PHX Minerals Inc. Reports First Quarter 2021 Results
OKLAHOMA CITY, Feb. 8, 2021 – PHX MINERALS INC., “PHX” or the “Company,” (NYSE: PHX), today reported financial and operating results for the first quarter ended Dec. 31, 2020.
SUMMARY OF RESULTS FOR THE PERIOD ENDED DEC. 31, 2020, AND SUBSEQUENT EVENTS
- Production volumes for the first fiscal quarter of 2021 were 2,074 Mmcfe, up from 2,038 Mmcfe in the fourth fiscal quarter of 2020 and down from 2,278 Mmcfe in the first fiscal quarter of 2020.
- Net loss in the first fiscal quarter of 2021 was $0.6 million, or $0.03 per share, as compared to net income of $1.9 million, or $0.11 per share, in the first fiscal quarter of 2020.
- Adjusted EBITDA excluding gain on asset sales(1) for the first quarter of 2021 was $2.7 million, up from $2.0 million in the fourth fiscal quarter of 2020 and down from $3.9 million in the first fiscal quarter of 2020.
- Reduced total debt 6% from $28.8 million, as of Sept. 30, 2020, to $27.0 million, as of Dec. 31, 2020. Total debt was further reduced to $26.0 million as of Feb. 1, 2021.
- On Oct. 8, 2020, the Company closed on the previously announced purchase of 297 net royalty acres in Grady County, Okla., and 237 net mineral acres (398 net royalty acres) in Harrison, Panola and Nacogdoches Counties, Texas, for consideration of $5.5 million and 153,375 shares of PHX common stock.
- On Nov. 12, 2020, and Dec. 17, 2020, the Company completed two additional acquisitions totaling 223 net mineral acres (326 net royalty acres) in San Augustine, Texas targeting the Haynesville play for a total of $1.75 million.
- Debt to adjusted EBITDA (TTM) (1) ratio was 2.99x at Dec. 31, 2020.
- Approved payment of a one cent per share dividend payable on March 5, 2021, to stockholders of record on Feb. 19, 2021.
Chad L. Stephens, President and CEO, commented, “Our first quarter of 2021 was much improved over the fourth quarter of 2020 with adjusted EBITDA excluding gain on asset sales(1) increasing by 37% and debt decreasing by 6%, or $1.8 million. Since the end of our first quarter, we have further reduced our debt by an additional $1.0 million, from $27.0 million to $26.0 million. Our results reflect a very strong quarter for PHX and an improving energy sector. I am very pleased with the high level at which our team is performing. During the quarter, we closed on $7.3 million of previously announced producing mineral acquisitions using proceeds from our equity offering completed in September 2020. This exhibits our stated strategy of acquiring producing minerals in the core of our focus areas with line-of-sight development opportunities. We are excited about additional opportunities we are seeing that we believe could further drive an increase in shareholder value, and we look forward to keeping you updated on our continued progress.”
- This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section.
