PHX Minerals Reports Results for the Quarter and Fiscal Year Ended Dec. 31, 2023; Announces Dividend and Provides 2024 Operational Outlook
FORT WORTH, Texas, Mar. 12, 2024 – PHX MINERALS INC., “PHX” or the “Company” (NYSE: PHX), today reported financial and operating results for the quarter and fiscal year ended Dec. 31, 2023.
Summary of Results for the Period Ended Dec. 31, 2023
- Net income in the fiscal fourth quarter and full fiscal year 2023 was $2.5 million, or $0.07 per diluted share, and $13.9 million, or $0.39 per diluted share, respectively, compared to net income of $1.9 million, or $0.05 per diluted share, for the quarter ended Sept. 30, 2023, and net income of $17.1 million, or $0.48 per diluted share, for the year ended Dec. 31, 2022.
- Adjusted EBITDA(1) in the fiscal fourth quarter and full fiscal year was $4.5 million and $22.7 million, respectively, compared to $6.3 million for the quarter ended Sept. 30, 2023, and $26.7 million for the year ended Dec. 31, 2022.
- Royalty production volumes for the fiscal fourth quarter decreased 6% to 1,946 Mmcfe compared to the quarter ended Sept. 30, 2023, and increased 23% to 8,123 Mmcfe for the full fiscal year 2023 compared to the year ended Dec. 31, 2022.
- Total production volumes for the fiscal fourth quarter decreased 4% to 2,245 Mmcfe compared to the quarter ended Sept. 30, 2023, and decreased 3% to 9,379 Mmcfe for the full fiscal year 2023 compared to the year ended Dec. 31, 2022.
- Net proved royalty interest reserves increased 9% to 57.8 Bcfe at Dec. 31, 2023 from 53.1 Bcfe at Dec. 31, 2022.
- Converted 46 gross (0.098 net) and 314 gross (1.03 net) wells to producing status in the fiscal fourth quarter and full fiscal year 2023, compared to 71 gross (0.155 net) during the quarter ended Sept. 30, 2023, and 313 gross (1.15 net) during the year ended Dec. 31, 2022.
- Inventory of 168 gross (0.851 net) wells in progress and 95 gross (0.444 net) permits as of Dec. 31, 2023, compared to 185 gross (0.81 net) wells in progress and 93 gross (0.28 net) permits as of Sept. 30, 2023.
- Total debt was $32.8 million and the debt to adjusted EBITDA (TTM) (1) ratio was 1.45x as of Dec. 31, 2023.
Subsequent Events
- PHX announced a $0.03 per share quarterly dividend, payable on March 29, 2024, to stockholders of record on March 18, 2024.
- This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section.
Chad L. Stephens, President and CEO, commented, “In 2023, PHX delivered year-over-year royalty volume growth of 23%, expanding 2P royalty reserves by 12%, generating significant operating cash flow and net income. These results enabled us to raise our quarterly dividend by 33% despite another challenging year in the natural gas pricing environment. Our strong balance sheet and strategy of modest leverage enabled us to deliver consistent results despite a historic drop in gas prices and rising interest rates validating our business strategy, which positions us for success in both up and down markets.”
“Looking forward, we are optimistic that reduced drilling activity, announced production curtailments, and the expansion of LNG export facilities should balance the market and improve commodity prices,” continued Mr. Stephens. “During the past year, PHX deployed more than $30 million to acquire almost 2,400 net royalty acres in the Haynesville and SCOOP plays. The acquisition of these high-quality minerals will further drive our royalty volumes, margin expansion and cash flow over the course of the next two to three years. With our strong financial position and a highly focused acquisition strategy we are poised to unlock value for our shareholders as the commodity pricing environment improves.”
Financial Highlights
|
|
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Three Months Ended |
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Three Months Ended |
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Twelve Months Ended |
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Twelve Months Ended |
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Dec. 31, 2023 |
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Dec. 31, 2022 |
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Dec. 31, 2023 |
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Dec. 31, 2022 |
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||||
|
Royalty Interest Sales |
|
$ |
7,378,650 |
|
|
$ |
10,571,704 |
|
|
$ |
31,593,351 |
|
|
$ |
47,335,656 |
|
|
Working Interest Sales |
|
$ |
1,170,133 |
|
|
$ |
4,316,970 |
|
|
$ |
4,942,934 |
|
|
$ |
23,726,485 |
|
|
Natural Gas, Oil and NGL Sales |
|
$ |
8,548,783 |
|
|
$ |
14,888,674 |
|
|
$ |
36,536,285 |
|
|
$ |
71,062,141 |
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||||
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Gains (Losses) on Derivative Contracts |
|
$ |
3,211,410 |
|
|
$ |
3,347,002 |
|
|
$ |
6,859,589 |
|
|
$ |
(16,322,244 |
) |
|
Lease Bonuses and Rental Income |
|
$ |
22,780 |
|
|
$ |
34,482 |
|
|
$ |
1,068,022 |
|
|
$ |
423,069 |
|
|
Total Revenue |
|
$ |
11,782,973 |
|
|
$ |
18,270,158 |
|
|
$ |
44,463,896 |
|
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$ |
55,162,966 |
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Lease Operating Expense |
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per Working Interest Mcfe |
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$ |
1.07 |
|
|
$ |
1.66 |
|
|
$ |
1.27 |
|
|
$ |
1.21 |
|
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Transportation, Gathering and Marketing |
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per Mcfe |
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$ |
0.42 |
|
|
$ |
0.66 |
|
|
$ |
0.39 |
|
|
$ |
0.63 |
|
|
Production and Ad Valorem Tax per Mcfe |
|
$ |
0.20 |
|
|
$ |
0.30 |
|
|
$ |
0.20 |
|
|
$ |
0.34 |
|
|
G&A Expense per Mcfe |
|
$ |
1.36 |
|
|
$ |
1.42 |
|
|
$ |
1.28 |
|
|
$ |
1.29 |
|
|
Cash G&A Expense per Mcfe (1) |
|
$ |
1.10 |
|
|
$ |
1.16 |
|
|
$ |
1.02 |
|
|
$ |
1.02 |
|
|
Interest Expense per Mcfe |
|
$ |
0.32 |
|
|
$ |
0.29 |
|
|
$ |
0.25 |
|
|
$ |
0.17 |
|
|
DD&A per Mcfe |
|
$ |
1.09 |
|
|
$ |
0.81 |
|
|
$ |
0.91 |
|
|
$ |
0.77 |
|
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Total Expense per Mcfe |
|
$ |
3.53 |
|
|
$ |
3.92 |
|
|
$ |
3.20 |
|
|
$ |
3.58 |
|
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||||
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Net Income |
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$ |
2,513,444 |
|
|
$ |
3,346,133 |
|
|
$ |
13,920,800 |
|
|
$ |
17,073,156 |
|
|
Adjusted EBITDA (2) |
|
$ |
4,504,288 |
|
|
$ |
5,334,016 |
|
|
$ |
22,652,263 |
|
|
$ |
26,743,500 |
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Cash Flow from Operations (3) |
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$ |
3,361,455 |
|
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$ |
10,141,814 |
|
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$ |
24,171,139 |
|
|
$ |
39,035,474 |
|
|
CapEx (4) |
|
$ |
4,587 |
|
|
$ |
87,104 |
|
|
$ |
325,983 |
|
|
$ |
447,065 |
|
|
CapEx - Mineral Acquisitions |
|
$ |
4,351,757 |
|
|
$ |
14,499,014 |
|
|
$ |
29,735,516 |
|
|
$ |
46,380,423 |
|
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Borrowing Base |
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$ |
50,000,000 |
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$ |
50,000,000 |
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||
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Debt |
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|
|
|
|
|
|
$ |
32,750,000 |
|
|
$ |
33,300,000 |
|
||
|
Debt to Adjusted EBITDA (TTM) (2) |
|
|
|
|
|
|
|
|
1.45 |
|
|
|
1.25 |
|
||
- 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.
