FORT WORTH, Texas, Nov. 8, 2023 /PRNewswire/ -- PHX MINERALS INC., "PHX" or the "Company" (NYSE: PHX), today reported financial and operating results for the quarter ended Sept. 30, 2023.

Summary of Results for the Quarter Ended Sept. 30, 2023

  • Net income was $1.9 million, or $0.05 per diluted share, compared to net loss of ($0.04) million, or $0.00 per diluted share, for the quarter ended June 30, 2023, and net income of $9.2 million, or $0.25 per diluted share, for the quarter ended Sept. 30, 2022.
  • Adjusted pretax net income(1) was $3.2 million, or $0.09 per diluted share, compared to $0.6 million, or $0.02 per diluted share, for the quarter ended June 30, 2023, and $5.3 million, or $0.15 per diluted share, for the quarter ended Sept. 30, 2022.
  • Adjusted EBITDA(1) was $6.3 million, compared to $4.1 million for the quarter ended June 30, 2023, and $8.4 million for the quarter ended Sept. 30, 2022.
  • Royalty production volumes increased 3% to 2,073 Mmcfe compared to the quarter ended June 30, 2023, and increased 13% compared to the quarter ended Sept. 30, 2022.
  • Total production volumes increased 2% to 2,348 Mmcfe compared to the quarter ended June 30, 2023, and decreased 9% compared to the quarter ended Sept. 30, 2022.
  • Converted 71 gross (0.155 net) wells to producing status, compared to 81 gross (0.30 net) during the quarter ended June 30, 2023 and 49 gross (0.22 net) during the quarter ended Sept. 30, 2022.
  • Inventory of 185 gross (0.81 net) wells in progress and 93 gross (0.28 net) permits as of Sept. 30, 2023, compared to 186 gross (0.51 net) wells in progress and 86 gross (0.40 net) permits as of June 30, 2023.
  • Total debt was $30.8 million and the debt to adjusted EBITDA (TTM) (1) ratio was 1.31x at Sept. 30, 2023.

Subsequent Events

  • PHX announced a 33% increase in its fixed quarterly dividend to $0.03 per share, payable on Dec. 7, 2023, to stockholders of record on Nov. 23, 2023.
  • PHX entered into the fifth amendment to its credit agreement on Nov. 6, 2023 pursuant to which, among other changes, the borrowing base under PHX's credit facility is increased from $45.0 million to $50.0 million in connection with its regularly scheduled semi-annual redetermination.

(1)

This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section.

Chad L. Stephens, President and CEO, commented, "We are pleased with this quarter's financial results as they highlight the company's progress. There continues to be robust drilling activity on our minerals reflecting the high-quality nature of our assets. Royalty volume growth remains on trend to increase approximately 20% year over year. Royalty volumes now represent over 90% of cash flow as the nonop working interest portion of our business has steadily become less material to our financial performance. We continue to see active deal flow, having completed roughly $13 million of mineral acquisitions during the quarter and in excess of $40 million over the trailing 12-month period."

"The Board of Directors approved an increase in our quarterly dividend from $0.0225 to $0.03, a 33% increase, which reflects their belief in the continued sustainability of our business model. Additionally, our bank group increased our borrowing base from $45.0 million to $50.0 million, which also reflects on the high quality of our asset base and our ability to execute on our strategy."

Financial Highlights




Three Months Ended



Three Months Ended



Nine Months Ended



Nine Months Ended




Sept. 30, 2023



Sept. 30, 2022



Sept. 30, 2023



Sept. 30, 2022


Royalty Interest Sales


$

7,873,297



$

15,411,544



$

24,214,701



$

36,763,953


Working Interest Sales


$

1,025,794



$

6,416,490



$

3,772,801



$

19,409,514


Natural Gas, Oil and NGL Sales


$

8,899,091



$

21,828,034



$

27,987,502



$

56,173,467















Gains (Losses) on Derivative Contracts


$

(337,647)



$

(4,298,614)



$

3,648,179



$

(19,669,246)


Lease Bonuses and Rental Income


$

620,101



$

17,350



$

1,045,242



$

388,587


Total Revenue


$

9,181,545



$

17,546,770



$

32,680,923



$

36,892,808















Lease Operating Expense













per Working Interest Mcfe


$

1.50



$

1.28



$

1.33



$

1.12


Transportation, Gathering and Marketing













per Mcfe


$

0.30



$

0.68



$

0.38



$

0.63


Production Tax per Mcfe


$

0.17



$

0.36



$

0.20



$

0.34


G&A Expense per Mcfe


$

1.18



$

1.46



$

1.25



$

1.26


Cash G&A Expense per Mcfe (1)


