BERAL, INC.  
Andrew G. Racz  
Director of Research  
300 East 54 Street, Suite 26C  
New York, New York 10022  
Telephone: (212) 319-6949  
Fax: (212) 753-1944  

 E-mail: mlikar@aol.com   

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January 4, 2010

Mexco Energy can surprise the market with a rapid explosion of EPS. Such event can set in motion a series of transactions that will reward the current stockholders in a possibly unusual manner.

2.     The selling price in the September, 2009 quarter was $3.04 per mcf.

3.     The selling price for the March quarter 2010 is projected at $6.00 per mcf. Thus, the extra price would add $750,000 to both revenues and pre-tax income.

4.     In 2010, the expected growth is not further price increase but acquisition of additional "territory". Additional gas wells.

5.     With an earnings power between $1.50 and $2.00, the stock can appreciate to $15. Market cap would then be $30M.

6.     A $15 price, clean balance sheet can enable MXC to raise $10M equity. The equity base of the company could change drastically.

OVERVIEW

At the NYMEX, the price of the near-month contract for January delivery increased $0.56, or nearly 12 percent, during the report week to $5.462 per MMBtu. The increase occurred possibly in response to expectations of continued extreme cold in consuming regions of the country, thus increasing space-heating demand. The early cold has also reduced concerns regarding the abundance of natural gas in storage, which reached a record high this fall. Nonetheless, the January 2010 contract is trading much lower than the settlement prices of contracts for comparable months over the last 2 years. The January 2009 and January 2008 contracts expired at $6.136 per MMBtu and $7.172 per MMBtu, respectively.

MEXICO ENERGY CORP. (MXC) has interest in 2,350 oil and gas wells and owns leasehold interests in 300,000 gross acres. It has proven reserves of 10,000 billion cubic feet of natural gas and 200,000 barrels of oil.

Mexico Energy Corporation is an independent, publicly-owned oil and gas company engaged in acquiring and developing oil and gas properties and the exploration for and production of oil and gas. Mexico Energy Corporation, a Colorado corporation founded in 1972, currently conducts all of its drilling, exploration and production activities in the United States. All of its oil and gas assets are located in the United States and all of its revenues are derived from sales to customers within the United States, primarily in the Permian Basin of West Texas.

Mexico focused primarily on the exploration for and development of natural gas reserves and, secondarily, oil reserves. In addition to exploration and development, Mexico acquires interests in producing and non-producing oil and gas leases from land owners and leaseholders in areas considered favorable for oil and gas exploration, development and production.

Mexico also engages in the business of acquiring proved reserves and continually searches for opportunities to acquire proved oil and gas properties, including royalties and mineral interests with development potential.

Oil and gas sales. Revenue from oil and gas sales was $1,391,754 for the six months ended September 30, 2009, a 57% decrease from $3,267,797 for the same period of fiscal 2009. This resulted from a decrease in oil and gas prices partially offset by an increase in gas production. Average gas prices were $3.06 per mcf for the first six months of fiscal 2010, a decrease from $9.24 per mcf for the first six months of fiscal 2009. Average oil prices were $50.12 per barrel for the first six months of fiscal 2010, a decrease from $117.25 per barrel for the first six months of fiscal 2009. Oil and gas production quantities were 8,,710 mcf for the first six months of fiscal 2010 and 8,713 barrels and 243,143 mcf for the first six months of fiscal 2009, an increase of 18% in gas production and no change in oil production.

Crude oil and natural gas prices have fluctuated significantly in recent years. During the second quarter of fiscal 1009, oil and gas prices began trending downward, while drilling, completion and operating costs remained high. The effect of declining product prices on business is significant. Lower product prices reduce cash flow from operations and diminish the present value of oil and gas reserves. Lower product prices also offer MXC less incentive to assume the drilling risks that are inherent in the business. The volatility of the energy markets make it extremely difficult to predict future oil and natural gas price movements with any certainty.

Mexco has a tiny capitalization. However, the Midland, Texas based company is well integrated in the local community.

However, acquiring new fields, there is a further earnings expansion, creating a $15 price possibility.

An experienced management team can raise additional capital and build -- at favorable prices -- a leverage growth for current stockholders.