FORT WORTH, Texas, Nov. 6, 2024 /PRNewswire/ -- PHX MINERALS INC., "PHX" or the "Company" (NYSE:PHX), today reported financial and operating results for the quarter ended Sept. 30, 2024.
Summary of Results for the Quarter Ended Sept. 30, 2024
- Net income was $1.1 million, or $0.03 per diluted share, compared to net income of $1.3 million, or $0.04 per diluted share, for the quarter ended June 30, 2024, and net income of $1.9 million, or $0.05 per diluted share, for the quarter ended Sept. 30, 2023.
- Adjusted EBITDA(1) was $4.9 million, compared to $6.4 million for the quarter ended June 30, 2024 and $6.3 million for the quarter ended Sept. 30, 2023.
- Royalty production volumes decreased 23% to 2,098 Mmcfe compared to the quarter ended June 30, 2024 and increased 1% compared to the quarter ended Sept. 30, 2023.
- Total production volumes decreased 20% to 2,379 Mmcfe compared to the quarter ended June 30, 2024, and increased 1% compared to the quarter ended Sept. 30, 2023.
- Converted 46 gross (0.18 net) wells to producing status, compared to a conversion of 55 gross (0.40 net) wells to producing status during the quarter ended June 30, 2024 and 71 gross (0.16 net) during the quarter ended Sept. 30, 2023.
- Inventory of 278 gross (0.93 net) wells in progress and permits as of Sept. 30, 2024, compared to 241 gross (0.93 net) wells in progress and permits as of June 30, 2024 and 278 gross (1.09 net) wells in progress and permits as of Sept. 30, 2023.
- Total debt was $27.8 million, down $5.0 million since Dec. 31, 2023, and the debt-to-adjusted EBITDA (TTM) (1) ratio was 1.36x at Sept. 30, 2024.
Subsequent Events
- PHX announced a $0.04 per share quarterly dividend, payable on Dec. 5, 2024, to stockholders of record on Nov. 21, 2024.
- PHX's borrowing base under its existing credit facility was reaffirmed at $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, "PHX generated our second-highest quarter for royalty volumes in our history, validating the quality of our asset base even amidst continued volatility in commodity pricing. We remain positive on natural gas prices as we move into a seasonal stronger period and are seeing sequential increased rig activities on and around our mineral acreage, further bolstering our longer-term outlook.
"During the quarter, we saw a growing pipeline of attractive M&A opportunities," continued Mr. Stephens. "We purchased 325 net royalty acres for $3.0 million and replaced 100% of the wells in progress that converted to production. We also reduced our debt by $1.0 million sequentially with cashflow generated from our production. With a strong balance sheet, and a proven track record of acquiring attractive mineral assets that produce cash flow even during challenging pricing, we are well-positioned for continued success.
"Our risk-mitigated business is built for resilient and sustainable profitability even during challenging pricing environments, and our strategic advantages are evident through commodity price cycles," concluded Mr. Stephens.
Financial Highlights | ||||||||||||||||
Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
Sept. 30, 2024 | Sept. 30, 2023 | Sept. 30, 2024 | Sept. 30, 2023 | |||||||||||||
Royalty Interest Sales | $ | 6,982,112 | $ | 7,873,297 | $ | 21,977,351 | $ | 24,214,701 | ||||||||
Working Interest Sales | $ | 906,404 | $ | 1,025,794 | $ | 2,827,379 | $ | 3,772,801 | ||||||||
Natural Gas, Oil and NGL Sales | $ | 7,888,516 | $ | 8,899,091 | $ | 24,804,730 | $ | 27,987,502 | ||||||||
Gains (Losses) on Derivative Contracts | $ | 1,089,242 | $ | (337,647) | $ | 1,297,737 | $ | 3,648,179 | ||||||||
Lease Bonuses and Rental Income | $ | 159,271 | $ | 620,101 | $ | 445,215 | $ | 1,045,242 | ||||||||
