FORT
WORTH, Texas, Aug. 8, 2023
/PRNewswire/ -- PHX MINERALS INC., "PHX" or the "Company"
(NYSE: PHX), today reported financial and operating results for the
quarter ended June 30, 2023.
Summary of Results for the Quarter Ended June 30, 2023
- Net loss was ($0.04) million, or
$0.00 per share, compared to net
income of $9.6 million, or
$0.27 per share, for the quarter
ended March 31, 2023, and net income
of $8.6 million, or $0.25 per share, for the quarter ended
June 30, 2022.
- Adjusted pretax net income(1) was $0.6 million, or $0.02 per share, compared to $4.7 million, or $0.13 per share, for the quarter ended
March 31, 2023, and $4.3 million, or $0.12 per share, for the quarter ended
June 30, 2022.
- Adjusted EBITDA(1) was $4.1
million, compared to $7.7
million for the quarter ended March
31, 2023, and $7.2 million for
the quarter ended June 30, 2022.
- Royalty production volumes decreased 4% to 2,010 Mmcfe compared
to the quarter ended March 31, 2023,
and increased 26% compared to the quarter ended June 30, 2022.
- Total production volumes decreased 7% to 2,304 Mmcfe compared
to the quarter ended March 31, 2023,
and decreased 5% compared to the quarter ended June 30, 2022.
- Converted 81 gross (0.30 net) wells to producing status,
compared to 117 gross (0.46 net) during the quarter ended
March 31, 2023 and 96 gross (0.25
net) during the quarter ended June 30,
2022.
- Inventory of 186 gross (0.51 net) wells in progress and 86
gross (0.40 net) permits as of June 30,
2023, compared to 198 gross (0.65 net) wells in progress and
86 gross (0.24 net) permits as of March 31,
2023.
- Total debt was $23.8 million and
the debt to adjusted EBITDA (TTM) (1) ratio was 0.93x at
June 30, 2023.
- PHX closed on acquisitions totaling 151 net royalty acres
located in the SCOOP and the Haynesville plays for approximately
$1.8 million.
- PHX announced a $0.0225 per share
quarterly dividend, payable on Sept. 8,
2023, to stockholders of record as of Aug. 24, 2023.
(1) This is a
non-GAAP measure. Refer to the Non-GAAP Reconciliation section.
Chad L. Stephens, President and
CEO, commented, "We continue to experience significant activity on
our minerals including wells being put on production, new wells
being spud and new permitting, demonstrating the quality of our
assets even during a down market with lower natural gas prices.
During the quarter, we experienced increased rig activity on our
minerals compared to a year ago, expanding our market share of rigs
operating within our core regions. The sequential decline in
royalty volumes during the quarter is primarily attributable to the
timing of wells being placed online. We continually monitor
operator activity across our mineral position and are confident
that the timing of our wells in progress will support our royalty
volume growth allowing us to achieve our royalty volume outlook for
calendar 2023, driving revenue growth and increasing cash flow.
"It appears the second quarter likely represented the bottom for
natural gas prices and current macro dynamics suggest sequential
price improvements in the remainder of the year," said Stephens.
"In spite of a dramatic drop in natural gas prices in the second
quarter, PHX Minerals remained focused on proactively allocating
its free cash flow to fund acquisitions, return capital to
shareholders via our fixed dividend and improving our liquidity
position. This speaks to the inherent benefits of our business
model in mitigating risks and expanding margins to maximize cash
flow. The acquisition market dynamics are improving as natural gas
prices stabilize. Our strong balance sheet and cash flow provide
ample liquidity to deploy judiciously to fund our growth
strategy."
Financial
Highlights
|
|
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
Royalty Interest
Sales
|
|
$
|
6,217,663
|
|
|
$
|
12,473,415
|
|
|
$
|
16,341,404
|
|
|
$
|
21,352,409
|
|
Working Interest
Sales
|
|
$
|
1,013,501
|
|
|
$
|
7,088,153
|
|
|
$
|
2,747,007
|
|
|
$
|
12,993,024
|
|
Natural Gas, Oil and
NGL Sales
|
|
$
|
7,231,164
|
|
|
$
|
19,561,568
|
|
|
$
|
19,088,411
|
|
|
$
|
34,345,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains (Losses) on
Derivative Contracts
|
|
$
|
183,006
|
|
|
$
|
(2,387,226)
|
|
|
$
|
3,985,826
|
|
|
$
|
(15,370,632)
|
|
Lease Bonuses and
Rental Income
|
|
$
|
111,991
|
|
|
$
|
209,329
|
|
|
$
|
425,141
|
|
|
$
|
371,237
|
|
Total
Revenue
|
|
$
|
7,526,161
|
|
|
$
|
17,383,671
|
|
|
$
|
23,499,378
|
|
|
$
|
19,346,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Operating
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
per Working Interest
Mcfe
|
|
$
|
1.07
|
|
|
$
|
1.08
|
|
|
$
|
1.26
|
|
|
$
|
1.05
|
|
Transportation,
Gathering and Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
per Mcfe
|
|
$
|
0.39
|
|
|
$
|
0.59
|
|
|
$
|
0.43
|
|
|
$
|
0.60
|
|
Production Tax per
Mcfe
|
|
$
|
0.20
|
|
|
$
|
0.38
|
|
|
$
|
0.22
|
|
|
$
|
0.33
|
|
G&A Expense per
Mcfe
|
|
$
|
1.38
|
|
|
$
|
1.18
|
|
|
$
|
1.29
|
|
|
$
|
1.15
|
|
Cash G&A Expense
per Mcfe (1)
|
|
$
|
1.07
|
|
|
$
|
0.95
|
|
|
$
|
1.01
|
|
|
$
|
0.94
|
|
Interest Expense per
Mcfe
|
|
$
|
0.23
|
|
|
$
|
0.12
|
|
|
$
|
0.23
|
|
|
$
|
0.11
|
|
DD&A per
Mcfe
|
|
$
|
0.96
|
|
|
$
|
0.83
|
|
|
$
|
0.86
|
|
|
$
|
0.85
|
|
Total Expense per
Mcfe
|
|
$
|
3.30
|
|
|
$
|
3.47
|
|
|
$
|
3.21
|
|
|
$
|
3.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
|
$
|
(41,291)
|
|
|
$
|
8,589,010
|
|
|
$
|
9,511,953
|
|
|
$
|
4,568,555
|
|
Adjusted EBITDA
(2)
|
|
$
|
4,086,707
|
|
|
$
|
7,194,102
|
|
|
$
|
11,826,947
|
|
|
$
|
13,013,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from
Operations (3)
|
|
$
|
4,915,788
|
|
|
$
|
8,404,654
|
|
|
$
|
13,849,265
|
|
|
$
|
15,700,984
|
|
CapEx
(4)
|
|
$
|
84,593
|
|
|
$
|
72,176
|
|
|
$
|
275,419
|
|
|
$
|
158,847
|
|
CapEx - Mineral
Acquisitions
|
|
$
|
1,677,388
|
|
|
$
|
8,954,133
|
|
|
$
|
11,914,003
|
|
|
$
|
18,228,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowing
Base
|
|
|
|
|
|
|
|
$
|
45,000,000
|
|
|
$
|
50,000,000
|
|
Debt
|
|
|
|
|
|
|
|
$
|
23,750,000
|
|
|
$
|
28,300,000
|
|
Debt to Adjusted EBITDA
(TTM) (2)
|
|
|
|
|
|
|
|
|
0.93
|
|
|
|
1.31
|
|
|
|
(1)
|
Cash G&A expense is
G&A excluding restricted stock and deferred director's expense
from the adjusted EBITDA table in the non-GAAP Reconciliation
section.
