Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2021 | Jun. 25, 2021 | Sep. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | MEXCO ENERGY CORP | ||
Entity Central Index Key | 0000066418 | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2021 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4,724,764 | ||
Entity Common Stock, Shares Outstanding | 2,076,666 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 57,813 | $ 34,381 |
Accounts receivable: | ||
Oil and natural gas sales | 621,384 | 271,315 |
Trade | 30,402 | 13,382 |
Prepaid costs and expenses | 47,895 | 50,188 |
Total current assets | 757,494 | 369,266 |
Property and equipment, at cost | ||
Oil and gas properties, using the full cost method | 38,664,347 | 37,465,172 |
Other | 120,208 | 116,993 |
Accumulated depreciation, depletion and amortization | (29,015,612) | (28,109,252) |
Property and equipment, net | 9,768,943 | 9,472,913 |
Investment in limited liability company at cost | 200,000 | 150,000 |
Operating lease, right-of-use asset | 20,861 | 76,130 |
Other noncurrent assets | 83,389 | 2,200 |
Total assets | 10,830,687 | 10,070,509 |
Current liabilities | ||
Accounts payable and accrued expenses | 116,569 | 116,760 |
Operating lease liability, current | 21,965 | 65,721 |
Total current liabilities | 138,534 | 182,481 |
Long-term liabilities | ||
Long-term debt | 1,154,949 | 757,423 |
Operating lease liability, long-term | 10,982 | |
Asset retirement obligations | 713,797 | 755,261 |
Total long-term liabilities | 1,868,746 | 1,523,666 |
Total liabilities | 2,007,280 | 1,706,147 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock - $1.00 par value; 10,000,000 shares authorized; none outstanding | ||
Common stock - $0.50 par value; 40,000,000 shares authorized; 2,143,666 and 2,107,166 shares issued; and, 2,076,666 and 2,040,166 shares outstanding as of March 31, 2021 and 2020 | 1,071,833 | 1,053,583 |
Additional paid-in capital | 7,624,214 | 7,339,351 |
Retained earnings | 473,361 | 317,429 |
Treasury stock, at cost (67,000 shares) | (346,001) | (346,001) |
Total stockholders' equity | 8,823,407 | 8,364,362 |
Total liabilities and stockholders' equity | $ 10,830,687 | $ 10,070,509 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Mar. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.50 | $ 0.50 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 2,143,666 | 2,107,166 |
Common stock, shares outstanding | 2,076,666 | 2,040,166 |
Treasury stock, shares | 67,000 | 67,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating revenues: | ||
Total operating revenues | $ 2,799,004 | $ 2,738,540 |
Operating expenses: | ||
Production | 871,963 | 914,649 |
Accretion of asset retirement obligation | 28,548 | 27,235 |
Depreciation, depletion and amortization | 906,361 | 853,801 |
General and administrative | 833,431 | 1,006,531 |
Total operating expenses | 2,640,303 | 2,802,216 |
Operating income (loss) | 158,701 | (63,676) |
Other income (expenses): | ||
Interest income | 706 | 1,854 |
Interest expense | (53,232) | (37,656) |
PPP loan forgiveness | 68,957 | |
Loss on derivative instruments | (19,200) | |
Net other expense | (2,769) | (35,802) |
Income (loss) before provision for income taxes | 155,932 | (99,478) |
Income tax | ||
Net income (loss) | $ 155,932 | $ (99,478) |
Income (loss) per common share: | ||
Basic: | $ 0.08 | $ (0.05) |
Diluted: | $ 0.08 | $ (0.05) |
Weighted average common shares outstanding: | ||
Basic: | 2,050,678 | 2,040,166 |
Diluted: | 2,062,070 | 2,040,166 |
Oil Sales [Member] | ||
Operating revenues: | ||
Total operating revenues | $ 2,028,792 | $ 2,310,127 |
Natural Gas Sales [Member] | ||
Operating revenues: | ||
Total operating revenues | 744,987 | 410,226 |
Other [Member] | ||
Operating revenues: | ||
Total operating revenues | $ 25,225 | $ 18,187 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock Par Value [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Balance at Mar. 31, 2019 | $ 1,053,583 | $ 7,305,048 | $ 416,907 | $ (346,001) | $ 8,429,537 |
Common stock shares, issued at Mar. 31, 2019 | 2,107,166 | ||||
Common stock shares, held in treasury at Mar. 31, 2019 | (67,000) | ||||
Net income loss | (99,478) | $ (99,478) | |||
Stock based compensation | 34,303 | $ 34,303 | |||
Common stock shares, issued | |||||
Common stock shares, held in treasury, Acquisitions, shares | |||||
Balance at Mar. 31, 2020 | 1,053,583 | 7,339,351 | 317,429 | (346,001) | $ 8,364,362 |
Common stock shares, issued at Mar. 31, 2020 | 2,107,166 | ||||
Common stock shares, held in treasury at Mar. 31, 2020 | (67,000) | ||||
Common stock shares outstanding at Mar. 31, 2020 | 2,040,166 | ||||
Net income loss | 155,932 | $ 155,932 | |||
Stock based compensation | 55,678 | 55,678 | |||
Issuance of stock through options exercised | 18,250 | 229,185 | $ 247,435 | ||
Common stock shares, issued | 36,500 | ||||
Common stock shares, held in treasury, Acquisitions, shares | |||||
Balance at Mar. 31, 2021 | $ 1,071,833 | $ 7,624,214 | $ 473,361 | $ (346,001) | $ 8,823,407 |
Common stock shares, issued at Mar. 31, 2021 | 2,143,666 | ||||
Common stock shares, held in treasury at Mar. 31, 2021 | (67,000) | ||||
Common stock shares outstanding at Mar. 31, 2021 | 2,076,666 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 155,932 | $ (99,478) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Stock-based compensation | 55,678 | 34,303 |
Depreciation, depletion and amortization | 906,361 | 853,801 |
Accretion of asset retirement obligations | 28,548 | 27,235 |
PPP loan forgiveness | (68,574) | |
Amortization of debt issuance costs | 12,526 | 14,221 |
Changes in operating assets and liabilities: | ||
(Increase) decrease in accounts receivable | (367,089) | 64,903 |
Decrease in right-of-use asset | 55,269 | 65,255 |
Decrease in prepaid expenses | 2,292 | 3,547 |
Decrease in other assets | 30,421 | |
Increase (decrease) in accounts payable and accrued expenses | 3,223 | (44,829) |
Decrease in operating lease liability | (54,739) | (64,682) |
Settlement of asset retirement obligations | (19,380) | (19,737) |
Net cash provided by operating activities | 710,047 | 864,960 |
Cash flows from investing activities: | ||
Additions to oil and gas properties | (1,592,023) | (1,692,190) |
Additions to other property and equipment | (3,215) | (3,951) |
Drilling refund | 136,236 | |
Investment in limited liability company at cost | (50,000) | (150,000) |
Proceeds from sale of oil and gas properties and equipment | 121,378 | 104,576 |
Net cash used in investing activities | (1,387,624) | (1,741,565) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 247,435 | |
Proceeds from long-term debt | 935,000 | 1,285,000 |
Proceeds from PPP loan | 68,574 | |
Debt issuance costs | (12,266) | |
Reduction of long-term debt | (550,000) | (490,000) |
Net cash provided by financing activities | 701,009 | 782,734 |
Net increase (decrease) in cash and cash equivalents | 23,432 | (93,871) |
Cash and cash equivalents at beginning of period | 34,381 | 128,252 |
Cash and cash equivalents at end of period | 57,813 | 34,381 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 39,269 | 23,276 |
Accrued capital expenditures included in accounts payable | 4,523 | 15,437 |
Non-cash investing and financing activities: | ||
Asset retirement obligations | 17,587 | 19,512 |
Operating lease - right of use asset and associated liabilities | $ 9,360 | $ 141,385 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1. Nature of Operations Mexco Energy Corporation (a Colorado corporation) and its wholly owned subsidiaries, Forman Energy Corporation (a New York corporation), Southwest Texas Disposal Corporation (a Texas corporation) and TBO Oil & Gas, LLC (a Texas limited liability company) (collectively, the “Company”) are engaged in the exploration, development and production of crude oil, natural gas, condensate and natural gas liquids (“NGLs”). Most of the Company’s oil and gas interests are centered in West Texas and Southeastern New Mexico; however, the Company owns producing properties and undeveloped acreage in fourteen states. All of the Company’s oil and gas interests are operated by others. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation Estimates and Assumptions Cash and Cash Equivalents Accounts Receivable. Oil and Gas Properties Excluded Costs Ceiling Test Depreciation, Depletion and Amortization Asset Retirement Obligations Estimating the future ARO requires management to make estimates and judgments regarding timing and existence of a liability, as well as what constitutes adequate restoration. The Company uses the present value of estimated cash flows related to the ARO to determine the fair value. Inherent in the present value calculation are numerous assumptions and judgments including the ultimate costs, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the present value of the existing ARO liability, a corresponding adjustment is made to the related asset. Income Taxes Other Property and Equipment Income (Loss) Per Common Share Revenue Recognition - Revenue from Contracts with Customers. The Company records transportation and processing costs that are incurred after control of its product has transferred to the customer as a reduction of “Natural gas sales” on the Consolidated Statement of Operations. Gas Balancing Stock-based Compensation Investments. Derivative Financial Instruments. The Company accounts for derivative financial instruments using fair value accounting and recognizes gains and losses in earnings during the period in which they occur. Unsettled derivative instruments are recorded in the accompanying consolidated balance sheets as either a current or non-current asset or a liability measured at its fair value. The Company only offsets derivative assets and liabilities for arrangements with the same counterparty when right of offset exists. Derivative assets and liabilities with different counterparties are recorded gross in the consolidated balance sheets. Derivative contract settlements are reflected in operating activities in the accompanying consolidated statements of cash flows. The Company uses certain pricing models to determine the fair value of its derivative financial instruments. Inputs to the pricing models include publicly available prices and forward price curves generated from a compilation of data gathered from third parties. Company management validates the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming that those securities trade in active markets. Recent Accounting Pronouncements. Liquidity and Capital Resources. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 3. Fair Value of Financial Instruments The Company applies FASB ASC Topic 820, Fair Value Measurements and Disclosure (“ASC Topic 820”), which establishes a framework for measuring fair value based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs or unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. These two types of inputs are further prioritized into the following fair value input hierarchy: Level 1: Quoted prices for identical instruments in active markets at the measurement date. Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at the measurement date and for the anticipated term of the instrument. Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability acquired, based on the best information available in the circumstances. The carrying amount reported in the accompanying consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. The fair value amount reported in the accompanying consolidated balance sheets for long-term debt approximates fair value because the actual interest rates do not significantly differ from current rates offered for instruments with similar characteristics. See the Company’s Note 5 on Long Term Debt for further discussion. Fair Value Measurements on a Recurring Basis A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s commodity derivative instruments were carried at fair value on a recurring basis in the Company’s consolidated balance sheets. The Company uses certain pricing models to determine the fair value of its derivative financial instruments. Inputs to the pricing models include publicly available prices and forward price curves generated from a compilation of data gathered from third parties. Company management validates the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming that those securities trade in active markets. Assumed credit risk adjustments, based on published credit ratings and public bond yield spreads are applied to the Company’s commodity derivatives. The Company’s derivative instruments are subject to netting arrangements and qualify for net presentation in the consolidated balance sheets in those instances where such arrangements exist with the respective counterparty. To ensure these derivative instruments are recorded at fair value, valuation adjustments may be required to reflect the creditworthiness of either party as well as market constraints on liquidity. There was no adjustment as of March 31, 2021. Fair Value Measurements on a Nonrecurring Basis The asset retirement obligation estimates are derived from historical costs and management’s expectation of future cost environments and, therefore, the Company has designated these liabilities as Level 3 measurements. The significant inputs to this fair value measurement include estimates of plugging, abandonment and remediation costs, well life, inflation and credit-adjusted risk-free rate. See Note 6 for a reconciliation of the beginning and ending balances of the liability for the Company’s asset retirement obligations. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 4. Derivative Financial Instruments It is the Company’s policy to enter into derivative contracts only with counterparties that are creditworthy financial institutions deemed by management as competent and competitive. The Company is exposed to certain risks relating to its ongoing business operations, such as commodity price risk. Derivative contracts are utilized to economically hedge the Company’s exposure to price fluctuations and reduce the variability in the Company’s cash flows associated with anticipated sales of future oil and natural gas production. The Company follows FASB ASC Topic 815, Derivatives and Hedging (ASC Topic 815), to account for its derivative financial instruments. The Company’s crude oil derivative positions consisted of put options. The Company has elected not to designate any of its derivative contracts for hedge accounting. Accordingly, the Company records the net change in the mark-to-market valuation of these derivative contracts, as well as all payments and receipts on settled derivative contracts, in net realized and unrealized gain (loss) on commodity price hedging contracts on the consolidated statements of operations. All derivative contracts are recorded at fair market value and included in the consolidated balance sheets as assets or liabilities. As of March 31, 2021 and 2020, the Company had no derivative contracts. The Company may have multiple hedge positions that span a several-month time period and result in fair value asset and liability positions. At the end of the reporting periods, those positions are offset to a single fair value asset or liability for each commodity and the netted balance is reflected in the consolidated balance sheets as an asset or liability. During the quarter ended June 30, 2020 the Company entered into a series of crude oil put option contracts. All of these such contracts expired in July and August 2020. The following tables summarizes the amounts of the Company’s realized and unrealized losses on derivative contracts listed as loss on derivative instruments in the Company’s consolidated statements of operations for the year ended March 31, 2021. Loss Recognized Realized loss on oil price hedging contracts $ (19,200 ) Unrealized gain (loss) on oil price hedging contracts - Net realized and unrealized loss on derivative contracts $ (19,200 ) |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 5. Long-Term Debt Long-term debt on the Consolidated Balance Sheets consisted of the following as of March 31: 2021 2020 Credit facility $ 1,180,000 $ 795,000 Unamortized debt issuance costs (25,051 ) (37,577 ) Total long-term debt $ 1,154,949 $ 757,423 On December 28, 2018, the Company entered into a loan agreement (the “Agreement”) with West Texas National Bank (“WTNB”), which provided for a credit facility of $1,000,000 with a maturity date of December 28, 2021. The Agreement has no monthly commitment reduction and a borrowing base to be evaluated annually. On February 28, 2020, the Agreement was amended to increase the credit facility to $2,500,000, extend the maturity date to March 28, 2023 and increase the borrowing base to $1,500,000. Under the Agreement, interest on the facility accrues at a rate equal to the prime rate as quoted in the Wall Street Journal plus one-half of one percent (.5%) floating daily. Interest on the outstanding amount under the Agreement is payable monthly. In addition, the Company will pay an unused commitment fee in an amount equal to one-half of one percent (.5%) times the daily average of the unadvanced amount of the commitment. The unused commitment fee is payable quarterly in arrears on the last day of each calendar quarter. As of March 31, 2021, there was $320,000 available on the facility. No principal payments are anticipated to be required through the maturity date of the credit facility, March 28, 2023. Upon closing with WTNB on the original Agreement, the Company paid a .5% loan origination fee in the amount of $5,000 plus legal and recording expenses totaling $34,532, which were deferred over the life of the credit facility. Upon closing the amendment to the Agreement, the Company paid a .1% loan origination fee of $2,500 and an extension fee of $3,125 plus legal and recording expenses totaling $12,266, which were also deferred over the life of the credit facility. Amounts borrowed under the Agreement are collateralized by the common stock of the Company’s wholly owned subsidiaries and substantially all of the Company’s oil and gas properties. The Agreement contains customary covenants for credit facilities of this type including limitations on change in control, disposition of assets, mergers and reorganizations. The Company is also obligated to meet certain financial covenants under the Agreement and requires senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratios (Senior Debt/EBITDA) less than or equal to 4.00 to 1.00 measured with respect to the four trailing fiscal quarters and minimum interest coverage ratios (EBITDA/Interest Expense) of 2.00 to 1.00 for each quarter. In addition, the Agreement prohibits the Company from paying cash dividends on its common stock without prior written permission of WTNB. The Agreement does not permit the Company to enter into hedge agreements covering crude oil and natural gas prices without prior WTNB approval. The Company obtained written permission from WTNB prior to entering into the current hedge agreement discussed in Note 4. The balance outstanding on the credit facility as of March 31, 2021 was $1,180,000. The following table is a summary of activity on the WTNB credit facility for the years ended March 31, 2021 and 2020: Principal Balance at April 1, 2019: $ - Borrowings 1,285,000 Repayments 490,000 Balance at March 31, 2020: $ 795,000 Borrowings 935,000 Repayments 550,000 Balance at March 31, 2021: $ 1,180,000 Subsequently, the Company has borrowed $100,000 and made payments totaling $480,000, leaving a balance of $800,000 as of June 21, 2021. The Company also maintained a Certificate of Deposit Account at WTNB to collateralize one outstanding letter of credit for $25,000 in lieu of a plugging bond with the Texas Railroad Commission covering the properties the Company operates. This operated property was sold effective December 1, 2019 and the letter of credit was cancelled. On April 10, 2020, the Certificate of Deposit Account was terminated and the funds deposited into the Company’s operating account. |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Mar. 31, 2021 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | 6. Asset Retirement Obligations The Company’s asset retirement obligations relate to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and gas properties. The fair value of a liability for an ARO is recorded in the period in which it is incurred, discounted to its present value using the credit adjusted risk-free interest rate, and a corresponding amount capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted each period until the liability is settled or the well is sold, at which time the liability is removed. The related asset retirement cost is capitalized as part of the carrying amount of our oil and natural gas properties. The ARO is included on the consolidated balance sheets with the current portion being included in the accounts payable and accrued expenses. The following table provides a rollforward of the asset retirement obligations for fiscal years ended March 31: 2021 2020 Carrying amount of asset retirement obligations, beginning of year $ 762,761 $ 861,534 Liabilities incurred 17,587 19,512 Liabilities settled (80,099 ) (145,520 ) Accretion expense 28,548 27,235 Revisions - - Carrying amount of asset retirement obligations, end of year 728,797 762,761 Less: Current portion 15,000 7,500 Non-Current asset retirement obligation $ 713,797 $ 755,261 |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The Company files a consolidated federal income tax return and various state income tax returns. The amount of income taxes the Company records requires the interpretation of complex rules and regulations of federal and state taxing jurisdictions. With few exceptions, the