Total Revenue | $ | 9,137,029 | $ | 9,181,545 | $ | 26,547,682 | $ | 32,680,923 | ||||||||
Lease Operating Expense | ||||||||||||||||
per Working Interest Mcfe | $ | 1.05 | $ | 1.32 | $ | 1.15 | $ | 1.34 | ||||||||
Transportation, Gathering and | ||||||||||||||||
Marketing per Mcfe | $ | 0.47 | $ | 0.30 | $ | 0.47 | $ | 0.38 | ||||||||
Production and Ad Valorem Tax | ||||||||||||||||
per Mcfe | $ | 0.18 | $ | 0.19 | $ | 0.19 | $ | 0.20 | ||||||||
G&A Expense per Mcfe | $ | 1.13 | $ | 1.18 | $ | 1.17 | $ | 1.25 | ||||||||
Cash G&A Expense per Mcfe (1) | $ | 0.91 | $ | 0.95 | $ | 0.92 | $ | 0.99 | ||||||||
Interest Expense per Mcfe | $ | 0.26 | $ | 0.24 | $ | 0.27 | $ | 0.23 | ||||||||
DD&A per Mcfe | $ | 1.00 | $ | 0.86 | $ | 0.94 | $ | 0.86 | ||||||||
Total Expense per Mcfe | $ | 3.16 | $ | 2.92 | $ | 3.16 | $ | 3.10 | ||||||||
Net Income (Loss) | $ | 1,100,310 | $ | 1,895,403 | $ | 2,212,466 | $ | 11,407,356 | ||||||||
Adjusted EBITDA (2) | $ | 4,905,335 | $ | 6,321,029 | $ | 15,938,535 | $ | 18,147,976 | ||||||||
Cash Flow from Operations (3) | $ | 5,784,497 | $ | 6,960,419 | $ | 15,207,852 | $ | 20,809,684 | ||||||||
CapEx (4) | $ | 28,902 | $ | 45,977 | $ | 64,628 | $ | 321,396 | ||||||||
CapEx - Mineral Acquisitions | $ | 2,994,669 | $ | 13,469,756 | $ | 5,272,847 | $ | 25,383,759 | ||||||||
Borrowing Base | $ | 50,000,000 | $ | 45,000,000 | ||||||||||||
Debt | $ | 27,750,000 | $ | 30,750,000 | ||||||||||||
Debt-to-Adjusted EBITDA (TTM) (2) | 1.36 | 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 | Nine Months Ended | Nine Months Ended | ||||||||||||
Sept. 30, 2024 | Sept. 30, 2023 | Sept. 30, 2024 | Sept. 30, 2023 | ||||||||||||
Gas Mcf Sold | 1,898,442 | 1,868,012 | 6,063,397 | 5,681,508 | |||||||||||
Average Sales Price per Mcf before the | |||||||||||||||
effects of settled derivative contracts | $ | 2.00 | $ | 2.40 | $ | 2.05 | $ | 2.63 | |||||||
Average Sales Price per Mcf after the | |||||||||||||||
effects of settled derivative contracts | $ | 2.54 | $ | 2.72 | $ | 2.70 | $ | 3.03 | |||||||
% of sales subject to hedges | 48 | % | 46 | % | 48 | % | 46 | % | |||||||
Oil Barrels Sold | 45,698 | 48,032 | 134,786 | 143,148 | |||||||||||
Average Sales Price per Bbl before the | |||||||||||||||
effects of settled derivative contracts | $ | 74.83 | $ | 78.48 | $ | 76.14 | $ | 76.23 | |||||||
Average Sales Price per Bbl after the | |||||||||||||||
effects of settled derivative contracts | $ | 72.95 | $ | 78.44 | $ | 74.78 | $ | 73.88 | |||||||
% of sales subject to hedges | 31 | % | 35 | % | 31 | % | 44 | % | |||||||
NGL Barrels Sold | 34,332 | 32,029 | 98,511 | 99,063 | |||||||||||
Average Sales Price per Bbl(1) | $ | 19.60 | $ | 20.35 | $ | 21.57 | $ | 21.48 | |||||||
Mcfe Sold | 2,378,622 | 2,348,378 | 7,463,177 | 7,134,770 | |||||||||||
Natural gas, oil and NGL sales before the | |||||||||||||||
effects of settled derivative contracts | $ | 7,888,516 | $ | 8,899,091 | $ | 24,804,730 | $ | 27,987,502 | |||||||
Natural gas, oil and NGL sales after the | |||||||||||||||
effects of settled derivative contracts | $ | 8,820,672 | $ | 9,502,036 | $ | 28,590,801 | $ | 29,896,064 | |||||||
(1) There were no NGL settled derivative contracts during the 2024 and 2023 periods. | |||||||||||||||
Total Production for the last four quarters was as follows:
Quarter ended | Mcf Sold | Oil Bbls Sold | NGL Bbls Sold | Mcfe Sold | ||||||||||||
9/30/2024 | 1,898,442 | 45,698 | 34,332 | 2,378,622 | ||||||||||||
6/30/2024 | 2,464,846 | 51,828 | 31,994 | 2,967,779 | ||||||||||||
3/31/2024 | 1,700,108 | 37,260 | 32,184 | 2,116,776 | ||||||||||||
12/31/2023 | 1,775,577 | 39,768 | 38,422 | 2,244,717 | ||||||||||||
The percentage of total production volumes attributable to natural gas was 80% for the quarter ended Sept. 30, 2024.
