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PHX Minerals Reports Results for the Quarter Ended Sept. 30, 2024

PHX Minerals Reports Results for the Quarter Ended Sept. 30, 2024

FORT WORTH, Texas, Nov. 6, 2024 – PHX MINERALS INC., “PHX” or the “Company” (NYSE: PHX), today reported financial and operating results for the quarter ended Sept. 30, 2024.

Summary of Results for the Quarter Ended Sept. 30, 2024

  • Net income was $1.1 million, or $0.03 per diluted share, compared to net income of $1.3 million, or $0.04 per diluted share, for the quarter ended June 30, 2024, and net income of $1.9 million, or $0.05 per diluted share, for the quarter ended Sept. 30, 2023.
  • Adjusted EBITDA(1) was $4.9 million, compared to $6.4 million for the quarter ended June 30, 2024 and $6.3 million for the quarter ended Sept. 30, 2023.
  • Royalty production volumes decreased 23% to 2,098 Mmcfe compared to the quarter ended June 30, 2024, and increased 1% compared to the quarter ended Sept. 30, 2023.
  • Total production volumes decreased 20%  to 2,379 Mmcfe compared to the quarter ended June 30, 2024, and increased 1% compared to the quarter ended Sept. 30, 2023.
  • Converted 46 gross (0.18 net) wells to producing status, compared to a conversion of 55 gross (0.40 net) wells to producing status during the quarter ended June 30, 2024 and 71 gross (0.16 net) during the quarter ended Sept. 30, 2023.
  • Inventory of 278 gross (0.93 net) wells in progress and permits as of Sept. 30, 2024, compared to 241 gross (0.93 net) wells in progress and permits as of June 30, 2024 and 278 gross (1.09 net) wells in progress and permits as of Sept. 30, 2023.
  • Total debt was $27.8 million, down $5.0 million since Dec. 31, 2023, and the debt-to-adjusted EBITDA (TTM) (1) ratio was 1.36x at Sept. 30, 2024.

Subsequent Events

  • PHX announced a $0.04 per share quarterly dividend, payable on Dec. 5, 2024, to stockholders of record on Nov. 21, 2024.
  • PHX's borrowing base under its existing credit facility was reaffirmed at $50.0 million in connection with its regularly scheduled semi-annual redetermination.
  1. This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section.

Chad L. Stephens, President and CEO, commented, “PHX generated our second-highest quarter for royalty volumes in our history, validating the quality of our asset base even amidst continued volatility in commodity pricing.  We remain positive on natural gas prices as we move into a seasonal stronger period and are seeing sequential increased rig activities on and around our mineral acreage, further bolstering our longer-term outlook.

 “During the quarter, we saw a growing pipeline of attractive M&A opportunities,” continued Mr. Stephens. “We purchased 325 net royalty acres for $3.0 million and replaced 100% of the wells in progress that converted to production. We also reduced our debt by $1.0 million sequentially with cashflow generated from our production.  With a strong balance sheet, and a proven track record of acquiring attractive mineral assets that produce cash flow even during challenging pricing, we are well-positioned for continued success.

 “Our risk-mitigated business is built for resilient and sustainable profitability even during challenging pricing environments, and our strategic advantages are evident through commodity price cycles,” concluded Mr. Stephens.

 

 

Financial Highlights

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

Sept. 30, 2024

 

 

Sept. 30, 2023

 

 

Sept. 30, 2024

 

 

Sept. 30, 2023

 

Royalty Interest Sales

 

$

6,982,112

 

 

$

7,873,297

 

 

$

21,977,351

 

 

$

24,214,701

 

Working Interest Sales

 

$

906,404

 

 

$

1,025,794

 

 

$

2,827,379

 

 

$

3,772,801

 

Natural Gas, Oil and NGL Sales

 

$

7,888,516

 

 

$

8,899,091

 

 

$

24,804,730

 

 

$

27,987,502

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains (Losses) on Derivative Contracts

 

$

1,089,242

 

 

$

(337,647

)

 

$

1,297,737

 

 

$

3,648,179

 

Lease Bonuses and Rental Income

 

$

159,271

 

 

$

620,101

 

 

