FORT
WORTH, Texas, Feb. 8, 2023
/PRNewswire/ -- PHX MINERALS INC., "PHX" or the "Company" (NYSE:
PHX), today reported financial and operating results for the
quarter ended Dec. 31, 2022.
Summary Of Results For The Quarter Ended Dec. 31, 2022
- Net income for the quarter ended Dec.
31, 2022, was $3.3 million, or
$0.09 per share, compared to net
income of $9.2 million, or
$0.26 per share, for the quarter
ended Sept. 30, 2022, and net income
of $6.7 million, or $0.20 per share, for the quarter ended
Dec. 31, 2021.
- Adjusted pretax net income(1) for the quarter ended
Dec. 31, 2022, was $2.3 million, or $0.07 per share, compared to $5.3 million, or $0.15 per share, for the quarter ended
Sept. 30, 2022, and $2.3 million, or $0.07 per share, for the quarter ended
Dec. 31, 2021.
- Adjusted EBITDA(1) for the quarter ended
Dec. 31, 2022, was $5.3 million, compared to $8.4 million for the quarter ended Sept. 30, 2022, and $4.4
million for the quarter ended Dec.
31, 2021.
- Royalty production volumes for the quarter ended Dec. 31, 2022, decreased 12% to 1,628 Mmcfe
compared to the quarter ended Sept. 30,
2022, and increased 33% compared to the quarter ended
Dec. 31, 2021.
- Total production volumes for the quarter ended Dec. 31, 2022, decreased 15% to 2,215 Mmcfe
compared to the quarter ended Sept. 30,
2022, and increased 4% compared to the quarter ended
Dec. 31, 2021.
- Converted 60 gross (0.27 net) wells to producing status during
the quarter ended Dec. 31, 2022,
compared to 49 gross (0.22 net) during the quarter ended
Sept. 30, 2022.
- Inventory of 203 gross (0.83 net) wells in progress as of
Dec. 31, 2022, compared to 172 gross
(0.85 net) as of Sept. 30, 2022.
- Total debt was $33.3 million and
the debt to adjusted EBITDA (TTM)(1) ratio was 1.25x at
Dec. 31, 2022.
- During the quarter ended Dec. 31,
2022, PHX closed on acquisitions totaling 1,256 net royalty
acres located in the SCOOP and the Haynesville plays for
approximately $14.7 million.
Subsequent Events
- On Jan. 31, 2023, PHX closed on
the two previously announced divestitures of a combined 257 gross
non-operated working interest wellbores for approximately
$10.7 million.
- Since Dec. 31, 2022, PHX has
closed on mineral acquisitions totaling 99 net royalty acres
located in the SCOOP and the Haynesville plays for approximately
$1.2 million.
- Total debt was $23.0 million at
Feb. 3, 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 enhance our asset base, divesting
non-core, non-working interest wellbores and reinvesting the
proceeds into high-quality minerals in our areas of focus. Royalty
production in the quarter was impacted by short-term disruptions in
the Haynesville due to temporary shut-ins in a few wells to
accommodate frac completion on an offsetting set of wells, and
fewer new wells coming online due to typical seasonal volatility.
However, the inventory of wells being drilled continues to
increase, giving us confidence in a near-term rebound and our
long-term prospects."
"Results were also impacted by lower commodity prices, but our
strong balance sheet and success in divestitures of working
interests continues to help us navigate near-term headwinds,"
continued Mr. Stephens. "We are bullish on a recovery in natural
gas prices in late 2023/ early 2024, as short-term impacts
dissipate. I am also pleased to announce that given the confidence
in our strategy and the steady conversion of our inventory, we have
the visibility to begin providing an annual operational outlook,
which is included in this press release and can be accessed in our
investor relations presentation on our corporate website."