Royalty Interest Production for the last four quarters was as follows:
Quarter ended | Mcf Sold | Oil Bbls Sold | NGL Bbls Sold | Mcfe Sold | ||||||||||||
9/30/2024 | 1,724,635 | 41,170 | 21,011 | 2,097,722 | ||||||||||||
6/30/2024 | 2,304,176 | 47,024 | 20,461 | 2,709,090 | ||||||||||||
3/31/2024 | 1,533,580 | 33,083 | 20,844 | 1,857,147 | ||||||||||||
12/31/2023 | 1,590,301 | 35,547 | 23,769 | 1,946,196 | ||||||||||||
The percentage of royalty production volumes attributable to natural gas was 82% for the quarter ended Sept. 30, 2024.
Working Interest Production for the last four quarters was as follows:
Quarter ended | Mcf Sold | Oil Bbls Sold | NGL Bbls Sold | Mcfe Sold | ||||||||||||
9/30/2024 | 173,807 | 4,528 | 13,321 | 280,900 | ||||||||||||
6/30/2024 | 160,670 | 4,804 | 11,533 | 258,689 | ||||||||||||
3/31/2024 | 166,528 | 4,177 | 11,340 | 259,629 | ||||||||||||
12/31/2023 | 185,276 | 4,221 | 14,653 | 298,521 | ||||||||||||
Quarter Ended Sept. 30, 2024 Results
The Company recorded net income of $1.1 million, or $0.03 per diluted share, for the quarter ended Sept. 30, 2024, as compared to net income of $1.90 million, or $0.05 per diluted share, for the quarter ended Sept. 30, 2023. The change in net income was principally the result of a decrease in natural gas, oil and NGL sales, a decrease in lease bonuses, an increase in transportation, gathering and marketing expenses and an increase in depreciation, depletion and amortization expenses, partially offset by an increase in gains associated with our derivative contracts.
Natural gas, oil and NGL revenue decreased $1.0 million, or 11%, for the quarter ended Sept. 30, 2024, compared to the quarter ended Sept. 30, 2023, due to decreases in natural gas, oil, and NGL prices of 17%, 5%, and 4%, respectively, and a decrease in oil volumes of 5%, partially offset by increases in natural gas and NGL volumes of 2% and 7%, respectively.
The increase in royalty production volumes during the quarter ended Sept. 30, 2024, as compared to the quarter ended Sept. 30, 2023, resulted primarily from new wells being brought online in the Haynesville Shale and SCOOP plays.
The Company had a net gain on derivative contracts of $1.1 million for the quarter ended Sept. 30, 2024, comprised of a $0.9 million gain on settled derivatives and a $0.2 million non-cash gain on derivatives, as compared to a net loss of ($0.3) million for the quarter ended Sept. 30, 2023. 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 Sept. 30, 2024 pricing relative to the strike price on open derivative contracts.
Nine Months Ended Sept. 30, 2024 Results
The Company recorded net income of $2.2 million, or $0.06 per diluted share, for the nine months ended Sept. 30, 2024, as compared to a net income of $11.4 million, or $0.31 per diluted share, for the nine months ended Sept. 30, 2023. The change in net income was principally the result of a decrease in natural gas, oil and NGL sales, a decrease in gains associated with our hedge contracts, a decrease in gains on asset sales, an increase in transportation, gathering and marketing expenses and an increase in depreciation, depletion and amortization expenses, partially offset by a decrease in income tax provision.
Natural gas, oil and NGL revenue decreased $3.2 million, or 11%, for the nine months ended Sept. 30, 2024, compared to the nine months ended Sept. 30, 2023, due to a decrease in natural gas prices of 22% and decreases in oil and NGL volumes of 6% and 1%, respectively, partially offset by an increase in gas volumes of 7%.
The production increase in royalty volumes during the nine months ended Sept. 30, 2024, as compared to the nine months ended Sept. 30, 2023, resulted primarily from new wells in the Haynesville Shale and SCOOP plays coming online. The production decrease in working interest volumes during the nine months ended Sept. 30, 2024, as compared to the nine months ended Sept. 30, 2023, resulted from natural production decline and working interest divestitures.