OPERATING HIGHLIGHTS
|
First Quarter Ended |
|
|
First Quarter Ended |
|
||
|
Dec. 31, 2020 |
|
|
Dec. 31, 2019 |
|
||
Mcfe Sold |
|
2,074,334 |
|
|
|
2,278,487 |
|
Average Sales Price per Mcfe |
$ |
3.10 |
|
|
$ |
3.33 |
|
Gas Mcf Sold |
|
1,475,456 |
|
|
|
1,647,827 |
|
Average Sales Price per Mcf |
$ |
2.34 |
|
|
$ |
2.13 |
|
Oil Barrels Sold |
|
58,675 |
|
|
|
65,880 |
|
Average Sales Price per Barrel |
$ |
39.90 |
|
|
$ |
52.60 |
|
NGL Barrels Sold |
|
41,138 |
|
|
|
39,230 |
|
Average Sales Price per Barrel |
$ |
15.20 |
|
|
$ |
15.67 |
|
FINANCIAL HIGHLIGHTS
|
|
First Quarter Ended |
|
|
First Quarter Ended |
|
||
|
|
Dec. 31, 2020 |
|
|
Dec. 31, 2019 |
|
||
Working Interest Sales |
|
$ |
3,907,524 |
|
|
$ |
4,684,737 |
|
Royalty Interest Sales |
|
$ |
2,517,455 |
|
|
$ |
2,909,101 |
|
Natural Gas, Oil and NGL Sales |
|
$ |
6,424,979 |
|
|
$ |
7,593,838 |
|
|
|
|
|
|
|
|
|
|
Lease Bonuses and Rental Income |
|
$ |
1,433 |
|
|
$ |
527,699 |
|
Total Revenue |
|
$ |
6,192,644 |
|
|
$ |
10,576,531 |
|
|
|
|
|
|
|
|
|
|
LOE per Mcfe |
|
$ |
0.48 |
|
|
$ |
0.52 |
|
Transportation, Gathering and Marketing per Mcfe |
|
$ |
0.62 |
|
|
$ |
0.61 |
|
Production Tax per Mcfe |
|
$ |
0.13 |
|
|
$ |
0.14 |
|
G&A Expense per Mcfe |
|
$ |
0.83 |
|
|
$ |
0.98 |
|
Interest Expense per Mcfe |
|
$ |
0.15 |
|
|
$ |
0.16 |
|
DD&A per Mcfe |
|
$ |
1.09 |
|
|
$ |
1.30 |
|
Total Expense per Mcfe |
|
$ |
3.30 |
|
|
$ |
3.71 |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
(596,720 |
) |
|
$ |
1,892,114 |
|
Adj. Pre-Tax Net Income (Loss) (1) |
|
$ |
201,630 |
|
|
$ |
3,865,781 |
|
Adjusted EBITDA (1) |
|
$ |
2,764,177 |
|
|
$ |
7,192,147 |
|
|
|
|
|
|
|
|
|
|
Cash Flow from Operations |
|
$ |
471,381 |
|
|
$ |
2,098,441 |
|
CapEx - Drilling & Completing |
|
$ |
128,083 |
|
|
$ |
105,265 |
|
CapEx - Mineral Acquisitions |
|
$ |
7,869,746 |
|
|
$ |
10,172,594 |
|
|
|
|
|
|
|
|
|
|
Borrowing Base |
|
$ |
30,000,000 |
|
|
$ |
70,000,000 |
|
Debt |
|
$ |
27,000,000 |
|
|
$ |
35,000,000 |
|
Debt/Adjusted EBITDA (TTM) (1) |
|
|
2.99 |
|
|
|
1.18 |
|
- This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section.
FIRST QUARTER 2021 RESULTS
The Company recorded a first quarter 2021 net loss of $596,720, or $0.03 per share, as compared to net income of $1,892,114, or $0.11 per share, in the first quarter 2020. The decrease was principally the result of decreased natural gas, oil and NGL sales, decreased gain on asset sales and decreased lease bonuses and rental income, partially offset by a decrease in general and administrative expenses (G&A), lease operating expenses (LOE), transportation, gathering and marketing expenses, production taxes, depreciation, depletion and amortization (DD&A) and changes in tax provision (benefit).
Natural gas, oil and NGL revenue decreased $1,168,859, or 15%, for the first quarter 2021 compared to the corresponding 2020 quarter due to decreases in oil and NGL prices of 24% and 3%, respectively, and decreases in natural gas and oil volumes of 10% and 11%, respectively.
The decrease in oil production was primarily due to postponement of workovers due to prevailing economic conditions, as well as naturally declining production in high interest wells in the Eagle Ford play. This decrease was partially offset by new wells brought online in the SCOOP and STACK plays. The increase in NGL production was primarily attributable to increased production on high interest wells in liquid-rich gas areas of the STACK play. Natural gas volumes decreased as a result of naturally declining production in the Fayetteville Shale, Arkoma Stack and STACK plays, as well as production downtime in high-interest wells and curtailments in response to market conditions in the Arkoma Stack and STACK plays.