- This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section.
- GAAP cash flow from operations.
- Includes legacy working interest expenditures and fixtures and equipment.
Operating Highlights
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
Twelve Months Ended |
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||||
|
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Dec. 31, 2023 |
|
|
Dec. 31, 2022 |
|
|
Dec. 31, 2023 |
|
|
Dec. 31, 2022 |
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||||
|
Gas Mcf Sold |
|
1,775,577 |
|
|
|
1,669,320 |
|
|
|
7,457,084 |
|
|
|
7,522,763 |
|
|
Average Sales Price per Mcf before the |
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|
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|
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|
effects of settled derivative contracts |
$ |
2.53 |
|
|
$ |
5.66 |
|
|
$ |
2.61 |
|
|
$ |
6.19 |
|
|
Average Sales Price per Mcf after the |
|
|
|
|
|
|
|
|
|
|
|
||||
|
effects of settled derivative contracts |
$ |
2.76 |
|
|
$ |
4.02 |
|
|
$ |
2.96 |
|
|
$ |
4.20 |
|
|
% of sales subject to hedges |
|
44 |
% |
|
|
65 |
% |
|
|
46 |
% |
|
|
61 |
% |
|
Oil Barrels Sold |
|
39,768 |
|
|
|
52,406 |
|
|
|
182,916 |
|
|
|
202,867 |
|
|
Average Sales Price per Bbl before the |
|
|
|
|
|
|
|
|
|
|
|
||||
|
effects of settled derivative contracts |
$ |
78.66 |
|
|
$ |
82.52 |
|
|
$ |
76.76 |
|
|
$ |
93.06 |
|
|
Average Sales Price per Bbl after the |
|
|
|
|
|
|
|
|
|
|
|
||||
|
effects of settled derivative contracts |
$ |
75.37 |
|
|
$ |
62.03 |
|
|
$ |
74.21 |
|
|
$ |
60.98 |
|
|
% of sales subject to hedges |
|
36 |
% |
|
|
57 |
% |
|
|
42 |
% |
|
|
66 |
% |
|
NGL Barrels Sold |
|
38,422 |
|
|
|
38,611 |
|
|
|
137,484 |
|
|
|
159,475 |
|
|
Average Sales Price per Bbl(1) |
$ |
24.00 |
|
|
$ |
28.77 |
|
|
$ |
22.18 |
|
|
$ |
35.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Mcfe Sold |
|
2,244,717 |
|
|
|
2,215,419 |
|
|
|
9,379,484 |
|
|
|
9,696,809 |
|
|
Natural gas, oil and NGL sales before the |
|
|
|
|
|
|
|
|
|
|
|
||||
|
effects of settled derivative contracts |
$ |
8,548,783 |
|
|
$ |
14,888,674 |
|
|
$ |
36,536,285 |
|
|
$ |
71,062,141 |
|
|
Natural gas, oil and NGL sales after the |
|
|
|
|
|
|
|
|
|
|
|
||||
|
effects of settled derivative contracts |
$ |
8,823,534 |
|
|
$ |
11,067,174 |
|
|
$ |
38,719,598 |
|
|
$ |
49,586,709 |
|
|
|
|
|
|
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|
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|
(1) There were no NGL settled derivative contracts during the 2023 and 2022 periods. |
|
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Total Production for the last four quarters was as follows:
|
Quarter ended |
|
Mcf Sold |
|
|
Oil Bbls Sold |
|
|
NGL Bbls Sold |
|
|
Mcfe Sold |
|
||||
|
12/31/2023 |
|
|
1,775,577 |
|
|
|
39,768 |
|
|
|
38,422 |
|
|
|
2,244,717 |
|
|
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 |
|
Natural gas volumes were 79% of total production volumes for the quarter ended Dec. 31, 2023.
Royalty Interest Production for the last four quarters was as follows:
|
Quarter ended |
|
Mcf Sold |
|
|
Oil Bbls Sold |
|
|
NGL Bbls Sold |
|
|
Mcfe Sold |
|
||||
|
12/31/2023 |
|
|
1,590,301 |
|
|
|
35,547 |
|
|
|
23,769 |
|
|
|
1,946,196 |
|
|
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 |
|
Natural gas volumes were 82% of total royalty production volumes for the quarter ended Dec. 31, 2023.