The Company had a net gain on derivative contracts of $1.3 million for the nine months ended Sept. 30, 2024, comprised of a $3.8 million gain on settled derivatives and a $2.5 million non-cash loss on derivatives, as compared to a net gain of $3.6 million for the nine months ended Sept. 30, 2023. 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 Sept. 30, 2024 pricing relative to the strike price on open derivative contracts.
Operations Update
During the quarter ended Sept. 30, 2024, the Company converted 46 gross (0.18 net) wells to producing status, including 12 gross (0.11 net) wells in the Haynesville and 18 gross (0.04 net) wells in the SCOOP, compared to 71 gross (0.16 net) wells converted in the quarter ended Sept. 30, 2023.
At Sept. 30, 2024, the Company had a total of 278 gross (0.93 net) wells in progress and permits across its mineral positions, compared to 241 gross (0.93 net) wells in progress and permits at June 30, 2024. As of Sept. 30, 2024, 18 rigs were operating on the Company's acreage and 70 rigs were operating within 2.5 miles of its acreage.
Bakken/ | |||||||||||||||||||||||||||
Three | Arkoma | ||||||||||||||||||||||||||
SCOOP | STACK | Forks | Stack | Haynesville | Other | Total | |||||||||||||||||||||
As of Sept. 30, 2024: | |||||||||||||||||||||||||||
Gross Wells in Progress on PHX Acreage (1) | 84 | 13 | 4 | 3 | 69 | 3 | 176 | ||||||||||||||||||||
Net Wells in Progress on PHX Acreage (1) | 0.351 | 0.021 | 0.001 | 0.015 | 0.240 | 0.030 | 0.658 | ||||||||||||||||||||
Gross Active Permits on PHX Acreage | 43 | 4 | 3 | 9 | 32 | 11 | 102 | ||||||||||||||||||||
Net Active Permits on PHX Acreage | 0.093 | 0.008 | 0.003 | 0.030 | 0.100 | 0.041 | 0.275 | ||||||||||||||||||||
As of Sept. 30, 2024: | |||||||||||||||||||||||||||
Rigs Present on PHX Acreage | 9 | 2 | 1 | - | 4 | 2 | 18 | ||||||||||||||||||||
Rigs Within 2.5 Miles of PHX Acreage | 12 | 12 | 13 | - | 20 | 13 | 70 | ||||||||||||||||||||
(1) Wells in progress includes drilling wells and drilled but uncompleted wells, or DUCs. |
Leasing Activity
During the quarter ended Sept. 30, 2024, the Company leased 183 net mineral acres to third-party exploration and production companies for an average bonus payment of $688 per net mineral acre and an average royalty of 25%.
Acquisition and Divestiture Update
During the quarter ended Sept. 30, 2024, the Company purchased 325 net royalty acres for approximately $3.0 million and had no significant divestitures.
Acquisitions | ||||||||||||||
SCOOP | Haynesville | Other | Total | |||||||||||
During Three Months Ended Sept. 30, 2024: | ||||||||||||||
Net Mineral Acres Purchased | 20 | 181 | - | 201 | ||||||||||
Net Royalty Acres Purchased | 40 | 285 | - | 325 | ||||||||||
Quarterly Conference Call
PHX will host a conference call to discuss the Company's results for the quarter ended Sept. 30, 2024, at 12 p.m. EST on Nov. 7, 2024. 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 13748980.