Financial
Highlights
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
|
Dec. 31,
2022
|
|
|
Dec. 31,
2021
|
|
Royalty Interest
Sales
|
|
$
|
10,571,704
|
|
|
$
|
5,966,645
|
|
Working Interest
Sales
|
|
$
|
4,316,970
|
|
|
$
|
7,720,519
|
|
Natural Gas, Oil and
NGL Sales
|
|
$
|
14,888,674
|
|
|
$
|
13,687,164
|
|
|
|
|
|
|
|
|
Gains (Losses) on
Derivative Contracts
|
|
$
|
3,347,002
|
|
|
$
|
2,836,168
|
|
Lease Bonuses and
Rental Income
|
|
$
|
34,482
|
|
|
$
|
78,915
|
|
Total
Revenue
|
|
$
|
18,270,158
|
|
|
$
|
16,602,247
|
|
|
|
|
|
|
|
|
Lease Operating
Expense
|
|
|
|
|
|
|
per Working Interest
Mcfe
|
|
$
|
1.73
|
|
|
$
|
1.39
|
|
Transportation,
Gathering and Marketing
|
|
|
|
|
|
|
per Mcfe
|
|
$
|
0.66
|
|
|
$
|
0.57
|
|
Production Tax per
Mcfe
|
|
$
|
0.28
|
|
|
$
|
0.32
|
|
Cash G&A Expense
per Mcfe (1)
|
|
$
|
1.16
|
|
|
$
|
0.83
|
|
G&A Expense per
Mcfe
|
|
$
|
1.42
|
|
|
$
|
0.98
|
|
Interest Expense per
Mcfe
|
|
$
|
0.29
|
|
|
$
|
0.08
|
|
DD&A per
Mcfe
|
|
$
|
0.81
|
|
|
$
|
0.74
|
|
Total Expense per
Mcfe
|
|
$
|
3.92
|
|
|
$
|
3.28
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
|
$
|
3,346,133
|
|
|
$
|
6,682,249
|
|
Adjusted EBITDA
(2)
|
|
$
|
5,334,016
|
|
|
$
|
4,416,065
|
|
|
|
|
|
|
|
|
Cash Flow from
Operations (3)
|
|
$
|
10,141,814
|
|
|
$
|
8,637,990
|
|
CapEx
(4)
|
|
$
|
87,104
|
|
|
$
|
192,677
|
|
CapEx - Mineral
Acquisitions
|
|
$
|
14,499,014
|
|
|
$
|
11,643,827
|
|
|
|
|
|
|
|
|
Borrowing
Base
|
|
$
|
50,000,000
|
|
|
$
|
32,000,000
|
|
Debt
|
|
$
|
33,300,000
|
|
|
$
|
20,000,000
|
|
Debt to Adjusted EBITDA
(TTM) (2)
|
|
|
1.25
|
|
|
|
1.16
|
|
|
|
(1)
|
Cash G&A expense is
G&A excluding restricted stock and deferred director's expense
from the adjusted EBITDA table on page 11.
|
(2)
|
This is a non-GAAP
measure. Refer to the Non-GAAP Reconciliation section.
|
(3)
|
GAAP cash flow from
operations. See page 9.
|
(4)
|
Includes legacy working
interest expenditures and fixtures and equipment.
|
Operating
Highlights
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
Dec. 31,
2022
|
|
|
Dec. 31,
2021
|
|
Gas Mcf Sold
|
|
1,669,320
|
|
|
|
1,574,265
|
|
Average Sales Price per
Mcf before the
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
5.66
|
|
|
$
|
5.52
|
|
Average Sales Price per
Mcf after the
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
4.02
|
|
|
$
|
3.52
|
|
% of sales subject to
hedges
|
|
65
|
%
|
|
|
67
|
%
|
Oil Barrels
Sold
|
|
52,406
|
|
|
|
48,074
|
|
Average Sales Price per
Bbl before the
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
82.52
|
|
|
$
|
74.39
|
|
Average Sales Price per
Bbl after the
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
62.03
|
|
|
$
|
48.45
|
|
% of sales subject to
hedges
|
|
57
|
%
|
|
|
79
|
%
|
NGL Barrels
Sold
|
|
38,611
|
|
|
|
44,256
|
|
Average Sales Price per
Bbl(1)
|
$
|
28.77
|
|
|
$
|
32.11
|
|
|
|
|
|
|
|
Mcfe Sold
|
|
2,215,419
|
|
|
|
2,128,248
|
|
Natural gas, oil and
NGL sales before the
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
14,888,674
|
|
|
$
|
13,687,164
|
|
Natural gas, oil and
NGL sales after the
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
11,067,174
|
|
|
$
|
9,284,742
|
|
|
|
|
|
|
|
(1) There were no NGL
settled derivative contracts during the 2022 and 2021
quarters.
|
|
Total Production for the last four quarters was as follows:
Quarter
ended
|
|
Mcf Sold
|
|
|
Oil Bbls
Sold
|
|
|
NGL Bbls
Sold
|
|
|
Mcfe Sold
|
|
12/31/2022
|
|
|
1,669,320
|
|
|
|
52,406
|
|
|
|
38,611
|
|
|
|
2,215,419
|
|
9/30/2022
|
|
|
2,047,614
|
|
|
|
49,902
|
|
|
|
40,761
|
|
|
|
2,591,588
|
|
6/30/2022
|
|
|
1,897,799
|
|
|
|
48,928
|
|
|
|
39,732
|
|
|
|
2,429,760
|
|
3/31/2022
|
|
|
1,908,030
|
|
|
|
51,631
|
|
|
|
40,371
|
|
|
|
2,460,042
|
|
Total production volumes attributable to natural gas were 75%
for the quarter ended Dec. 31,
2022.