earliest year open to examination by U.S. federal and state income tax jurisdictions is 2016. On December 22, 2017, the tax legislation referred to as the 2017 Tax Reform Act (“Tax Cuts and Jobs Act”) was enacted. The more significant changes that impact the Company are the reduction in the corporate federal income tax rate from 35% to 21%. Effective April 1, 2018, our corporate federal statutory income tax rate is 21%. GAAP requires deferred income tax assets and liabilities to be measured at the enacted tax rate expected to apply when temporary differences are to be realized or settled. Significant components of net deferred tax assets (liabilities) at March 31 are as follows: 2021 2020 Deferred tax assets: Percentage depletion carryforwards $ 1,132,352 $ 1,167,594 Deferred stock-based compensation 37,977 36,568 Asset retirement obligation 153,048 160,180 Net operating loss 1,411,017 1,248,528 Other 9,840 7,372 2,744,234 2,620,242 Deferred tax liabilities: Excess financial accounting bases over tax bases of property and equipment 1,485,833 1,313,271 Deferred tax asset, net $ 1,258,401 $ 1,306,971 Valuation allowance (1,258,401 ) (1,306,971 ) Net deferred tax $ - $ - As of March 31, 2021, the Company has a statutory depletion carryforward of approximately $5,400,000, which does not expire. At March 31, 2021, the Company had a net operating loss carryforward for regular income tax reporting purposes of approximately $6,700,000, which will begin expiring in 2029. The Company’s ability to use some of its net operating loss carryforwards and certain other tax attributes to reduce current and future U.S. federal taxable income is subject to limitations under the Internal Revenue Code. A valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. To assess that likelihood, we use estimates and judgment regarding our future taxable income, and we consider the tax consequences in the jurisdiction where such taxable income is generated, to determine whether a valuation allowance is required. Such evidence can include our current financial position, our results of operations, both actual and forecasted, the reversal of deferred tax liabilities, and tax planning strategies as well as the current and forecasted business economics of our industry. A reconciliation of the provision for income taxes to income taxes computed using the federal statutory rate for years ended March 31 follows: 2021 2020 Tax expense at federal statutory rate (1) $ 32,746 $ (20,891 ) Statutory depletion carryforward 35,242 (31,384 ) Change in valuation allowance (48,570 ) 46,850 U. S. tax reform, corporate rate reduction - - Permanent differences (19,418 ) 5,427 Other - (2 ) Total income tax $ - $ - Effective income tax rate - - (1) The federal statutory rate was 21% for fiscal years ending March 31, 2021 and 2020. For the years ended March 31, 2021 and 2020, the Company did not have any uncertain tax positions. While the amount of unrecognized tax benefits may change in the next 12 months, the Company does not expect any change to have a significant impact on its results of operations. The recognition of the total amount of the unrecognized tax benefits would have an impact on the effective tax rate. If these unrecognized tax benefits are disallowed, the Company will be required to pay additional taxes. Based on the material write-downs of the carrying value of our oil and natural gas properties for the year ending March 31, 2016, we are in a net deferred tax asset position for years ending March 31, 2021 and 2020. Our deferred tax asset is $1,258,401 as of March 31, 2021 with a valuation amount of $1,258,401. We believe it is more likely than not that these deferred tax assets will not be realized. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of deferred tax assets. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income are increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as expected future growth. In December 2020, the President of the United States signed the Consolidated Appropriations Act, 2021 (“the Act”). The Act includes many tax provisions, including the extension of various expiring provisions, extensions and expansions of certain earlier pandemic tax relief provisions, among other things. The Act did not have a material impact on the Company’s current year tax provision or the Company’s consolidated financial statements. In March 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to stabilize the economy during the coronavirus pandemic. The CARES Act temporarily suspends and modifies certain tax laws established by the 2017 Tax Cuts and Jobs Act, including, but not limited to, modifications to net operating loss limitations, business interest limitations and alternative minimum tax. The CARES Act did not have a material impact on the Company’s current year provision and the Company’s consolidated financial statements. |
Major Customers
Major Customers | 12 Months Ended |
Mar. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Major Customers | 8. Major Customers Currently, the Company operates exclusively within the United States and its revenues and operating profit are derived 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 Company’s ability to sell its oil and gas production. In fiscal 2021, one customer accounted for 66% of the total oil and natural gas revenues and 71% of the total oil and natural gas accounts receivable. In fiscal 2020, one customer accounted for 52% of the total oil and natural gas revenues and 63% of the total oil and natural gas accounts receivable. |
Oil and Natural Gas Costs
Oil and Natural Gas Costs | 12 Months Ended |
Mar. 31, 2021 | |
Extractive Industries [Abstract] | |
Oil and Natural Gas Costs | 9. Oil and Natural Gas Costs The costs related to the Company’s oil and natural gas activities were incurred as follows for the years ended March 31: 2021 2020 Property acquisition costs: Proved $ - $ - Unproved - - Exploration - 168 Development 1,581,109 1,687,499 Capitalized asset retirement obligations 17,587 19,512 Total costs incurred for oil and gas properties $ 1,598,696 $ 1,707,179 The Company had the following aggregate capitalized costs relating to its oil and gas property activities at March 31: 2021 2020 Proved oil and gas properties $ 38,664,347 $ 37,465,172 Unproved oil and gas properties: subject to amortization - - not subject to amortization - - 38,664,347 37,465,172 Less accumulated DD&A 28,906,419 28,003,961 $ 9,757,928 $ 9,461,211 DD&A amounted to $8.68 and $9.15 per BOE of production for the years ended March 31, 2021 and 2020, respectively. |
Income (Loss) Per Common Share
Income (Loss) Per Common Share | 12 Months Ended |
Mar. 31, 2021 | |
Income (loss) per common share: | |
Income (Loss) Per Common Share | 10. Income (Loss) Per Common Share The following is a reconciliation of the number of shares used in the calculation of basic income per share and diluted income per share for the years ended March 31: 2021 2020 Net income (loss) $ 155,932 $ (99,478 ) Shares outstanding: Weighted avg. common shares outstanding – basic 2,050,678 2,040,166 Effect of the assumed exercise of dilutive stock options 11,392 - Weighted avg. common shares outstanding – dilutive 2,062,070 2,040,166 Income (loss) per common share: Basic $ 0.08 $ (0.05 ) Diluted $ 0.08 $ (0.05 ) For the year ended March 31, 2021, no anti-dilutive shares relating to stock options were excluded from the computation of diluted net income. Due to a net loss for the year ended March 31, 2020, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | 11. Stockholders’ Equity In September 2020, the Board of Directors authorized the use of up to $250,000 to repurchase shares of the Company’s common stock for the treasury account. There were no shares of common stock repurchased for the treasury account during fiscal 2021 and 2020. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | 12. Stock-based Compensation In September 2019, the Company adopted the 2019 Employee Incentive Stock Plan (the “2019 Plan”). The 2019 Plan provides for the award of stock options up to 200,000 shares and includes option awards as well as stock awards. Option awards are granted with the restriction of requiring payment for the shares. Stock awards are granted without restrictions and without payment by the recipient. Neither option awards nor stock awards may exceed 25,000 shares granted to any one individual in any fiscal year. 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. The 2019 Plan expires ten years from the date of adoption. According to the Company’s employee stock incentive plan, new shares will be issued upon the exercise of stock options and the Company can repurchase shares exercised under the plan. During the year ended March 31, 2021, there were no stock options issued. During the year ended March 31, 2020, the Compensation Committee of the Board of Directors approved and the Company issued options covering 42,000 shares of stock. The plan also provides for the granting of stock awards. No stock awards were granted during fiscal 2021 and 2020. The Company recognized compensation expense of $55,678 and $34,303 related to vesting stock options in general and administrative expense in the Consolidated Statements of Operations for fiscal 2021 and 2020, respectively. The total cost related to non-vested awards not yet recognized at March 31, 2021 totals $114,131, which is expected to be recognized over a weighted average of 2.35 years. The fair value of each stock option is estimated on the date of grant using the Binomial valuation model. Expected volatilities are based on historical volatility of the Company’s stock over the contractual term of 120 months and other factors. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. As the Company has never declared dividends, no dividend yield is used in the calculation. Actual value realized, if any, is dependent on the future performance of the Company’s common stock and overall stock market conditions. There is no assurance the value realized by an optionee will be at or near the value estimated by the Binomial model. Included in the following table is a summary of the grant-date fair value of stock options granted and the related assumptions used in the Binomial models for stock options granted in fiscal 2021 and 2020. All such amounts represent the weighted average amounts for each period. For the year ended March 31, 2021 2020 Grant-date fair value - $ 2.24 Volatility factor - 60.12 % Dividend yield - - Risk-free interest rate - .85 % Expected term (in years) - 6.25 No forfeiture rate is assumed for stock options granted to directors or employees due to the forfeiture rate history for these types of awards. During the year ended March 31, 2021, 1,000 unvested stock options were forfeited due to the resignation of an employee and 34,200 vested stock options expired unexercised. During the year ended March 31, 2020, there were no stock options forfeited or expired. The following table is a summary of activity of stock options for the years ended March 31, 2021 and 2020: Number of Shares Weighted Average Exercise Price Per Share Weighted Aggregate Average Remaining Contract Life in Years Intrinsic Value Outstanding at April 1, 2019 185,700 $ 6.18 4.68 $ - Granted 42,000 - Exercised - - Forfeited or Expired - - Outstanding at March 31, 2020 227,700 $ 5.65 4.83 $ - Granted - - Exercised (36,500 ) - Forfeited or Expired (35,200 ) - Outstanding at March 31, 2021 156,000 $ 5.28 5.53 $ 555,100 Vested at March 31, 2021 105,250 $ 5.92 4.17 $ 307,000 Exercisable at March 31, 2021 105,250 $ 5.92 4.17 $ 307,000 During the year ended March 31, 2021, stock options covering 36,500 shares were exercised with a total intrinsic value of $72,981. The Company received proceeds of $247,435 from these exercises. During the year ended March 31, 2020, no stock options were exercised. Other information pertaining to option activity was as follows during the year ended March 31: 2021 2020 Weighted average grant-date fair value of stock options granted (per share) $ - $ 2.24 Total fair value of options vested $ 55,460 $ 32,500 Total intrinsic value of options exercised $ 72,981 $ - The following table summarizes information about options outstanding at March 31, 2021: Range of Exercise Prices Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contract Life in Years Aggregate Intrinsic Value $ 3.34 – 4.83 41,000 $ 3.34 4.84 – 5.97 40,000 4.84 5.98 – 6.26 30,000 5.98 6.27 – 7.00 45,000 6.98 $ 3.34 – 7.00 156,000 $ 5.28 5.53 $ 555,100 Outstanding options at March 31, 2021 expire between November 2021 and March 2030 and have exercise prices ranging from $3.34 to $7.00. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. Related Party Transactions Related party transactions for the Company primarily relate to shared office expenditures in addition to administrative and operating expenses paid on behalf of the principal stockholder. The total billed to and reimbursed by the stockholder for the years ended March 31, 2021 and 2020 were $39,067 and $44,724, respectively. The principal stockholder pays for his share of the lease amount for the shared office space directly to the lessor. Amounts paid by the principal stockholder directly to the lessor for the year ending March 31, 2021 and 2020 were $16,549 and $15,881, respectively. In March 2020, the Company entered into an agreement with our principal shareholder, Nicholas C. Taylor for the sale of surface rights to an undivided interest of 1.98 acres in a 160-acre tract of rural land located in Brazoria County, Texas. Mr. Taylor paid the company approximately $18,000 in cash for these rights, such price being based on a November 22, 2019 appraisal by a firm of MAI appraisers at $9,000 per acre. |
Leases
Leases | 12 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | 14. Leases The Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for the corporate office located in Midland, Texas. This includes 1,021 square feet of office space shared with and reimbursed by the majority shareholder. The lease is a 36-month lease that expired in May 2021 and does not include an option to renew. In June 2020, in exchange for a reduction in rent for the months of June and July 2020, the Company agreed to a 2-month extension to its current lease agreement at the regular monthly rate extending its current lease expiration date to July 2021. The Company determines an arrangement is a lease at inception. Operating leases are recorded in operating lease right-of-use asset, operating lease liability, current, and operating lease liability, long-term on the consolidated balance sheets. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s lease does not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate used at adoption was 6.0%. Significant judgement is required when determining the incremental borrowing rate. The Company chose not to discount because the difference is not significant. Rent expense for lease payments is recognized on a straight-line basis over the lease term. The balance sheets classification of lease assets and liabilities was as follows: March 31, 2021 Assets Operating lease right-of-use asset, beginning balance $ 76,130 Current period amortization (64,629 ) Lease amendment (1,622 ) Lease extension 10,982 Total operating lease right-of-use asset $ 20,861 Liabilities Operating lease liability, current $ 21,965 Operating lease liability, long term - Total lease liabilities $ 21,965 Future minimum lease payments as of March 31, 2021 under non-cancellable operating leases are as follows: Lease Obligation Fiscal Year Ended March 31, 2022 $ 21,965 Fiscal Year Ended March 31, 2023 - Total lease payments $ 21,965 Less: imputed interest - Operating lease liability 21,965 Less: operating lease liability, current (21,965 ) Operating lease liability, long term $ - Net cash paid for our operating lease for the year ended March 31, 2021 and 2020 was $48,360 and $46,447, respectively. Rent expense, less sublease income of $19,109 and $18,234, respectively, is included in general and administrative expenses. Subsequently, in June 2021, the Company agreed to extend its current lease for its principal office space located at 415 West Wall Street, Suite 475, Midland, Texas 79701 for 36 months. The amended lease now expires on July 31, 2024. |
Paycheck Protection Program (PP
Paycheck Protection Program (PPP) Loan | 12 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Paycheck Protection Program (PPP) Loan | 15. Paycheck Protection Program (PPP) Loan. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act commonly referred to as the CARES Act became effective. One component of the CARES Act was the paycheck protection program (“PPP”) which provides small businesses with the resources needed to maintain their payroll and cover applicable overhead. The PPP is implemented by the United States Small Business Administration (“SBA”) with support from the Department of the Treasury. The PPP provides funds to pay up to 24 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities. The Company applied for, and was accepted to participate in this program. On May 5, 2020, the Company received funding for approximately $68,600. The loan was a two-year loan with a maturity date of May 5, 2022 an annual interest rate of 1% payable monthly with the first six monthly payments deferred. The Company applied for and on November 25, 2020 was approved for loan forgiveness in the amount of $68,957 under the provisions of Section 1106 of the CARES Act. This was for the forgiveness of our PPP loan in the amount of $68,574 and $383 in accrued interest expense. The Company was eligible for loan forgiveness because the Company used all loan proceeds to partially subsidize direct payroll expenses. |
Oil and Gas Reserve Data (Unaud
Oil and Gas Reserve Data (Unaudited) | 12 Months Ended |
Mar. 31, 2021 | |
Notes to Financial Statements | |
Oil and Gas Reserve Data (Unaudited) | 16. 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 generally accepted petroleum engineering and evaluation principles and definitions and guidelines established by the SEC. The estimates as of March 31, 2021 and 2020 were based on evaluations prepared by Russell K. Hall and Associates, Inc. The services provided by Russell K. Hall and Associates, Inc. are not audits of our reserves but instead consist of complete engineering evaluations of the respective properties. For more information about their evaluations performed, refer to the copy of their report filed as an exhibit to this Annual Report on Form 10-K. Management emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries are more imprecise than those of currently producing oil and natural gas properties. Accordingly, these estimates are expected to change as additional information becomes available in the future. The following table summarizes the prices utilized in the reserve estimates for 2021 and 2020. Commodity prices utilized for the reserve estimates prior to adjustments for location, grade and quality are as follows: March 31, 2021 2020 Prices utilized in the reserve estimates before adjustments: Oil per Bbl $ 36.49 $ 52.23 Natural gas per MMBtu $ 2.16 $ 2.30 The Company’s total estimated proved reserves at March 31, 2021 were approximately 1.504 MBOE of which 49% was oil and natural gas liquids and 51% was natural gas. Changes in Proved Reserves Oil Natural Gas Proved Developed and Undeveloped Reserves: As of April 1, 2019 1,040,000 5,381,000 Revision of previous estimates (72,000 ) (384,000 ) Purchase of minerals in place - - Extensions and discoveries 90,000 175,000 Sales of minerals in place (6,000 ) (28,000 ) Production (44,000 ) (294,000 ) As of March 31, 2020 1,008,000 4,850,000 Revision of previous estimates (292,000 ) (200,000 ) Purchase of minerals in place - - Extensions and discoveries 92,000 283,000 Sales of minerals in place (20,000 ) (14,000 ) Production (50,000 ) (324,000 ) As of March 31, 2021 738,000 4,595,000 Proved developed reserves are those expected to be recovered through existing wells, equipment and operating methods. Proved undeveloped reserves (“PUD”) are proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion within five years of the date of their initial recognition. Moreover, the Company may be required to write down its proved undeveloped reserves if the operators do not drill on the reserves within the required five-year timeframe. Such downward revisions are primarily the result of reserves written off due to the five-year limitation. They are primarily working interests in a unit in the Wolfcamp B Zone in Upton and Reagan Counties, Texas which are on a lease held by production and still in place to be developed in the future. Summary of Proved Developed and Undeveloped Reserves as of March 31, 2021 and 2020 Oil Natural Gas Proved Developed Reserves: As of April 1, 2019 376,600 3,823,440 As of March 31, 2020 358,230 3,344,210 As of March 31, 2021 413,050 3,639,330 Proved Undeveloped Reserves: As of April 1, 2019 663,860 1,557,250 As of March 31, 2020 649,570 1,506,160 As of March 31, 2021 325,020 956,050 At March 31, 2021, the Company reported estimated PUDs of 484 MBOE, which accounted for 32% of its total estimated proved oil and gas reserves. This figure primarily consists of a projected 121 new wells (263 MBOE) operated by others, 7 wells are currently being drilled with plans for 60 wells to follow in 2022, 48 wells in 2023 and 6 wells in 2024. The cost of these projects would be funded, to the extent possible, from existing cash balances, cash flow from operations and bank borrowings. The remainder may be funded through non-core asset sales and/or sales of our common stock. The following table discloses the Company’s progress toward the conversion of PUDs during fiscal 2021. Progress of Converting Proved Undeveloped