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 Income | ||||||||||||||||
Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Revenues: | ||||||||||||||||
Natural gas, oil and NGL sales | $ | 7,888,516 | $ | 8,899,091 | $ | 24,804,730 | $ | 27,987,502 | ||||||||
Lease bonuses and rental income | 159,271 | 620,101 | 445,215 | 1,045,242 | ||||||||||||
Gains (losses) on derivative contracts | 1,089,242 | (337,647) | 1,297,737 | 3,648,179 | ||||||||||||
9,137,029 | 9,181,545 | 26,547,682 | 32,680,923 | |||||||||||||
Costs and expenses: | ||||||||||||||||
Lease operating expenses | 294,720 | 363,426 | 921,483 | 1,279,831 | ||||||||||||
Transportation, gathering and marketing | 1,111,980 | 693,915 | 3,495,880 | 2,729,044 | ||||||||||||
Production and ad valorem taxes | 428,577 | 437,841 | 1,418,899 | 1,424,679 | ||||||||||||
Depreciation, depletion and amortization | 2,376,025 | 2,022,709 | 7,000,635 | 6,123,031 | ||||||||||||
Provision for impairment | - | 36,460 | - | 38,533 | ||||||||||||
Interest expense | 622,480 | 556,941 | 1,989,348 | 1,638,708 | ||||||||||||
General and administrative | 2,683,434 | 2,760,342 | 8,765,099 | 8,919,354 | ||||||||||||
Losses (gains) on asset sales and other | 62,248 | (174,492) | (110,866) | (4,369,613) | ||||||||||||
Total costs and expenses | 7,579,464 | 6,697,142 | 23,480,478 | 17,783,567 | ||||||||||||
Income (loss) before provision for income taxes | 1,557,565 | 2,484,403 | 3,067,204 | 14,897,356 | ||||||||||||
Provision for income taxes | 457,255 | 589,000 | 854,738 | 3,490,000 | ||||||||||||
Net income (loss) | $ | 1,100,310 | $ | 1,895,403 | $ | 2,212,466 | $ | 11,407,356 | ||||||||
Basic earnings per common share | $ | 0.03 | $ | 0.05 | $ | 0.06 | $ | 0.32 | ||||||||
Diluted earnings per common share | $ | 0.03 | $ | 0.05 | $ | 0.06 | $ | 0.31 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 36,316,742 | 35,983,116 | 36,306,593 | 35,961,570 | ||||||||||||
Diluted | 36,983,669 | 36,656,272 | 36,731,643 | 36,670,494 | ||||||||||||
Dividends per share of | ||||||||||||||||
common stock paid in period | $ | 0.0400 | $ | 0.0225 | $ | 0.1000 | $ | 0.0675 | ||||||||
Balance Sheets | |||||||
Sept. 30, 2024 | Dec. 31, 2023 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,601,681 | $ | 806,254 | |||
Natural gas, oil, and NGL sales receivables (net of $0 | 4,080,560 | 4,900,126 | |||||
allowance for uncollectable accounts) | |||||||
Refundable income taxes | 343,814 | 455,931 | |||||
Derivative contracts, net | 761,527 | 3,120,607 | |||||
Other | 417,929 | 878,659 | |||||
Total current assets | 8,205,511 | 10,161,577 | |||||
Properties and equipment at cost, based on | |||||||
successful efforts accounting: | |||||||
Producing natural gas and oil properties | 219,958,671 | 209,082,847 | |||||
Non-producing natural gas and oil properties | 52,503,370 | 58,820,445 | |||||
Other | 1,361,064 | 1,360,614 | |||||
273,823,105 | 269,263,906 | ||||||
Less accumulated depreciation, depletion and amortization | (120,301,196) | (114,139,423) | |||||
Net properties and equipment | 153,521,909 | 155,124,483 | |||||
Derivative contracts, net | 33,726 | 162,980 | |||||
Operating lease right-of-use assets | 466,135 | 572,610 | |||||
Other, net | 596,830 | 486,630 | |||||
Total assets | $ | 162,824,111 | $ | 166,508,280 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 512,936 | $ | 562,607 | |||
Current portion of operating lease liability | 243,184 | 233,390 | |||||
Accrued liabilities and other | 1,815,758 | 1,215,275 | |||||
Total current liabilities | 2,571,878 | 2,011,272 | |||||
Long-term debt | 27,750,000 | 32,750,000 | |||||
Deferred income taxes, net | 7,289,591 | 6,757,637 | |||||
Asset retirement obligations | 1,087,416 | 1,062,139 | |||||