Royalty Interest Production for the last four quarters was as
follows:
Quarter
ended
|
|
Mcf Sold
|
|
|
Oil Bbls
Sold
|
|
|
NGL Bbls
Sold
|
|
|
Mcfe Sold
|
|
12/31/2022
|
|
|
1,303,825
|
|
|
|
33,691
|
|
|
|
20,353
|
|
|
|
1,628,089
|
|
9/30/2022
|
|
|
1,525,363
|
|
|
|
32,202
|
|
|
|
20,488
|
|
|
|
1,841,502
|
|
6/30/2022
|
|
|
1,283,737
|
|
|
|
32,562
|
|
|
|
19,369
|
|
|
|
1,595,323
|
|
3/31/2022
|
|
|
1,261,949
|
|
|
|
28,758
|
|
|
|
18,852
|
|
|
|
1,547,609
|
|
Royalty production volumes attributable to natural gas were 80%
for the quarter ended Dec. 31,
2022.
Working Interest Production for the last four quarters was as
follows:
Quarter
ended
|
|
Mcf Sold
|
|
|
Oil Bbls
Sold
|
|
|
NGL Bbls
Sold
|
|
|
Mcfe Sold
|
|
12/31/2022
|
|
|
365,495
|
|
|
|
18,715
|
|
|
|
18,258
|
|
|
|
587,330
|
|
9/30/2022
|
|
|
522,251
|
|
|
|
17,700
|
|
|
|
20,273
|
|
|
|
750,086
|
|
6/30/2022
|
|
|
614,062
|
|
|
|
16,366
|
|
|
|
20,363
|
|
|
|
834,437
|
|
3/31/2022
|
|
|
646,081
|
|
|
|
22,873
|
|
|
|
21,519
|
|
|
|
912,433
|
|
Quarter Ended Dec. 31, 2022
Results
The Company recorded net income of $3,346,133, or $0.09 per share, for the quarter ended
Dec. 31, 2022, as compared to net
income of $6,682,249, or $0.20 per share, for the quarter ended
Dec. 31, 2021. The change in net
income was principally the result of increased impairment expense
associated with the pending sale of non-operated working interest
wellbores in the Arkoma play and general and administrative costs,
or G&A, partially offset by increased natural gas, oil and NGL
sales, increased gains on asset sales and increased gains
associated with our hedge contracts.
Natural gas, oil and NGL revenue increased $1,201,510, or 9%, for the quarter ended
Dec. 31, 2022, compared to the
quarter ended Dec. 31, 2021, due to
increases in natural gas and oil prices of 3% and 11%,
respectively, and an increase in natural gas and oil volumes of 6%
and 9%, respectively, partially offset by a decrease in NGL prices
and volumes of 10% and 13%, respectively.
The production increase in royalty volumes during the quarter
ended Dec. 31, 2022, as compared to
the quarter ended Dec. 31, 2021, was
primarily due to acquisitions and new drilling in the Haynesville
and SCOOP plays. The decrease in working interest volumes resulted
from the divestiture of low-value legacy working interests in
Oklahoma and the Fayetteville
Shale in Arkansas and naturally
declining production in high-interest wells in the Arkoma Stack,
STACK, and Eagle Ford plays.
The Company had a net gain on derivative contracts of
$3,347,002 in the quarter ended
Dec. 31, 2022, as compared to a net
gain of $2,836,168 in the quarter
ended Dec. 31, 2021, of which
($2,918,039) is a loss on settled
derivatives and $6,265,041 is a
non-cash gain on derivatives with respect to the quarter ended
Dec. 31, 2022. Loss on settled
derivative contracts for the quarter ended Dec. 31, 2022, excludes $903,461 of cash paid to settle off-market
derivative contracts. The change in net loss on derivative
contracts was due to the Company's settlements of natural gas and
oil collars and fixed price swaps and the change in valuation
caused by the difference in Dec. 31,
2022, pricing relative to the strike price on open
derivative contracts.
The 20% increase in total cost per Mcfe in the quarter ended
Dec. 31, 2022, relative to the
quarter ended Dec. 31, 2021, was
primarily driven by an increase in G&A and interest expense.
G&A increased $1,041,844, or 50%,
in the quarter ended Dec. 31, 2022,
compared to the quarter ended Dec. 31,
2021, due to the write-off of costs associated with the
At-The-Market equity offering program, which was terminated in
December 2022, increased
administrative expenses associated with higher transaction
activity, and restricted stock expense. Interest expense increased
$460,979, or 261%, due to higher
average debt balance and average interest rate in the quarter ended
Dec. 31, 2022, compared to the
quarter ended Dec. 31, 2021.
Operations Update
During the quarter ended Dec. 31,
2022, the Company converted 60 gross (0.27 net)
wells to producing status, including 8 gross (0.09 net) wells in
the SCOOP and 31 gross (0.076 net) wells in the Haynesville,
compared to 68 gross (0.19 net) wells in the quarter ended
Dec. 31, 2021.
At Dec. 31, 2022, the Company had
a total of 203 gross (0.83 net) wells in progress across its
mineral positions and 76 gross (0.22 net) active permitted wells,
compared to 172 gross (0.85 net) wells in progress and 64 gross
(0.21 net) active permitted wells at Sept.