|
(2)
|
This is a non-GAAP
measure. Refer to the Non-GAAP Reconciliation section.
|
(3)
|
GAAP cash flow from
operations.
|
(4)
|
Includes legacy working
interest expenditures and fixtures and equipment.
|
Operating
Highlights
|
|
|
|
|
Three
Months Ended
|
|
|
Three
Months Ended
|
|
|
Six
Months Ended
|
|
|
Six
Months Ended
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
Gas Mcf Sold
|
|
1,854,485
|
|
|
|
1,897,799
|
|
|
|
3,813,496
|
|
|
|
3,805,829
|
|
Average Sales Price per
Mcf before the
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
1.92
|
|
|
$
|
6.82
|
|
|
$
|
2.75
|
|
|
$
|
5.65
|
|
Average Sales Price per
Mcf after the
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
2.49
|
|
|
$
|
4.32
|
|
|
$
|
3.18
|
|
|
$
|
3.80
|
|
% of sales subject to
hedges
|
|
45
|
%
|
|
|
63
|
%
|
|
|
47
|
%
|
|
|
62
|
%
|
Oil Barrels
Sold
|
|
41,009
|
|
|
|
48,928
|
|
|
|
95,116
|
|
|
|
100,559
|
|
Average Sales Price per
Bbl before the
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
73.87
|
|
|
$
|
105.23
|
|
|
$
|
75.09
|
|
|
$
|
98.06
|
|
Average Sales Price per
Bbl after the
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
73.80
|
|
|
$
|
60.18
|
|
|
$
|
71.58
|
|
|
$
|
62.02
|
|
% of sales subject to
hedges
|
|
53
|
%
|
|
|
73
|
%
|
|
|
49
|
%
|
|
|
73
|
%
|
NGL Barrels
Sold
|
|
33,929
|
|
|
|
39,732
|
|
|
|
67,033
|
|
|
|
80,103
|
|
Average Sales Price per
Bbl(1)
|
$
|
18.93
|
|
|
$
|
36.76
|
|
|
$
|
22.02
|
|
|
$
|
37.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mcfe Sold
|
|
2,304,113
|
|
|
|
2,429,760
|
|
|
|
4,786,390
|
|
|
|
4,889,802
|
|
Natural gas, oil and
NGL sales before the
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
7,231,164
|
|
|
$
|
19,561,568
|
|
|
$
|
19,088,411
|
|
|
$
|
34,345,433
|
|
Natural gas, oil and
NGL sales after the
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
8,280,104
|
|
|
$
|
12,607,397
|
|
|
$
|
20,394,028
|
|
|
$
|
23,687,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) There were no NGL
settled derivative contracts during the 2023 and 2022
quarters.
|
|
Total Production for the last four quarters was as follows:
Quarter
ended
|
|
Mcf Sold
|
|
|
Oil Bbls
Sold
|
|
|
NGL Bbls
Sold
|
|
|
Mcfe Sold
|
|
6/30/2023
|
|
|
1,854,485
|
|
|
|
41,009
|
|
|
|
33,929
|
|
|
|
2,304,113
|
|
3/31/2023
|
|
|
1,959,010
|
|
|
|
54,107
|
|
|
|
33,104
|
|
|
|
2,482,276
|
|
12/31/2022
|
|
|
1,669,320
|
|
|
|
52,406
|
|
|
|
38,611
|
|
|
|
2,215,419
|
|
9/30/2022
|
|
|
2,047,614
|
|
|
|
49,902
|
|
|
|
40,761
|
|
|
|
2,591,588
|
|
Total production volumes attributable to natural gas were 80%
for the quarter ended June 30,
2023.
Royalty Interest Production for the last four quarters was as
follows:
Quarter
ended
|
|
Mcf Sold
|
|
|
Oil Bbls
Sold
|
|
|
NGL Bbls
Sold
|
|
|
Mcfe Sold
|
|
6/30/2023
|
|
|
1,673,346
|
|
|
|
35,599
|
|
|
|
20,516
|
|
|
|
2,010,036
|
|
3/31/2023
|
|
|
1,700,974
|
|
|
|
45,395
|
|
|
|
20,063
|
|
|
|
2,093,722
|
|
12/31/2022
|
|
|
1,303,825
|
|
|
|
33,691
|
|
|
|
20,353
|
|
|
|
1,628,089
|
|
9/30/2022
|
|
|
1,525,363
|
|
|
|
32,202
|
|
|
|
20,488
|
|
|
|
1,841,502
|
|
Royalty production volumes attributable to natural gas were 83%
for the quarter ended June 30,
2023.
Working Interest Production for the last four quarters was as
follows:
Quarter
ended
|
|
Mcf Sold
|
|
|
Oil Bbls
Sold
|
|
|
NGL Bbls
Sold
|
|
|
Mcfe Sold
|
|
6/30/2023
|
|
|
181,139
|
|
|
|
5,410
|
|
|
|
13,413
|
|
|
|
294,077
|
|
3/31/2023
|
|
|
258,036
|
|
|
|
8,712
|
|
|
|
13,041
|
|
|
|
388,554
|
|
12/31/2022
|
|
|
365,495
|
|
|
|
18,715
|
|
|
|
18,258
|
|
|
|
587,330
|
|
9/30/2022
|
|
|
522,251
|
|
|
|
17,700
|
|
|
|
20,273
|
|
|
|
750,086
|
|
Quarter Ended June 30, 2023,
Results
The Company recorded net loss of ($0.04)
million, or $0.00 per share,
for the quarter ended June 30, 2023,
as compared to net income of $8.6
million, or $0.25 per share,
for the quarter ended June 30, 2022.
