                       Bbls      Mcf       Bbls      Mcf       Bbls      Mcf
                     -------  ---------  -------  ---------  -------  ---------
Proved reserves,
  beginning of year  139,000  4,755,000  194,000  4,194,000  246,000  3,197,000
Revision of previous
  estimates          (15,000)   (10,000)  13,000   (471,000)  (2,000)   348,000
Purchase of minerals
  in place           108,000  1,706,000    3,000  1,403,000     --      939,000
Extensions and
  discoveries         21,000    398,000    1,000    174,000     --      193,000
Production           (18,000)  (504,000) (19,000)  (541,000) (50,000)  (483,000)
Sales of minerals
  in place              --         --    (53,000)    (4,000)    --         --
                     -------  ---------  -------  ---------  -------  ---------
Proved reserves,
  end of year        235,000  6,345,000  139,000  4,755,000  194,000  4,194,000
                     =======  =========  =======  =========  =======  =========

PROVED DEVELOPED RESERVES (UNAUDITED):

Beginning of year    139,000  4,755,000  194,000  4,194,000  219,000  2,941,000
End of year          235,000  6,337,000  139,000  4,755,000  194,000  4,194,000

STANDARDIZED  MEASURE OF  DISCOUNTED  FUTURE NET CASH FLOWS  RELATING  TO PROVED
RESERVES (UNAUDITED):
                                                     March 31,
                                   --------------------------------------------
                                       2001            2000            1999
                                   ------------    ------------    ------------
Future cash inflows                $ 40,179,000    $ 15,590,000    $  8,994,000
Future production and
  development costs                  (9,988,000)     (4,414,000)     (2,989,000)
Future income taxes (a)              (7,182,000)     (2,249,000)       (715,000)
                                   ------------    ------------    ------------
Future net cash flows                23,009,000       8,927,000       5,290,000
Annual 10% discount for
  estimated timing of cash flows    (10,824,000)     (4,019,000)     (2,220,000)
                                   ------------    ------------    ------------
Standardized measure of
  discounted future net cash flows $ 12,185,000    $  4,908,000    $  3,070,000
                                   ============    ============    ============

(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 and effects of statutory depletion.

CHANGES IN STANDARIZED  MEASURE OF DISCOUNTED  FUTURE NET CASH FLOWS FROM PROVED
RESERVES (UNAUDITED):
                                                 Year ended March 31,
                                        ---------------------------------------
                                            2001          2000          1999
                                        -----------   -----------   -----------
Sales of oil and gas produced,
  net of production costs               $(2,566,000)  $(1,136,000)  $  (859,000)
Net changes in price and production
  costs                                   5,104,000     2,310,000    (1,255,000)
Changes in previously estimated
  development costs                         (20,000)       22,000       296,000
Revisions of quantity estimates            (148,000)     (281,000)      389,000
Net change due to purchases and
  sales of minerals in place              5,939,000     1,164,000       527,000
Extensions and discoveries,
  less related costs                        975,000       187,000        81,000
Net change in income taxes               (2,567,000)     (821,000)      (18,000)
Accretion of discount                       614,000       349,000       389,000
Changes in timing of estimated
  cash flows and other                      (54,000)       44,000        25,000
                                        -----------   -----------   -----------
Changes in standardized measure           7,277,000     1,838,000      (425,000)

Standardized measure, beginning of year   4,908,000     3,070,000     3,495,000
                                        -----------   -----------   -----------

Standardized measure, end of year       $12,185,000   $ 4,908,000   $ 3,070,000
                                        ===========   ===========   ===========

                                       29
<PAGE>
ITEM 11.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
     FINANCIAL DISCLOSURES

         None.

                                    PART III

ITEM 12. 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 30, 2001.

     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 13. 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 30, 2001.

ITEM 14. 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 30, 2001.

ITEM 15. 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 30, 2001.

                                       30
<PAGE>
                                     PART IV

  ITEM 16. 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.

     (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.
     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.

          A report on Form 8-K, dated January 12, 2001, was filed by the Company
     during the quarter ended March 31, 2001 under Item 5. Other Events.

                                       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

                                           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, 2001,  by the  following  persons on
behalf of the Company and in the capacity indicated.

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

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

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

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

Thomas R. Craddick
-----------------------------------
Thomas R. Craddick
Director

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

Jack D. Ladd
-----------------------------------
Jack D. Ladd
Director

                                       32
<PAGE>
                                INDEX TO EXHIBITS

 Exhibit
 Number  Exhibit                                                           Page
-------  ---------------------------------------------------------         ----

 3.1*    Articles of Incorporation.
 3.2     Bylaws.                                                            34
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 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.

                                       33