30, 2022. As of Jan. 17, 2023,
22 rigs were operating on the Company's acreage with 91 rigs
operating within 2.5 miles of its acreage, compared to 15 rigs
operating on the Company's acreage with 93 rigs operating within
2.5 miles of its acreage as of Sept. 30,
2022.
|
|
|
|
|
|
|
Bakken/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
Arkoma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCOOP
|
|
|
STACK
|
|
|
Forks
|
|
|
Stack
|
|
|
Fayetteville
|
|
|
Haynesville
|
|
|
Other
|
|
|
Total
|
|
As of Dec. 31,
2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Wells in Progress
on PHX Acreage
|
|
61
|
|
|
|
32
|
|
|
|
7
|
|
|
|
5
|
|
|
|
-
|
|
|
|
90
|
|
|
|
8
|
|
|
|
203
|
|
Net Wells in Progress
on PHX Acreage
|
|
0.12
|
|
|
|
0.07
|
|
|
|
0.01
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.61
|
|
|
|
0.02
|
|
|
|
0.83
|
|
Gross Active Permits on
PHX Acreage
|
|
22
|
|
|
|
11
|
|
|
|
3
|
|
|
|
4
|
|
|
|
-
|
|
|
|
30
|
|
|
|
6
|
|
|
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of Jan. 17,
2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rigs Present on PHX
Acreage
|
|
7
|
|
|
|
3
|
|
|
|
3
|
|
|
|
1
|
|
|
|
-
|
|
|
|
8
|
|
|
|
-
|
|
|
|
22
|
|
Rigs Within 2.5 Miles
of PHX Acreage
|
|
20
|
|
|
|
19
|
|
|
|
12
|
|
|
|
1
|
|
|
|
-
|
|
|
|
31
|
|
|
|
8
|
|
|
|
91
|
|
Leasing Activity
During the quarter ended Dec. 31,
2022, the Company leased 99 net mineral acres for an average
bonus payment of $850 per net mineral
acre and an average royalty of 23%.
Acquisition And Divestiture Update
During the quarter ended Dec. 31,
2022, the Company purchased 1,256 net royalty acres for
approximately $14.7 million and sold
4,743 net mineral acres, which were outside the Company's core
focus areas and predominantly undeveloped and unleased, for
approximately $1.0 million.
|
|
Acquisitions
|
|
Three Months Ended Dec.
31, 2022
|
|
SCOOP
|
|
|
Haynesville
|
|
|
Other
|
|
|
Total
|
|
Net Mineral Acres
Purchased
|
|
|
159
|
|
|
|
608
|
|
|
|
-
|
|
|
|
767
|
|
Net Royalty Acres
Purchased
|
|
|
219
|
|
|
|
1,037
|
|
|
|
-
|
|
|
|
1,256
|
|
Outlook
PHX is providing an operational outlook for 2023 as follows:
|
|
Calendar Year 2022
Actual
|
|
Calendar Year 2023
Outlook
|
Mineral & Royalty
Production (Mmcfe)
|
|
6,613
|
|
7,400 -
8,600
|
Working Interest
Production (Mmcfe) (1)
|
|
3,084
|
|
1,200 -
1,400
|
Total Production
(Mmcfe)
|
|
9,697
|
|
8,600 -
10,000
|
Percentage Natural
Gas
|
|
78 %
|
|
80% - 85%
|
|
|
|
|
|
Transportation,
Gathering & Marketing (per Mcfe)
|
|
$0.63
|
|
$0.53 -
$0.58
|
Production Tax (as % of
pre-hedge sales volumes)
|
|
4.50 %
|
|
4.75% -
5.25%
|
LOE Expenses (on an
absolute basis in 000's)
|
|
$3,807
|
|
$1,200 -
$1,400
|
Cash G&A (per
Mcfe)
|
|
$1.01
|
|
$1.00 -
$1.07
|
|
|
(1)
|
Pro-forma divestitures
of Eagle Ford and Arkoma working interest assets, excludes
potential future sales of additional working interest
assets.
|
Quarterly Conference Call
PHX will host a conference call to discuss the Company's results
for the quarter ended Dec. 31,
2022, at 11:00 a.m. EST
tomorrow, Feb. 9, 2023.
Management's discussion will be followed by a question-and-answer
session with investors.
To participate on the conference call, please dial 877-407-3088
(toll-free domestic) or 201-389-0927. A replay of the call will be
available for 14 days after the call. The number to access the
replay of the conference call is 877-660-6853 and the PIN for the
replay is 13736024.
A live audio webcast of the conference call will be accessible
from the "Investors" section of PHX's website at
https://phxmin.com/events. The webcast will be archived for at
least 90 days.
FINANCIAL
RESULTS
|
|
Statements of
Operations
|
|
|
Three Months Ended Dec.