The change in net income was principally the result of a decrease
in natural gas, oil and NGL sales and a decrease in gains on asset
sales, partially offset by an increase in gains associated with our
hedge contracts and a decrease in income tax provision.
Natural gas, oil and NGL revenue decreased $12.3 million, or 63%, for the quarter ended
June 30, 2023, compared to the
quarter ended June 30, 2022, due to
decreases in natural gas, oil and NGL prices of 72%, 30% and 49%,
respectively, and decreases in natural gas, oil and NGL volumes of
2%, 16% and 15%, respectively.
The production increase in royalty volumes during the quarter
ended June 30, 2023, as compared to
the quarter ended June 30, 2022,
resulted from new wells in the Haynesville Shale coming online.
The Company had a net gain on derivative contracts of
$0.2 million for the quarter ended
June 30, 2023, compromised of a
$1.0 million gain on settled
derivatives and a $0.9 million
non-cash loss on derivatives, as compared to a net loss of
($2.4) million for the quarter ended
June 30, 2022. The change in net gain
on derivative contracts was due to the Company's settlements of
natural gas and oil collars and fixed price swaps and the change in
valuation caused by the difference in June
30, 2023 pricing relative to the strike price on open
derivative contracts.
Six Months Ended June 30, 2023,
Results
The Company recorded net income of $9.5
million, or $0.26 per share,
for the six months ended June 30,
2023, as compared to a net income of $4.6 million, or $0.13 per share, for the six months ended
June 30, 2022. The change in net
income was principally the result of an increase in gains
associated with our hedge contracts and an increase in gains on
asset sales, partially offset by a decrease in natural gas, oil and
NGL sales and an increase in income tax provision.
Natural gas, oil and NGL revenue decreased $15.3 million, or 44%, for the six months ended
June 30, 2023, compared to the six
months ended June 30, 2022, due to
decreases in natural gas, oil and NGL prices of 51%, 23% and 41%,
respectively, and decreases in oil and NGL volumes of 5% and 16%,
respectively.
The production increase in royalty volumes during the six months
ended June 30, 2023, as compared to
the six months ended June 30, 2022,
resulted from new wells in the Haynesville Shale coming online.
The Company had a net gain on derivative contracts of
$4.0 million for the six months ended
June 30, 2023, compromised of a
$1.7 million gain on settled
derivatives and a $2.3 million
non-cash gain on derivatives, as compared to a net loss of
($15.4) million for the six months
ended June 30, 2022. Gain on settled
derivative contracts for the six months ended June 30, 2023, excludes $0.4 million of cash paid to settle off-market
derivative contracts. The total cash received to settle hedge
contracts during the six months ended June
30, 2023 was $1.3 million. The
change in net gain on derivative contracts was due to the Company's
settlements of natural gas and oil collars and fixed price swaps
and the change in valuation caused by the difference in
June 30, 2023 pricing relative to the
strike price on open derivative contracts.
Operations Update
During the quarter ended June 30,
2023, the Company converted 81 gross (0.30 net)
wells to producing status, including 26 gross (0.20 net) wells in
the Haynesville and 20 gross (0.06 net) wells in the SCOOP,
compared to 96 gross (0.25 net) wells in the quarter ended
June 30, 2022.
At June 30, 2023, the Company had
a total of 186 gross (0.51 net) wells in progress across its
mineral positions and 86 gross (0.40 net) active permitted wells,
compared to 198 gross (0.65 net) wells in progress and 86 gross
(0.24 net) active permitted wells at March
31, 2023. As of July 10, 2023,
15 rigs were operating on the Company's acreage and 61 rigs
operating within 2.5 miles of its acreage.
|
|
|
|
|
|
|
Bakken/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
Arkoma
|
|
|
|
|
|
|
|
|
|
|
|
SCOOP
|
|
|
STACK
|
|
|
Forks
|
|
|
Stack
|
|
|
Haynesville
|
|
|
Other
|
|
|
Total
|
|
As of June 30,
2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Wells in Progress
on PHX Acreage (1)
|
|
68
|
|
|
|
12
|
|
|
|
8
|
|
|
|
5
|
|
|
|
84
|
|
|
|
9
|
|
|
|
186
|
|
Net Wells in Progress
on PHX Acreage (1)
|
|
0.174
|
|
|
|
0.025
|
|
|
|
0.001
|
|
|
|
0.001
|
|
|
|
0.284
|
|
|
|
0.028
|
|
|
|
0.513
|
|
Gross Active Permits on
PHX Acreage
|
|
30
|
|
|
|
11
|
|
|
|
13
|
|
|
|
5
|
|
|
|
21
|
|
|
|
6
|
|
|
|
86
|
|
Net Active Permits on
PHX Acreage
|
|
0.115
|
|
|
|
0.046
|
|
|
|
0.049
|
|
|
|
0.002
|
|
|
|
0.161
|
|
|
|
0.025
|
|
|
|
0.398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of July 10,
2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rigs Present on PHX
Acreage
|
|
5
|
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8
|
|
|
|
-
|
|
|
|
15
|
|
Rigs Within 2.5 Miles
of PHX Acreage
|
|
12
|
|
|
|
15
|
|
|
|
3
|
|
|
|
1
|
|
|
|
23
|
|
|
|
7
|
|
|
|
61
|
|
|
|
(1)
|
Wells in progress
includes drilling wells and drilled but uncompleted wells,
or DUCs.
|
Leasing Activity
During the quarter ended June 30,
2023, the Company leased 367 net mineral acres for an
average bonus payment of $526 per net
mineral acre and an average royalty of 23%.