Reserves Oil & Natural Gas Future (BOE) Development Costs PUDs, beginning of year 900,592 $ 6,632,064 Revision of previous estimates (447,215 ) (3,765,188 ) Sales of reserves (14,394 ) - Conversions to PD reserves (83,202 ) (947,290 ) Additional PUDs added 128,581 1,095,588 PUDs, end of year 484,362 $ 3,015,174 Estimated future net cash flows represent an estimate of future net revenues from the production of proved reserves using average prices for 2021 and 2020 along with estimates of the operating costs, production taxes and future development costs necessary to produce such reserves. No deduction has been made for depreciation, depletion or any indirect costs such as general corporate overhead or interest expense. Operating costs and production taxes are estimated based on current costs with respect to producing oil and natural gas properties. Future development costs including abandonment costs are based on the best estimate of such costs assuming current economic and operating conditions. The future cash flows estimated to be spent to develop the Company’s share of proved undeveloped properties through March 31, 2024 are $3,015,174. Income tax expense is computed based on applying the appropriate statutory tax rate to the excess of future cash inflows less future production and development costs over the current tax basis of the properties involved, less applicable carryforwards. The future net revenue information assumes no escalation of costs or prices, except for oil and natural gas sales made under terms of contracts which include fixed and determinable escalation. Future costs and prices could significantly vary from current amounts and, accordingly, revisions in the future could be significant. The current reporting rules require that year end reserve calculations and future cash inflows be based on the 12-month average market prices for sales of oil and gas on the first calendar day of each month during the fiscal year discounted at 10% per year and assuming continuation of existing economic conditions. The average prices used for fiscal 2021 were $37.42 per bbl of oil and $2.29 per mcf of natural gas. The average prices used for fiscal 2020 were $53.23 per bbl of oil and $1.66 per mcf of natural gas. The standardized measure of discounted future net cash flows is computed by applying the 12-month unweighted average of the first day of the month pricing for oil and natural gas (with consideration of price changes only to the extent provided by contractual arrangements) to the estimated future production of proved oil and natural gas reserves, less estimated future expenditures (based on year end costs) to be incurred in developing and producing the proved reserves, discounted using a rate of 10% per year to reflect the estimated timing of the future cash flows. Future income taxes are calculated by comparing undiscounted future cash flows to the tax basis of oil and natural gas properties plus available carryforwards and credits and applying the current tax rate to the difference. The basis for this table is the reserve studies prepared by an independent petroleum engineering consultant, which contain imprecise estimates of quantities and rates of production of reserves. Revisions of previous year estimates can have a significant impact on these results. Also, exploration costs in one year may lead to significant discoveries in later years and may significantly change previous estimates of proved reserves and their valuation. Therefore, the standardized measure of discounted future net cash flow is not necessarily indicative of the fair value of proved oil and gas properties. The following information is based on the Company’s best estimate of the required data for the Standardized Measure of Discounted Future Net Cash Flows as of March 31, 2021 and 2020 in accordance with ASC 932, “Extractive Activities – Oil and Gas” which requires the use of a 10% discount rate. This information is not the fair market value, nor does it represent the expected present value of future cash flows of the Company’s proved oil and gas reserves. Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves: March 31 2021 2020 Future cash inflows $ 38,144,000 $ 61,676,000 Future production costs and taxes (11,248,000 ) (16,682,000 ) Future development costs (3,213,000 ) (6,984,000 ) Future income taxes (1,714,000 ) (4,675,000 ) Future net cash flows 21,969,000 33,335,000 Annual 10% discount for estimated timing of cash flows (9,206,000 ) (14,359,000 ) Standardized measure of discounted future net cash flows $ 12,763,000 $ 18,976,000 Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves: March 31 2021 2020 Sales of oil and gas produced, net of production costs $ (1,902,000 ) $ (1,806,000 ) Net changes in price and production costs (5,680,000 ) (2,871,000 ) Changes in previously estimated development costs 2,623,000 865,000 Revisions of quantity estimates (5,954,000 ) (2,140,000 ) Net change due to purchases and sales of minerals in place (54,000 ) (335,000 ) Extensions and discoveries, less related costs 1,150,000 1,519,000 Net change in income taxes 2,070,000 404,000 Accretion of discount 1,376,000 2,164,000 Changes in timing of estimated cash flows and other 158,000 1,924,000 Changes in standardized measure (6,213,000 ) (276,000 ) Standardized measure, beginning of year 18,976,000 19,252,000 Standardized measure, end of year $ 12,763,000 $ 18,976,000 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events During the first quarter of fiscal 2022, the Company borrowed $100,000 on the credit facility and made payments totaling $480,000 on the credit facility leaving a balance of $800,000. During the first quarter of fiscal 2022, the Company expended approximately $326,000 for participation in the drilling of eight wells and the completion of six wells in Lea County, New Mexico. In June 2021, the Company agreed to extend its current lease for its principal office space located at 415 West Wall Street, Suite 475, Midland, Texas 79701 for 36 months. The amended lease now expires on July 31, 2024. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
Estimates and Assumptions | Estimates and Assumptions |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable | Accounts Receivable. |
Oil and Gas Properties | Oil and Gas Properties |
Excluded Costs | Excluded Costs |
Ceiling Test | Ceiling Test |
Depreciation, Depletion and Amortization | Depreciation, Depletion and Amortization |
Asset Retirement Obligations | Asset Retirement Obligations Estimating the future ARO requires management to make estimates and judgments regarding timing and existence of a liability, as well as what constitutes adequate restoration. The Company uses the present value of estimated cash flows related to the ARO to determine the fair value. Inherent in the present value calculation are numerous assumptions and judgments including the ultimate costs, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the present value of the existing ARO liability, a corresponding adjustment is made to the related asset. |
Income Taxes | Income Taxes |
Other Property and Equipment | Other Property and Equipment |
Income (Loss) Per Common Share | Income (Loss) Per Common Share |
Revenue Recognition - Revenue from Contracts with Customers | Revenue Recognition - Revenue from Contracts with Customers. The Company records transportation and processing costs that are incurred after control of its product has transferred to the customer as a reduction of “Natural gas sales” on the Consolidated Statement of Operations. |
Gas Balancing | Gas Balancing |
Stock-based Compensation | Stock-based Compensation |
Investments | Investments. |
Derivative Financial Instruments | Derivative Financial Instruments. The Company accounts for derivative financial instruments using fair value accounting and recognizes gains and losses in earnings during the period in which they occur. Unsettled derivative instruments are recorded in the accompanying consolidated balance sheets as either a current or non-current asset or a liability measured at its fair value. The Company only offsets derivative assets and liabilities for arrangements with the same counterparty when right of offset exists. Derivative assets and liabilities with different counterparties are recorded gross in the consolidated balance sheets. Derivative contract settlements are reflected in operating activities in the accompanying consolidated statements of cash flows. The Company uses certain pricing models to determine the fair value of its derivative financial instruments. Inputs to the pricing models include publicly available prices and forward price curves generated from a compilation of data gathered from third parties. Company management validates the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming that those securities trade in active markets. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. |
Liquidity and Capital Resources | Liquidity and Capital Resources. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Realized and Unrealized Losses On Derivative Contracts | The following tables summarizes the amounts of the Company’s realized and unrealized losses on derivative contracts listed as loss on derivative instruments in the Company’s consolidated statements of operations for the year ended March 31, 2021. Loss Recognized Realized loss on oil price hedging contracts $ (19,200 ) Unrealized gain (loss) on oil price hedging contracts - Net realized and unrealized loss on derivative contracts $ (19,200 ) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt on the Consolidated Balance Sheets consisted of the following as of March 31: 2021 2020 Credit facility $ 1,180,000 $ 795,000 Unamortized debt issuance costs (25,051 ) (37,577 ) Total long-term debt $ 1,154,949 $ 757,423 |
Summary of Line of Credit Activity | The following table is a summary of activity on the WTNB credit facility for the years ended March 31, 2021 and 2020: Principal Balance at April 1, 2019: $ - Borrowings 1,285,000 Repayments 490,000 Balance at March 31, 2020: $ 795,000 Borrowings 935,000 Repayments 550,000 Balance at March 31, 2021: $ 1,180,000 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Rollforward of Asset Retirement Obligations | The following table provides a rollforward of the asset retirement obligations for fiscal years ended March 31: 2021 2020 Carrying amount of asset retirement obligations, beginning of year $ 762,761 $ 861,534 Liabilities incurred 17,587 19,512 Liabilities settled (80,099 ) (145,520 ) Accretion expense 28,548 27,235 Revisions - - Carrying amount of asset retirement obligations, end of year 728,797 762,761 Less: Current portion 15,000 7,500 Non-Current asset retirement obligation $ 713,797 $ 755,261 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Net Deferred Tax Assets (Liabilities) | Significant components of net deferred tax assets (liabilities) at March 31 are as follows: 2021 2020 Deferred tax assets: Percentage depletion carryforwards $ 1,132,352 $ 1,167,594 Deferred stock-based compensation 37,977 36,568 Asset retirement obligation 153,048 160,180 Net operating loss 1,411,017 1,248,528 Other 9,840 7,372 2,744,234 2,620,242 Deferred tax liabilities: Excess financial accounting bases over tax bases of property and equipment 1,485,833 1,313,271 Deferred tax asset, net $ 1,258,401 $ 1,306,971 Valuation allowance (1,258,401 ) (1,306,971 ) Net deferred tax $ - $ - |