31,
|
|
|
2022
|
|
|
2021
|
|
Revenues:
|
|
|
Natural gas, oil and
NGL sales
|
$
|
14,888,674
|
|
|
$
|
13,687,164
|
|
Lease bonuses and
rental income
|
|
34,482
|
|
|
|
78,915
|
|
Gains (losses) on
derivative contracts
|
|
3,347,002
|
|
|
|
2,836,168
|
|
|
|
18,270,158
|
|
|
|
16,602,247
|
|
Costs and
expenses:
|
|
|
|
|
|
Lease operating
expenses
|
|
1,015,981
|
|
|
|
1,256,011
|
|
Transportation,
gathering and marketing
|
|
1,455,260
|
|
|
|
1,213,604
|
|
Production
taxes
|
|
617,948
|
|
|
|
678,947
|
|
Depreciation,
depletion and amortization
|
|
1,802,114
|
|
|
|
1,583,760
|
|
Provision for
impairment
|
|
6,100,696
|
|
|
|
5,585
|
|
Interest
expense
|
|
637,698
|
|
|
|
176,719
|
|
General and
administrative
|
|
3,137,401
|
|
|
|
2,095,557
|
|
Losses (gains) on
asset sales and other
|
|
(824,073)
|
|
|
|
2,147,815
|
|
Total costs and
expenses
|
|
13,943,025
|
|
|
|
9,157,998
|
|
Income (loss) before
provision (benefit) for income taxes
|
|
4,327,133
|
|
|
|
7,444,249
|
|
|
|
|
|
|
|
Provision (benefit) for
income taxes
|
|
981,000
|
|
|
|
762,000
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
3,346,133
|
|
|
$
|
6,682,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per common share
|
$
|
0.09
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
Basic
|
|
35,679,740
|
|
|
|
33,127,722
|
|
Diluted
|
|
36,489,353
|
|
|
|
33,127,722
|
|
|
|
|
|
|
|
Dividends per share
of
|
|
|
|
|
|
common stock paid in
period
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
Dividends declared per
share of
|
|
|
|
|
|
common stock and to be
paid in quarters
|
|
|
|
|
|
ended March 31, 2023
and 2022
|
$
|
0.0225
|
|
|
$
|
0.015
|
|
|
|
|
|
|
|
Balance
Sheets
|
|
|
Dec. 31,
2022
|
|
|
Sept. 30,
2022
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,115,652
|
|
|
$
|
3,396,809
|
|
Natural gas, oil, and
NGL sales receivables (net of $0
|
|
9,783,996
|
|
|
|
13,152,274
|
|
allowance for
uncollectable accounts)
|
|
|
|
|
|
Held for sale
assets
|
|
6,420,051
|
|
|
|
-
|
|
Other
|
|
1,543,956
|
|
|
|
1,372,847
|
|
Total current
assets
|
|
19,863,655
|
|
|
|
17,921,930
|
|
|
|
|
|
|
|
Properties and
equipment at cost, based on
|
|
|
|
|
|
successful efforts
accounting:
|
|
|
|
|
|
Producing natural gas
and oil properties
|
|
181,431,139
|
|
|
|
248,978,928
|
|
Non-producing natural
gas and oil properties
|
|
57,781,644
|
|
|
|
51,779,336
|
|
Other
|
|
1,122,436
|
|
|
|
1,085,056
|
|
|
|
240,335,219
|
|
|
|
301,843,320
|
|
Less accumulated
depreciation, depletion and amortization
|
|
(107,085,212)
|
|
|
|
(168,759,385)
|
|
Net properties and
equipment
|
|
133,250,007
|
|
|
|
133,083,935
|
|
|
|
|
|
|
|
Derivative contracts,
net
|
|
141,345
|
|
|
|
-
|
|
Operating lease
right-of-use assets
|
|
706,871
|
|
|
|
739,131
|
|
Other, net
|
|
695,399
|
|
|
|
757,116
|
|
Total assets
|
$
|
154,657,277
|
|
|
$
|
152,502,112
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
504,466
|
|
|
$
|
647,217
|
|
Derivative contracts,
net
|
|
1,534,034
|
|
|
|
7,873,979
|
|
Income taxes
payable
|
|
576,427
|
|
|
|
495,858
|
|
Current portion of
operating lease liability
|
|
217,656
|
|
|
|
213,355
|
|
Held for sale
liabilities
|
|
889,155
|
|
|
|
-
|
|
Accrued liabilities
and other
|
|
3,121,522
|
|
|
|
2,032,275
|
|
Total current
liabilities
|
|
6,843,260
|
|
|
|
11,262,684
|
|
|
|
|
|
|
|
Long-term
debt
|
|
33,300,000
|
|
|
|
28,300,000
|
|
Deferred income taxes,
net
|
|
2,453,906
|
|
|
|
1,585,906
|
|
Asset retirement
obligations
|
|
1,027,777
|
|
|
|
1,901,904
|
|
Derivative contracts,
net
|
|
-
|
|
|
|
687,212
|
|
Operating lease
liability, net of current portion
|
|
929,208
|
|
|
|
985,887
|
|
|
|
|
|
|
|
Total
liabilities
|
|
44,554,151
|
|
|
|
44,723,593
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Voting common stock,
par value $0.01666 per share: 54,000,500 shares
|
|
|
|
|
|
authorized and
35,938,206 shares issued and outstanding at Dec. 31,
2022;
|
|
|
|
|
|
54,000,500 shares
authorized and 35,776,752 shares issued and
|
|
598,731
|
|
|
|
596,041
|
|
outstanding at Sept.