$

0.95



$

1.06



$

0.99



$

0.98


Interest Expense per Mcfe


$

0.24



$

0.18



$

0.23



$

0.13


DD&A per Mcfe


$

0.86



$

0.60



$

0.86



$

0.76


Total Expense per Mcfe


$

2.93



$

3.65



$

3.10



$

3.49















Net Income (Loss)


$

1,895,403



$

9,158,468



$

11,407,356



$

13,727,023


Adjusted EBITDA (2)


$

6,321,029



$

8,395,965



$

18,147,976



$

21,409,483















Cash Flow from Operations (3)


$

6,960,419



$

13,192,676



$

20,809,684



$

28,893,660


CapEx (4)


$

45,977



$

201,114



$

321,396



$

359,961


CapEx - Mineral Acquisitions


$

13,469,756



$

13,652,829



$

25,383,759



$

31,881,409















Borrowing Base








$

45,000,000



$

50,000,000


Debt








$

30,750,000



$

28,300,000


Debt to Adjusted EBITDA (TTM) (2)









1.31




1.10




(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



Nine Months Ended



Nine Months Ended



Sept. 30, 2023



Sept. 30, 2022



Sept. 30, 2023



Sept. 30, 2022


Gas Mcf Sold


1,868,012




2,047,614




5,681,508




5,853,443


Average Sales Price per Mcf before the












effects of settled derivative contracts

$

2.40



$

7.61



$

2.63



$

6.33


Average Sales Price per Mcf after the












effects of settled derivative contracts

$

2.72



$

5.08



$

3.03



$

4.25


% of sales subject to hedges


46

%



58

%



46

%



60

%

Oil Barrels Sold


48,032




49,902




143,148




150,461


Average Sales Price per Bbl before the












effects of settled derivative contracts

$

78.48



$

94.07



$

76.23



$

96.73


Average Sales Price per Bbl after the












effects of settled derivative contracts

$

78.44



$

57.80



$

73.88



$

60.62


% of sales subject to hedges


35

%



62

%



44

%



69

%

NGL Barrels Sold


32,029




40,761




99,063




120,864


Average Sales Price per Bbl(1)

$

20.35



$

37.89



$

21.48



$

37.57














Mcfe Sold


2,348,378




2,591,588




7,134,770




7,481,390


Natural gas, oil and NGL sales before the












effects of settled derivative contracts

$

8,899,091



$

21,828,034



$

27,987,502



$

56,173,467


Natural gas, oil and NGL sales after the












effects of settled derivative contracts

$

9,502,036



$

14,832,521



$

29,896,064



$

38,519,536














(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


9/30/2023



1,868,012




48,032




32,029




2,348,378


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


Total production volumes attributable to natural gas were 80% for the quarter ended Sept. 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


9/30/2023



1,689,396




43,575




20,416




2,073,342


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


Royalty production volumes attributable to natural gas were 81% for the quarter ended Sept. 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


9/30/2023



178,616




4,457




11,613




275,036


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


Quarter Ended Sept. 30, 2023 Results

The Company recorded net income of $1.9 million, or $0.05 per diluted share, for the quarter ended Sept. 30, 2023, as compared to net income of $9.2 million, or $0.25 per diluted share, for the quarter ended Sept. 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 a decrease in losses associated with our derivative contracts and a decrease in income tax provision.

Natural gas, oil and NGL revenue decreased $12.9 million, or 59%, for the quarter ended Sept. 30, 2023, compared to the quarter ended Sept. 30, 2022, due to decreases in natural gas, oil and NGL prices of 68%, 17% and 46%, respectively, and decreases in natural gas, oil and NGL volumes of 9%, 4% and 21%, respectively.

The increase in royalty production volumes during the quarter ended Sept. 30, 2023, as compared to the quarter ended Sept. 30, 2022, resulted from new wells in the Haynesville Shale and SCOOP coming online. The production decrease in working interest volumes during the quarter ended Sept. 30, 2023, as compared to the quarter ended Sept. 30, 2022, resulted from the divestiture of working interest properties.

The Company had a net loss on derivative contracts of ($0.3) million for the quarter ended Sept. 30, 2023, comprised of a $0.6 million gain on settled derivatives and a ($0.9) million non-cash loss on derivatives, as compared to a net loss of ($4.3) million for the quarter ended Sept. 30, 2022. The change in net loss 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 Sept. 30, 2023 pricing relative to the strike price on open derivative contracts.