$

445,215

 

 

$

1,045,242

 

Total Revenue

 

$

9,137,029

 

 

$

9,181,545

 

 

$

26,547,682

 

 

$

32,680,923

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease Operating Expense

 

 

 

 

 

 

 

 

 

 

 

 

per Working Interest Mcfe

 

$

1.05

 

 

$

1.32

 

 

$

1.15

 

 

$

1.34

 

Transportation, Gathering and

 

 

 

 

 

 

 

 

 

 

 

 

Marketing per Mcfe

 

$

0.47

 

 

$

0.30

 

 

$

0.47

 

 

$

0.38

 

Production and Ad Valorem Tax

 

 

 

 

 

 

 

 

 

 

 

 

per Mcfe

 

$

0.18

 

 

$

0.19

 

 

$

0.19

 

 

$

0.20

 

G&A Expense per Mcfe

 

$

1.13

 

 

$

1.18

 

 

$

1.17

 

 

$

1.25

 

Cash G&A Expense per Mcfe (1)

 

$

0.91

 

 

$

0.95

 

 

$

0.92

 

 

$

0.99

 

Interest Expense per Mcfe

 

$

0.26

 

 

$

0.24

 

 

$

0.27

 

 

$

0.23

 

DD&A per Mcfe

 

$

1.00

 

 

$

0.86

 

 

$

0.94

 

 

$

0.86

 

Total Expense per Mcfe

 

$

3.16

 

 

$

2.92

 

 

$

3.16

 

 

$

3.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

1,100,310

 

 

$

1,895,403

 

 

$

2,212,466

 

 

$

11,407,356

 

Adjusted EBITDA (2)

 

$

4,905,335

 

 

$

6,321,029

 

 

$

15,938,535

 

 

$

18,147,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow from Operations (3)

 

$

5,784,497

 

 

$

6,960,419

 

 

$

15,207,852

 

 

$

20,809,684

 

CapEx (4)

 

$

28,902

 

 

$

45,977

 

 

$

64,628

 

 

$

321,396

 

CapEx - Mineral Acquisitions

 

$

2,994,669

 

 

$

13,469,756

 

 

$

5,272,847

 

 

$

25,383,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowing Base

 

 

 

 

 

 

 

$

50,000,000

 

 

$

45,000,000

 

Debt

 

 

 

 

 

 

 

$

27,750,000

 

 

$

30,750,000

 

Debt-to-Adjusted EBITDA (TTM) (2)

 

 

 

 

 

 

 

 

1.36

 

 

 

1.31

 

  1. Cash G&A expense is G&A excluding restricted stock and deferred director’s expense from the adjusted EBITDA table in the non-GAAP Reconciliation section.
  2. This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section.
  3. GAAP cash flow from operations.
  4. Includes legacy working interest expenditures and fixtures and equipment.

 

Operating Highlights

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

Sept. 30, 2024

 

 

Sept. 30, 2023

 

 

Sept. 30, 2024

 

 

Sept. 30, 2023

 

Gas Mcf Sold

 

1,898,442

 

 

 

1,868,012

 

 

 

6,063,397

 

 

 

5,681,508

 

Average Sales Price per Mcf before the

 

 

 

 

 

 

 

 

 

 

 

effects of settled derivative contracts

$

2.00

 

 

$

2.40

 

 

$

2.05

 

 

$

2.63

 

Average Sales Price per Mcf after the

 

 

 

 

 

 

 

 

 

 

 

effects of settled derivative contracts

$

2.54

 

 

$

2.72

 

 

$

2.70

 

 

$

3.03

 

% of sales subject to hedges

 

48

%

 

 

46

%

 

 

48

%

 

 

46

%

Oil Barrels Sold

 

45,698

 

 

 

48,032

 

 

 

134,786

 

 

 

143,148

 

Average Sales Price per Bbl before the

 

 

 

 

 

 

 

 

 

 

 

effects of settled derivative contracts

$

74.83

 

 

$

78.48

 

 

$

76.14

 

 

$

76.23

 

Average Sales Price per Bbl after the

 

 

 

 

 

 

 

 

 

 

 

effects of settled derivative contracts

$

72.95

 