Acquisition and Divestiture Update
During the quarter ended June 30,
2023, the Company purchased 151 net royalty acres for
approximately $1.8 million and had no
significant divestitures.
|
|
Acquisitions
|
|
|
|
SCOOP
|
|
|
Haynesville
|
|
|
Other
|
|
|
Total
|
|
During Three Months
Ended June 30, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Mineral Acres
Purchased
|
|
|
113
|
|
|
|
5
|
|
|
|
-
|
|
|
|
118
|
|
Net Royalty Acres
Purchased
|
|
|
144
|
|
|
|
7
|
|
|
|
-
|
|
|
|
151
|
|
Outlook
PHX is providing an updated operational outlook for 2023 as
follows:
|
|
Calendar Year
2022
Actual
|
|
Calendar Year
2023
YTD Actual
|
|
Calendar Year
2023
Outlook
|
Mineral & Royalty
Production (Mmcfe)
|
|
6,613
|
|
4,104
|
|
7,600 -
8,600
|
Working Interest
Production (Mmcfe)
|
|
3,084
|
|
683
|
|
1,200 -
1,400(1)
|
Total Production
(Mmcfe)
|
|
9,697
|
|
4,787
|
|
8,800 -
10,000
|
Percentage Natural
Gas
|
|
78 %
|
|
80 %
|
|
78% - 83%
|
|
|
|
|
|
|
|
Transportation,
Gathering & Marketing (per Mcfe)
|
|
$0.63
|
|
$0.43
|
|
$0.45 -
$0.50
|
Production Tax (as % of
pre-hedge sales volumes)
|
|
4.50 %
|
|
5.50 %
|
|
5.50% -
6.00%
|
LOE Expenses (on an
absolute basis in 000's)
|
|
$3,807
|
|
$860
|
|
$1,200 -
$1,400
|
Cash G&A (per
Mcfe)
|
|
$1.01
|
|
$1.01
|
|
$1.00 -
$1.06
|
|
|
(1)
|
Pro-forma divestitures
of Eagle Ford and Arkoma working interest assets, excludes
potential future sales of additional working interest
assets.
|
Quarterly Conference Call
PHX will host a conference call to discuss the Company's results
for the quarter ended June 30,
2023, at 11 a.m. EDT tomorrow,
Aug. 9, 2023. Management's discussion
will be followed by a question-and-answer session with
investors.
To participate on the conference call, please dial 877-407-3088
(toll-free domestic) or 201-389-0927. A replay of the call will be
available for 14 days after the call. The number to access the
replay of the conference call is 877-660-6853 and the PIN for the
replay is 13740305.
A live audio webcast of the conference call will be accessible
from the "Investors" section of PHX's website at
https://phxmin.com/events. The webcast will be archived for at
least 90 days.
FINANCIAL
RESULTS
|
|
|
|
Statements of
Operations
|
|
|
|
|
Three Months Ended June
30,
|
|
|
Six Months Ended June
30,
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Revenues:
|
|
|
|
|
|
Natural gas, oil and
NGL sales
|
$
|
7,231,164
|
|
|
$
|
19,561,568
|
|
|
$
|
19,088,411
|
|
|
$
|
34,345,433
|
|
Lease bonuses and
rental income
|
|
111,991
|
|
|
|
209,329
|
|
|
|
425,141
|
|
|
|
371,237
|
|
Gains (losses) on
derivative contracts
|
|
183,006
|
|
|
|
(2,387,226)
|
|
|
|
3,985,826
|
|
|
|
(15,370,632)
|
|
|
|
7,526,161
|
|
|
|
17,383,671
|
|
|
|
23,499,378
|
|
|
|
19,346,038
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
314,150
|
|
|
|
900,807
|
|
|
|
859,917
|
|
|
|
1,830,261
|
|
Transportation,
gathering and marketing
|
|
906,373
|
|
|
|
1,430,136
|
|
|
|
2,035,129
|
|
|
|
2,918,654
|
|
Production
taxes
|
|
461,893
|
|
|
|
925,197
|
|
|
|
1,043,326
|
|
|
|
1,622,590
|
|
Depreciation,
depletion and amortization
|
|
2,210,332
|
|
|
|
2,022,832
|
|
|
|
4,100,322
|
|
|
|
4,143,948
|
|
Provision for
impairment
|
|
-
|
|
|
|
6,277
|
|
|
|
2,073
|
|
|
|
6,277
|
|
Interest
expense
|
|
524,294
|
|
|
|
286,345
|
|
|
|
1,081,767
|
|
|
|
516,557
|
|
General and
administrative
|
|
3,177,103
|
|
|
|
2,877,614
|
|
|
|
6,159,012
|
|
|
|
5,621,878
|
|
Losses (gains) on
asset sales and other
|
|
139,307
|
|
|
|
(630,547)
|
|
|
|
(4,195,121)
|
|
|
|
(2,891,682)
|
|
Total costs and
expenses
|
|
7,733,452
|
|
|
|
7,818,661
|
|
|
|
11,086,425
|
|
|
|
13,768,483
|
|
Income (loss) before
provision (benefit) for income taxes
|
|
(207,291)
|
|
|
|
9,565,010
|
|
|
|
12,412,953
|
|
|
|
5,577,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for
income taxes
|
|
(166,000)
|
|
|
|
976,000
|
|
|
|
2,901,000
|
|
|
|
1,009,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(41,291)
|
|
|
$
|
8,589,010
|
|
|
$
|
9,511,953
|
|
|
$
|
4,568,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per common share
|
$
|
(0.00)
|
|
|
$
|
0.25
|
|
|
$
|
0.26
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
35,965,281
|
|
|
|
34,652,155
|
|
|
|
35,950,615
|
|
|
|
34,473,247
|
|
Diluted
|
|
35,965,281
|
|
|
|
34,851,214
|
|
|
|
36,034,438
|
|
|
|
34,473,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share
of
|
|
|
|
|
|
|
|
|
|
|
|
common stock paid in
period
|
$
|
0.0225
|
|
|
$
|
0.02
|
|
|
$
|
0.045
|
|
|
$
|
0.035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
Sheets
|
|
|
|
|
June 30,
2023
|
|
|
Dec. 31,
2022
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,267,627
|
|
|
$
|
2,115,652
|
|
Natural gas, oil, and
NGL sales receivables (net of $0
|
|
5,839,904
|
|
|
|
9,783,996
|
|
allowance for
uncollectable accounts)
|
|
|
|
|
|
Refundable income
taxes
|
|
675,268
|
|
|
|
-
|
|
Derivative contracts,
net
|
|
1,371,377
|
|
|
|
-
|
|
Held for sale
assets
|
|
-
|
|
|
|
6,420,051
|
|
Other
|
|
370,896
|
|
|
|
1,543,956
|
|
Total current
assets
|
|
9,525,072
|
|
|
|
19,863,655
|
|
|
|
|
|
|
|
Properties and
equipment at cost, based on
|
|
|
|
|
|
successful
efforts accounting:
|
|
|
|
|
|
Producing natural gas
and oil properties
|
|
189,868,020
|
|
|
|
181,431,139
|
|
Non-producing natural
gas and oil properties
|
|
61,180,555
|
|
|
|
57,781,644
|
|
Other
|
|
1,347,124
|
|
|
|
1,122,436
|
|
|
|
252,395,699
|
|
|
|
240,335,219
|
|
Less accumulated
depreciation, depletion and amortization
|
|
(110,426,239)
|
|
|
|
(107,085,212)
|
|
Net properties and
equipment
|
|
141,969,460
|
|
|
|
