0000315131false00003151312023-11-082023-11-08

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 08, 2023

 

 

PHX MINERALS INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-31759

73-1055775

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

 

 

1320 South University Drive

Suite 720

 

Fort Worth, Texas

 

76107

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (405) 948-1560

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Common Stock, $0.01666 par value

 

PHX

 

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 


 

Item 2.02

Results of Operations and Financial Condition.

On November 8, 2023, PHX Minerals Inc. (the “Company”) issued a press release providing information regarding the Company’s quarter ended September 30, 2023 financial and operating results. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Item 7.01

Regulation FD Disclosure.

The information set forth under Item 2.02 of this Current Report on Form 8-K is hereby incorporated in this Item 7.01 by reference.

 

On November 8, 2023, the Company posted an updated investor presentation to its website. A copy of the presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K.

 

The information in Item 2.02 and Item 7.01 of this Current Report on Form 8-K, including the attached Exhibit 99.1 and 99.2, is being furnished pursuant to Item 2.02 and Item 7.01 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.

 

Item 9.01

Financial Statements and Exhibits

(d)

Exhibits.

Exhibit

No.

Title of Document

99.1

Press Release, dated November 8, 2023

99.2

Corporate Presentation

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

PHX MINERALS INC.

 

 

 

By:

/s/ Chad L. Stephens

 

 

 

Chad L. Stephens

 

 

 

Chief Executive Officer

 

 

 

 

DATE:

November 8, 2023

 

 

 


Exhibit 99.1

img202703845_0.jpg 

 

FOR IMMEDIATE RELEASE

 

PHX Minerals Reports Results for the Quarter Ended Sept. 30, 2023; Increases Fixed Quarterly Dividend 33% and Expands Borrowing Base

 

FORT WORTH, Texas, Nov. 8, 2023 – 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.”

 

img202703845_1.jpg 

1


PHX Minerals Inc.

Reports Quarter ended Sept. 30, 2023 Results …cont.

 

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.

 

 

*****MORE*****

 

2


PHX Minerals Inc.

Reports Quarter ended Sept. 30, 2023 Results …cont.

 

 

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.

 

 

 

*****MORE*****

 

3


PHX Minerals Inc.

Reports Quarter ended Sept. 30, 2023 Results …cont.

 

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.

 

*****MORE*****

 

4


PHX Minerals Inc.

Reports Quarter ended Sept. 30, 2023 Results …cont.

 

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

 

 

 

*****MORE*****

 

5


PHX Minerals Inc.

Reports Quarter ended Sept. 30, 2023 Results …cont.

 

 

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.

 

 

 

*****MORE*****

 

6


PHX Minerals Inc.

Reports Quarter ended Sept. 30, 2023 Results …cont.

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*****MORE*****

 

7


PHX Minerals Inc.

Reports Quarter ended Sept. 30, 2023 Results …cont.

 

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

 

 

 

*****MORE*****

 

8


PHX Minerals Inc.

Reports Quarter ended Sept. 30, 2023 Results …cont.

 

Condensed Statements of Cash Flows

 

 

Nine Months Ended Sept. 30,

 

 

2023

 

 

2022

 

Operating Activities