PR Newswire
FORT WORTH, Texas, Aug. 8, 2023
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 | Three Months | Six Months | Six Months | |||||||||||||
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 | |||||||||||||