Operating lease liability, net of current portion | 512,357 | 695,818 | |||||
Total liabilities | 39,211,242 | 43,276,866 | |||||
Stockholders' equity: | |||||||
Common Stock, $0.01666 par value; 75,000,000 shares authorized and | |||||||
36,121,723 issued at Sept. 30, 2024; 54,000,500 shares authorized | |||||||
and 36,121,723 issued at Dec. 31, 2023 | 601,788 | 601,788 | |||||
Capital in excess of par value | 43,526,595 | 41,676,417 | |||||
Deferred directors' compensation | 1,276,295 | 1,487,590 | |||||
Retained earnings | 78,492,889 | 80,022,839 | |||||
123,897,567 | 123,788,634 | ||||||
Less treasury stock, at cost; 67,203 shares at Sept. 30, | |||||||
2024, and 131,477 shares at Dec. 31, 2023 | (284,698) | (557,220) | |||||
Total stockholders' equity | 123,612,869 | 123,231,414 | |||||
Total liabilities and stockholders' equity | $ | 162,824,111 | $ | 166,508,280 | |||
Condensed Statements of Cash Flows | |||||||
Nine Months Ended | |||||||
Sept. 30, 2024 | Sept. 30, 2023 | ||||||
Operating Activities | |||||||
Net income (loss) | $ | 2,212,466 | $ | 11,407,356 | |||
Adjustments to reconcile net income (loss) to net cash provided | |||||||
by operating activities: | |||||||
Depreciation, depletion and amortization | 7,000,635 | 6,123,031 | |||||
Impairment of producing properties | - | 38,533 | |||||
Provision for deferred income taxes | 531,954 | 3,256,000 | |||||
Gain from leasing fee mineral acreage | (445,215) | (1,045,242) | |||||
Proceeds from leasing fee mineral acreage | 451,616 | 1,108,909 | |||||
Net (gain) loss on sales of assets | (518,816) | (4,671,253) | |||||
Directors' deferred compensation expense | 137,617 | 165,582 | |||||
Total (gain) loss on derivative contracts | (1,297,737) | (3,648,179) | |||||
Cash receipts (payments) on settled derivative contracts | 3,786,071 | 2,468,724 | |||||
Restricted stock award expense | 1,773,789 | 1,695,637 | |||||
Other | 76,375 | 105,604 | |||||
Cash provided (used) by changes in assets and liabilities: | |||||||
Natural gas, oil and NGL sales receivables | 819,566 | 4,369,921 | |||||
Income taxes receivable | 112,117 | (712,475) | |||||
Other current assets | 430,119 | 408,533 | |||||
Accounts payable | (68,183) | (107,796) | |||||
Other non-current assets | (81,037) | 150,515 | |||||
Income taxes payable | - | (576,427) | |||||
Accrued liabilities | 286,515 | 272,711 | |||||
Total adjustments | 12,995,386 | 9,402,328 | |||||
Net cash provided by operating activities | 15,207,852 | 20,809,684 | |||||
Investing Activities | |||||||
Capital expenditures | (64,628) | (321,396) | |||||
Acquisition of minerals and overriding royalty interests | (5,272,847) | (25,383,759) | |||||
Net proceeds from sales of assets | 527,167 | 9,556,666 | |||||
Net cash provided by (used in) investing activities | (4,810,308) | (16,148,489) | |||||
Financing Activities | |||||||
Borrowings under credit facility | 1,000,000 | 16,000,000 | |||||
Payments of loan principal | (6,000,000) | (18,550,000) | |||||
Payments on off-market derivative contracts | - | (560,162) | |||||
Purchases of treasury stock | - | (669) | |||||
Payments of dividends | (3,602,117) | (2,430,823) | |||||
Net cash provided by (used in) financing activities | (8,602,117) | (5,541,654) | |||||
Increase (decrease) in cash and cash equivalents | 1,795,427 | (880,459) | |||||
Cash and cash equivalents at beginning of period | 806,254 | 2,115,652 | |||||
Cash and cash equivalents at end of period | $ | 2,601,681 | $ | 1,235,193 | |||
Supplemental Disclosures of Cash Flow Information: | |||||||
Interest paid (net of capitalized interest) | $ | 2,041,252 | $ | 1,652,872 | |||
Income taxes paid (net of refunds received) | $ | 210,668 | $ | 1,522,904 | |||
