<DOCUMENT>
<TYPE>EX-7.1
<SEQUENCE>3
<FILENAME>falconex72-1202.txt
<DESCRIPTION>COMMON STOCK WARRANT
<TEXT>

                                     WARRANT

                                  COMMON STOCK

NO. 1                                                             107,500 Shares

                            MEXCO ENERGY CORPORATION
             (Incorporated under the laws of the State of Colorado)

     This is to certify that for value received FALCON BAY ENERGY LLC or assigns
(hereinafter  called the "Holder" or "Holders",  as the case may be) is entitled
to purchase from MEXCO ENERGY CORPORATION (hereinafter called the "Company"), at
any time after 5:00 p.m.  (Texas Time) on December 5, 2002, and before 5:00 p.m.
(Texas Time) on December 5, 2004, 107,500 fully paid and  non-assessable  shares
of Common Stock, par value $.50 per share of the Company,  such shares not being
registered under the Securities Act of 1933 as amended (the "Act")  (hereinafter
called  "Common  Stock") at a price of $5.00 per share  (hereinafter  called the
"Warrant Price").

     The  Warrant  Price  and the  number of shares  purchasable  hereunder  are
subject to adjustment as hereinafter provided.

     This  Warrant may be  exercised  by the Holder for an  aggregate of 107,500
shares of Common Stock and is issued pursuant to the terms of an Agreement dated
December 5, 2002, between the Company and Holders. This Warrant and any Warrants
issued in exchange therefor or in replacement  thereof are hereinafter  referred
to as the "Warrants".

     This Warrant may be exercised by the Holder as  hereinabove  provided as to
the whole or any part of the shares of Common Stock covered  hereby by surrender
of this Warrant at the  principal  office of any  transfer  agent for the Common
Stock,  or, if the  Company  shall not have any  transfer  agent for the  Common
Stock,  at the principal  office of the Company (any such transfer agent, or the
Company acting hereunder, being hereinafter

<PAGE>

called the  "Warrant  Agent"),  with the  statement  of  election  to  subscribe
attached  hereto duly  executed  and upon  payment to the Company of the Warrant
Price for shares so purchased in cash or by cashier's check or bank draft in New
York Clearing House funds.  Thereupon (except that if, upon such date, the stock
transfer  books of the Company  shall be closed,  then upon the next  succeeding
date on which such transfer books are open) this Warrant shall be deemed to have
been  exercised  and the person  exercising  the same to have become a Holder of
record of shares of Common  Stock (or of the other  securities  or  property  to
which such person is entitled upon such  exercise)  purchased  hereunder for all
purposes,  and  certificates  for such shares so purchased shall be delivered to
the purchaser within a reasonable time (not exceeding 10 days,  except while the
transfer  books of the Company are closed)  after this  Warrant  shall have been
exercised  as set forth  hereinabove.  If this  Warrant  shall be  exercised  in
respect of a part only of the shares of Common Stock covered hereby,  the Holder
shall be entitled to receive a similar  Warrant of like tenor and date  covering
the  number of shares  in  respect  of which  this  Warrant  shall not have been
exercised.

     This  Warrant  is  exchangeable,  upon the  surrender  hereof by the Holder
hereof at said principal  office of the Warrant Agent,  for new Warrants of like
tenor and date  representing  in the  aggregate  the right to subscribe  for and
purchase  the  number  of  shares  which  may be  subscribed  for and  purchased
hereunder.

     The Company  covenants  and agrees that all shares which may be issued upon
the exercise of the rights  represented by this Warrant will, upon issuance,  be
validly issued, fully paid and non-assessable and free from all taxes, liens and
charges  with respect to the issue  thereof  (other than taxes in respect of any
transfer).  The Company  further  covenants  and agrees that,  during the period
within which the rights represented by this Warrant may

WARRANT - Page 2
<PAGE>

be  exercised,  the Company  will at all times have  authorized  and  reserved a
sufficient  number of shares of Common  Stock to provide for the exercise of the
rights represented by this Warrant.

     The rights of the Holder of this Warrant  shall be subject to the following
terms and conditions:

     1.1  In case  the  Company  shall  hereafter  at any  time  (i)  change  by
split-up,  subdivision or combination the number of outstanding shares of Common
Stock into a  different  number of shares of Common  Stock  with or without  par
value, or (ii) declare and pay a dividend in shares of Common Stock,  the number
of shares of Common Stock which immediately prior to such change or dividend the
Holder of this  Warrant  shall have been  entitled to purchase  pursuant to this
Warrant shall be increased or decreased in direct  proportion to the increase or
decrease,  respectively,  in the  number of shares of Common  Stock  outstanding
immediately  prior to such change or dividend,  and the Warrant  Price in effect
immediately  prior to such change shall be increased or  decreased,  as the case
may be, in inverse proportion to such increase or decrease in the number of such
shares  outstanding  immediately  prior to such  change  or  dividend.  Any such
adjustment  shall  become  effective  on the  effective  date of such  split-up,
subdivision or combination, or the record date of such dividend, as the case may
be. For the  purposes of this  Section 1.1 the number of shares of Common  Stock
outstanding  at any given time shall not include  shares in the  treasury of the
Company  but shall  include  shares  issuable  in respect to scrip  certificates
representing fractional interests with respect to Common Stock.