 

$

78.44

 

 

$

74.78

 

 

$

73.88

 

% of sales subject to hedges

 

31

%

 

 

35

%

 

 

31

%

 

 

44

%

NGL Barrels Sold

 

34,332

 

 

 

32,029

 

 

 

98,511

 

 

 

99,063

 

Average Sales Price per Bbl(1)

$

19.60

 

 

$

20.35

 

 

$

21.57

 

 

$

21.48

 

 

 

 

 

 

 

 

 

 

 

 

 

Mcfe Sold

 

2,378,622

 

 

 

2,348,378

 

 

 

7,463,177

 

 

 

7,134,770

 

Natural gas, oil and NGL sales before the

 

 

 

 

 

 

 

 

 

 

 

effects of settled derivative contracts

$

7,888,516

 

 

$

8,899,091

 

 

$

24,804,730

 

 

$

27,987,502

 

Natural gas, oil and NGL sales after the

 

 

 

 

 

 

 

 

 

 

 

effects of settled derivative contracts

$

8,820,672

 

 

$

9,502,036

 

 

$

28,590,801

 

 

$

29,896,064

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) There were no NGL settled derivative contracts during the 2024 and 2023 periods.

 

Total Production for the last four quarters was as follows:

Quarter ended

 

Mcf Sold

 

 

Oil Bbls Sold

 

 

NGL Bbls Sold

 

 

Mcfe Sold

 

9/30/2024

 

 

1,898,442

 

 

 

45,698

 

 

 

34,332

 

 

 

2,378,622

 

6/30/2024

 

 

2,464,846

 

 

 

51,828

 

 

 

31,994

 

 

 

2,967,779

 

3/31/2024

 

 

1,700,108

 

 

 

37,260

 

 

 

32,184

 

 

 

2,116,776

 

12/31/2023

 

 

1,775,577

 

 

 

39,768

 

 

 

38,422

 

 

 

2,244,717

 

 

The percentage of total production volumes attributable to natural gas was 80% for the quarter ended Sept. 30, 2024.

 

Royalty Interest Production for the last four quarters was as follows:

 

Quarter ended

 

Mcf Sold

 

 

Oil Bbls Sold

 

 

NGL Bbls Sold

 

 

Mcfe Sold

 

9/30/2024

 

 

1,724,635

 

 

 

41,170

 

 

 

21,011

 

 

 

2,097,722

 

6/30/2024

 

 

2,304,176

 

 

 

47,024

 

 

 

20,461

 

 

 

2,709,090

 

3/31/2024

 

 

1,533,580

 

 

 

33,083

 

 

 

20,844

 

 

 

1,857,147

 

12/31/2023

 

 

1,590,301

 

 

 

35,547

 

 

 

23,769

 

 

 

1,946,196

 

 

The percentage of royalty production volumes attributable to natural gas was 82% for the quarter ended Sept. 30, 2024.

 

Working Interest Production for the last four quarters was as follows:

 

Quarter ended

 

Mcf Sold

 

 

Oil Bbls Sold

 

 

NGL Bbls Sold

 

 

Mcfe Sold

 

9/30/2024

 

 

173,807

 

 

 

4,528

 

 

 

13,321

 

 

 

280,900

 

6/30/2024

 

 

160,670

 

 

 

4,804

 

 

 

11,533

 

 

 

258,689

 

3/31/2024

 

 

166,528

 

 

 

4,177

 

 

 

11,340

 

 

 

259,629

 

12/31/2023

 

 

185,276

 

 

 

4,221

 

 

 

14,653

 

 

 

298,521

 

 

Quarter Ended Sept. 30, 2024 Results

The Company recorded net income of $1.1 million, or $0.03 per diluted share, for the quarter ended Sept. 30, 2024, as compared to net income of $1.90 million, or $0.05 per diluted share, for the quarter ended Sept. 30, 2023. The change in net income was principally the result of a decrease in natural gas, oil and NGL sales, a decrease in lease bonuses, an increase in transportation, gathering and marketing expenses and an increase in depreciation, depletion and amortization expenses, partially offset by an increase in gains associated with our derivative contracts.