Nine Months Ended Sept. 30, 2023 Results

The Company recorded net income of $11.4 million, or $0.31 per diluted share, for the nine months ended Sept. 30, 2023, as compared to net income of $13.7 million, or $0.39 per diluted share, for the nine months ended Sept. 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 derivative contracts and decreases in lease operating expenses and transportation, gathering and marketing expenses.

Natural gas, oil and NGL revenue decreased $28.2 million, or 50%, for the nine months ended Sept. 30, 2023, compared to the nine months ended Sept. 30, 2022, due to decreases in natural gas, oil and NGL prices of 58%, 21% and 43%, respectively, and decreases in natural gas, oil and NGL volumes of 3%, 5% and 18%, respectively.

The increase in royalty production volumes during the nine months ended Sept. 30, 2023, as compared to the nine months ended Sept. 30, 2022, resulted from new wells in the Haynesville Shale and SCOOP coming online. The production decrease in working interest volumes during the nine months ended Sept. 30, 2023, as compared to the nine months ended Sept. 30, 2022, resulted from the divestiture of working interest properties.

The Company had a net gain on derivative contracts of $3.6 million for the nine months ended Sept. 30, 2023, comprised of a $2.3 million gain on settled derivatives and a $1.4 million non-cash gain on derivatives, as compared to a net loss of ($19.7) million for the nine months ended Sept. 30, 2022. The gain on settled derivative contracts for the nine months ended Sept. 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 nine months ended Sept. 30, 2023 was $1.9 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 September 30, 2023 pricing relative to the strike price on open derivative contracts.

Operations Update

During the quarter ended Sept. 30, 2023, the Company converted 71 gross (0.155 net) wells to producing status, including 22 gross (0.08 net) wells in the Haynesville and 32 gross (0.07 net) wells in the SCOOP, compared to 49 gross (0.22 net) wells in the quarter ended Sept. 30, 2022.

At Sept. 30, 2023, the Company had a total of 185 gross (0.81 net) wells in progress across its mineral positions and 93 gross (0.28 net) active permitted wells, compared to 186 gross (0.51 net) wells in progress and 86 gross (0.40 net) active permitted wells at June 30, 2023. As of October 9, 2023, 14 rigs were operating on the Company's acreage and 56 rigs operating within 2.5 miles of its acreage.








Bakken/





















Three



Arkoma












SCOOP



STACK



Forks



Stack



Haynesville



Other



Total


As of Sept. 30, 2023:





















Gross Wells in Progress on PHX Acreage (1)


52




13




8




4




97




11




185


Net Wells in Progress on PHX Acreage (1)


0.159




0.034




0.043




0.003




0.538




0.031




0.808


Gross Active Permits on PHX Acreage


43




7




5




5




28




5




93


Net Active Permits on PHX Acreage


0.128




0.031




0.006




0.002




0.095




0.021




0.283























As of Oct. 9, 2023:





















Rigs Present on PHX Acreage


6




-




1




-




5




2




14


Rigs Within 2.5 Miles of PHX Acreage


11




13




5




-




19




8




56



(1) Wells in progress includes drilling wells and drilled but uncompleted wells, or DUCs.

Leasing Activity

During the quarter ended Sept. 30, 2023, the Company leased 357 net mineral acres to third-party exploration and production companies for an average bonus payment of $2,075 per net mineral acre and an average royalty of 24%.

Acquisition and Divestiture Update

During the quarter ended Sept. 30, 2023, the Company purchased 974 net royalty acres for approximately $13.4 million and had no significant divestitures.



Acquisitions




SCOOP



Haynesville



Other



Total


During Three Months Ended Sept. 30, 2023:













Net Mineral Acres Purchased



102




459




-




561


Net Royalty Acres Purchased



159




815



-




974



















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


6,177


8,000 - 8,400

Working Interest Production (Mmcfe)


3,084


958


1,200 - 1,400(1)

Total Production (Mmcfe)


9,697


7,135


9,200 - 9,800

Percentage Natural Gas


78 %


80 %


79% - 81%








Transportation, Gathering & Marketing (per Mcfe)


$0.63


$0.38


$0.37 - $0.42

Production Tax (as % of pre-hedge sales volumes)


4.50 %


5.10 %


5.00% - 5.50%

LOE Expenses (on an absolute basis in 000's)


$3,807


$1,274


$1,500 - $1,700

Cash G&A (per Mcfe)


$1.01


$0.99


$0.99 - $1.02


(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 Sept. 30, 2023, at 11 a.m. EST tomorrow, Nov. 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 13742254.