Supplemental Schedule of Noncash Investing and Financing Activities: | |||||||
Dividends declared and unpaid | $ | 140,300 | $ | 94,587 | |||
Gross additions to properties and equipment | $ | 5,386,597 | $ | 26,392,844 | |||
Net increase (decrease) in accounts receivable for properties | |||||||
and equipment additions | (49,122) | (687,689) | |||||
Capital expenditures and acquisitions | $ | 5,337,475 | $ | 25,705,155 | |||
Derivative Contracts as of Sept. 30, 2024 | ||||||
Production volume | ||||||
Contract period | covered per month | Index | Contract price | |||
Natural gas costless collars | ||||||
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 | |||
December 2024 | 75,000 Mmbtu | NYMEX Henry Hub | $3.00 floor / $3.37 ceiling | |||
January - March 2025 | 25,000 Mmbtu | NYMEX Henry Hub | $3.00 floor / $3.37 ceiling | |||
January - March 2025 | 30,000 Mmbtu | NYMEX Henry Hub | $3.50 floor / $5.15 ceiling | |||
January 2025 | 55,000 Mmbtu | NYMEX Henry Hub | $3.50 floor / $4.40 ceiling | |||
February 2025 | 25,000 Mmbtu | NYMEX Henry Hub | $3.50 floor / $4.40 ceiling | |||
March 2025 | 35,000 Mmbtu | NYMEX Henry Hub | $3.50 floor / $4.40 ceiling | |||
April 2025 - September 2025 | 55,000 Mmbtu | NYMEX Henry Hub | $3.00 floor / $3.75 ceiling | |||
November 2025 - March 2026 | 100,000 Mmbtu | NYMEX Henry Hub | $3.50 floor / $4.85 ceiling | |||
November 2025 - March 2026 | 75,000 Mmbtu | NYMEX Henry Hub | $3.50 floor / $4.72 ceiling | |||
November 2025 - March 2026 | 15,000 Mmbtu | NYMEX Henry Hub | $3.50 floor / $5.15 ceiling | |||
Natural gas fixed price swaps | ||||||
October 2024 | 50,000 Mmbtu | NYMEX Henry Hub | $3.17 | |||
October 2024 | 75,000 Mmbtu | NYMEX Henry Hub | $3.47 | |||
October 2024 | 25,000 Mmbtu | NYMEX Henry Hub | $3.47 | |||
October 2024 | 105,000 Mmbtu | NYMEX Henry Hub | $3.24 | |||
November 2024 | 25,000 Mmbtu | NYMEX Henry Hub | $2.80 | |||
November - December 2024 | 70,000 Mmbtu | NYMEX Henry Hub | $4.16 | |||
December 2024 | 50,000 Mmbtu | NYMEX Henry Hub | $3.39 | |||
January - March 2025 | 60,000 Mmbtu | NYMEX Henry Hub | $4.16 | |||
January - March 2025 | 50,000 Mmbtu | NYMEX Henry Hub | $3.51 | |||
April - May 2025 | 25,000 Mmbtu | NYMEX Henry Hub | $3.23 | |||
April - August 2025 | 125,000 Mmbtu | NYMEX Henry Hub | $3.01 | |||
April - October 2025 | 100,000 Mmbtu | NYMEX Henry Hub | $3.28 | |||
June 2025 | 10,000 Mmbtu | NYMEX Henry Hub | $3.23 | |||
July 2025 | 45,000 Mmbtu | NYMEX Henry Hub | $3.23 | |||
August 2025 | 40,000 Mmbtu | NYMEX Henry Hub | $3.23 | |||
September 2025 | 50,000 Mmbtu | NYMEX Henry Hub | $3.23 | |||
September - October 2025 | 100,000 Mmbtu | NYMEX Henry Hub | $3.01 | |||
October 2025 | 100,000 Mmbtu | NYMEX Henry Hub | $3.23 | |||
April - June 2026 | 50,000 Mmbtu | NYMEX Henry Hub | $3.10 | |||
Oil costless collars | ||||||
September 2024 | 500 Bbls | NYMEX WTI | $70.00 floor / $78.10 ceiling | |||
September - October 2024 | 1,650 Bbls | NYMEX WTI | $65.00 floor / $76.50 ceiling | |||
October - December 2024 | 500 Bbls | NYMEX WTI | $67.00 floor / $77.00 ceiling | |||
Oil fixed price swaps | ||||||
September - October 2024 | 1,000 Bbls | NYMEX WTI | $66.10 | |||
September - October 2024 | 1,500 Bbls | NYMEX WTI | $69.50 | |||
September 2024 | 500 Bbls | NYMEX WTI | $76.46 | |||
October 2024 | 500 Bbls | NYMEX WTI | $76.12 | |||
October 2024 - August 2025 | 1,000 Bbls | NYMEX WTI | $68.80 | |||
November 2024 | 500 Bbls | NYMEX WTI | $75.49 | |||
November - December 2024 | 2,000 Bbls | NYMEX WTI | $69.50 | |||
November 2024 - March 2025 | 1,600 Bbls | NYMEX WTI | $64.80 | |||
December 2024 | 500 Bbls | NYMEX WTI | $74.94 | |||
January 2025 | 500 Bbls | NYMEX WTI | $74.48 | |||
January - March 2025 | 500 Bbls | NYMEX WTI | $69.50 | |||
