Of these oil and gas reserves, approximately 77% is natural gas and 23% oil. Mexco believes that there is potential for further development of a number of these royalties especially through horizontal and vertical drilling and fracturing. These royalty interests are free of expenses to Mexco for drilling and operations.

Approximately 15% of the net revenue from these royalties comes from 237 wells located in Reagan County, Texas. Also included are interests in 21 wells in Glasscock County, Texas. Both of these counties are in the horizontal Spraberry Wolfcamp trend. The second largest source of net income is in Webb County, Texas from 202 wells producing 13.5 % of net income. Royalties in Karnes County, Texas produce approximately 5% of net revenue from 30 wells. Both of these counties are in the Eagle Ford trend.

Also Mexco announced the purchase for $525,000; 12.5% (approximately 10% net revenue interest) long lived non-operated working interests. Six wells are producing oil from the Lower Tubb formation in Pecos County, Texas. These wells are on 20-acre spacing with four additional proven undeveloped locations at approximately 3,600 foot depth on the 190 acres. The operator has agreed to pay for the drilling and completion costs of one additional well and fracture treatment of one of the existing wells, as well as pay all operating expenses of all wells on these leases. In addition, Mexco will receive 100% of the gross disposal fees from one disposal well located on these properties paid by an adjacent operator. Mexco would be responsible for payment of the cost of drilling and completion on the balance of any development wells.

These expenditures have been funded through bank borrowings on Mexco’s line of credit.

Also, the Company today reported the Board of Directors appointed Christopher M. Schroeder to the Company’s Board of Directors as well as to membership on the Audit, Compensation and Nominating Committees effective November 1, 2014. Mr. Schroeder is expected to stand for election at the 2015 Annual Meeting of Shareholders on September 15, 2015 for a term of one year.