133,250,007
|
|
|
|
|
|
|
|
Derivative contracts,
net
|
|
-
|
|
|
|
141,345
|
|
Operating lease
right-of-use assets
|
|
640,799
|
|
|
|
706,871
|
|
Other, net
|
|
596,874
|
|
|
|
695,399
|
|
Total assets
|
$
|
152,732,205
|
|
|
$
|
154,657,277
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
270,780
|
|
|
$
|
504,466
|
|
Derivative contracts,
net
|
|
-
|
|
|
|
1,534,034
|
|
Income taxes
payable
|
|
-
|
|
|
|
576,427
|
|
Current portion of
operating lease liability
|
|
226,389
|
|
|
|
217,656
|
|
Held for sale
liabilities
|
|
-
|
|
|
|
889,155
|
|
Accrued liabilities
and other
|
|
1,342,795
|
|
|
|
3,121,522
|
|
Total current
liabilities
|
|
1,839,964
|
|
|
|
6,843,260
|
|
|
|
|
|
|
|
Long-term
debt
|
|
23,750,000
|
|
|
|
33,300,000
|
|
Deferred income taxes,
net
|
|
5,132,906
|
|
|
|
2,453,906
|
|
Asset retirement
obligations
|
|
1,041,177
|
|
|
|
1,027,777
|
|
Derivative contracts,
net
|
|
83,857
|
|
|
|
-
|
|
Operating lease
liability, net of current portion
|
|
814,169
|
|
|
|
929,208
|
|
|
|
|
|
|
|
Total
liabilities
|
|
32,662,073
|
|
|
|
44,554,151
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Common Stock, $0.01666
par value; 54,000,500 shares authorized and
|
|
|
|
|
|
35,938,900 issued at
June 30, 2023; 54,000,500 shares authorized
|
|
|
|
|
|
and 35,938,206 issued
at Dec. 31, 2022
|
|
598,742
|
|
|
|
598,731
|
|
Capital in excess of
par value
|
|
43,782,600
|
|
|
|
43,344,916
|
|
Deferred directors'
compensation
|
|
1,368,956
|
|
|
|
1,541,070
|
|
Retained
earnings
|
|
77,555,195
|
|
|
|
68,925,774
|
|
|
|
123,305,493
|
|
|
|
114,410,491
|
|
Less treasury stock,
at cost; 225,723 shares at June 30,
|
|
|
|
|
|
2023, and 300,272
shares at Dec. 31, 2022
|
|
(3,235,361)
|
|
|
|
(4,307,365)
|
|
Total stockholders'
equity
|
|
120,070,132
|
|
|
|
110,103,126
|
|
Total liabilities and
stockholders' equity
|
$
|
152,732,205
|
|
|
$
|
154,657,277
|
|
Condensed Statements of
Cash Flows
|
|
|
|
|
Six Months Ended June
30,
|
|
|
2023
|
|
|
2022
|
|
Operating
Activities
|
|
|
Net income
(loss)
|
$
|
9,511,953
|
|
|
$
|
4,568,555
|
|
Adjustments to
reconcile net income (loss) to net cash provided
|
|
|
|
|
|
by operating
activities:
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
4,100,322
|
|
|
|
4,143,948
|
|
Impairment of
producing properties
|
|
2,073
|
|
|
|
6,277
|
|
Provision for deferred
income taxes
|
|
2,679,000
|
|
|
|
(159,000)
|
|
Gain from leasing fee
mineral acreage
|
|
(425,141)
|
|
|
|
(370,131)
|
|
Proceeds from leasing
fee mineral acreage
|
|
488,173
|
|
|
|
450,881
|
|
Net (gain) loss on
sales of assets
|
|
(4,428,212)
|
|
|
|
(3,028,394)
|
|
Directors' deferred
compensation expense
|
|
109,383
|
|
|
|
79,728
|
|
Total (gain) loss on
derivative contracts
|
|
(3,985,826)
|
|
|
|
15,370,632
|
|
Cash receipts
(payments) on settled derivative contracts
|
|
1,865,779
|
|
|
|
(1,215,245)
|
|
Restricted stock award
expense
|
|
1,228,871
|
|
|
|
963,203
|
|
Other
|
|
70,526
|
|
|
|
18,515
|
|
Cash provided (used)
by changes in assets and liabilities:
|
|
|
|
|
|
Natural gas, oil and
NGL sales receivables
|
|
3,944,092
|
|
|
|
(3,760,490)
|
|
Other current
assets
|
|
405,055
|
|
|
|
247,518
|
|
Accounts
payable
|
|
(228,305)
|
|
|
|
(155,410)
|
|
Income taxes
receivable
|
|
(675,268)
|
|
|
|
(860,416)
|
|
Other non-current
assets
|
|
95,283
|
|
|
|
(403,745)
|
|
Income taxes
payable
|
|
(576,427)
|
|
|
|
(499,939)
|
|
Accrued
liabilities
|
|
(332,066)
|
|
|
|
304,497
|
|
Total
adjustments
|
|
4,337,312
|
|
|
|
11,132,429
|
|
Net cash provided by
operating activities
|
|
13,849,265
|
|
|
|
15,700,984
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
Capital
expenditures
|
|
(275,419)
|
|
|
|
(158,847)
|
|
Acquisition of
minerals and overriding royalty interests
|
|
(11,914,003)
|
|
|
|
(18,228,580)
|
|
Net proceeds from
sales of assets
|
|
9,223,405
|
|
|
|
3,265,897
|
|
Net cash provided
(used) by investing activities
|
|
(2,966,017)
|
|
|
|
(15,121,530)
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
Borrowings under
credit facility
|
|
6,000,000
|
|
|
|
10,300,000
|
|
Payments of loan
principal
|
|
(15,550,000)
|
|
|
|
(2,000,000)
|
|
Net proceeds from
equity issuance
|
|
-
|
|
|
|
4,702,619
|
|
Cash receipts from
(payments on) off-market derivative contracts
|
|
(560,162)
|
|
|
|
(9,443,174)
|
|
Purchases of treasury
stock
|
|
(669)
|
|
|
|
-
|
|
Payments of
dividends
|
|
(1,620,442)
|
|
|
|
(1,208,967)
|
|
Net cash provided
(used) by financing activities
|
|
(11,731,273)
|
|
|
|
2,350,478
|
|
|
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
|
(848,025)
|
|
|
|
2,929,932
|
|
Cash and cash
equivalents at beginning of period
|
|
2,115,652
|
|
|
|
1,559,350
|
|
Cash and cash
equivalents at end of period
|
$
|
1,267,627
|
|
|
$
|
4,489,282
|
|
|
|
|
|
|
|
Supplemental
Disclosures of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid (net of
capitalized interest)
|
$
|
1,155,637
|
|
|
$
|
487,487
|
|
Income taxes paid (net
of refunds received)
|
$
|
1,473,696
|
|
|
$
|
2,528,356
|
|
|
|
|
|
|
|
Supplemental
Schedule of Noncash Investing and Financing
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
Gross additions to
properties and equipment
|
$
|
12,952,046
|
|
|
$
|
18,248,046
|
|
Net increase
(decrease) in accounts receivable for properties
|
|
|
|
|
|
and equipment
additions
|
|
(762,624)
|
|
|
|
139,381
|
|
Capital expenditures
and acquisitions
|
$
|
12,189,422
|
|
|
$
|
18,387,427
|
|
Proved
Reserves
|
|
|
|
|
Proved Reserves SEC
Pricing
|
|
|
June 30,
2023
|
|
|
Sept. 30,
2022
|
|
Proved Developed
Reserves:
|
|
|
Mcf of Gas
|
|
46,258,075
|
|
|
|
50,304,185