     1.2  In case of any capital  reorganization or any  reclassification of the
capital  stock  of the  Company  (other  than a change  in par  value of a stock
split-up) or in case of the

WARRANT - Page 3
<PAGE>

consolidation or merger of the Company with another corporation,  or in any case
of any sale,  transfer or other  disposition  to another  corporation  of all or
substantially all the property,  assets, business and goodwill of the Company as
an entirety,  as the case may be, the Holder of this Warrant shall thereafter be
entitled  to  purchase  for  the  aggregate   Warrant  Price  payable  hereunder
immediately  prior thereto in order to exercise  this Warrant in full,  the kind
and amount of shares of stock and other securities and property receivable, upon
such capital reorganization,  reclassification of capital stock,  consolidation,
merger, sale, transfer or other disposition, by a Holder of the number of shares
of Common  Stock  which this  Warrant  entitled  the Holder  thereof to purchase
immediately prior to such capital  reorganization,  reclassification  of capital
stock,  consolidation,  merger, sale, transfer or other disposition;  and in any
such case  appropriate  provisions  herein set forth with  respect to rights and
interests  thereafter  of the  Holder  of  this  Warrant,  to the end  that  the
provisions  set forth  herein  (including  the  specified  changes  in and other
adjustments  of the Warrant Price) shall  thereafter be  applicable,  as near as
reasonably  may be,  in  relation  to any  shares or other  property  thereafter
purchasable upon the exercise of this Warrant.

     1.3  In case the Company  shall  hereafter  at any time  declare a dividend
(other than a dividend payable in shares of Common Stock or a cash dividend paid
out of  retained  earnings)  upon  shares of Common  Stock,  the  Holder of this
Warrant shall, upon exercise of this Warrant in whole or in part, be entitled to
receive,  in addition to the number of shares of Common Stock  deliverable  upon
such exercise  pursuant  hereto  (including any shares  deliverable  pursuant to
Section  1.1) against  payment of the  aggregate  Warrant  Price  therefor,  but
without further  consideration,  the cash, stock or other securities or property
which the Holder of this Warrant  would have  received as  dividends  (otherwise
than a cash

WARRANT - Page 4
<PAGE>

dividend  paid out of retained  earnings and  otherwise  than a dividend paid in
shares of Common Stock) if continuously  since the date set forth at the foot of
this  Warrant  such  Holder  (i) had been the  Holder of record of the number of
shares of  Common  Stock  deliverable  upon such  exercise  hereof  and (ii) had
retained  all  dividends  in stock or other  securities  (other  than a dividend
payable in shares of Common Stock and otherwise than a cash dividend paid out of
retained earnings) paid or payable in respect of said number of shares of Common
Stock or in respect of any such stock or other  securities so paid or payable as
such dividends.

     1.4 No certificates  for fractional  shares of Common Stock shall be issued
upon the exercise of this Warrant,  but in lieu thereof the Company shall,  upon
exercise  in full of this  Warrant,  purchase  out of  funds  legally  available
therefor any such  fractional  interest from the Holder or Holders for an amount
in cash equal to the current market value of such fractional interest calculated
to the nearest cent,  computed on the basis of the mean between the high bid and
low asked prices, as reported by the applicable  quotation system, of the Common
Stock in the market on the most  recent day within ten days prior to the date of
such  exercise  for which both bid and asked prices shall have been so reported,
or, if the Common Stock is listed on a stock exchange located in the City of New
York,  the last  reported  sale price on such exchange on such day; and if there
shall have been no sale on said day, then the  computation  shall be made on the
basis of the last reported sale price on such exchange  within ten days prior to
such date.  If there have been no  reported  bid and asked  prices,  or reported
sales prices, as the case may be, within such ten days, the current market value
shall be fixed in a manner determined in good faith by the Board of Directors of
the Company.