The Company had a net loss on derivative contracts of $254,036 in the 2021 quarter as compared to a net loss of $817,894 in the 2020 quarter. The net loss on derivative contracts in both periods was principally due to the natural gas and oil collars and fixed price swaps being less beneficial in relation to their respective contracted volumes and prices at the beginning of the periods.
The 11% decrease in total cost per Mcfe in the 2021 quarter relative to the 2020 quarter was primarily driven by a decrease in DD&A. DD&A decreased $695,052, or 24%, in the 2021 quarter to $1.09 per Mcfe as compared to $1.30 per Mcfe in the 2020 quarter. $265,399 of the decrease was a result of production decreasing 9% in the 2021 quarter. Also, DD&A decreased $429,653 as a result of a $0.21 decrease in the DD&A rate per Mcfe. The rate decrease was mainly due to impairments taken at the end of both fiscal 2019 and the 2020 second quarter, which lowered the basis of the assets. The rate decrease was partially offset by lower natural gas, oil and NGL prices utilized in the reserve calculations during the 2021 quarter, as compared to prices used for the 2020 quarter, shortening the economic life of wells.
OPERATIONS UPDATE
During the quarter ended Dec. 31, 2020, we converted seven gross and 0.02 net wells in progress to producing wells. Our inventory of wells in progress increased to 120 gross wells and 0.62 net wells.
|
|
|
|
|
|
|
|
|
|
Bakken/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three |
|
|
Arkoma |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
SCOOP |
|
|
STACK |
|
|
Forks |
|
|
Stack |
|
|
Permian |
|
|
Fayetteville |
|
|
Haynesville |
|
|
Other |
|
|
Total |
|||||||||
Gross Wells in Progress on PHX Acreage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 9/30/20 |
|
|
46 |
|
|
|
31 |
|
|
|
5 |
|
|
|
1 |
|
|
|
4 |
|
|
|
- |
|
|
|
- |
|
|
|
7 |
|
|
|
94 |
Net Change |
|
|
-1 |
|
|
|
1 |
|
|
|
- |
|
|
|
1 |
|
|
|
- |
|
|
|
- |
|
|
|
25 |
|
|
|
- |
|
|
|
26 |
As of 12/31/20 |
|
|
45 |
|
|
|
32 |
|
|
|
5 |
|
|
|
2 |
|
|
|
4 |
|
|
|
- |
|
|
|
25 |
|
|
|
7 |
|
|
|
120 |
Net Wells in Progress on PHX Acreage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 9/30/20 |
|
|
0.09 |
|
|
|
0.16 |
|
|
|
- |
|
|
|
- |
|
|
|
0.14 |
|
|
|
- |
|
|
|
- |
|
|
|
0.07 |
|
|
|
0.46 |
Net Change |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.16 |
|
|
|
- |
|
|
|
0.16 |
As of 12/31/20 |
|
|
0.09 |
|
|
|
0.16 |
|
|
|
- |
|
|
|
- |
|
|
|
0.14 |
|
|
|
- |
|
|
|
0.16 |
|
|
|
0.07 |
|
|
|
0.62 |
Gross Active Permits on PHX Acreage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 9/30/20 |
|
|
31 |
|
|
|
22 |
|
|
|
25 |
|
|
|
10 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
18 |
|
|
|
106 |
Net Change |
|
|
-2 |
|
|
|
-7 |
|
|
|
-15 |
|
|
|
-3 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
-5 |
|
|
|
-32 |
As of 12/31/20 |
|
|
29 |
|
|
|
15 |
|
|
|
10 |
|
|
|
7 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
13 |
|
|
|
74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 12/31/20: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rigs Present on PHX Acreage |
|
|
2 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1 |
|
|
|
3 |
Rigs Within 2.5 Miles of PHX Acreage |
|
|
7 |
|
|
|
5 |
|
|
|
1 |
|
|
|
1 |
|
|
|
5 |
|
|
|
- |
|
|
|
8 |
|
|
|
3 |
|
|
|
30 |
Leasing Activity
During the first quarter of fiscal 2021, the Company leased two net mineral acres for an average bonus payment of $100 per net mineral acre and an average royalty of 19%.