Working Interest Production for the last four quarters was as follows:
|
Quarter ended |
|
Mcf Sold |
|
|
Oil Bbls Sold |
|
|
NGL Bbls Sold |
|
|
Mcfe Sold |
|
||||
|
12/31/2023 |
|
|
185,276 |
|
|
|
4,221 |
|
|
|
14,653 |
|
|
|
298,521 |
|
|
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 |
|
Outlook
PHX is providing an operational outlook for 2024 as follows:
|
|
|
Calendar Year 2022 Actual |
|
Calendar Year 2023 Actual |
|
Calendar Year 2024 Outlook |
|
Mineral & Royalty Production (Mmcfe) |
|
6,613 |
|
8,123 |
|
8,100 - 8,800 |
|
Working Interest Production (Mmcfe) |
|
3,084 |
|
1,256 |
|
1,000 - 1,200 |
|
Total Production (Mmcfe) |
|
9,697 |
|
9,379 |
|
9,100 - 10,000 |
|
Percentage Natural Gas |
|
78% |
|
80% |
|
79% - 82% |
|
|
|
|
|
|
|
|
|
Transportation, Gathering & Marketing (per Mcfe) |
|
$0.63 |
|
$0.39 |
|
$0.38 - $0.43 |
|
Production Tax (as % of pre-hedge sales volumes) |
|
4.50% |
|
5.20% |
|
5.00% - 5.50% |
|
LOE Expenses (on an absolute basis in 000’s) |
|
$3,807 |
|
$1,599 |
|
$1,100 - $1,300 |
|
Cash G&A (on an absolute basis in 000’s) |
|
$9,900 |
|
$9,500 |
|
$9,700 - $9,900 |
Quarter Ended Dec. 31, 2023 Results
The Company recorded net income of $2.5 million, or $0.07 per diluted share, for the quarter ended Dec. 31, 2023, as compared to net income of $3.3 million, or $0.09 per diluted share, for the quarter ended Dec. 31, 2022. The change in net income was principally the result of a decrease in natural gas, oil and NGL sales, a decrease in gains on asset sales, and an increase in DD&A, partially offset by decreases in impairment, lease operating expenses, and transportation, gathering and marketing expenses.
Natural gas, oil and NGL revenue decreased $6.3 million, or 43%, for the quarter ended Dec. 31, 2023, compared to the quarter ended Dec. 31, 2022, due to decreases in natural gas, oil and NGL prices of 55%, 5% and 17%, respectively, and a decrease in oil volumes of 24%, partially offset by an increase in natural gas volumes of 6%.
The increase in royalty production volumes during the quarter ended Dec. 31, 2023 to 1,946 Mmcfe from 1,628 Mmcfe during the quarter ended Dec. 31, 2022 resulted from new wells in the Haynesville Shale and SCOOP coming online. The production decrease in working interest volumes during the quarter ended Dec. 31, 2023, as compared to the quarter ended Dec. 31, 2022, resulted from the divestiture of working interest properties in the Arkoma Stack and Eagle Ford Shale plays.
The Company had a net gain on derivative contracts of $3.2 million for the quarter ended Dec. 31, 2023, comprised of a $2.9 million non-cash gain on derivatives and a $0.3 million gain on settled derivatives, as compared to a net gain of $3.3 million for the quarter ended Dec. 31, 2022. The change in net gain on derivative contracts was due to the Company’s settlements of natural gas and oil collars and fixed price swaps and the change in valuation caused by the difference in Dec. 31, 2023 pricing relative to the strike price on open derivative contracts.
The Company recorded no impairment and made immaterial divestitures during the quarter ended Dec. 31, 2023. Lease operating expenses and transportation, gathering and marketing expenses were lower due to the divestiture of working interest properties in the Arkoma Stack and Eagle Ford Shale plays.
Twelve Months Ended Dec. 31, 2023 Results
The Company recorded net income of $13.9 million, or $0.39 per diluted share, for the twelve months ended Dec. 31, 2023, as compared to net income of $17.1 million, or $0.48 per diluted share, for the twelve months ended Dec. 31, 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 impairment, lease operating expenses, production and ad valorem taxes, and transportation, gathering and marketing expenses.
Natural gas, oil and NGL revenue decreased $34.5 million, or 49%, for the twelve months ended Dec. 31, 2023, compared to the twelve months ended Dec. 31, 2022, due to decreases in natural gas, oil and NGL prices of 58%, 18% and 37%, respectively, and decreases in natural gas, oil and NGL volumes of 1%, 10% and 14%, respectively.
The increase in royalty production volumes during the twelve months ended Dec. 31, 2023 to 8,123 Mmcfe from 6,613 Mmcfe during the twelve months ended Dec. 31, 2022 resulted from new wells in the Haynesville Shale and SCOOP coming online. The production decrease in working interest volumes during the twelve months ended Dec. 31, 2023, as compared to the twelve months ended Dec. 31, 2022, resulted from the divestiture of working interest properties in the Fayetteville Shale, Arkoma Stack, and Eagle Ford Shale plays.
The Company had a net gain on derivative contracts of $6.9 million for the twelve months ended Dec. 31, 2023, comprised of a a $4.3 million non-cash gain on derivatives and a $2.6 million gain on settled derivatives, as compared to a net loss of ($16.3) million for the twelve months ended Dec. 31, 2022. The gain on settled derivative contracts for the twelve months ended Dec. 31, 2023 excludes $0.4 million of cash paid to settle off-market derivative contracts. The total net cash received to settle hedge contracts during the twelve months ended Dec. 31, 2023 was $2.2 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 Dec. 31, 2023 pricing relative to the strike price on open derivative contracts.
Lease operating expenses and transportation, gathering and marketing expenses were lower due to the divestiture of working interest properties in the Fayetteville Shale, Arkoma Stack, and Eagle Ford Shale plays. Production and ad valorem taxes decreased due to a 49% decrease in natural gas, oil and NGL sales.
Operations Update
During the quarter ended Dec. 31, 2023, the Company converted 46 gross (0.098 net) wells to producing status, including 21 gross (0.044 net) wells in the Haynesville and 14 gross (0.024 net) wells in the SCOOP, compared to 60 gross (0.27 net) wells in the quarter ended Dec. 31, 2022.