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 Sept. 30,



Nine Months Ended Sept. 30,



2023



2022



2023



2022


Revenues:






Natural gas, oil and NGL sales

$

8,899,091



$

21,828,034



$

27,987,502



$

56,173,467


Lease bonuses and rental income


620,101




17,350




1,045,242




388,587


Gains (losses) on derivative contracts


(337,647)




(4,298,614)




3,648,179




(19,669,246)




9,181,545




17,546,770




32,680,923




36,892,808


Costs and expenses:












Lease operating expenses


413,643




961,148




1,273,560




2,791,409


Transportation, gathering and marketing


693,915




1,758,132




2,729,044




4,676,786


Production taxes


387,624




929,330




1,430,950




2,551,920


Depreciation, depletion and amortization


2,022,709




1,550,410




6,123,031




5,694,358


Provision for impairment


36,460




2,703




38,533




8,980


Interest expense


556,941




471,716




1,638,708




988,273


General and administrative


2,760,342




3,783,159




8,919,354




9,405,037


Losses (gains) on asset sales and other


(174,492)




(3,499,296)




(4,369,613)




(6,390,978)


Total costs and expenses


6,697,142




5,957,302




17,783,567




19,725,785


Income (loss) before provision (benefit) for income taxes


2,484,403




11,589,468




14,897,356




17,167,023














Provision (benefit) for income taxes


589,000




2,431,000




3,490,000




3,440,000














Net income (loss)

$

1,895,403



$

9,158,468



$

11,407,356



$

13,727,023






































Basic earnings (loss) per common share

$

0.05



$

0.26



$

0.32



$

0.39














Diluted earnings (loss) per common share

$

0.05



$

0.25



$

0.31



$

0.39














Weighted average shares outstanding:












Basic


35,983,116




35,573,813




35,961,570




34,833,427


Diluted


36,656,272




35,916,878




36,670,494




35,204,241














Dividends per share of












common stock paid in period

$

0.0225



$

0.02



$

0.0675



$

0.055














 

Balance Sheets



Sept. 30, 2023



Dec. 31, 2022


Assets






Current assets:






Cash and cash equivalents

$

1,235,193



$

2,115,652


Natural gas, oil, and NGL sales receivables (net of $0


5,414,075




9,783,996


allowance for uncollectable accounts)






Refundable income taxes


712,475




-


Derivative contracts, net


577,381




-


Held for sale assets


-




6,420,051


Other


438,524




1,543,956


Total current assets


8,377,648




19,863,655








Properties and equipment at cost, based on






   successful efforts accounting:






Producing natural gas and oil properties


202,915,457




181,431,139


Non-producing natural gas and oil properties


61,096,631




57,781,644


Other


1,353,686




1,122,436




265,365,774




240,335,219


Less accumulated depreciation, depletion and amortization


(112,095,510)




(107,085,212)


Net properties and equipment


153,270,264




133,250,007








Derivative contracts, net


-




141,345


Operating lease right-of-use assets


606,978




706,871


Other, net


540,402




695,399


Total assets

$

162,795,292



$

154,657,277








Liabilities and Stockholders' Equity






Current liabilities:






Accounts payable

$

387,460



$

504,466


Derivative contracts, net


-




1,534,034


Income taxes payable


-




576,427


Current portion of operating lease liability


230,347




217,656


Held for sale liabilities


-




889,155


Accrued liabilities and other


2,024,369




3,121,522


Total current liabilities


2,642,176




6,843,260








Long-term debt


30,750,000




33,300,000


Deferred income taxes, net


5,709,906




2,453,906


Asset retirement obligations


1,051,224




1,027,777


Derivative contracts, net


230,453




-


Operating lease liability, net of current portion


755,541




929,208


Total liabilities


41,139,300




44,554,151








Stockholders' equity:






Common Stock, $0.01666 par value; 54,000,500 shares authorized and






35,938,900 issued at Sept. 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


44,249,366




43,344,916


Deferred directors' compensation


1,425,155




1,541,070


Retained earnings


78,618,090




68,925,774




124,891,353




114,410,491


Less treasury stock, at cost; 225,723 shares at Sept. 30,






2023, and 300,272 shares at Dec. 31, 2022


(3,235,361)




(4,307,365)


Total stockholders' equity


121,655,992




110,103,126


Total liabilities and stockholders' equity

$

162,795,292



$

154,657,277


 