Schedule of Reconciliation of Provision for Income Taxes | A reconciliation of the provision for income taxes to income taxes computed using the federal statutory rate for years ended March 31 follows: 2021 2020 Tax expense at federal statutory rate (1) $ 32,746 $ (20,891 ) Statutory depletion carryforward 35,242 (31,384 ) Change in valuation allowance (48,570 ) 46,850 U. S. tax reform, corporate rate reduction - - Permanent differences (19,418 ) 5,427 Other - (2 ) Total income tax $ - $ - Effective income tax rate - - (1) The federal statutory rate was 21% for fiscal years ending March 31, 2021 and 2020. |
Oil and Natural Gas Costs (Tabl
Oil and Natural Gas Costs (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Extractive Industries [Abstract] | |
Schedule of Cost Related to Oil and Gas Activities | The costs related to the Company’s oil and natural gas activities were incurred as follows for the years ended March 31: 2021 2020 Property acquisition costs: Proved $ - $ - Unproved - - Exploration - 168 Development 1,581,109 1,687,499 Capitalized asset retirement obligations 17,587 19,512 Total costs incurred for oil and gas properties $ 1,598,696 $ 1,707,179 |
Schedule of Aggregate Capitalized Costs Relating Oil and Gas Property Activities | The Company had the following aggregate capitalized costs relating to its oil and gas property activities at March 31: 2021 2020 Proved oil and gas properties $ 38,664,347 $ 37,465,172 Unproved oil and gas properties: subject to amortization - - not subject to amortization - - 38,664,347 37,465,172 Less accumulated DD&A 28,906,419 28,003,961 $ 9,757,928 $ 9,461,211 |
Income (Loss) Per Common Share
Income (Loss) Per Common Share (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Income (loss) per common share: | |
Schedule of Reconciliation of Basic and Diluted Net Income (loss) Per Share | The following is a reconciliation of the number of shares used in the calculation of basic income per share and diluted income per share for the years ended March 31: 2021 2020 Net income (loss) $ 155,932 $ (99,478 ) Shares outstanding: Weighted avg. common shares outstanding – basic 2,050,678 2,040,166 Effect of the assumed exercise of dilutive stock options 11,392 - Weighted avg. common shares outstanding – dilutive 2,062,070 2,040,166 Income (loss) per common share: Basic $ 0.08 $ (0.05 ) Diluted $ 0.08 $ (0.05 ) |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binomial Models | All such amounts represent the weighted average amounts for each period. For the year ended March 31, 2021 2020 Grant-date fair value - $ 2.24 Volatility factor - 60.12 % Dividend yield - - Risk-free interest rate - .85 % Expected term (in years) - 6.25 |
Summary of Activity of Stock Options | The following table is a summary of activity of stock options for the years ended March 31, 2021 and 2020: Number of Shares Weighted Average Exercise Price Per Share Weighted Aggregate Average Remaining Contract Life in Years Intrinsic Value Outstanding at April 1, 2019 185,700 $ 6.18 4.68 $ - Granted 42,000 - Exercised - - Forfeited or Expired - - Outstanding at March 31, 2020 227,700 $ 5.65 4.83 $ - Granted - - Exercised (36,500 ) - Forfeited or Expired (35,200 ) - Outstanding at March 31, 2021 156,000 $ 5.28 5.53 $ 555,100 Vested at March 31, 2021 105,250 $ 5.92 4.17 $ 307,000 Exercisable at March 31, 2021 105,250 $ 5.92 4.17 $ 307,000 |
Schedule of Other Information Pertaining to Option Activity | Other information pertaining to option activity was as follows during the year ended March 31: 2021 2020 Weighted average grant-date fair value of stock options granted (per share) $ - $ 2.24 Total fair value of options vested $ 55,460 $ 32,500 Total intrinsic value of options exercised $ 72,981 $ - |
Summary of Information About Options Outstanding | The following table summarizes information about options outstanding at March 31, 2021: Range of Exercise Prices Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contract Life in Years Aggregate Intrinsic Value $ 3.34 – 4.83 41,000 $ 3.34 4.84 – 5.97 40,000 4.84 5.98 – 6.26 30,000 5.98 6.27 – 7.00 45,000 6.98 $ 3.34 – 7.00 156,000 $ 5.28 5.53 $ 555,100 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Operating Lease Assets and Liabilities | The balance sheets classification of lease assets and liabilities was as follows: March 31, 2021 Assets Operating lease right-of-use asset, beginning balance $ 76,130 Current period amortization (64,629 ) Lease amendment (1,622 ) Lease extension 10,982 Total operating lease right-of-use asset $ 20,861 Liabilities Operating lease liability, current $ 21,965 Operating lease liability, long term - Total lease liabilities $ 21,965 |
Schedule of Future Minimum Lease Payments | Future minimum lease payments as of March 31, 2021 under non-cancellable operating leases are as follows: Lease Obligation Fiscal Year Ended March 31, 2022 $ 21,965 Fiscal Year Ended March 31, 2023 - Total lease payments $ 21,965 Less: imputed interest - Operating lease liability 21,965 Less: operating lease liability, current (21,965 ) Operating lease liability, long term $ - |
Oil and Gas Reserve Data (Una_2
Oil and Gas Reserve Data (Unaudited) (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Extractive Industries [Abstract] | |
Schedule of Commodity Prices Utilized for Reserve Estimates the Prior to Adjustments | Commodity prices utilized for the reserve estimates prior to adjustments for location, grade and quality are as follows: March 31, 2021 2020 Prices utilized in the reserve estimates before adjustments: Oil per Bbl $ 36.49 $ 52.23 Natural gas per MMBtu $ 2.16 $ 2.30 |
Schedule of Changes in Proved Reserve | Changes in Proved Reserves Oil Natural Gas Proved Developed and Undeveloped Reserves: As of April 1, 2019 1,040,000 5,381,000 Revision of previous estimates (72,000 ) (384,000 ) Purchase of minerals in place - - Extensions and discoveries 90,000 175,000 Sales of minerals in place (6,000 ) (28,000 ) Production (44,000 ) (294,000 ) As of March 31, 2020 1,008,000 4,850,000 Revision of previous estimates (292,000 ) (200,000 ) Purchase of minerals in place - - Extensions and discoveries 92,000 283,000 Sales of minerals in place (20,000 ) (14,000 ) Production (50,000 ) (324,000 ) As of March 31, 2021 738,000 4,595,000 |
Summary of Proved Developed and Undeveloped Reserves | Summary of Proved Developed and Undeveloped Reserves as of March 31, 2021 and 2020 Oil Natural Gas Proved Developed Reserves: As of April 1, 2019 376,600 3,823,440 As of March 31, 2020 358,230 3,344,210 As of March 31, 2021 413,050 3,639,330 Proved Undeveloped Reserves: As of April 1, 2019 663,860 1,557,250 As of March 31, 2020 649,570 1,506,160 As of March 31, 2021 325,020 956,050 |
Schedule of Progress of Converting Proved Undeveloped Reserves | The following table discloses the Company’s progress toward the conversion of PUDs during fiscal 2021. Progress of Converting Proved Undeveloped Reserves Oil & Natural Gas Future (BOE) Development Costs PUDs, beginning of year 900,592 $ 6,632,064 Revision of previous estimates (447,215 ) (3,765,188 ) Sales of reserves (14,394 ) - Conversions to PD reserves (83,202 ) (947,290 ) Additional PUDs added 128,581 1,095,588 PUDs, end of year 484,362 $ 3,015,174 |
Schedule of Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves | Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves: March 31 2021 2020 Future cash inflows $ 38,144,000 $ 61,676,000 Future production costs and taxes (11,248,000 ) (16,682,000 ) Future development costs (3,213,000 ) (6,984,000 ) Future income taxes (1,714,000 ) (4,675,000 ) Future net cash flows 21,969,000 33,335,000 Annual 10% discount for estimated timing of cash flows (9,206,000 ) (14,359,000 ) Standardized measure of discounted future net cash flows $ 12,763,000 $ 18,976,000 |
Schedule of Changes in Standardized Measure of Discounted Future Net Cash Flows to Proved Oil and Gas Reserves | Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves: March 31 2021 2020 Sales of oil and gas produced, net of production costs $ (1,902,000 ) $ (1,806,000 ) Net changes in price and production costs (5,680,000 ) (2,871,000 ) Changes in previously estimated development costs 2,623,000 865,000 Revisions of quantity estimates (5,954,000 ) (2,140,000 ) Net change due to purchases and sales of minerals in place (54,000 ) (335,000 ) Extensions and discoveries, less related costs 1,150,000 1,519,000 Net change in income taxes 2,070,000 404,000 Accretion of discount 1,376,000 2,164,000 Changes in timing of estimated cash flows and other 158,000 1,924,000 Changes in standardized measure (6,213,000 ) (276,000 ) Standardized measure, beginning of year 18,976,000 19,252,000 Standardized measure, end of year $ 12,763,000 $ 18,976,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Allowances for doubtful accounts | ||
Excluded costs | ||
Cost method investments, percentage description | The Company accounts for investments of less than 1% of any limited liability company using the cost method. | |
Office Furniture and Equipment [Member] | Minimum [Member] | ||
Estimated useful lives of property and equipment | 3 years | |
Office Furniture and Equipment [Member] | Maximum [Member] | ||
Estimated useful lives of property and equipment | 10 years |
Derivative Financial Instrume_3
Derivative Financial Instruments - Summary of Realized and Unrealized Losses On Derivative Contracts (Details) | Mar. 31, 2021USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Realized loss on oil price hedging contracts | $ (19,200) |
Unrealized gain (loss) on oil price hedging contracts | |
Net realized and unrealized loss on derivative contracts | $ (19,200) |
Long-Term Debt (Details Narrati
Long-Term Debt (Details Narrative) - USD ($) | Jun. 23, 2021 | Feb. 28, 2020 | Dec. 28, 2018 | Mar. 31, 2021 | Mar. 31, 2020 | Jun. 21, 2021 | Mar. 31, 2019 |
Line of credit | $ 1,180,000 | $ 795,000 | |||||
Repayments | 550,000 | $ 490,000 | |||||
West Texas National Bank [Member] | |||||||
Outstanding letter of credit | $ 25,000 | ||||||
West Texas National Bank [Member] | Subsequent Event [Member] | |||||||
Line of credit | $ 100,000 | $ 800,000 | |||||
Repayments | $ 480,000 | ||||||
Loan Agreement [Member] | |||||||