Natural gas, oil and NGL revenue decreased $1.0 million, or 11%, for the quarter ended Sept. 30, 2024, compared to the quarter ended Sept. 30, 2023, due to decreases in natural gas, oil, and NGL prices of 17%, 5%, and 4%, respectively, and a decrease in oil volumes of 5%, partially offset by increases in natural gas and NGL volumes of 2% and 7%, respectively.

The increase in royalty production volumes during the quarter ended Sept. 30, 2024, as compared to the quarter ended Sept. 30, 2023, resulted primarily from new wells being brought online in the Haynesville Shale and SCOOP plays.

The Company had a net gain on derivative contracts of $1.1 million for the quarter ended Sept. 30, 2024, comprised of a $0.9 million gain on settled derivatives and a $0.2 million non-cash gain on derivatives, as compared to a net loss of ($0.3) million for the quarter ended Sept. 30, 2023. The change in net gain on derivative contracts was due to the Company’s settlements of natural gas and oil collars and fixed price swaps and the change in valuation caused by the difference in Sept. 30, 2024 pricing relative to the strike price on open derivative contracts.

Nine Months Ended Sept. 30, 2024 Results

The Company recorded net income of $2.2 million, or $0.06 per diluted share, for the nine months ended Sept. 30, 2024, as compared to a net income of $11.4 million, or $0.31 per diluted share, for the nine months ended Sept. 30, 2023. The change in net income was principally the result of a decrease in natural gas, oil and NGL sales, a decrease in gains associated with our hedge contracts, a decrease in gains on asset sales, an increase in transportation, gathering and marketing expenses and an increase in depreciation, depletion and amortization expenses, partially offset by a decrease in income tax provision.

Natural gas, oil and NGL revenue decreased $3.2 million, or 11%, for the nine months ended Sept. 30, 2024, compared to the nine months ended Sept. 30, 2023, due to a decrease in natural gas prices of 22% and decreases in oil and NGL volumes of 6% and 1%, respectively, partially offset by an increase in gas volumes of 7%.

The production increase in royalty volumes during the nine months ended Sept. 30, 2024, as compared to the nine months ended Sept. 30, 2023, resulted primarily from new wells in the Haynesville Shale and SCOOP plays coming online. The production decrease in working interest volumes during the nine months ended Sept. 30, 2024, as compared to the nine months ended Sept. 30, 2023, resulted from natural production decline and working interest divestitures.

The Company had a net gain on derivative contracts of $1.3 million for the nine months ended Sept. 30, 2024, comprised of a $3.8 million gain on settled derivatives and a $2.5 million non-cash loss on derivatives, as compared to a net gain of $3.6 million for the nine months ended Sept. 30, 2023. The change in net gain on derivative contracts was due to the Company’s settlements of natural gas and oil collars and fixed price swaps and the change in valuation caused by the difference in Sept. 30, 2024 pricing relative to the strike price on open derivative contracts.

Operations Update

During the quarter ended Sept. 30, 2024, the Company converted 46 gross (0.18 net) wells to producing status, including 12 gross (0.11 net) wells in the Haynesville and 18 gross (0.04 net) wells in the SCOOP, compared to 71 gross (0.16 net) wells converted in the quarter ended Sept. 30, 2023.

At Sept. 30, 2024, the Company had a total of 278 gross (0.93 net) wells in progress and permits across its mineral positions, compared to 241 gross (0.93 net) wells in progress and permits at June 30, 2024. As of Sept. 30, 2024, 18 rigs were operating on the Company’s acreage and 70 rigs were operating within 2.5 miles of its acreage.