At Dec. 31, 2023, the Company had a total of 168 gross (0.851 net) wells in progress across its mineral positions and 95 gross (0.444 net) active permitted wells, compared to 185 gross (0.81 net) wells in progress and 93 gross (0.28 net) active permitted wells at Sept. 30, 2023. As of Feb. 12, 2024, 14 rigs were operating on the Company’s acreage and 57 rigs operating within 2.5 miles of its acreage.
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Bakken/ |
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Three |
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Arkoma |
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SCOOP |
|
|
STACK |
|
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Forks |
|
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Stack |
|
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Haynesville |
|
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Other |
|
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Total |
|
|||||||
|
As of Dec. 31, 2023: |
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|
Gross Wells in Progress on PHX Acreage (1) |
|
57 |
|
|
|
5 |
|
|
|
8 |
|
|
|
2 |
|
|
|
87 |
|
|
|
9 |
|
|
|
168 |
|
|
Net Wells in Progress on PHX Acreage (1) |
|
0.227 |
|
|
|
0.023 |
|
|
|
0.043 |
|
|
|
0.001 |
|
|
|
0.537 |
|
|
|
0.020 |
|
|
|
0.851 |
|
|
Gross Active Permits on PHX Acreage |
|
35 |
|
|
|
5 |
|
|
- |
|
|
|
5 |
|
|
|
44 |
|
|
|
6 |
|
|
|
95 |
|
|
|
Net Active Permits on PHX Acreage |
|
0.151 |
|
|
|
0.011 |
|
|
- |
|
|
|
0.002 |
|
|
|
0.246 |
|
|
|
0.034 |
|
|
|
0.444 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
As of Feb. 12, 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Rigs Present on PHX Acreage |
|
6 |
|
|
|
- |
|
|
|
1 |
|
|
|
- |
|
|
|
4 |
|
|
|
3 |
|
|
|
14 |
|
|
Rigs Within 2.5 Miles of PHX Acreage |
|
14 |
|
|
|
9 |
|
|
|
2 |
|
|
|
1 |
|
|
|
23 |
|
|
|
8 |
|
|
|
57 |
|
(1) Wells in progress includes drilling wells and drilled but uncompleted wells, or DUCs.
Leasing Activity
During the quarter ended Dec. 31, 2023, the Company leased 108 net mineral acres to third-party exploration and production companies for an average bonus payment of $968 per net mineral acre and an average royalty of 24%.
Acquisition and Divestiture Update
During the quarter ended Dec. 31, 2023, the Company purchased 325 net royalty acres for approximately $4.3 million and had no significant divestitures.
|
|
|
Acquisitions |
|
|||||||||||
|
|
|
SCOOP |
|
|
Haynesville |
|
|
Other |
|
Total |
|
|||
|
During Three Months Ended Dec. 31, 2023: |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Net Mineral Acres Purchased |
|
|
96 |
|
|
|
142 |
|
|
- |
|
|
238 |
|
|
Net Royalty Acres Purchased |
|
|
112 |
|
|
|
213 |
|
|
- |
|
|
325 |
|
Royalty Reserves Update
At Dec. 31, 2023, proved royalty reserves increased 9% to 57.8 Bcfe compared to 53.1 Bcfe at Dec. 31, 2022. Proved developed reserves increased by 5.3 Bcfe and proved undeveloped reserves decreased by 0.7 Bcfe, primarily due to execution of our acquisition strategy and consistent development in the Haynesville and SCOOP plays resulting in conversion of undeveloped reserves to producing.
|
|
Proved Royalty Interest |
|
|||||
|
|
Reserves SEC Pricing |
|
|||||
|
|
Dec. 31, 2023 |
|
|
Dec. 31, 2022 |
|
||
|
Proved Developed Reserves: |
|
|
|||||
|
Mcf of Gas |
|
36,156,363 |
|
|
|
31,467,785 |
|
|
Barrels of Oil |
|
731,527 |
|
|
|
628,289 |
|
|
Barrels of NGL |
|
715,683 |
|
|
|
712,342 |
|
|
Mcfe (1) |
|
44,839,623 |
|
|
|
39,511,571 |
|
|
Proved Undeveloped Reserves: |
|
|
|
|
|
||
|
Mcf of Gas |
|
11,508,969 |
|
|
|
12,608,549 |
|
|
Barrels of Oil |
|
134,497 |
|
|
|
118,168 |
|
|
Barrels of NGL |
|
99,712 |
|
|
|
48,136 |
|
|
Mcfe (1) |
|
12,914,223 |
|
|
|
13,606,373 |
|
|
Total Proved Reserves: |
|
|
|
|
|
||
|
Mcf of Gas |
|
47,665,332 |
|
|
|
44,076,334 |
|
|
Barrels of Oil |
|
866,024 |
|
|
|
746,457 |
|
|
Barrels of NGL |
|
815,395 |
|
|
|
760,478 |
|
|
Mcfe (1) |
|
57,753,846 |
|
|
|
53,117,944 |
|
|
|
|
|
|
|
|
||
|
10% Discounted Estimated Future |
|
|
|
|
|
||
|
Net Cash Flows (before income taxes): |
|
|
|
|
|
||
|
Proved Developed |
$ |
73,448,070 |
|
|
$ |
122,723,015 |
|
|
Proved Undeveloped |
|
23,525,572 |
|
|
|
56,306,773 |
|
|
Total |
$ |
96,973,642 |
|
|
$ |
179,029,788 |
|
|
|
|
|
|
|
|
||
|
(1) Crude oil and NGL converted to natural gas on a one barrel of crude oil or NGL equals six Mcf of natural gas basis. |
|
||||||
Total Reserves Update
At Dec. 31, 2023, proved reserves were 71.2 Bcfe, as calculated by Cawley, Gillespie and Associates, Inc., the Company’s independent consulting petroleum engineering firm. This was an 11% decrease, compared to the 79.7 Bcfe of proved reserves at Dec. 31, 2022. Total proved developed reserves decreased 12% to 58.3 Bcfe, as compared to Dec. 31, 2022 reserve volumes, mainly due to sales of working interest properties in the Arkoma Stack and Eagle Ford Shale. SEC prices used for the Dec. 31, 2023 report averaged $2.67 per Mcf for natural gas, $76.85 per barrel for oil and $21.98 per barrel for NGL, compared to $6.52 per Mcf for natural gas, $92.74 per barrel for oil and $39.18 per barrel for NGL for the Dec. 31, 2022 report. These prices reflect net prices received at the wellhead.