|
|
|
|
|
|
|
|
|
|
Bakken/ |
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|
|
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|
|
|
|
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|
|
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|
|
|
|
|
|
|
|
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|
Three |
|
|
Arkoma |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
SCOOP |
|
|
STACK |
|
|
Forks |
|
|
Stack |
|
|
Permian |
|
|
Fayetteville |
|
|
Haynesville |
|
|
Other |
|
|
Total |
|||||||||
During Three Months Ended 12/31/20: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Mineral Acres Leased |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2 |
|
|
|
2 |
Average Bonus per Net Mineral Acre |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
100 |
|
|
$ |
100 |
Average Royalty per Net Mineral Acre |
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
19% |
|
|
19% |
ACQUISITION AND DIVESTITURE UPDATE
During the first quarter of fiscal 2021, the Company purchased 1,021 net royalty acres at an average price of $7,115.
|
|
|
|
|
|
|
|
|
|
Bakken/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three |
|
|
Arkoma |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
SCOOP |
|
|
STACK |
|
|
Forks |
|
|
Stack |
|
|
Permian |
|
|
Fayetteville |
|
|
Haynesville |
|
|
Other |
|
|
Total |
|
|||||||||
During Three Months Ended 12/31/20: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Mineral Acres Purchased |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
460 |
|
|
|
- |
|
|
|
460 |
|
Net Royalty Acres Purchased |
|
|
297 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
724 |
|
|
|
- |
|
|
|
1,021 |
|
Price per Net Royalty Acre |
|
$ |
6,826 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
7,234 |
|
|
|
- |
|
|
$ |
7,115 |
|
Net Mineral Acres Sold |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net Royalty Acres Sold |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Price per Net Royalty Acre |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
FIRST QUARTER EARNINGS CALL
PHX will host a conference call to discuss first quarter results at 5:00 p.m. EST on Feb. 8, 2021. Management’s discussion will be followed by a question and answer session with investors. To participate on the conference call, please dial 888-506-0062 (domestic) or 973-528-0011 (international). A replay of the call will be available for seven days after the call. The number to access the replay of the conference call is 877-481-4010 and the PIN for the replay is 39440.
FINANCIAL RESULTS
Statements of Operations
|
Three Months Ended Dec. 31, |
|
|||||
|
2020 |
|
|
2019 |
|
||
Revenues: |
|
|
|||||
Natural gas, oil and NGL sales |
$ |
6,424,979 |
|
|
$ |
7,593,838 |
|
Lease bonuses and rental income |
|
1,433 |
|
|
|
527,699 |
|
Gains (losses) on derivative contracts |
|
(254,036 |
) |
|
|
(817,894 |
) |
Gain on asset sales |
|
20,268 |
|
|
|
3,272,888 |
|
|
$ |
6,192,644 |
|
|
|
10,576,531 |
|
Costs and expenses: |
|
|
|
|
|
|
|
Lease operating expenses |
|
1,004,412 |
|
|
|
1,181,671 |
|
Transportation, gathering and marketing |
|
1,280,965 |
|
|
|
1,383,001 |
|
Production taxes |
|
276,026 |
|
|
|
327,281 |
|