January - June 2025 | 2,000 Bbls | NYMEX WTI | $70.90 | |||
February 2025 | 500 Bbls | NYMEX WTI | $74.10 | |||
March 2025 | 500 Bbls | NYMEX WTI | $73.71 | |||
April 2025 | 500 Bbls | NYMEX WTI | $73.30 | |||
April - June 2025 | 750 Bbls | NYMEX WTI | $69.50 | |||
April - June 2025 | 1,000 Bbls | NYMEX WTI | $68.00 | |||
May 2025 | 500 Bbls | NYMEX WTI | $72.92 | |||
June 2025 | 500 Bbls | NYMEX WTI | $72.58 | |||
July 2025 | 500 Bbls | NYMEX WTI | $72.24 | |||
July - August 2025 | 1,250 Bbls | NYMEX WTI | $70.81 | |||
July - September 2025 | 500 Bbls | NYMEX WTI | $69.50 | |||
July - December 2025 | 1,500 Bbls | NYMEX WTI | $68.90 | |||
August 2025 | 500 Bbls | NYMEX WTI | $71.88 | |||
September 2025 | 500 Bbls | NYMEX WTI | $71.60 | |||
September 2025 | 1,500 Bbls | NYMEX WTI | $68.80 | |||
October 2025 | 750 Bbls | NYMEX WTI | $71.12 | |||
October 2025 | 2,000 Bbls | NYMEX WTI | $68.80 | |||
November 2025 | 750 Bbls | NYMEX WTI | $70.99 | |||
November 2025 - March 2026 | 1,500 Bbls | NYMEX WTI | $68.80 | |||
December 2025 | 750 Bbls | NYMEX WTI | $70.66 | |||
January 2026 | 1,500 Bbls | NYMEX WTI | $70.53 | |||
February 2026 | 1,500 Bbls | NYMEX WTI | $71.28 | |||
March 2026 | 1,500 Bbls | NYMEX WTI | $70.42 | |||
April - June 2026 | 1,000 Bbls | NYMEX WTI | $68.80 | |||
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, 2024 | Sept. 30, 2023 | Sept. 30, 2024 | Sept. 30, 2023 | June 30, 2024 | |||||||||||||||
Net Income | $ | 1,100,310 | $ | 1,895,403 | $ | 2,212,466 | $ | 11,407,356 | $ | 1,295,771 | |||||||||
Plus: | |||||||||||||||||||
Income tax expense | 457,255 | 589,000 | 854,738 | 3,490,000 | 355,151 | ||||||||||||||
Interest expense | 622,480 | 556,941 | 1,989,348 | 1,638,708 | 651,982 | ||||||||||||||
DD&A | 2,376,025 | 2,022,709 | 7,000,635 | 6,123,031 | 2,268,284 | ||||||||||||||
Impairment expense | - | 36,460 | - | 38,533 | - | ||||||||||||||
Less: | |||||||||||||||||||
Non-cash gains (losses) | |||||||||||||||||||
on derivatives | 157,086 | (940,592) | (2,488,334) | 1,365,872 | (1,603,604) | ||||||||||||||
Gains (losses) on asset sales | 6,708 | 243,041 | 518,391 | 4,671,254 | 445,184 | ||||||||||||||
Plus: | |||||||||||||||||||
Cash payments on off-market derivative | |||||||||||||||||||
contracts | - | - | - | (373,745) | - | ||||||||||||||
Restricted stock and deferred | |||||||||||||||||||
director's expense | 513,059 | 522,965 | 1,911,405 | 1,861,219 | 696,559 | ||||||||||||||
Adjusted EBITDA | $ | 4,905,335 | $ | 6,321,029 | $ | 15,938,535 | $ | 18,147,976 | $ | 6,426,167 | |||||||||
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, 2024 | Sept. 30, 2023 | ||||||
Net Income | $ | 4,725,910 | $ | 14,753,489 | |||
Plus: | |||||||
Income tax expense | 2,100,198 | 4,471,000 | |||||
Interest expense | 2,713,033 | 2,276,406 | |||||
DD&A | 9,443,789 | 7,925,145 | |||||
Impairment expense | - | 6,139,229 | |||||
Less: | |||||||
Non-cash gains (losses) | |||||||
on derivatives | 448,324 | 7,630,914 | |||||
Gains (losses) on asset sales | 575,897 | 5,605,461 | |||||
Plus: | |||||||
Cash payments on off-market derivative | |||||||
contracts | - | (1,277,206) | |||||
Restricted stock and deferred | |||||||
director's expense | 2,484,115 | 2,430,303 | |||||
Adjusted EBITDA | $ | 20,442,824 | $ | 23,481,991 | |||
Debt | $ | 27,750,000 | $ | 30,750,000 | |||
Debt-to-Adjusted EBITDA (TTM) | 1.36 | 1.31 | |||||
PHX Minerals Inc. 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 about 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.
Investor Contact:
Rob Fink / Stephen Lee
FNK IR
646.809.4048
[email protected]
Corporate Contact:
405.948.1560
[email protected]
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SOURCE PHX MINERALS INC.