|
|
Proved Reserves SEC Pricing |
|
|||||
|
|
Dec. 31, 2023 |
|
|
Dec. 31, 2022 |
|
||
|
Proved Developed Reserves: |
|
|
|||||
|
Mcf of Gas |
|
44,479,988 |
|
|
|
48,596,944 |
|
|
Barrels of Oil |
|
937,465 |
|
|
|
1,253,838 |
|
|
Barrels of NGL |
|
1,362,944 |
|
|
|
1,660,439 |
|
|
Mcfe (1) |
|
58,282,442 |
|
|
|
66,082,606 |
|
|
Proved Undeveloped Reserves: |
|
|
|
|
|
||
|
Mcf of Gas |
|
11,508,969 |
|
|
|
12,608,549 |
|
|
Barrels of Oil |
|
134,497 |
|
|
|
118,168 |
|
|
Barrels of NGL |
|
99,712 |
|
|
|
48,136 |
|
|
Mcfe (1) |
|
12,914,223 |
|
|
|
13,606,373 |
|
|
Total Proved Reserves: |
|
|
|
|
|
||
|
Mcf of Gas |
|
55,988,957 |
|
|
|
61,205,493 |
|
|
Barrels of Oil |
|
1,071,962 |
|
|
|
1,372,006 |
|
|
Barrels of NGL |
|
1,462,656 |
|
|
|
1,708,575 |
|
|
Mcfe (1) |
|
71,196,665 |
|
|
|
79,688,979 |
|
|
|
|
|
|
|
|
||
|
10% Discounted Estimated Future |
|
|
|
|
|
||
|
Net Cash Flows (before income taxes): |
|
|
|
|
|
||
|
Proved Developed |
$ |
86,694,012 |
|
|
$ |
185,018,066 |
|
|
Proved Undeveloped |
|
23,325,572 |
|
|
|
56,306,773 |
|
|
Total |
$ |
110,019,584 |
|
|
$ |
241,324,839 |
|
|
SEC Pricing |
|
|
|
|
|
||
|
Gas/Mcf |
$ |
2.67 |
|
|
$ |
6.52 |
|
|
Oil/Barrel |
$ |
76.85 |
|
|
$ |
92.74 |
|
|
NGL/Barrel |
$ |
21.98 |
|
|
$ |
39.18 |
|
|
|
|
|
|
|
|
||
|
Proved Reserves - Projected Future Pricing (2) |
|
||||||
|
|
|
|
|
|
|
||
|
10% Discounted Estimated Future |
Proved Reserves |
|
|||||
|
Net Cash Flows (before income taxes): |
Dec. 31, 2023 |
|
|
Dec. 31, 2022 |
|
||
|
Proved Developed |
$ |
107,635,503 |
|
|
$ |
126,605,850 |
|
|
Proved Undeveloped |
|
29,439,523 |
|
|
|
38,748,236 |
|
|
Total |
$ |
137,075,026 |
|
|
$ |
165,354,086 |
|
|
|
|
|
|
|
|
||
|
(1) Crude oil and NGL converted to natural gas on a one barrel of crude oil or NGL equals six Mcf of natural gas basis. |
|
||||||
|
(2) Projected futures pricing as of Dec. 31, 2023 and Dec. 31, 2022 basis adjusted to Company wellhead price. |
|
||||||
Quarterly Conference Call
PHX will host a conference call to discuss the Company’s results for the quarter ended Dec. 31, 2023 at 11 a.m. EDT tomorrow, March 13, 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 13744298.
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 Dec. 31, |
|
|
Twelve Months Ended |
|
|
Twelve Months Ended |
|
|||||||
|
|
2023 |
|
|
2022 |
|
|
Dec. 31, 2023 |
|
|
Sept. 30, 2022 |
|
||||
|
Revenues: |
|
|
|
|
|
|
|
|
|||||||
|
Natural gas, oil and NGL sales |
$ |
8,548,783 |
|
|
$ |
14,888,674 |
|
|
$ |
36,536,285 |
|
|
$ |
69,860,631 |
|
|
Lease bonuses and rental income |
|
22,780 |
|
|
|
34,482 |
|
|
|
1,068,022 |
|
|
|
467,502 |
|
|
Gains (losses) on derivative contracts |
|
3,211,410 |
|
|
|
3,347,002 |
|
|
|
6,859,589 |
|
|
|
(16,833,078 |
) |
|
|
|
11,782,973 |
|
|
|
18,270,158 |
|
|
|
44,463,896 |
|
|
|
53,495,055 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Lease operating expenses |
|
319,113 |
|
|
|
977,165 |
|
|
|
1,598,944 |
|
|
|
3,945,706 |
|
|
Transportation, gathering and marketing |
|
945,788 |
|
|
|
1,455,260 |
|
|
|
3,674,832 |
|
|
|
5,890,390 |
|
|
Production and ad valorem taxes |
|
457,058 |
|
|
|
656,764 |
|
|
|
1,881,737 |
|
|
|
3,332,581 |
|
|
Depreciation, depletion and amortization |
|
2,443,154 |
|
|
|
1,802,114 |
|
|
|
8,566,185 |
|
|
|
7,278,118 |
|
|
Provision for impairment |
|
- |
|
|
|
6,100,696 |
|
|
|
38,533 |
|
|
|
14,565 |
|
|
Interest expense |
|
723,685 |
|
|
|
637,698 |
|
|
|
2,362,393 |
|
|
|
1,164,992 |
|
|
General and administrative |
|
3,050,828 |
|
|
|
3,137,401 |
|
|
|
11,970,182 |
|
|
|
11,500,594 |
|
|
Losses (gains) on asset sales and other |
|
84,443 |
|
|
|
(824,073 |
) |
|
|
(4,285,170 |
) |
|
|
(4,243,163 |
) |
|
Total costs and expenses |
|
8,024,069 |
|
|
|
13,943,025 |
|
|
|
25,807,636 |
|
|
|
28,883,783 |
|
|
Income (loss) before provision (benefit) for income taxes |
|
3,758,904 |
|
|
|
4,327,133 |
|
|
|
18,656,260 |
|
|
|
24,611,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Provision for income taxes |
|
1,245,460 |
|
|
|
981,000 |
|
|
|
4,735,460 |
|
|
|
4,202,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income |
$ |
2,513,444 |
|
|
$ |
3,346,133 |
|
|
$ |
13,920,800 |
|
|
$ |
20,409,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic earnings per common share |
$ |
0.07 |
|
|
$ |
0.09 |
|
|
$ |
0.39 |
|
|
$ |
0.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Diluted earnings per common share |