Condensed Statements of Cash Flows



Nine Months Ended Sept. 30,



2023



2022


Operating Activities



Net income (loss)

$

11,407,356



$

13,727,023


Adjustments to reconcile net income (loss) to net cash provided






  by operating activities:






Depreciation, depletion and amortization


6,123,031




5,694,358


Impairment of producing properties


38,533




8,980


Provision for deferred income taxes


3,256,000




876,000


Gain from leasing fee mineral acreage


(1,045,242)




(387,419)


Proceeds from leasing fee mineral acreage


1,108,909




593,168


Net (gain) loss on sales of assets


(4,671,253)




(6,587,005)


Directors' deferred compensation expense


165,582




124,281


Total (gain) loss on derivative contracts


(3,648,179)




19,669,246


Cash receipts (payments) on settled derivative contracts


2,468,724




(2,796,250)


Restricted stock award expense


1,695,637




1,955,829


Other


105,604




50,215


Cash provided (used) by changes in assets and liabilities:






Natural gas, oil and NGL sales receivables


4,369,921




(5,132,207)


Other current assets


408,533




576,348


Accounts payable


(107,796)




85,344


Income taxes receivable


(712,475)




-


Other non-current assets


150,515




(391,217)


Income taxes payable


(576,427)




(4,081)


Accrued liabilities


272,711




831,047


Total adjustments


9,402,328




15,166,637


Net cash provided by operating activities


20,809,684




28,893,660








Investing Activities






Capital expenditures


(321,396)




(359,961)


Acquisition of minerals and overriding royalty interests


(25,383,759)




(31,881,409)


Net proceeds from sales of assets


9,556,666




8,631,352


Net cash provided (used) by investing activities


(16,148,489)




(23,610,018)








Financing Activities






Borrowings under credit facility


16,000,000




17,300,000


Payments of loan principal


(18,550,000)




(9,000,000)


Net proceeds from equity issuance


-




5,039,045


Cash receipts from (payments on) off-market derivative contracts


(560,162)




(14,857,682)


Purchases of treasury stock


(669)




(1,855)


Payments of dividends


(2,430,823)




(1,925,691)


Net cash provided (used) by financing activities


(5,541,654)




(3,446,183)








Increase (decrease) in cash and cash equivalents


(880,459)




1,837,459


Cash and cash equivalents at beginning of period


2,115,652




1,559,350


Cash and cash equivalents at end of period

$

1,235,193



$

3,396,809








Supplemental Disclosures of Cash Flow Information:












Interest paid (net of capitalized interest)

$

1,652,872



$

888,720


Income taxes paid (net of refunds received)

$

1,522,904



$

2,568,081








Supplemental Schedule of Noncash Investing and Financing Activities:












Dividends declared and unpaid

$

94,587



$

-








Gross additions to properties and equipment

$

26,392,844



$

31,607,517


Net increase (decrease) in accounts receivable for properties






and equipment additions


(687,689)




633,853


Capital expenditures and acquisitions

$

25,705,155



$

32,241,370


 