|
|
Barrels of
Oil
|
|
979,110
|
|
|
|
1,275,853
|
|
Barrels of
NGL
|
|
1,456,785
|
|
|
|
1,698,046
|
|
Mcfe (1)
|
|
60,873,448
|
|
|
|
68,147,579
|
|
Proved Undeveloped
Reserves:
|
|
|
|
|
|
Mcf of Gas
|
|
6,484,678
|
|
|
|
11,933,021
|
|
Barrels of
Oil
|
|
90,075
|
|
|
|
106,924
|
|
Barrels of
NGL
|
|
119,268
|
|
|
|
64,637
|
|
Mcfe (1)
|
|
7,740,736
|
|
|
|
12,962,387
|
|
Total Proved
Reserves:
|
|
|
|
|
|
Mcf of Gas
|
|
52,742,753
|
|
|
|
62,237,206
|
|
Barrels of
Oil
|
|
1,069,185
|
|
|
|
1,382,777
|
|
Barrels of
NGL
|
|
1,576,053
|
|
|
|
1,762,683
|
|
Mcfe (1)
|
|
68,614,184
|
|
|
|
81,109,966
|
|
|
|
|
|
|
|
10% Discounted
Estimated Future
|
|
|
|
|
|
Net Cash Flows (before
income taxes):
|
|
|
|
|
|
Proved
Developed
|
$
|
135,258,962
|
|
|
$
|
184,948,239
|
|
Proved
Undeveloped
|
|
22,990,870
|
|
|
|
52,978,389
|
|
Total
|
$
|
158,249,832
|
|
|
$
|
237,926,628
|
|
SEC Pricing
|
|
|
|
|
|
Gas/Mcf
|
$
|
4.63
|
|
|
$
|
6.41
|
|
Oil/Barrel
|
$
|
82.41
|
|
|
$
|
90.33
|
|
NGL/Barrel
|
$
|
31.24
|
|
|
$
|
38.09
|
|
|
|
|
|
|
|
Proved Reserves -
Projected Future Pricing (2)
|
|
|
|
|
|
|
|
10% Discounted
Estimated Future
|
Proved
Reserves
|
|
Net Cash Flows (before
income taxes):
|
June 30,
2023
|
|
|
Sept. 30,
2022
|
|
Proved
Developed
|
$
|
102,982,498
|
|
|
$
|
128,718,584
|
|
Proved
Undeveloped
|
|
17,361,221
|
|
|
|
39,770,031
|
|
Total
|
$
|
120,343,719
|
|
|
$
|
168,488,615
|
|
|
|
|
|
|
|
(1) Crude oil and NGL
converted to natural gas on a one barrel of crude oil or NGL equals
six Mcf of natural gas basis.
|
|
(2) Projected futures
pricing as of June 30, 2023, and Sept. 30, 2022 (the Company's
fiscal year-end prior to adoption of December 31 as fiscal
year-end), basis adjusted to Company wellhead price.
|
|
Derivative Contracts as
of July 20, 2023
|
|
|
|
Production
volume
|
|
|
|
|
Contract
period
|
|
covered per
month
|
|
Index
|
|
Contract
price
|
Natural gas costless
collars
|
|
|
|
|
|
|
July - December
2023
|
|
20,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.00 floor / $4.70
ceiling
|
July - September
2023
|
|
75,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $7.00
ceiling
|
October - December
2023
|
|
25,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $7.00
ceiling
|
November 2023 - March
2024
|
|
30,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.25 floor / $5.25
ceiling
|
December 2023 -
September 2024
|
|
30,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.00 floor / $3.60
ceiling
|
January 2024
|
|
135,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$4.50 floor / $7.90
ceiling
|
February
2024
|
|
125,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$4.50 floor / $7.90
ceiling
|
March 2024
|
|
130,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$4.50 floor / $7.90
ceiling
|
April 2024
|
|
90,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $4.70
ceiling
|
May 2024
|
|
95,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $4.70
ceiling
|
June 2024
|
|
90,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $4.70
ceiling
|
January - March
2024
|
|
30,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.00 floor / $6.00
ceiling
|
October 2024 - June
2025
|
|
30,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.00 floor / $5.00
ceiling
|
November 2024 - March
2025
|
|
90,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.25 floor / $5.25
ceiling
|
Natural gas fixed price
swaps
|
|
|
|
|
|
|
July - December
2023
|
|
100,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.37
|
July - December
2023
|
|
20,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.57
|
July - October
2023
|
|
20,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.58
|
July - October
2023
|
|
50,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$2.52
|
April - June
2024
|
|
10,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.21
|
April - October
2024
|
|
50,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.17
|
July - October
2024
|
|
75,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.47
|
July - October
2024
|
|
25,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.47
|
Oil costless
collars
|
|
|
|
|
|
|
January 2024
|
|
1,850 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
February
2024
|
|
1,700 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
March 2024
|
|
1,750 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
April 2024
|
|
1,700 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
May 2024
|
|
1,750 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
June 2024
|
|
1,650 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
January - March
2024
|
|
1,650 Bbls
|
|
NYMEX WTI
|
|
$65.00 floor / $76.50
ceiling
|
April - June
2024
|
|
500 Bbls
|
|
NYMEX WTI
|
|
$65.00 floor / $76.50
ceiling
|
July - October
2024
|
|
1,650 Bbls
|
|
NYMEX WTI
|
|
$65.00 floor / $76.50
ceiling
|
Oil fixed price
swaps
|
|
|
|
|
|
|
July - December
2023
|
|
1,500 Bbls
|
|
NYMEX WTI
|
|
$67.55
|
July - December
2023
|
|
750 Bbls
|
|
NYMEX WTI
|
|
$70.05
|
July - December
2023
|
|
1,500 Bbls
|
|
NYMEX WTI
|
|
$80.80
|
July - December
2023
|
|
1,000 Bbls
|
|
NYMEX WTI
|
|
$80.74
|
December 2023 - March
2024
|
|
750 Bbls
|
|
NYMEX WTI
|
|
$71.75
|
April - October
2024
|
|
1,000 Bbls
|
|
NYMEX WTI
|
|
$66.10
|
April - June
2024
|
|
1,300 Bbls
|
|
NYMEX WTI
|
|
$70.59
|
November 2024 - March
2025
|
|
1,600 Bbls
|
|
NYMEX WTI
|
|
$64.80
|
April - June
2025
|
|
1,000 Bbls
|
|
NYMEX WTI
|
|
$68.00
|
Non-GAAP Reconciliation
This press release includes certain "non-GAAP financial
measures" as defined under the rules and regulations of the U.S.