Debt instrument covenant description | The Company is also obligated to meet certain financial covenants under the Agreement and requires senior debt to earnings before interest, taxes, depreciation and amortization ("EBITDA") ratios (Senior Debt/EBITDA) less than or equal to 4.00 to 1.00 measured with respect to the four trailing fiscal quarters and minimum interest coverage ratios (EBITDA/Interest Expense) of 2.00 to 1.00 for each quarter. | ||||||
Loan Agreement [Member] | West Texas National Bank [Member] | |||||||
Credit facility face amount | $ 2,500,000 | $ 1,000,000 | $ 320,000 | ||||
Line of credit maturity date | Mar. 28, 2023 | Dec. 28, 2021 | |||||
Line of credit, increase in borrowing base amount | $ 1,500,000 | ||||||
Accrued variable interest rate | 0.50% | ||||||
Line of credit commitment fee description | the Company will pay an unused commitment fee in an amount equal to one-half of one percent (.5%) times the daily average of the unadvanced amount of the commitment. | ||||||
Line of credit commitment fee, percentage | 0.50% | ||||||
Loan origination fee, percentage | 0.50% | 0.10% | |||||
Loan origination fee | $ 5,000 | $ 2,500 | |||||
Legal and recording expenses | $ 34,532 | 12,266 | |||||
Extension fees | $ 3,125 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 |
Debt Disclosure [Abstract] | |||
Credit facility | $ 1,180,000 | $ 795,000 | |
Unamortized debt issuance costs | (25,051) | (37,577) | |
Total long-term debt | $ 1,154,949 | $ 757,423 |
Long-Term Debt - Summary of Lin
Long-Term Debt - Summary of Line of Credit Activity (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Balance | $ 795,000 | |
Borrowings | 935,000 | 1,285,000 |
Repayments | 550,000 | 490,000 |
Balance | $ 1,180,000 | $ 795,000 |
Asset Retirement Obligations -
Asset Retirement Obligations - Schedule of Rollforward of Asset Retirement Obligations (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Carrying amount of asset retirement obligations, beginning of the period | $ 762,761 | $ 861,534 |
Liabilities incurred | 17,587 | 19,512 |
Liabilities settled | (80,099) | (145,520) |
Accretion expense | 28,548 | 27,235 |
Revision | ||
Carrying amount of asset retirement obligations, end of the period | 728,797 | 762,761 |
Less: Current portion | 15,000 | 7,500 |
Non-Current asset retirement obligation | $ 713,797 | $ 755,261 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Federal income tax rate | 21.00% | 21.00% |
Net operating loss carryforward with no expiration | $ 5,400,000 | |
Net operating loss carryforward | $ 6,700,000 | |
Net operating carryforwards expiration date, description | Expiring in 2029 | |
Uncertain tax positions | ||
Deferred tax asset, net | 1,258,401 | 1,306,971 |
Valuation allowance | $ 1,258,401 | $ 1,306,971 |
Tax Cuts and Jobs Act [Member] | ||
Income tax examination description | On December 22, 2017, the tax legislation referred to as the 2017 Tax Reform Act ("Tax Cuts and Jobs Act") was enacted. The more significant changes that impact the Company are the reduction in the corporate federal income tax rate from 35% to 21%. | |
Federal income tax rate | 21.00% |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Net Deferred Tax Assets (Liabilities) (Details) - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Percentage depletion carryforwards | $ 1,132,352 | $ 1,167,594 |
Deferred stock-based compensation | 37,977 | 36,568 |
Asset retirement obligation | 153,048 | 160,180 |
Net operating loss | 1,411,017 | 1,248,528 |
Other | 9,840 | 7,372 |
Total deferred tax assets | 2,744,234 | 2,620,242 |
Excess financial accounting bases over tax bases of property and equipment | 1,485,833 | 1,313,271 |
Deferred tax asset, net | 1,258,401 | 1,306,971 |
Valuation allowance | (1,258,401) | (1,306,971) |
Net deferred tax |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Income Tax Disclosure [Abstract] | |||
Tax expense at federal statutory rate | [1] | $ 32,746 | $ (20,891) |
Statutory depletion carryforward | 35,242 | (31,384) | |
Change in valuation allowance | (48,570) | 46,850 | |
U. S. tax reform, corporate rate reduction | |||
Permanent differences | (19,418) | 5,427 | |
Other | (2) | ||
Total income tax | |||
Effective income tax rate | |||
[1] | The federal statutory rate was 21% for fiscal years ending March 31, 2021 and 2020. |
Income Taxes - Schedule of Re_2
Income Taxes - Schedule of Reconciliation of Provision for Income Taxes (Details) (Parenthetical) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 21.00% |
Major Customers (Details Narrat
Major Customers (Details Narrative) - Customer Concentration Risk [Member] - One Customer [Member] | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue [Member] | ||
Concentration of credit risk | 66.00% | 52.00% |
Accounts Receivable [Member] | ||
Concentration of credit risk | 71.00% | 63.00% |
Oil and Natural Gas Costs (Deta
Oil and Natural Gas Costs (Details Narrative) - $ / shares | Mar. 31, 2021 | Mar. 31, 2020 |
Extractive Industries [Abstract] | ||
DD&A per BOE production | $ 8.68 | $ 9.15 |
Oil and Natural Gas Costs - Sch
Oil and Natural Gas Costs - Schedule of Cost Related to Oil and Gas Activities (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Extractive Industries [Abstract] | ||
Property acquisition costs Proved | ||
Property acquisition costs Unproved | ||
Exploration | 168 | |
Development | 1,581,109 | 1,687,499 |
Capitalized asset retirement obligations | 17,587 | 19,512 |
Total costs incurred for oil and gas properties | $ 1,598,696 | $ 1,707,179 |
Oil and Natural Gas Costs - S_2
Oil and Natural Gas Costs - Schedule of Aggregate Capitalized Costs Relating Oil and Gas Property Activities (Details) - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 |
Extractive Industries [Abstract] | ||
Proved oil and gas properties | $ 38,664,347 | $ 37,465,172 |
Unproved oil and gas properties: subject to amortization | ||
Unproved oil and gas properties: not subject to amortization | ||
Oil and gas properties, gross | 38,664,347 | 37,465,172 |
Less accumulated DD&A | 28,906,419 | 28,003,961 |
Total oil and gas properties | $ 9,757,928 | $ 9,461,211 |
Income (Loss) Per Common Shar_2
Income (Loss) Per Common Share - Schedule of Reconciliation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income (loss) per common share: | ||
Net income (loss) | $ 155,932 | $ (99,478) |
Shares outstanding: Weighted avg. common shares outstanding - basic | 2,050,678 | 2,040,166 |
Shares outstanding: Effect of the assumed exercise of dilutive stock options | $ 11,392 | |
Shares outstanding: Weighted avg. common shares outstanding - dilutive | 2,062,070 | 2,040,166 |
Income (loss) per common share: Basic | $ 0.08 | $ (0.05) |
Income (loss) per common share: Diluted | $ 0.08 | $ (0.05) |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Sep. 30, 2020 | |
Stock repurchased during the period, shares | |||
Board of Directors [Member] | |||
Stock authorized repurchased shares for treasury | $ 250,000 |
Stock-based Compensation (Detai
Stock-based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | |
Number of stock options granted shares | |||
Total cost related to non-vested awards | $ 114,131 | ||
Non-vested awards, weighted average period of recognition | 2 years 4 months 6 days | ||
Stock options shares forfeited | 1,000 | ||
Stock options shares expired | 34,200 | ||
Stock options shares exercised | 36,500 | ||
Stock options intrinsic value exercised | $ 72,981 | ||
Proceeds from options exercised | $ 247,435 | ||
Outstanding options expiration date description | Outstanding options at March 31, 2021 expire between November 2021 and March 2030 and have exercise prices ranging from $3.34 to $7.00. | ||
Stock option exercise price, minimum | $ 3.34 | ||
Stock option exercise price, maximum | $ 7 | ||
Minimum [Member] | |||
Outstanding options expiration month and year | 2021-11 | ||
Maximum [Member] | |||
Outstanding options expiration month and year | 2030-03 | ||
General and Administrative Expense [Member] | |||
Stock based compensation expense | $ 55,678 | $ 34,303 | |
Board of Directors [Member] | |||
Number of stock options granted shares | 42,000 | ||
2019 Employee Incentive Stock Plan [Member] | |||
Number of stock options awards shares | 200,000 | ||
Number of stock options granted shares | 25,000 | ||
Percentage of options purchase of common stock at fair value | 25.00% | ||
Stock options expires term | 10 years |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Grant-date Fair Value of Stock Options Granted and Assumptions Used Binomial Models (Details) - $ / shares | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Grant-date fair value | $ 2.24 | |
Volatility factor | 60.12% | |
Dividend yield | 0.00% | |
Risk-free interest rate | 0.85% | |
Expected term (in years) | 6 years 2 months 30 days |
Stock-based Compensation - Su_2
Stock-based Compensation - Summary of Activity of Stock Options (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Number of Shares, Granted | ||
Number of Shares, Exercised | (36,500) | |
Stock Option [Member] | ||
Number of Shares, Beginning Balance | 227,700 | 185,700 |
Number of Shares, Granted | 42,000 | |
Number of Shares, Exercised | (36,500) | |
Number of Shares, Forfeited or Expired | (35,200) | |
Number of Shares, Ending Balance | 156,000 | 227,700 |
Number of Shares, Vested | 105,250 | |
Number of Shares, Exercisable | 105,250 | |
Weighted Average Exercise Price Per Share, Beginning Balance | $ 5.65 | $ 6.18 |
Weighted Average Exercise Price Per Share, Granted | ||
Weighted Average Exercise Price Per Share, Exercised | ||
Weighted Average Exercise Price Per Share, Forfeited or Expired | ||
Weighted Average Exercise Price Per Share, Ending Balance | 5.28 | $ 5.65 |
Weighted Average Exercise Price Per Share, Vested | 5.92 | |
Weighted Average Exercise Price Per Share, Exercisable | $ 5.92 | |
Weighted Average Remaining Contract Life in Years, Beginning Balance | 4 years 9 months 29 days | 4 years 8 months 5 days |
Weighted Average Remaining Contract Life in Years, Ending Balance | 5 years 6 months 10 days | 4 years 9 months 29 days |
Weighted Aggregate Average Remaining Contract Life in Years, Vested | 4 years 2 months 1 day | |
Weighted Aggregate Average Remaining Contract Life in Years, Exercisable | 4 years 2 months 1 day | |
Intrinsic Value, Ending Balance | $ 555,100 | |
Intrinsic Value, Vested | 307,000 | |
Intrinsic Value, Exercisable | $ 307,000 |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Other Information Pertaining to Option Activity (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Weighted average grant-date fair value of stock options granted (per share) | $ 2.24 | |
Total fair value of options vested | $ 55,460 | $ 32,500 |
Total intrinsic value of options exercised | $ 72,981 |
Stock-based Compensation - Su_3
Stock-based Compensation - Summary of Information About Options Outstanding (Details) | 12 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Range of Exercise Prices lower | $ 3.34 |
Range of Exercise Prices upper | 7 |
Range One [Member] | |
Range of Exercise Prices lower | 3.34 |