Derivative Contracts as of October 31, 2023




Production volume





Contract period


covered per month


Index


Contract price

Natural gas costless collars







October - December 2023


20,000 Mmbtu


NYMEX Henry Hub


$3.00 floor / $4.70 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

November - December 2024


35,000 Mmbtu


NYMEX Henry Hub


$3.50 floor / $5.15 ceiling

January - March 2025


30,000 Mmbtu


NYMEX Henry Hub


$3.50 floor / $5.15 ceiling

Natural gas fixed price swaps







October - December 2023


100,000 Mmbtu


NYMEX Henry Hub


$3.37

October - December 2023


20,000 Mmbtu


NYMEX Henry Hub


$3.57

December 2023 - February 2024


135,000 Mmbtu


NYMEX Henry Hub


$3.65

October 2023


20,000 Mmbtu


NYMEX Henry Hub


$3.58

October 2023


50,000 Mmbtu


NYMEX Henry Hub


$2.52

March 2024


127,500 Mmbtu


NYMEX Henry Hub


$3.65

April - June 2024


10,000 Mmbtu


NYMEX Henry Hub


$3.21

April - October 2024


50,000 Mmbtu


NYMEX Henry Hub


$3.17

April - July 2024


127,500 Mmbtu


NYMEX Henry Hub


$3.24

July - October 2024


75,000 Mmbtu


NYMEX Henry Hub


$3.47

July - October 2024


25,000 Mmbtu


NYMEX Henry Hub


$3.47

August - September 2024


120,000 Mmbtu


NYMEX Henry Hub


$3.24

October 2024


105,000 Mmbtu


NYMEX Henry Hub


$3.24

November - December 2024


70,000 Mmbtu


NYMEX Henry Hub


$4.16

January - March 2025


60,000 Mmbtu


NYMEX Henry Hub


$4.16

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







October - December 2023


1,500 Bbls


NYMEX WTI


$67.55

October - December 2023


750 Bbls


NYMEX WTI


$70.05

October - December 2023


1,500 Bbls


NYMEX WTI


$80.80

October - 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



Nine Months Ended



Nine Months Ended



Three Months Ended



Sept. 30, 2023



Sept. 30, 2022



Sept. 30, 2023



Sept. 30, 2022



June 30, 2023


Net Income (Loss)

$

1,895,403



$

9,158,468



$

11,407,356



$

13,727,023



$

(41,291)


Plus:















Income tax expense















(benefit)


589,000




2,431,000




3,490,000




3,440,000




(166,000)


Interest expense


556,941




471,716




1,638,708




988,273




524,294


DD&A


2,022,709




1,550,410




6,123,031




5,694,358




2,210,332


Impairment expense


36,460




2,703




38,533




8,980




-


Less:















Non-cash gains (losses)















on derivatives


(940,592)




1,639,703




1,365,872




(6,850,017)




(865,935)


Gains (losses) on asset sales


243,041




3,558,611




4,671,254




6,544,575




10,230


Plus:















Cash receipts from (payments on)















off-market derivative contracts(1)


-




(1,057,197)




(373,745)




(4,834,703)




-


Restricted stock and deferred















director's expense


522,965




1,037,179




1,861,219




2,080,110




703,667


Adjusted EBITDA

$

6,321,029



$

8,395,965



$

18,147,976



$

21,409,483



$

4,086,707

















(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



Sept. 30, 2023



Sept. 30, 2022


Net Income (Loss)

$

14,753,489



$

20,409,272


Plus:






Income tax expense (benefit)


4,471,000




4,202,000


Interest expense


2,276,406




1,164,992


DD&A


7,925,145




7,278,118


Impairment expense


6,139,229




14,565


Less:






Non-cash gains (losses)






on derivatives


7,630,914




(2,299,518)


Gains (losses) on asset sales


5,605,461




4,423,648


Plus:






Cash receipts from (payments on)






off-market derivative contracts(1)


(1,277,206)




(7,522,794)


Restricted stock and deferred






director's expense


2,430,303




2,403,525


Adjusted EBITDA

$

23,481,991



$

25,825,548








Debt

$

30,750,000



$

28,300,000


Debt to Adjusted EBITDA (TTM)


1.31




1.10








(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



Nine Months Ended



Nine Months Ended



Three Months Ended



Sept. 30, 2023



Sept. 30, 2022



Sept. 30, 2023



Sept. 30, 2022



June 30, 2023


Net Income (Loss)

$

1,895,403



$

9,158,468



$

11,407,356



$

13,727,023



$

(41,291)


Plus:















Income tax expense (benefit)


589,000




2,431,000




3,490,000




3,440,000




(166,000)


Impairment expense


36,460




2,703




38,533




8,980




-


Less:















Non-cash gains (losses)















on derivatives


(940,592)




1,639,703




1,365,872




(6,850,017)




(865,935)


Gains (losses) on asset sales


243,041




3,558,611




4,671,254




6,544,575




10,230


Plus:















Cash receipts from (payments on)















off-market derivative contracts(1)


-




(1,057,197)




(373,745)




(4,834,703)




-


Adjusted Pretax Net Income (Loss)

$

3,218,414



$

5,336,660



$

8,525,018



$

12,646,742



$

648,414

















Weighted average shares outstanding















Basic


35,983,116




35,573,813




35,961,570




34,833,427




35,965,281


Diluted


36,656,272




35,916,878




36,670,494




35,204,241




35,965,281

















Adjusted Pretax Net Income (Loss)















per basic share

$

0.09



$

0.15



$

0.24



$

0.36



$

0.02


Adjusted Pretax Net Income (Loss)















per diluted share

$

0.09



$

0.15



$

0.23



$

0.36



$

0.02

















(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.

Cision View original content:https://www.prnewswire.com/news-releases/phx-minerals-reports-results-for-the-quarter-ended-sept-30-2023-increases-fixed-quarterly-dividend-33-and-expands-borrowing-base-301982161.html

SOURCE PHX MINERALS INC.

Copyright 2023 PR Newswire

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