30, 2022
|
|
|
|
|
|
Capital in excess of
par value
|
|
43,344,916
|
|
|
|
44,177,051
|
|
Deferred directors'
compensation
|
|
1,541,070
|
|
|
|
1,496,243
|
|
Retained
earnings
|
|
68,925,774
|
|
|
|
67,117,791
|
|
|
|
114,410,491
|
|
|
|
113,387,126
|
|
Less treasury stock,
at cost; 300,272 shares at Dec. 31,
|
|
|
|
|
|
2022, and 377,232
shares at Sept. 30, 2022
|
|
(4,307,365)
|
|
|
|
(5,608,607)
|
|
Total stockholders'
equity
|
|
110,103,126
|
|
|
|
107,778,519
|
|
Total liabilities and
stockholders' equity
|
$
|
154,657,277
|
|
|
$
|
152,502,112
|
|
Condensed Statements of
Cash Flows
|
|
|
Three Months Ended Dec.
31,
|
|
|
2022
|
|
|
2021
|
|
Operating
Activities
|
|
|
Net income
(loss)
|
$
|
3,346,133
|
|
|
$
|
6,682,249
|
|
Adjustments to
reconcile net income (loss) to net cash provided
|
|
|
|
|
|
by operating
activities:
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
1,802,114
|
|
|
|
1,583,760
|
|
Impairment of
producing properties
|
|
6,100,696
|
|
|
|
5,585
|
|
Provision for deferred
income taxes
|
|
868,000
|
|
|
|
366,000
|
|
Gain from leasing fee
mineral acreage
|
|
(34,371)
|
|
|
|
(78,922)
|
|
Proceeds from leasing
fee mineral acreage
|
|
67,651
|
|
|
|
95,039
|
|
Net (gain) loss on
sales of assets
|
|
(934,207)
|
|
|
|
2,163,359
|
|
Directors' deferred
compensation expense
|
|
44,827
|
|
|
|
67,570
|
|
Total (gain) loss on
derivative contracts
|
|
(3,347,002)
|
|
|
|
(2,836,168)
|
|
Cash receipts
(payments) on settled derivative contracts
|
|
(810,839)
|
|
|
|
-
|
|
Restricted stock award
expense
|
|
524,257
|
|
|
|
255,844
|
|
Other
|
|
30,157
|
|
|
|
37,138
|
|
Cash provided (used)
by changes in assets and liabilities:
|
|
|
|
|
|
Natural gas, oil and
NGL sales receivables
|
|
3,368,278
|
|
|
|
(1,591,085)
|
|
Other current
assets
|
|
(309,051)
|
|
|
|
(325,780)
|
|
Accounts
payable
|
|
(129,304)
|
|
|
|
(95,649)
|
|
Income taxes
receivable
|
|
-
|
|
|
|
2,413,942
|
|
Other non-current
assets
|
|
63,723
|
|
|
|
10,253
|
|
Income taxes
payable
|
|
80,569
|
|
|
|
165,889
|
|
Accrued
liabilities
|
|
(589,817)
|
|
|
|
(281,034)
|
|
Total
adjustments
|
|
6,795,681
|
|
|
|
1,955,741
|
|
Net cash provided by
operating activities
|
|
10,141,814
|
|
|
|
8,637,990
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
Capital
expenditures
|
|
(87,104)
|
|
|
|
(192,677)
|
|
Acquisition of
minerals and overriding royalty interests
|
|
(14,499,014)
|
|
|
|
(11,643,827)
|
|
Net proceeds from
sales of assets
|
|
1,137,730
|
|
|
|
4,586,492
|
|
Deposits received on
held for sale assets
|
|
815,000
|
|
|
|
-
|
|
Net cash provided
(used) by investing activities
|
|
(12,633,388)
|
|
|
|
(7,250,012)
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
Borrowings under
credit facility
|
|
10,000,000
|
|
|
|
4,000,000
|
|
Payments of loan
principal
|
|
(5,000,000)
|
|
|
|
(1,500,000)
|
|
Net proceeds from
equity issuance
|
|
-
|
|
|
|
(32,507)
|
|
Cash receipts from
(payments on) off-market derivative contracts
|
|
(3,010,661)
|
|
|
|
(4,402,422)
|
|
Purchases of treasury
stock
|
|
(52,460)
|
|
|
|
-
|
|
Payments of
dividends
|
|
(726,462)
|
|
|
|
(332,210)
|
|
Net cash provided
(used) by financing activities
|
|
1,210,417
|
|
|
|
(2,267,139)
|
|
|
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
|
(1,281,157)
|
|
|
|
(879,161)
|
|
Cash and cash
equivalents at beginning of period
|
|
3,396,809
|
|
|
|
2,438,511
|
|
Cash and cash
equivalents at end of period
|
$
|
2,115,652
|
|
|
$
|
1,559,350
|
|
|
|
|
|
|
|
Supplemental
Disclosures of Cash Flow Information
|
|
|
|
|
|
Dividends declared and
unpaid
|
$
|
811,688
|
|
|
$
|
517,479
|
|
|
|
|