WARRANT - Page 5
<PAGE>

     1.5  Whenever the Warrant Price is adjusted As herein provided, the Company
shall in the event of any dispute between the Company and the Holder cause to be
filed with the Warrant Agent a statement of the Company's  independent certified
public accountants  showing the adjusted Warrant Price which shall be conclusive
and  binding on the  parties.  Such  statement  shall show in detail the factors
requiring such adjustment,  including a statement of the consideration  received
by the Company for any additional securities issued.  Whenever the Warrant Price
is adjusted,  the Company will  forthwith  cause a notice stating the adjustment
and the Warrant Price to be mailed to the  registered  Holder of this Warrant at
the address of such Holder shown on the books of the Company. Where appropriate,
such notice may be given in advance and included as part of a notice required to
be mailed under the provisions of Section 1.6.

     1.6  In case at any time:

          (i)  the  Company  shall pay any  dividend  payable  in stock upon its
     Common Stock or make any  distribution  (other than cash  dividends) to the
     Holders of its Common Stock; or

          (ii) the Company shall offer for  subscription pro rata to the Holders
     of its  Common  Stock  any  additional  shares of stock of any class or any
     other rights; or

          (iii) the Company  shall  effect  any  capital  reorganization  or any
     reclassification  of or  change  in the  outstanding  capital  stock of the
     Company (other than a change in par value, or a change from par value to no
     par  value,  or a  change  from no par  value  to par  value,  or a  change
     resulting from a subdivision or combination of outstanding shares of Common
     Stock),  or any  consolidation  or merger or any  sale,  transfer  or other
     disposition of all or substantially all of its

WARRANT - Page 6
<PAGE>

     property,  assets, business and goodwill as an entirety or the liquidation,
     dissolution or winding up of the Company; or

          (iv) the  Company  shall  declare a  dividend  (other  than a dividend
     payable in shares of Common Stock or a cash  dividend  paid out of retained
     earnings) upon shares of its Common "Stock;

then,  in any such case,  the Company shall cause notice at least ten days prior
to the record date or the date on which the transfer  books of the Company shall
be closed to be mailed to the Warrant Agent and to the registered Holder of this
Warrant at the address of such Holder  shown on the books of the  Company.  Such
notice  shall  also  specify  the date on which the books of the  Company  shall
close,  or  a  record  be  taken,  for  such  stock  dividend,  distribution  or
subscription  rights,  or the  estimated  date on which  such  reclassification,
reorganization, consolidation, merger, sale, transfer, disposition, liquidation,
dissolution,  winding up or dividend,  as the case may be, shall take place, and
the date of  participation  therein by the  Holders of Common  Stock if any such
date is to be fixed, and shall also set forth such fact with respect thereto, as
shall be  reasonably  necessary  to  indicate  the effect of such  action on the
rights  of the  Holders  of the  Warrants.  Such  notice  shall not be deemed an
admission that any right of the Holder hereof has accrued.

     1.7  In case at any time the Company  shall pay any cash  dividend  payable
upon its Common Stock,  then in any such case, the Company shall cause notice at
least ten (10) days prior to the record date for such cash  dividend or the date
on which the transfer books of the Company shall be closed,  to be given by mail
to the registered  Holder of this Warrant at the address of such Holder shown on
the books of the Company,  and such notice shall  specify the amount of the cash
dividend and the date on which the books of the Company

WARRANT - Page 7
<PAGE>

shall close, or a record be taken,  for such cash dividend;  provided,  however,
that such notice need not be mailed if shares of the Company's  Common Stock are
listed on a national  securities exchange located in the City of New York, N.Y.,
and the Company has complied with its agreement  with such exchange with respect
to notice thereto of such cash dividend.

     2.1  At any time after  December  5, 2002 any Holder or Holders may request
in writing to the Company  that it take such  action,  at the Holder or Holders'
expense,  as may be necessary in order to permit such Holder or Holders publicly
to offer and sell the shares of Common  Stock  issuable  or issued to him, it or
them on the exercise of the Warrants in  compliance  with  applicable  state and
Federal law.

     3.1  The issue of any stock or other  certificate upon the exercise of this
Warrant shall be made without charge to the registered Holder hereof for any tax
in respect of the issue of such certificate.  The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and  delivery of any  certificate  in a name other than that of the
registered  Holder of this  Warrant,  and the  Company  shall not be required to
issue or  deliver  any such  certificate  unless and until the person or persons
requesting  the issue  thereof shall have paid to the Company the amount of such
tax or shall have  established to  satisfaction of the Company that such tax has
been paid.