$ |
0.07 |
|
|
$ |
0.09 |
|
|
$ |
0.39 |
|
|
$ |
0.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic |
|
36,036,270 |
|
|
|
35,679,740 |
|
|
|
35,980,309 |
|
|
|
34,403,498 |
|
|
Diluted |
|
36,083,449 |
|
|
|
36,489,353 |
|
|
|
35,980,309 |
|
|
|
34,560,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Dividends per share of |
|
|
|
|
|
|
|
|
|
|
|
||||
|
common stock paid in period |
$ |
0.0300 |
|
|
$ |
0.0200 |
|
|
$ |
0.0975 |
|
|
$ |
0.0650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance Sheets
|
|
Dec. 31, 2023 |
|
|
Sept. 30, 2022 |
|
||
|
Assets |
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
|
||
|
Cash and cash equivalents |
$ |
806,254 |
|
|
$ |
3,396,809 |
|
|
Natural gas, oil, and NGL sales receivables (net of $0 |
|
4,900,126 |
|
|
|
13,152,274 |
|
|
allowance for uncollectable accounts) |
|
|
|
|
|
||
|
Refundable income taxes |
|
455,931 |
|
|
|
- |
|
|
Derivative contracts, net |
|
3,120,607 |
|
|
|
- |
|
|
Other |
|
878,659 |
|
|
|
1,372,847 |
|
|
Total current assets |
|
10,161,577 |
|
|
|
17,921,930 |
|
|
|
|
|
|
|
|
||
|
Properties and equipment at cost, based on |
|
|
|
|
|
||
|
successful efforts accounting: |
|
|
|
|
|
||
|
Producing natural gas and oil properties |
|
209,082,847 |
|
|
|
248,978,928 |
|
|
Non-producing natural gas and oil properties |
|
58,820,445 |
|
|
|
51,779,336 |
|
|
Other |
|
1,360,614 |
|
|
|
1,085,056 |
|
|
|
|
269,263,906 |
|
|
|
301,843,320 |
|
|
Less accumulated depreciation, depletion and amortization |
|
(114,139,423 |
) |
|
|
(168,759,385 |
) |
|
Net properties and equipment |
|
155,124,483 |
|
|
|
133,083,935 |
|
|
|
|
|
|
|
|
||
|
Derivative contracts, net |
|
162,980 |
|
|
|
- |
|
|
Operating lease right-of-use assets |
|
572,610 |
|
|
|
739,131 |
|
|
Other, net |
|
486,630 |
|
|
|
757,116 |
|
|
Total assets |
$ |
166,508,280 |
|
|
$ |
152,502,112 |
|
|
|
|
|
|
|
|
||
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
|
||
|
Accounts payable |
$ |
562,607 |
|
|
$ |
647,217 |
|
|
Derivative contracts, net |
|
- |
|
|
|
7,873,979 |
|
|
Income taxes payable |
|
- |
|
|
|
495,858 |
|
|
Current portion of operating lease liability |
|
233,390 |
|
|
|
213,355 |
|
|
Accrued liabilities and other |
|
1,215,275 |
|
|
|
2,032,275 |
|
|
Total current liabilities |
|
2,011,272 |
|
|
|
11,262,684 |
|
|
|
|
|
|
|
|
||
|
Long-term debt |
|
32,750,000 |
|
|
|
28,300,000 |
|
|
Deferred income taxes, net |
|
6,757,637 |
|
|
|
1,585,906 |
|
|
Asset retirement obligations |
|
1,062,139 |
|
|
|
1,901,904 |
|
|
Derivative contracts, net |
|
- |
|
|
|
687,212 |
|
|
Operating lease liability, net of current portion |
|
695,818 |
|
|
|
985,887 |
|
|
Total liabilities |
|
43,276,866 |
|
|
|
44,723,593 |
|
|
|
|
|
|
|
|
||
|
Stockholders' equity: |
|
|
|
|
|
||
|
Common Stock, $0.01666 par value; 54,000,500 shares authorized and |
|
|
|
|
|
||
|
36,121,723 issued at Dec. 31, 2023; 54,000,500 shares authorized |
|
|
|
|
|
||
|
and 35,776,752 issued at Sep. 30, 2022 |
|
601,788 |
|
|
|
596,041 |
|
|
Capital in excess of par value |
|
41,676,417 |
|
|
|
44,177,051 |
|
|
Deferred directors' compensation |
|
1,487,590 |
|
|
|
1,496,243 |
|
|
Retained earnings |
|
80,022,839 |
|
|
|
67,117,791 |
|
|
|
|
123,788,634 |
|
|
|
113,387,126 |
|
|
Less treasury stock, at cost; 131,477 shares at Dec. 31, |
|
|
|
|
|
||
|
2023, and 377,232 shares at Sep. 30, 2022 |
|
(557,220 |
) |
|
|
(5,608,607 |
) |
|
Total stockholders' equity |
|
123,231,414 |
|
|
|
107,778,519 |
|
|
Total liabilities and stockholders' equity |
$ |
166,508,280 |
|
|
$ |
152,502,112 |
|
Condensed Statements of Cash Flows
|
|
Twelve Months Ended |
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|||
|
|
Dec. 31, 2023 |
|
|
Dec. 31, 2022 |
|
|
Sept. 30, 2022 |
|
|||
|
Operating Activities |
|
|
|
|
|
|
|
|
|||
|
Net income |
$ |
13,920,800 |
|
|
$ |
3,346,133 |
|
|
$ |
20,409,272 |
|
|
Adjustments to reconcile net income (loss) to net cash provided |
|
|
|
|
|
|
|
|
|||
|
by operating activities: |
|
|
|
|
|
|
|
|
|||
|
Depreciation, depletion and amortization |
|
8,566,185 |
|
|
|
1,802,114 |
|
|
|
7,278,118 |
|
|
Impairment of producing properties |
|
38,533 |
|
|
|
6,100,696 |
|
|
|
14,565 |
|
|
Provision for deferred income taxes |
|
4,303,731 |
|
|
|
868,000 |
|
|
|
1,242,000 |
|
|
Gain from leasing fee mineral acreage |
|
(1,067,992 |
) |
|
|
(34,371 |
) |
|
|