|
|
|
Gross additions to
properties and equipment
|
$
|
14,710,613
|
|
|
$
|
15,183,829
|
|
Equity offering used
for acquisitions
|
|
-
|
|
|
|
(3,510,001)
|
|
Net (increase)
decrease in accounts payable for properties
|
|
|
|
|
|
and equipment
additions
|
|
(124,495)
|
|
|
|
162,676
|
|
Capital expenditures
and acquisitions
|
$
|
14,586,118
|
|
|
$
|
11,836,504
|
|
Derivative Contracts as
of Dec. 31, 2022
|
|
|
|
|
|
|
|
|
|
|
Collar
Average
|
|
|
Collar
Average
|
|
Calendar
Period
|
|
Product
|
|
Volume
Mcf/Bbl
|
|
Swap Price
|
|
|
Floor Price
|
|
|
Ceiling
Price
|
|
2023
|
|
Natural Gas
|
|
1,170,000
|
|
|
|
|
$
|
4.01
|
|
|
$
|
7.82
|
|
2023
|
|
Natural Gas
|
|
1,780,000
|
|
$
|
3.37
|
|
|
|
|
|
|
|
2024
|
|
Natural Gas
|
|
665,000
|
|
|
|
|
$
|
4.09
|
|
|
$
|
6.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
Crude Oil
|
|
15,000
|
|
|
|
|
$
|
75.00
|
|
|
$
|
96.00
|
|
2023
|
|
Crude Oil
|
|
57,000
|
|
$
|
74.02
|
|
|
|
|
|
|
|
2024
|
|
Crude Oil
|
|
10,400
|
|
|
|
|
$
|
63.00
|
|
|
$
|
76.00
|
|
Non-GAAP Reconciliation
This press release includes certain "non-GAAP financial
measures" as defined under the rules and regulations of the U.S.
Securities and Exchange Commission, or the SEC, including
Regulation G. These non-GAAP financial measures are calculated
using GAAP amounts in the Company's financial statements. These
measures, detailed below, are provided in addition to, not as an
alternative for, and should be read in conjunction with, the
information contained in the Company's financial statements
prepared in accordance with GAAP (including the notes thereto),
included in the Company's SEC filings and posted on its
website.
Adjusted EBITDA Reconciliation
We define "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. We have
included a presentation of adjusted EBITDA because we recognize
that certain investors consider this amount to be a useful means of
measuring our ability to meet our debt service obligations and
evaluating our 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
|
|
|
Three Months
Ended
|
|
|
Dec. 31,
2022
|
|
|
Dec. 31,
2021
|
|
|
Sept. 30,
2022
|
|
Net Income
(Loss)
|
$
|
3,346,133
|
|
|
$
|
6,682,249
|
|
|
$
|
9,158,468
|
|
Plus:
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
|
|
|
|
|
|
(benefit)
|
|
981,000
|
|
|
|
762,000
|
|
|
|
2,431,000
|
|
Interest
expense
|
|
637,698
|
|
|
|
176,719
|
|
|
|
471,716
|
|
DD&A
|
|
1,802,114
|
|
|
|
1,583,760
|
|
|
|
1,550,410
|
|
Impairment
expense
|
|
6,100,696
|
|
|
|
5,585
|
|
|
|
2,703
|
|
Less:
|
|
|
|
|
|
|
|
|
Non-cash gains
(losses)
|
|
|
|
|
|
|
|
|
on
derivatives
|
|
6,265,041
|
|
|
|
4,550,499
|
|
|
|
1,639,703
|
|
Gains (losses) on asset
sales
|
|
934,207
|
|
|
|
(2,120,927)
|
|
|
|
3,558,611
|
|
Plus:
|
|
|
|
|
|
|
|
|
Cash receipts from
(payments on)
|
|
|
|
|
|
|
|
|
off-market derivative
contracts(1)
|
|
(903,461)
|
|
|
|
(2,688,091)
|
|
|
|
(1,057,197)
|
|
Restricted stock and
deferred
|
|
|
|
|
|
|
|
|
director's
expense
|
|
569,084
|
|
|
|
323,415
|
|
|
|
1,037,179
|
|
Adjusted
EBITDA
|
$
|
5,334,016
|
|
|
$
|
4,416,065
|
|
|
$
|
8,395,965
|
|
|
|
|
|
|
|
|
|
|
(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. We have included a presentation of debt to adjusted EBITDA
(TTM) because we recognize that certain investors consider such
ratios to be a useful means of measuring our ability to meet our
debt service obligations and for evaluating our 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,
2022
|
|
|
Dec. 31,
2021
|
|
Net Income
(Loss)
|
$
|
17,073,156
|
|
|
$
|
1,061,732
|
|
Plus:
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