Securities and Exchange Commission, or the SEC, including
Regulation G. These non-GAAP financial measures are calculated
using GAAP amounts in the Company's financial statements. These
measures, detailed below, are provided in addition to, not as an
alternative for, and should be read in conjunction with, the
information contained in the Company's financial statements
prepared in accordance with GAAP (including the notes thereto),
included in the Company's SEC filings and posted on its
website.
Adjusted EBITDA Reconciliation
The Company defines "adjusted EBITDA" as earnings before
interest, taxes, depreciation and amortization, or EBITDA,
excluding non-cash gains (losses) on derivatives and gains (losses)
on asset sales and including cash receipts from (payments on)
off-market derivatives and restricted stock and deferred directors'
expense. The Company has included a presentation of adjusted EBITDA
because it recognizes that certain investors consider this amount
to be a useful means of measuring the Company's ability to meet its
debt service obligations and evaluating its financial performance.
Adjusted EBITDA has limitations and should not be considered in
isolation or as a substitute for net income, operating income, cash
flow from operations or other consolidated income or cash flow data
prepared in accordance with GAAP. Because not all companies use
identical calculations, this presentation of adjusted EBITDA may
not be comparable to a similarly titled measure of other companies.
The following table provides a reconciliation of net income (loss)
to adjusted EBITDA for the quarters indicated:
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
Six Months
Ended
|
|
|
Three Months
Ended
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
March 31,
2023
|
|
Net Income
(Loss)
|
$
|
(41,291)
|
|
|
$
|
8,589,010
|
|
|
$
|
9,511,953
|
|
|
$
|
4,568,555
|
|
|
$
|
9,553,244
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(benefit)
|
|
(166,000)
|
|
|
|
976,000
|
|
|
|
2,901,000
|
|
|
|
1,009,000
|
|
|
|
3,067,000
|
|
Interest
expense
|
|
524,294
|
|
|
|
286,345
|
|
|
|
1,081,767
|
|
|
|
516,557
|
|
|
|
557,473
|
|
DD&A
|
|
2,210,332
|
|
|
|
2,022,832
|
|
|
|
4,100,322
|
|
|
|
4,143,948
|
|
|
|
1,889,990
|
|
Impairment
expense
|
|
-
|
|
|
|
6,277
|
|
|
|
2,073
|
|
|
|
6,277
|
|
|
|
2,073
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash gains
(losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
on
derivatives
|
|
(865,935)
|
|
|
|
3,282,921
|
|
|
|
2,306,464
|
|
|
|
(8,489,719)
|
|
|
|
3,172,399
|
|
Gains (losses) on asset
sales
|
|
10,230
|
|
|
|
693,750
|
|
|
|
4,428,213
|
|
|
|
2,985,965
|
|
|
|
4,417,983
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash receipts from
(payments on)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
off-market derivative
contracts(1)
|
|
-
|
|
|
|
(1,284,024)
|
|
|
|
(373,745)
|
|
|
|
(3,777,505)
|
|
|
|
(373,745)
|
|
Restricted stock and
deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
director's
expense
|
|
703,667
|
|
|
|
574,333
|
|
|
|
1,338,254
|
|
|
|
1,042,931
|
|
|
|
634,587
|
|
Adjusted
EBITDA
|
$
|
4,086,707
|
|
|
$
|
7,194,102
|
|
|
$
|
11,826,947
|
|
|
$
|
13,013,517
|
|
|
$
|
7,740,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The initial receipt
of $8.8 million of cash from BP Energy Company, or BP, for entering
into the off-market derivative contracts had no effect on the
Company's statement of operations and was considered cash flow from
financing activities. A portion of subsequent settlements with BP
had no effect on the Company's statement of operations.
|
|
Debt to Adjusted EBITDA (TTM) Reconciliation
"Debt to adjusted EBITDA (TTM)" is defined as the ratio of
long-term debt to adjusted EBITDA on a trailing 12-month (TTM)
basis. The Company has included a presentation of debt to adjusted
EBITDA (TTM) because it recognizes that certain investors consider
such ratios to be a useful means of measuring the Company's ability
to meet its debt service obligations and for evaluating its
financial performance. The debt to adjusted EBITDA (TTM) ratio has
limitations and should not be considered in isolation or as a
substitute for net income, operating income, cash flow from
operations or other consolidated income or cash flow data prepared
in accordance with GAAP. Because not all companies use identical
calculations, this presentation of debt to adjusted EBITDA (TTM)
may not be comparable to a similarly titled measure of other
companies. The following table provides a reconciliation of net
income (loss) to adjusted EBITDA on a TTM basis and of the
resulting debt to adjusted EBITDA (TTM) ratio:
|
TTM Ended
|
|
|
TTM Ended
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
Net Income
(Loss)
|
$
|
22,016,554
|
|
|
$
|
7,486,604
|
|
Plus:
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
6,313,000
|
|
|
|
2,221,949
|
|
Interest
expense
|
|
2,191,181
|
|
|
|
898,201
|
|
DD&A
|
|
7,452,846
|
|
|
|
7,297,339
|
|
Impairment
expense
|
|
6,105,472
|
|
|
|
16,482
|
|
Less:
|
|
|
|
|
|
Non-cash gains
(losses)
|
|
|
|
|
|
on
derivatives
|
|
10,211,207
|
|
|
|
(815,184)
|
|
Gains (losses) on asset
sales
|
|
8,921,031
|
|
|
|
1,112,581
|
|
Plus:
|
|
|
|
|
|
Cash receipts from
(payments on)
|
|
|
|
|
|
off-market derivative
contracts(1)
|
|
(2,334,403)
|
|
|
|
2,334,403
|
|
Restricted stock and
deferred
|
|
|
|
|
|
director's
expense
|
|
2,944,517
|
|
|
|
1,691,912
|
|
Adjusted
EBITDA
|
$
|
25,556,929
|
|
|
$
|
21,649,493
|
|
|
|
|
|
|
|
Debt
|
$
|
23,750,000
|
|
|
$
|
28,300,000
|
|
Debt to Adjusted
EBITDA (TTM)
|
|
0.93
|
|
|
|
1.31
|
|
|
|
|
|
|
|
(1) The initial receipt
of $8.8 million of cash from BP for entering into the off-market
derivative contracts had no effect on the Company's statement of
operations and was considered cash flow from financing activities.