(466,341 |
) |
|
Proceeds from leasing fee mineral acreage |
|
1,213,913 |
|
|
|
67,651 |
|
|
|
688,207 |
|
|
Net (gain) loss on sales of assets |
|
(4,728,758 |
) |
|
|
(934,207 |
) |
|
|
(4,423,646 |
) |
|
Directors' deferred compensation expense |
|
228,017 |
|
|
|
44,827 |
|
|
|
191,852 |
|
|
Total (gain) loss on derivative contracts |
|
(6,859,589 |
) |
|
|
(3,347,002 |
) |
|
|
16,833,078 |
|
|
Cash receipts (payments) on settled derivative contracts |
|
2,743,475 |
|
|
|
(810,839 |
) |
|
|
(2,796,250 |
) |
|
Restricted stock award expense |
|
2,205,910 |
|
|
|
524,257 |
|
|
|
2,211,673 |
|
|
Other |
|
136,412 |
|
|
|
30,157 |
|
|
|
87,353 |
|
|
Cash provided (used) by changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|||
|
Natural gas, oil and NGL sales receivables |
|
4,883,870 |
|
|
|
3,368,278 |
|
|
|
(6,723,292 |
) |
|
Income taxes receivable |
|
(455,931 |
) |
|
|
- |
|
|
|
2,413,942 |
|
|
Other current assets |
|
(45,869 |
) |
|
|
(309,051 |
) |
|
|
250,568 |
|
|
Accounts payable |
|
69,228 |
|
|
|
(129,304 |
) |
|
|
(10,305 |
) |
|
Other non-current assets |
|
206,292 |
|
|
|
63,723 |
|
|
|
(380,964 |
) |
|
Income taxes payable |
|
(576,427 |
) |
|
|
80,569 |
|
|
|
161,808 |
|
|
Accrued liabilities |
|
(610,661 |
) |
|
|
(589,817 |
) |
|
|
550,012 |
|
|
Total adjustments |
|
10,250,339 |
|
|
|
6,795,681 |
|
|
|
17,122,378 |
|
|
Net cash provided by operating activities |
|
24,171,139 |
|
|
|
10,141,814 |
|
|
|
37,531,650 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Investing Activities |
|
|
|
|
|
|
|
|
|||
|
Capital expenditures |
|
(325,983 |
) |
|
|
(87,104 |
) |
|
|
(552,638 |
) |
|
Acquisition of minerals and overriding royalty interests |
|
(29,735,516 |
) |
|
|
(14,499,014 |
) |
|
|
(43,525,236 |
) |
|
Net proceeds from sales of assets |
|
9,614,194 |
|
|
|
1,137,730 |
|
|
|
13,217,844 |
|
|
Deposits received on held for sale assets |
|
- |
|
|
|
815,000 |
|
|
|
- |
|
|
Net cash provided (used) by investing activities |
|
(20,447,305 |
) |
|
|
(12,633,388 |
) |
|
|
(30,860,030 |
) |
|
|
|
|
|
|
|
|
|
|
|||
|
Financing Activities |
|
|
|
|
|
|
|
|
|||
|
Borrowings under credit facility |
|
19,500,000 |
|
|
|
10,000,000 |
|
|
|
21,300,000 |
|
|
Payments of loan principal |
|
(20,050,000 |
) |
|
|
(5,000,000 |
) |
|
|
(10,500,000 |
) |
|
Net proceeds from equity issuance |
|
- |
|
|
|
- |
|
|
|
5,006,538 |
|
|
Cash receipts from (payments on) off-market derivative contracts |
|
(560,162 |
) |
|
|
(3,010,661 |
) |
|
|
(19,260,104 |
) |
|
Purchases of treasury stock |
|
(402,704 |
) |
|
|
(52,460 |
) |
|
|
(1,855 |
) |
|
Payments of dividends |
|
(3,520,366 |
) |
|
|
(726,462 |
) |
|
|
(2,257,901 |
) |
|
Net cash provided (used) by financing activities |
|
(5,033,232 |
) |
|
|
1,210,417 |
|
|
|
(5,713,322 |
) |
|
|
|
|
|
|
|
|
|
|
|||
|
Increase (decrease) in cash and cash equivalents |
|
(1,309,398 |
) |
|
|
(1,281,157 |
) |
|
|
958,298 |
|
|
Cash and cash equivalents at beginning of period |
|
2,115,652 |
|
|
|
3,396,809 |
|
|
|
2,438,511 |
|
|
Cash and cash equivalents at end of period |
$ |
806,254 |
|
|
$ |
2,115,652 |
|
|
$ |
3,396,809 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Supplemental Disclosures of Cash Flow Information: |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Interest paid (net of capitalized interest) |
$ |
2,405,361 |
|
|
$ |
581,142 |
|
|
$ |
997,085 |
|
|
Income taxes paid (net of refunds received) |
$ |
1,464,087 |
|
|
$ |
32,431 |
|
|
$ |
384,249 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Supplemental Schedule of Noncash Investing and Financing Activities: |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Dividends declared and unpaid |
$ |
113,443 |
|
|
$ |
811,688 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Gross additions to properties and equipment |
$ |
30,761,578 |
|
|
$ |
14,710,613 |
|
|
$ |
46,791,346 |
|
|
Value of shares used for acquisitions |
|
- |
|
|
|
- |
|
|
|
(3,510,001 |
) |
|
Net increase (decrease) in accounts receivable for properties |
|
|
|
|
|
|
|
|
|||
|
and equipment additions |
|
(700,079 |
) |
|
|
(124,495 |
) |
|
|
796,529 |
|
|
Capital expenditures and acquisitions |
$ |
30,061,499 |
|
|
$ |
14,586,118 |
|
|
$ |
44,077,874 |
|
Derivative Contracts as of March 7, 2024
|
|
|
Production volume |
|
|
|
|
|
Contract period |
|
covered per month |
|
Index |
|
Contract price |
|
Natural gas costless collars |