Depreciation, depletion and amortization |
|
2,260,649 |
|
|
|
2,955,701 |
|
Interest expense |
|
301,898 |
|
|
|
370,665 |
|
General and administrative |
|
1,731,097 |
|
|
|
2,223,028 |
|
Other expense (income) |
|
3,317 |
|
|
|
(10,930 |
) |
|
|
6,858,364 |
|
|
|
8,430,417 |
|
Income (loss) before provision (benefit) for income taxes |
|
(665,720 |
) |
|
|
2,146,114 |
|
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes |
|
(69,000 |
) |
|
|
254,000 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(596,720 |
) |
|
$ |
1,892,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss) per common share |
$ |
(0.03 |
) |
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding: |
|
|
|
|
|
|
|
Common shares |
|
22,378,146 |
|
|
|
16,339,673 |
|
Unissued, directors' deferred compensation shares |
|
178,090 |
|
|
|
180,864 |
|
|
|
22,556,236 |
|
|
|
16,520,537 |
|
|
|
|
|
|
|
|
|
Dividends declared per share of |
|
|
|
|
|
|
|
common stock and paid in period |
$ |
0.01 |
|
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
Dividends declared per share of |
|
|
|
|
|
|
|
common stock and to be paid in quarter ended March 31 |
$ |
0.01 |
|
|
$ |
0.04 |
|
Balance Sheets
|
Dec. 31, 2020 |
|
|
Sept. 30, 2020 |
||
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
1,163,818 |
|
|
$ |
10,690,395 |
Natural gas, oil, and NGL sales receivables (net of |
|
3,793,159 |
|
|
|
2,943,220 |
allowance for uncollectable accounts) |
|
|
|
|
|
|
Refundable income taxes |
|
3,817,772 |
|
|
|
3,805,227 |
Other |
|
1,195,774 |
|
|
|
351,088 |
Total current assets |
|
9,970,523 |
|
|
|
17,789,930 |
|
|
|
|
|
|
|
Properties and equipment at cost, based on |
|
|
|
|
|
|
successful efforts accounting: |
|
|
|
|
|
|
Producing natural gas and oil properties |
|
329,648,805 |
|
|
|
324,886,491 |
Non-producing natural gas and oil properties |
|
22,101,506 |
|
|
|
18,993,814 |
Other |
|
582,444 |
|
|
|
582,444 |
|
|
352,332,755 |
|
|
|
344,462,749 |
Less accumulated depreciation, depletion and amortization |
|
(265,704,923 |
) |
|
|
(263,590,801 |
Net properties and equipment |
|
86,627,832 |
|
|
|
80,871,948 |
|
|
|
|
|
|
|
Operating lease right-of-use assets |
|
670,065 |
|
|
|
690,316 |
Other, net |
|
630,429 |
|
|
|
669,641 |
Total assets |
$ |
97,898,849 |
|
|
$ |
100,021,835 |
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
536,972 |
|
|
$ |
997,637 |
Derivative contracts, net |
|
1,189,277 |
|
|
|
281,942 |
Current portion of operating lease liability |
|
149,922 |
|
|
|
127,108 |
Accrued liabilities and other |
|
1,254,061 |
|
|
|
1,297,363 |
Short-term debt |
|
- |
|
|
|
1,750,000 |
Total current liabilities |
|
3,130,232 |
|
|
|
4,454,050 |
|
|
|
|
|
|
|
Long-term debt |
|
27,000,000 |
|
|
|
27,000,000 |
Deferred income taxes, net |
|
1,260,007 |
|
|
|
1,329,007 |
Asset retirement obligations |
|
2,919,495 |
|
|
|
2,897,522 |
Derivative contracts, net |
|
385,720 |
|
|
|
425,705 |
Operating lease liability, net of current portion |
|
867,509 |
|
|
|
921,625 |
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
Class A voting common stock, $0.01666 par value; 24,000,500 |
|
|
|
|
|
|
shares authorized; 22,800,681 issued at Dec. 31, 2020, and |
|
|
|
|
|
|
22,647,306 issued at Sept. 30, 2020 |