A portion of subsequent settlements with BP had no effect on the
Company's statement of operations.
|
|
Adjusted Pretax Net Income
(Loss) Reconciliation
"Adjusted pretax net income (loss)" is defined as earnings
before taxes and impairment expense, excluding non-cash gains
(losses) on derivatives and gains (losses) on asset sales and
including cash receipts from (payments on) off-market derivatives.
The Company has included a presentation of adjusted pretax net
income (loss) because it recognizes that certain investors consider
this amount to be a useful means of measuring the Company's ability
to meet its debt service obligations and evaluating its financial
performance. Adjusted pretax net income (loss) has limitations and
should not be considered in isolation or as a substitute for net
income, operating income, cash flow from operations or other
consolidated income or cash flow data prepared in accordance with
GAAP. Because not all companies use identical calculations, this
presentation of adjusted pretax net income (loss) may not be
comparable to a similarly titled measure of other companies. The
following table provides a reconciliation of net income (loss) to
adjusted pretax net income (loss) for the periods indicated:
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
Six Months
Ended
|
|
|
Three Months
Ended
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
March 31,
2023
|
|
Net Income
(Loss)
|
$
|
(41,291)
|
|
|
$
|
8,589,010
|
|
|
$
|
9,511,953
|
|
|
$
|
4,568,555
|
|
|
$
|
9,553,244
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
(166,000)
|
|
|
|
976,000
|
|
|
|
2,901,000
|
|
|
|
1,009,000
|
|
|
|
3,067,000
|
|
Impairment
expense
|
|
-
|
|
|
|
6,277
|
|
|
|
2,073
|
|
|
|
6,277
|
|
|
|
2,073
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash gains
(losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
on
derivatives
|
|
(865,935)
|
|
|
|
3,282,921
|
|
|
|
2,306,464
|
|
|
|
(8,489,719)
|
|
|
|
3,172,399
|
|
Gains (losses) on asset
sales
|
|
10,230
|
|
|
|
693,750
|
|
|
|
4,428,213
|
|
|
|
2,985,965
|
|
|
|
4,417,983
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash receipts from
(payments on)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
off-market derivative
contracts(1)
|
|
-
|
|
|
|
(1,284,024)
|
|
|
|
(373,745)
|
|
|
|
(3,777,505)
|
|
|
|
(373,745)
|
|
Adjusted Pretax Net
Income (Loss)
|
$
|
648,414
|
|
|
$
|
4,310,592
|
|
|
$
|
5,306,604
|
|
|
$
|
7,310,081
|
|
|
$
|
4,658,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
35,965,281
|
|
|
|
34,652,155
|
|
|
|
35,950,615
|
|
|
|
34,473,247
|
|
|
|
35,935,791
|
|
Diluted
|
|
35,965,281
|
|
|
|
34,851,214
|
|
|
|
36,034,438
|
|
|
|
34,473,247
|
|
|
|
35,935,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Pretax Net
Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per basic and
diluted share
|
$
|
0.02
|
|
|
$
|
0.12
|
|
|
$
|
0.15
|
|
|
$
|
0.21
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The initial receipt
of $8.8 million of cash from BP for entering into the off-market
derivative contracts had no effect on the Company's statement of
operations and was considered cash flow from financing activities.
A portion of subsequent settlements with BP had no effect on the
Company's statement of operations.
|
|
PHX Minerals Inc. (NYSE: PHX) Fort
Worth-based, PHX Minerals Inc. is a natural gas and oil mineral
company with a strategy to proactively grow its mineral position in
its core focus areas. PHX owns mineral acreage principally located
in Oklahoma, Texas, Louisiana, North
Dakota and Arkansas. Additional information on the
Company can be found at www.phxmin.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Words such as "anticipates," "plans," "estimates,"
"believes," "expects," "intends," "will," "should," "may" and
similar expressions may be used to identify forward-looking
statements. Forward-looking statements are not statements of
historical fact and reflect PHX's current views about future
events. Forward-looking statements may include, but are not limited
to, statements relating to: the Company's operational outlook; the
Company's ability to execute its business strategies; the
volatility of realized natural gas and oil prices; the level of
production on the Company's properties; estimates of quantities of
natural gas, oil and NGL reserves and their values; general
economic or industry conditions; legislation or regulatory
requirements; conditions of the securities markets; the Company's
ability to raise capital; changes in accounting principles,
policies or guidelines; financial or political instability; acts of
war or terrorism; title defects in the properties in which the
Company invests; and other economic, competitive, governmental,
regulatory or technical factors affecting properties, operations or
prices. Although the Company believes expectations reflected in
these and other forward-looking statements are reasonable, the
Company can give no assurance such expectations will prove to be
correct. Such forward-looking statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of the Company. These forward-looking statements involve
certain risks and uncertainties that could cause results to differ
materially from those expected by the Company's management.
Information concerning these risks and other factors can be found
in the Company's filings with the SEC, including its Annual Reports
on Form 10-K and Quarterly Reports on Form 10-Q, available on the
Company's website or the SEC's website at www.sec.gov.
Investors are cautioned that any such forward-looking statements
are not guarantees of future performance and that actual results or
developments may differ materially from those projected. The
forward-looking statements in this press release are made as of the
date hereof, and the Company does not undertake any obligation to
update the forward-looking statements as a result of new
information, future events or otherwise.
View original
content:https://www.prnewswire.com/news-releases/phx-minerals-reports-results-for-the-quarter-ended-june-30-2023-announces-dividend-payment-301896102.html
SOURCE PHX MINERALS INC.