Range of Exercise Prices upper | $ 4.83 |
Number of Options | shares | 41,000 |
Weighted Average Exercise Price Per Share | $ 3.34 |
Range Two [Member] | |
Range of Exercise Prices lower | 4.84 |
Range of Exercise Prices upper | $ 5.97 |
Number of Options | shares | 40,000 |
Weighted Average Exercise Price Per Share | $ 4.84 |
Range Three [Member] | |
Range of Exercise Prices lower | 5.98 |
Range of Exercise Prices upper | $ 6.26 |
Number of Options | shares | 30,000 |
Weighted Average Exercise Price Per Share | $ 5.98 |
Range Four [Member] | |
Range of Exercise Prices lower | 6.27 |
Range of Exercise Prices upper | $ 7 |
Number of Options | shares | 45,000 |
Weighted Average Exercise Price Per Share | $ 6.98 |
Range Five [Member] | |
Range of Exercise Prices lower | 3.34 |
Range of Exercise Prices upper | $ 7 |
Number of Options | shares | 156,000 |
Weighted Average Exercise Price Per Share | $ 5.28 |
Weighted Average Remaining Contract Life in Years | 5 years 6 months 10 days |
Aggregate Intrinsic Value | $ | $ 555,100 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | Nov. 22, 2019USD ($) | Mar. 31, 2020USD ($)a | Mar. 31, 2021USD ($)ft² | Mar. 31, 2020USD ($)a |
Total billed to and reimbursed expenses | $ 39,067 | $ 44,724 | ||
Due to related party | $ 16,549 | $ 15,881 | ||
Area of land | ft² | 4,160 | |||
Nicholas C. Taylor [Member] | ||||
Due to related party | $ 18,000 | |||
Land value, per acre | $ 9,000 | |||
Nicholas C. Taylor [Member] | Brazoria County, Texas [Member] | ||||
Area of land | a | 1.98 | 1.98 |
Leases (Details Narrative)
Leases (Details Narrative) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Mar. 31, 2021USD ($)ft² | Mar. 31, 2020USD ($) | |
Area of lease | ft² | 4,160 | |||
Lease term | 36 months | |||
Lease expiration date | May 31, 2021 | |||
Lease term extension, description | In June 2020, in exchange for a reduction in rent for the months of June and July 2020, the Company agreed to a 2-month extension to its current lease agreement at the regular monthly rate extending its current lease expiration date to July 2021. | |||
Incremental borrowing interest percentage | 6.00% | |||
Net cash paid for operating lease | $ | $ 48,360 | $ 46,447 | ||
Sublease income | $ | $ 19,109 | $ 18,234 | ||
Subsequent Event [Member] | ||||
Lease expiration date | Jul. 31, 2024 | |||
Shareholder [Member] | ||||
Area of lease | ft² | 1,021 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Assets and Liabilities (Details) - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use asset, beginning balance | $ 76,130 | |
Current period amortization | (64,629) | |
Lease amendment | (1,622) | |
Lease extension | 10,982 | |
Total operating lease right-of-use asset | 20,861 | $ 76,130 |
Operating lease liability, current | 21,965 | 65,721 |
Operating lease liability, long term | $ 10,982 | |
Total lease liabilities | $ 21,965 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 |
Leases [Abstract] | ||
Fiscal Year Ended March 31, 2022 | $ 21,965 | |
Fiscal Year Ended March 31, 2023 | ||
Total lease payments | 21,965 | |
Less: imputed interest | ||
Operating lease liability | 21,965 | |
Less: operating lease liability, current | (21,965) | $ (65,721) |
Operating lease liability, long term | $ 10,982 |
Paycheck Protection Program (_2
Paycheck Protection Program (PPP) Loan (Details Narrative) - USD ($) | Nov. 25, 2020 | May 05, 2020 | Mar. 31, 2021 |
PPP fund received | $ 68,600 | ||
Loan term | 2 years | ||
Debt maturity date | May 5, 2022 | ||
Annual interest rate | 1.00% | ||
Debt description | The loan was a two-year loan with a maturity date of May 5, 2022 an annual interest rate of 1% payable monthly with the first six monthly payments deferred. | ||
Proceeds from PPP loan | $ 68,574 | ||
Accrued interest expense | $ 383 | ||
CARES Act [Member] | |||
Loan forgiveness amount | $ 68,957 |
Oil and Gas Reserve Data (Una_3
Oil and Gas Reserve Data (Unaudited) (Details Narrative) | 12 Months Ended | ||
Mar. 31, 2021USD ($)BoeWells$ / shares | Mar. 31, 2020USD ($)$ / shares | Mar. 31, 2019USD ($) | |
Barrels of oil equivalent | Boe | 1.504 | ||
Percentage of estimated proved reserves of oil and natural gas liquids | 49.00% | ||
Percentage of estimated proved reserves of natural gas | 51.00% | ||
Description on PUD's oil and gas reserves | At March 31, 2021, the Company reported estimated PUDs of 484 MBOE, which accounted for 32% of its total estimated proved oil and gas reserves. This figure primarily consists of a projected 121 new wells (263 MBOE) operated by others, 7 wells are currently being drilled with plans for 60 wells to follow in 2022, 48 wells in 2023 and 6 wells in 2024. | ||
Estimated proved oil and gas reserves rate | 32.00% | ||
Future cash flows estimate to develop proved undeveloped properties | $ | $ 3,015,174 | $ 6,632,064 | |
Estimated future cash flows discounted rate | 10.00% | ||
Average prices used, per bbl | $ / shares | $ 37.42 | $ 53.23 | |
Average prices used, per mcf | $ / shares | $ 2.29 | $ 1.66 | |
March 31, 2024 [Member] | |||
Future cash flows estimate to develop proved undeveloped properties | $ | $ 3,015,174 | ||
2022 [Member] | |||
Number of drilled wells | 60 | ||
2023 [Member] | |||
Number of drilled wells | 48 | ||
2024 [Member] | |||
Number of drilled wells | 6 | ||
Current Plans [Member] | |||
Number of drilled wells | 7 | ||
142 New Wells [Member] | |||
Number of drilled wells | 121 |
Oil and Gas Reserve Data (Una_4
Oil and Gas Reserve Data (Unaudited) - Schedule of Commodity Prices Utilized for Reserve Estimates the Prior to Adjustments (Details) | 12 Months Ended | |
Mar. 31, 2021bblMMBbls | Mar. 31, 2020bblMMBbls | |
Oil [Member] | ||
Prices utilized for reserve estimates | bbl | 36.49 | 52.23 |
Natural Gas [Member] | ||
Prices utilized for reserve estimates | MMBbls | 2.16 | 2.30 |
Oil and Gas Reserve Data (Una_5
Oil and Gas Reserve Data (Unaudited) - Schedule of Changes in Proved Reserves (Details) | 12 Months Ended | |
Mar. 31, 2021bblMcf | Mar. 31, 2020bblMcf | |
Oil [Member] | ||
Proved Developed and Undeveloped Reserves Beginning Period | bbl | 1,008,000 | 1,040,000 |
Revision of previous estimates | bbl | (292,000) | (72,000) |
Purchase of minerals in place | bbl | ||
Extensions and discoveries | bbl | 92,000 | 90,000 |
Sales of minerals in place | bbl | (20,000) | (6,000) |
Production | bbl | (50,000) | (44,000) |
Proved Developed and Undeveloped Reserves Ending period | bbl | 738,000 | 1,008,000 |
Natural Gas [Member] | ||
Proved Developed and Undeveloped Reserves Beginning Period | Mcf | 4,850,000 | 5,381,000 |
Revision of previous estimates | Mcf | (200,000) | (384,000) |
Purchase of minerals in place | Mcf | ||
Extensions and discoveries | Mcf | 283,000 | 175,000 |
Sales of minerals in place | Mcf | (14,000) | (28,000) |
Production | Mcf | (324,000) | (294,000) |
Proved Developed and Undeveloped Reserves Ending period | Mcf | 4,595,000 | 4,850,000 |
Oil and Gas Reserve Data (Una_6
Oil and Gas Reserve Data (Unaudited) - Summary of Proved Developed and Undeveloped Reserves (Details) | Mar. 31, 2021bblMcf | Mar. 31, 2020bblMcf | Mar. 31, 2019bblMcf |
Oil [Member] | |||
Proved Developed Reserves | bbl | 413,050 | 358,230 | 376,600 |
Proved Undeveloped Reserves | bbl | 325,020 | 649,570 | 663,860 |
Natural Gas [Member] | |||
Proved Developed Reserves | Mcf | 3,639,330 | 3,344,210 | 3,823,440 |
Proved Undeveloped Reserves | Mcf | 956,050 | 1,506,160 | 1,557,250 |
Oil and Gas Reserve Data (Una_7
Oil and Gas Reserve Data (Unaudited) - Schedule of Progress of Converting Proved Undeveloped Reserves (Details | 12 Months Ended |
Mar. 31, 2020USD ($)Boe | |
Extractive Industries [Abstract] | |
PUDs, beginning of year | Boe | 900,592 |
Revision of previous estimates | Boe | (447,215) |
Sales of reserves | Boe | (14,394) |
Conversions to PD reserves | Boe | (83,202) |
Additional PUDs added | Boe | 128,581 |
PUDs, end of year | Boe | 484,362 |
PUDs, beginning of year, Future Development Costs | $ | $ 6,632,064 |
Revision of previous estimates, Future Development Costs | $ | (3,765,188) |
Sales of reserves, Future Development Costs | $ | |
Conversions to PD reserves, Future Development Costs | $ | (947,290) |
Additional PUDs added, Future Development Costs | $ | 1,095,588 |
PUDs, end of year, Future Development Costs | $ | $ 3,015,174 |
Oil and Gas Reserve Data (Una_8
Oil and Gas Reserve Data (Unaudited) - Schedule of Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Reserves (Details) - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 |
Extractive Industries [Abstract] | |||
Future cash inflows | $ 38,144,000 | $ 61,676,000 | |
Future production costs and taxes | (11,248,000) | (16,682,000) | |
Future development costs | (3,213,000) | (6,984,000) | |
Future income taxes | (1,714,000) | (4,675,000) | |
Future net cash flows | 21,969,000 | 33,335,000 | |
Annual 10% discount for estimated timing of cash flows | (9,206,000) | (14,359,000) | |
Standardized measure of discounted future net cash flows | $ 12,763,000 | $ 18,976,000 | $ 19,252,000 |
Oil and Gas Reserve Data (Una_9
Oil and Gas Reserve Data (Unaudited) - Schedule of Changes in Standardized Measure of Discounted Future Net Cash Flows to Proved Oil and Gas Reserves (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Extractive Industries [Abstract] | ||
Sales of oil and gas produced, net of production costs | $ (1,902,000) | $ (1,806,000) |
Net changes in price and production costs | (5,680,000) | (2,871,000) |
Changes in previously estimated development costs | 2,623,000 | 865,000 |
Revisions of quantity estimates | (5,954,000) | (2,140,000) |
Net change due to purchases and sales of minerals in place | (54,000) | (335,000) |
Extensions and discoveries, less related costs | 1,150,000 | 1,519,000 |
Net change in income taxes | 2,070,000 | 404,000 |
Accretion of discount | 1,376,000 | 2,164,000 |
Changes in timing of estimated cash flows and other | 158,000 | 1,924,000 |
Changes in standardized measure | (6,213,000) | (276,000) |
Standardized measure, beginning of year | 18,976,000 | 19,252,000 |
Standardized measure, end of year | $ 12,763,000 | $ 18,976,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 1 Months Ended | 12 Months Ended | 15 Months Ended | ||
Jun. 30, 2021 | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2022USD ($)Wells | Mar. 31, 2019USD ($) | |
Proceeds from line of credit | $ 935,000 | $ 1,285,000 | |||
Payments for line of credit | 550,000 | 490,000 | |||
Line of credit | $ 1,180,000 | $ 795,000 | |||
Lease expiration date | May 31, 2021 | ||||
Subsequent Event [Member] | |||||
Lease expiration date | Jul. 31, 2024 | ||||
Forecast [Member] | |||||
Proceeds from line of credit | $ 100,000 | ||||
Payments for line of credit | 480,000 | ||||
Line of credit | 800,000 | ||||
Forecast [Member] | Lea County, New Mexico [Member] | |||||
Expended for drilling wells | $ 326,000 | ||||
Number of drilled wells | Wells | 8 |