|
|
|
|
|
|
|
January - March 2024 |
|
30,000 Mmbtu |
|
NYMEX Henry Hub |
|
$3.25 floor / $5.25 ceiling |
|
January - 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 |
|
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 |
|
Natural gas fixed price swaps |
|
|
|
|
|
|
|
Janurary - February 2024 |
|
135,000 Mmbtu |
|
NYMEX Henry Hub |
|
$3.65 |
|
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 |
|
January - March 2025 |
|
50,000 Mmbtu |
|
NYMEX Henry Hub |
|
$3.51 |
|
April - October 2025 |
|
100,000 Mmbtu |
|
NYMEX Henry Hub |
|
$3.28 |
|
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 |
|
June - September 2024 |
|
500 Bbls |
|
NYMEX WTI |
|
$70.00 floor / $78.10 ceiling |
|
July - 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 |
|
|
|
|
|
|
|
January - 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 |
|
July - October 2024 |
|
1,500 Bbls |
|
NYMEX WTI |
|
$69.50 |
|
November - December 2024 |
|
2,000 Bbls |
|
NYMEX WTI |
|
$69.50 |
|
November 2024 - March 2025 |
|
1,600 Bbls |
|
NYMEX WTI |
|
$64.80 |
|
January - March 2025 |
|
500 Bbls |
|
NYMEX WTI |
|
$69.50 |
|
January - June 2025 |
|
2,000 Bbls |
|
NYMEX WTI |
|
$70.90 |
|
April - June 2025 |
|
750 Bbls |
|
NYMEX WTI |
|
$69.50 |
|
April - June 2025 |
|
1,000 Bbls |
|
NYMEX WTI |
|
$68.00 |
|
July - September 2025 |
|
500 Bbls |
|
NYMEX WTI |
|
$69.50 |
|
July - December 2025 |
|
1,500 Bbls |
|
NYMEX WTI |
|
$68.90 |
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 |
|
|
Twelve Months Ended |
|
|
Twelve Months Ended |
|
|
Three Months Ended |
|
|||||
|
|
Dec. 31, 2023 |
|
|
Dec. 31, 2022 |
|
|
Dec. 31, 2023 |
|
|
Dec. 31, 2022 |
|
|
Sept. 30, 2023 |
|
|||||
|
Net Income |
$ |
2,513,444 |
|
|
$ |
3,346,133 |
|
|
$ |
13,920,800 |
|
|
$ |
17,073,156 |
|
|
$ |
1,895,403 |
|
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Income tax expense |
|
1,245,460 |
|
|
|
981,000 |
|
|
|
4,735,460 |
|
|
|
4,421,000 |
|
|
|
589,000 |
|
|
Interest expense |
|
723,685 |
|
|
|
637,698 |
|
|
|
2,362,393 |
|
|
|
1,625,971 |
|
|
|
556,941 |
|
|
DD&A |
|
2,443,154 |
|
|
|
1,802,114 |
|
|
|
8,566,185 |
|
|
|
7,496,472 |
|
|
|
2,022,709 |
|
|
Impairment expense |
|
- |
|
|
|
6,100,696 |
|
|
|
38,533 |
|
|
|
6,109,676 |
|
|
|
36,460 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Non-cash gains (losses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
on derivatives |
|
2,936,659 |
|
|
|
6,265,041 |
|
|
|
4,302,531 |
|
|
|
(584,976 |
) |
|
|
(940,592 |
) |
|
Gains (losses) on asset sales |
|
57,505 |
|
|
|
934,207 |
|
|
|
4,728,759 |
|
|
|
7,478,781 |
|
|
|
243,041 |
|
|
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash receipts from (payments on) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
off-market derivative contracts(1) |
|
- |
|
|
|
(903,461 |
) |
|
|
(373,745 |
) |
|
|
(5,738,164 |
) |
|
|
- |
|
|
Restricted stock and deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
director's expense |
|
572,709 |
|
|
|
569,084 |
|
|
|
2,433,927 |
|
|
|
2,649,194 |
|
|
|
522,965 |
|
|
Adjusted EBITDA |
$ |
4,504,288 |
|
|
$ |
5,334,016 |
|
|
$ |
22,652,263 |
|
|
$ |
26,743,500 |
|
|
$ |
6,321,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
(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 |
|
||
|
|
Dec. 31, 2023 |
|
|
Dec. 31, 2022 |
|
||
|
Net Income |
$ |
13,920,800 |
|
|
$ |
17,073,156 |
|
|
Plus: |
|
|
|
|
|
||
|
Income tax expense |
|
4,735,460 |
|
|
|
4,421,000 |
|
|
Interest expense |
|
2,362,393 |
|
|
|
1,625,971 |
|
|
DD&A |
|
8,566,185 |
|
|
|
7,496,472 |
|
|
Impairment expense |
|
38,533 |
|
|
|
6,109,676 |
|
|
Less: |
|
|
|
|
|
||
|
Non-cash gains (losses) |
|
|
|
|
|
||
|
on derivatives |
|
4,302,531 |
|
|
|
(584,976 |
) |
|
Gains (losses) on asset sales |
|
4,728,759 |
|
|
|
7,478,781 |
|
|
Plus: |
|
|
|
|
|
||
|
Cash receipts from (payments on) |
|
|
|
|
|
||
|
off-market derivative contracts(1) |
|
(373,745 |
) |
|
|
(5,738,164 |
) |
|
Restricted stock and deferred |
|
|
|
|
|
||
|
director's expense |
|
2,433,927 |
|
|
|
2,649,194 |
|
|
Adjusted EBITDA |
$ |
22,652,263 |
|
|
$ |
26,743,500 |
|
|
|
|
|
|
|
|
||
|
Debt |
$ |
32,750,000 |
|
|
$ |
33,300,000 |
|
|
Debt to Adjusted EBITDA (TTM) |
|
1.45 |
|
|
|
1.25 |
|
|
|
|
|
|
|
|
||
|
(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.
Investor Contact:
Rob Fink / Stephen Lee
FNK IR
646.809.4048
Corporate Contact:
405.948.1560