|
379,859 |
|
|
|
377,304 |
Capital in excess of par value |
|
10,678,906 |
|
|
|
10,649,611 |
Deferred directors' compensation |
|
1,918,534 |
|
|
|
1,874,007 |
Retained earnings |
|
55,192,444 |
|
|
|
56,244,100 |
|
|
68,169,743 |
|
|
|
69,145,022 |
Less treasury stock, at cost; 390,267 shares at Dec. 31, |
|
|
|
|
|
|
2020, and 411,487 shares at Sept. 30, 2020 |
|
(5,833,857 |
) |
|
|
(6,151,096 |
Total stockholders' equity |
|
62,335,886 |
|
|
|
62,993,926 |
Total liabilities and stockholders' equity |
$ |
97,898,849 |
|
|
$ |
100,021,835 |
Condensed Statements of Cash Flows
|
Three months ended Dec. 31, |
|||||
|
2020 |
|
|
2019 |
||
Operating Activities |
|
|||||
Net income (loss) |
$ |
(596,720 |
) |
|
$ |
1,892,114 |
Adjustments to reconcile net income (loss) to net cash provided |
|
|
|
|
|
|
by operating activities: |
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
2,260,649 |
|
|
|
2,955,701 |
Provision for deferred income taxes |
|
(69,000 |
) |
|
|
658,000 |
Gain from leasing fee mineral acreage |
|
(232 |
) |
|
|
(523,384 |
Proceeds from leasing fee mineral acreage |
|
232 |
|
|
|
537,777 |
Net (gain) loss on sale of assets |
|
(30,862 |
) |
|
|
(3,272,888 |
Directors' deferred compensation expense |
|
44,527 |
|
|
|
86,213 |
Total (gain) loss on derivative contracts |
|
254,036 |
|
|
|
817,894 |
Cash receipts (payments) on settled derivative contracts |
|
613,314 |
|
|
|
901,773 |
Restricted stock awards |
|
122,978 |
|
|
|
148,515 |
Other |
|
14,387 |
|
|
|
8,896 |
Cash provided (used) by changes in assets and liabilities: |
|
|
|
|
|
|
Natural gas, oil and NGL sales receivables |
|
(813,167 |
) |
|
|
56,160 |
Other current assets |
|
(676,620 |
) |
|
|
(407,610 |
Accounts payable |
|
(398,556 |
) |
|
|
(73,831 |
Income taxes receivable |
|
(12,545 |
) |
|
|
(412,073 |
Other non-current assets |
|
30,958 |
|
|
|
1,090 |
Accrued liabilities |
|
(271,998 |
) |
|
|
(1,275,906 |
Total adjustments |
|
1,068,101 |
|
|
|
206,327 |
Net cash provided by operating activities |
|
471,381 |
|
|
|
2,098,441 |
|
|
|
|
|
|
|
Investing Activities |
|
|
|
|
|
|
Capital expenditures |
|
(128,083 |
) |
|
|
(105,265 |
Acquisition of minerals and overrides |
|
(7,869,746 |
) |
|
|
(10,172,594 |
Proceeds from sales of assets |
|
- |
|
|
|
3,376,049 |
Net cash provided (used) by investing activities |
|
(7,997,829 |
) |
|
|
(6,901,810 |
|
|
|
|
|
|
|
Financing Activities |
|
|
|
|
|
|
Borrowings under Credit Facility |
|
- |
|
|
|
4,774,297 |
Payments of loan principal |
|
(1,750,000 |
) |
|
|
(5,199,297 |
Net proceeds from equity issuance |
|
(24,242 |
) |
|
|
- |
Purchase of treasury stock |
|
- |
|
|
|
(7,635 |
Payments of dividends |
|
(225,887 |
) |
|
|
(655,980 |
Net cash provided (used) by financing activities |
|
(2,000,129 |
) |
|
|
(1,088,615 |
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
|
(9,526,577 |
) |
|
|
(5,891,984 |
Cash and cash equivalents at beginning of period |
|
10,690,395 |
|
|
|
6,160,691 |
Cash and cash equivalents at end of period |
$ |
1,163,818 |
|
|
$ |
268,707 |
|
|
|
|
|
|
|
Supplemental Schedule of Noncash Investing and Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared and unpaid |
$ |
229,049 |
|
|
$ |