     3.2  This  Warrant,  which  is not  registered  under  the  Act,  shall  be
transferable only to "accredited" investors in conformity with the Act. Any such
transfer  shall  be made  upon  surrender  of this  Warrant,  with  the  form of
Assignment  attached hereto duly executed by the registered  Holder hereof or by
his attorney duly  authorized in writing,  to the Warrant Agent at its principal
office hereinabove referred to, and thereupon there shall be issued in

WARRANT - Page 8
<PAGE>

the name of the transferee or transferees,  in exchange for this Warrant,  a new
Warrant or Warrants of like tenor and date,  representing  in the  aggregate the
right to  subscribe  for and  purchase  the  number of shares,  or such  portion
thereof  as shall be  transferred,  which may be  subscribed  for and  purchased
hereunder  and if there shall be any balance of such shares not so  transferred,
there shall be issued in the name of the  registered  Holder of this Warrant,  a
new Warrant or Warrants of like tenor and date representing in the aggregate the
right to  subscribe  for and  purchase the balance of the number of shares which
may be subscribed  for and purchased  hereunder.  In the case of any transfer of
this Warrant,  or any part hereof, the person,  firm or corporation to whom such
transfer  is made shall agree with the Company in writing to be bound by, and to
observe, all of the terms and conditions herein set forth.

     3.3  If this Warrant shall be lost,  stolen,  mutilated or  destroyed,  the
Company  may  instruct  the  Warrant  Agent,  on such terms as to  indemnity  or
otherwise as the Company may in its discretion impose, to issue a new Warrant of
like denomination,  tenor and date as the Warrant so lost, stolen,  mutilated or
destroyed.  Any  such new  Warrant  shall  constitute  an  original  contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated,
or destroyed Warrant shall be at any time enforceable by anyone.

     3.4  The Company and any  Warrant  Agent may deem and treat the  registered
Holder of this  Warrant as the  absolute  owner of this Warrant for all purposes
and shall not be affected by any notice to the contrary.

     3.5  This  Warrant  shall  not  entitle  the  Holder  to  any  rights  of a
shareholder  of the  Company,  either at law or in  equity,  including,  without
limitation,  the right to vote,  to receive  dividends  and other  distributions
(except as permitted by this Agreement), to

WARRANT - Page 9
<PAGE>

exercise  any  preemptive  rights  or to  receive  any  notice  of  meetings  of
shareholders or of any other proceedings of the Company.

     3.6  This  Warrant,  in all  events,  shall  not be  exercisable  prior  to
December 5, 2002 and shall be wholly void and have no effect  after  December 5,
2004.

     3.7  This Warrant shall be governed by the laws of the State of Texas.

Dated:  December 5, 2002.

                                        MEXCO ENERGY CORPORATION

                                        By ____________________________
                                               President

WARRANT - Page 10
<PAGE>

                              ELECTION TO SUBSCRIBE

                                                    Date: ________________, 2002

     The undersigned  hereby  subscribes for ___________ of the shares of Common
Stock covered by the within Warrant and tenders  payment  herewith in the amount
of $_____________ in accordance with the terms thereof:

Issue certificate(s) for said stock to:      Deliver certificate(s) against
                                             counter recipient by mail to:

---------------------------                  -----------------------------
(Name)                                       (Name)

---------------------------                  -----------------------------
(Taxpayer Identification No.)                (Street and Number)

---------------------------                  -----------------------------
(Street and Number)                          (City, State and Zip)

---------------------------
(City, State and Zip)

and if said  number of  shares  shall not be all of the  shares  covered  by the
within  Warrant,  that a new Warrant for the balance of the shares  remaining be
registered in the name of, and delivered as follows:

Issue Warrant for said shares to:            Deliver Warrant against counter
                                             receipt by mail to:
---------------------------                  ------------------------------
(Name)                                       (Name)

---------------------------                  -----------------------------
(Taxpayer Identification No.)                (Street and Number)

---------------------------                  -----------------------------
(Street and Number)                          (City, State and Zip)

---------------------------
(City, State and Zip)

WARRANT - Page 11
<PAGE>

                                        Very truly yours,


                                        ----------------------------------
                                        (Signature of Subscriber or Agent)


     For value  received  _________________________  hereby  sells,  assigns and
transfers unto the persons named in Exhibit A hereto, all of whom are accredited
investors  within the meaning of the Securities Act of 1933, as amended,  in the
respective  amounts  set  forth  opposite  their  respective  names the right to
purchase an  aggregate  of 107,500 of the shares of Common Stock of MEXCO ENERGY
CORPORATION, a Colorado corporation,  which rights are represented by the within
Warrant, and does hereby irrevocably constitute and appoint ____________________
attorney to transfer said rights on the books of the within named Company,  with
full power of substitution in the premises.


                                        ------------------------------

                                        By:
                                           ---------------------------
Dated:
      --------------------------


In the Presence of

--------------------------------

WARRANT - Page 12

</TEXT>
</DOCUMENT>