4,421,000
|
|
|
|
179,949
|
|
Interest
expense
|
|
1,625,971
|
|
|
|
869,948
|
|
DD&A
|
|
7,496,472
|
|
|
|
7,068,915
|
|
Impairment
expense
|
|
6,109,676
|
|
|
|
56,060
|
|
Less:
|
|
|
|
|
|
Non-cash gains
(losses)
|
|
|
|
|
|
on
derivatives
|
|
(584,977)
|
|
|
|
1,141,029
|
|
Gains (losses) on asset
sales
|
|
7,478,783
|
|
|
|
(1,824,556)
|
|
Plus:
|
|
|
|
|
|
Cash receipts from
(payments on)
|
|
|
|
|
|
off-market derivative
contracts(1)
|
|
(5,738,163)
|
|
|
|
6,111,909
|
|
Restricted stock and
deferred
|
|
|
|
|
|
director's
expense
|
|
2,649,194
|
|
|
|
1,191,576
|
|
Adjusted
EBITDA
|
$
|
26,743,500
|
|
|
$
|
17,223,616
|
|
|
|
|
|
|
|
Debt
|
$
|
33,300,000
|
|
|
$
|
20,000,000
|
|
Debt to Adjusted
EBITDA (TTM)
|
|
1.25
|
|
|
|
1.16
|
|
|
|
|
|
|
|
(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 has no effect on the Company's statement of
operations.
|
|
Adjusted Pretax Net Income
(Loss) Reconciliation
"Adjusted pretax net income (loss)" is defined as earnings
before taxes and impairment expense, excluding non-cash gains
(losses) on derivatives and gains (losses) on asset sales and
including cash receipts from (payments on) off-market derivatives.
We have included a presentation of adjusted pretax net income
(loss) because we recognize that certain investors consider this
amount to be a useful means of measuring our ability to meet our
debt service obligations and evaluating our financial performance.
Adjusted pretax net income (loss) has limitations and should not be
considered in isolation or as a substitute for net income,
operating income, cash flow from operations or other consolidated
income or cash flow data prepared in accordance with GAAP. Because
not all companies use identical calculations, this presentation of
adjusted pretax net income (loss) may not be comparable to a
similarly titled measure of other companies. The following table
provides a reconciliation of net income (loss) to adjusted pretax
net income (loss) for the periods indicated:
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
Dec. 31,
2022
|
|
|
Dec. 31,
2021
|
|
|
Sept. 30,
2022
|
|
Net Income
(Loss)
|
$
|
3,346,133
|
|
|
$
|
6,682,249
|
|
|
$
|
9,158,468
|
|
Plus:
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
981,000
|
|
|
|
762,000
|
|
|
|
2,431,000
|
|
Impairment
expense
|
|
6,100,696
|
|
|
|
5,585
|
|
|
|
2,703
|
|
Less:
|
|
|
|
|
|
|
|
|
Non-cash gains
(losses)
|
|
|
|
|
|
|
|
|
on
derivatives
|
|
6,265,041
|
|
|
|
4,550,499
|
|
|
|
1,639,703
|
|
Gains (losses) on asset
sales
|
|
934,207
|
|
|
|
(2,120,927)
|
|
|
|
3,558,611
|
|
Plus:
|
|
|
|
|
|
|
|
|
Cash receipts from
(payments on)
|
|
|
|
|
|
|
|
|
off-market derivative
contracts(1)
|
|
(903,461)
|
|
|
|
(2,688,091)
|
|
|
|
(1,057,197)
|
|
Adjusted Pretax Net
Income (Loss)
|
$
|
2,325,120
|
|
|
$
|
2,332,171
|
|
|
$
|
5,336,660
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
35,679,740
|
|
|
|
33,127,722
|
|
|
|
35,573,813
|
|
Diluted
|
|
36,489,353
|
|
|
|
33,127,722
|
|
|
|
35,916,878
|
|
|
|
|
|
|
|
|
|
|
Adjusted Pretax Net
Income (Loss)
|
|
|
|
|
|
|
|
|
per basic and
diluted share
|
$
|
0.07
|
|
|
$
|
0.07
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 statements are not
guarantees of future performance and that actual results or
developments may differ materially from those projected in
forward-looking statements. 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.
View original
content:https://www.prnewswire.com/news-releases/phx-minerals-reports-results-for-the-quarter-ended-dec-31-2022-and-provides-2023-operational-outlook-301742171.html
SOURCE PHX MINERALS INC.