663,919 |
Additions to asset retirement obligations |
$ |
- |
|
|
$ |
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross additions to properties and equipment |
$ |
7,986,350 |
|
|
$ |
10,164,680 |
Equity offering used for acquisitions |
|
(250,000 |
) |
|
|
- |
Net (increase) decrease in accounts payable for properties |
|
|
|
|
|
|
and equipment additions |
|
261,479 |
|
|
|
113,179 |
Capital expenditures and acquisitions |
$ |
7,997,829 |
|
|
$ |
10,277,859 |
Derivative Contracts as of Feb. 4, 2021
Period |
|
|
|
|
|
|
|
|
|
|
|
Collar Average |
|
|
Collar Average |
||
(Calendar Year) |
|
Product |
|
Volume Mcf/Bbl |
|
|
Swap Price |
|
|
Floor Price |
|
|
Ceiling Price |
||||
2021 |
|
Natural Gas |
|
|
2,451,000 |
|
|
|
|
|
|
$ |
2.34 |
|
|
$ |
3.04 |
2021 |
|
Natural Gas |
|
|
1,317,000 |
|
|
$ |
2.80 |
|
|
|
|
|
|
|
|
2022 |
|
Natural Gas |
|
|
1,942,500 |
|
|
|
|
|
|
$ |
2.42 |
|
|
$ |
3.14 |
2022 |
|
Natural Gas |
|
|
125,500 |
|
|
$ |
2.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
Crude Oil |
|
|
44,500 |
|
|
|
|
|
|
$ |
36.74 |
|
|
$ |
44.85 |
2021 |
|
Crude Oil |
|
|
103,000 |
|
|
$ |
39.00 |
|
|
|
|
|
|
|
|
2022 |
|
Crude Oil |
|
|
59,500 |
|
|
|
|
|
|
$ |
38.77 |
|
|
$ |
49.61 |
2022 |
|
Crude Oil |
|
|
59,000 |
|
|
$ |
41.51 |
|
|
|
|
|
|
|
|
Non-GAAP Reconciliation
This news release includes certain “non-GAAP financial measures” under the rules of the Securities and Exchange Commission, including Regulation G. These non-GAAP measures are calculated using GAAP amounts in our financial statements. These measures, detailed below, are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website.
Adjusted EBITDA Reconciliation
Adjusted EBITDA is defined as net income (loss) plus interest expense, provision for impairment, depreciation, depletion and amortization of properties and equipment, including amortization of other assets, provision (benefit) for income taxes and unrealized (gains) losses on derivative contracts. Adjusted EBITDA is not a measure of financial performance under GAAP. We have included a presentation of adjusted EBITDA because we recognize that certain investors consider adjusted EBITDA 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 periods indicated:
|
First Quarter Ended |
|
|
First Quarter Ended |
||
|
Dec. 31, 2020 |
|
|
Dec. 31, 2019 |
||
Net Income (Loss) |
$ |
(596,720 |
) |
|
$ |
1,892,114 |
Plus: |
|
|
|
|
|
|
Unrealized (gains) losses on derivatives |
|
867,350 |
|
|
|
1,719,667 |
Income Tax Expense (Benefit) |
|
(69,000 |
) |
|
|
254,000 |
Interest Expense |
|
301,898 |
|
|
|
370,665 |
DD&A |
|
2,260,649 |
|
|
|
2,955,701 |
Impairment |
|
- |
|
|
|
- |
Adjusted EBITDA |
$ |
2,764,177 |
|
|
$ |
7,192,147 |
Adjusted EBITDA Excluding Gain on Asset Sales Reconciliation
Adjusted EBITDA excluding gain on asset sales is defined as the adjusted EBITDA less gains on asset sales. We have included a presentation of adjusted EBITDA excluding gain on asset sales because we recognize that certain investors consider this amount a useful means of measuring our ability to meet our debt service obligations and evaluating our financial performance. The adjusted EBITDA excluding gain on asset sales 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 excluding gain on asset sales may not be comparable to a similarly titled measure of other companies. The following table provides a presentation of net income (loss) to adjusted EBITDA and of the resulting adjusted EBITDA excluding gain on asset sales for the periods indicated:
|
First Quarter Ended |
|
|
First Quarter Ended |
|
|
Fourth Quarter Ended |
|||
|
Dec. 31, 2020 |
|
|
Dec. 31, 2019 |
|
|
Sep. 30, 2020 |
|||
Net Income (Loss) |
$ |
(596,720 |
) |
|
$ |
1,892,114 |
|
|
$ |
(1,834,122 |
Plus: |
|
|
|
|
|
|
|
|
|
|
Unrealized (gains) losses on derivatives |
|
867,350 |
|
|
|
1,719,667 |
|
|
|
2,387,158 |
Income Tax Expense (Benefit) |
|
(69,000 |
) |
|
|
254,000 |
|
|
|
(678,060 |
Interest Expense |
|
301,898 |
|
|
|
370,665 |
|
|
|
328,359 |
DD&A |
|
2,260,649 |
|
|
|
2,955,701 |
|
|
|
2,519,996 |
Adjusted EBITDA |
$ |
2,764,177 |
|
|
$ |
7,192,147 |
|
|
$ |
2,723,331 |
|
|
|
|
|
|
|
|
|
|
|
Gain on asset sales |
|
20,268 |
|
|
|
3,272,888 |
|
|
|
721,440 |
Adjusted EBITDA excluding Gain on asset sales |
$ |
2,743,909 |
|
|
$ |
3,919,259 |
|
|
$ |
2,001,891 |
Debt/Adjusted EBITDA (TTM) Reconciliation
Debt/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/adjusted EBITDA (TTM) because we recognize that certain investors consider such ratio a useful means of measuring our ability to meet our debt service obligations and evaluating our financial performance. The debt/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/adjusted EBITDA (TTM) may not be comparable to a similarly titled measure of other companies. The following table provides a presentation of net income (loss) to adjusted EBITDA on a TTM basis, and of the resulting debt/adjusted EBITDA (TTM) ratio:
|
TTM Ended |
|
|
TTM Ended |
||
|
Dec. 31, 2020 |
|
|
Dec. 31, 2019 |
||
Net Income (Loss) |
$ |
(26,440,871 |
) |
|
$ |
(51,588,764 |
Plus: |
|
|
|
|
|
|
Unrealized (gains) losses on derivatives |
|
2,349,474 |
|
|
|
2,017,688 |
Income Tax Expense (Benefit) |
|
(8,612,000 |
) |
|
|
(16,798,000 |
Interest Expense |
|
1,218,021 |
|
|
|
1,827,084 |
DD&A |
|
10,618,731 |
|
|
|
17,338,598 |
Impairment |
|
29,904,528 |
|
|
|
76,824,337 |
Adjusted EBITDA |
$ |
9,037,883 |
|
|
$ |
29,620,943 |
|
|
|
|
|
|
|
Debt |
$ |
27,000,000 |
|
|
$ |
35,000,000 |
Debt/Adjusted EBITDA |
|
2.99 |
|
|
|
1.18 |
Adjusted Pre-Tax Net Income (Loss) Reconciliation
Adjusted pre-tax net income (loss) is defined as net income (loss) plus provision for impairment, provision (benefit) for income taxes and unrealized (gains) losses on derivative contracts. We have included a presentation of adjusted pre-tax net income (loss) because we recognize that certain investors consider adjusted pre-tax net income (loss) a useful means of evaluating our financial performance. Adjusted pre-tax 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 pre-tax 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 pre-tax net income (loss) for the periods indicated:
|
First Quarter Ended |
|
|
First Quarter Ended |
|
||
|
Dec. 31, 2020 |
|
|
Dec. 31, 2019 |
|
||
Net Income (Loss) |
$ |
(596,720 |
) |
|
$ |
1,892,114 |
|
Plus: |
|
|
|
|
|
|
|
Unrealized (gains) losses on derivatives |
|
867,350 |
|
|
|
1,719,667 |
|
|