 

 

 

 

 

 

 

Bakken/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three

 

 

Arkoma

 

 

 

 

 

 

 

 

 

 

 

SCOOP

 

 

STACK

 

 

Forks

 

 

Stack

 

 

Haynesville

 

 

Other

 

 

Total

 

As of Sept. 30, 2024:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Wells in Progress on PHX Acreage (1)

 

84

 

 

 

13

 

 

 

4

 

 

 

3

 

 

 

69

 

 

 

3

 

 

 

176

 

Net Wells in Progress on PHX Acreage (1)

 

0.351

 

 

 

0.021

 

 

 

0.001

 

 

 

0.015

 

 

 

0.240

 

 

 

0.030

 

 

 

0.658

 

Gross Active Permits on PHX Acreage

 

43

 

 

 

4

 

 

 

3

 

 

 

9

 

 

 

32

 

 

 

11

 

 

 

102

 

Net Active Permits on PHX Acreage

 

0.093

 

 

 

0.008

 

 

 

0.003

 

 

 

0.030

 

 

 

0.100

 

 

 

0.041

 

 

 

0.275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of Sept. 30, 2024:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rigs Present on PHX Acreage

 

9

 

 

 

2

 

 

 

1

 

 

 

-

 

 

 

4

 

 

 

2

 

 

 

18

 

Rigs Within 2.5 Miles of PHX Acreage

 

12

 

 

 

12

 

 

 

13

 

 

 

-

 

 

 

20

 

 

 

13

 

 

 

70

 

(1) Wells in progress includes drilling wells and drilled but uncompleted wells, or DUCs.

 

Leasing Activity

During the quarter ended Sept. 30, 2024, the Company leased 183 net mineral acres to third-party exploration and production companies for an average bonus payment of $688 per net mineral acre and an average royalty of 25%.

 

Acquisition and Divestiture Update

During the quarter ended Sept. 30, 2024, the Company purchased 325 net royalty acres for approximately $3.0 million and had no significant divestitures.

 

 

Acquisitions

 

 

 

SCOOP

 

 

Haynesville

 

 

Other

 

Total

 

During Three Months Ended Sept. 30, 2024:

 

 

 

 

 

 

 

 

 

 

 

Net Mineral Acres Purchased

 

 

20

 

 

 

181

 

 

-

 

 

201

 

Net Royalty Acres Purchased

 

 

40

 

 

 

285

 

 

-

 

 

325

 

Quarterly Conference Call

PHX will host a conference call to discuss the Company’s results for the quarter ended Sept. 30, 2024, at 12 p.m. EST on Nov. 7, 2024. Management’s discussion will be followed by a question-and-answer session with investors.

To participate on the conference call, please dial 877-407-3088 (toll-free domestic) or 201-389-0927. A replay of the call will be available for 14 days after the call. The number to access the replay of the conference call is 877-660-6853 and the PIN for the replay is 13748980.

A live audio webcast of the conference call will be accessible from the “Investors” section of PHX’s website at https://phxmin.com/events. The webcast will be archived for at least 90 days.

 

 

FINANCIAL RESULTS

Statements of Income

 

Three Months Ended Sept. 30,

 

 

Nine Months Ended Sept. 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

Revenues:

 

 

 

 

 

 

 

Natural gas, oil and NGL sales

$

7,888,516

 

 

$

8,899,091

 

 

$

24,804,730

 

 

$

27,987,502

 

 

Lease bonuses and rental income

 

159,271

 

 

 

620,101

 

 

 

445,215

 

 

 

1,045,242

 

 

Gains (losses) on derivative contracts

 

1,089,242

 

 

 

(337,647

)

 

 

1,297,737

 

 

 

3,648,179

 

 

 

 

9,137,029

 

 

 

9,181,545

 

 

 

26,547,682

 

 

 

32,680,923

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

294,720

 

 

 

363,426

 

 

 

921,483

 

 

 

1,279,831

 

 

Transportation, gathering and marketing

 

1,111,980

 

 

 

693,915

 

 

 

3,495,880

 

 

 

2,729,044

 

 

Production and ad valorem taxes

 

428,577

 

 

 

437,841

 

 

 

1,418,899

 

 

 

1,424,679

 

 

Depreciation, depletion and amortization

 

2,376,025

 

 

 

2,022,709

 

 

 

7,000,635

 

 

 

6,123,031

 

 

Provision for impairment

 

-

 

 

 

36,460

 

 

 

-

 

 

 

38,533

 

 

Interest expense

 

622,480

 

 

 

556,941

 

 

 

1,989,348

 

 

 

1,638,708

 

 

General and administrative

 

2,683,434

 

 

 

2,760,342

 

 

 

8,765,099

 

 

 

8,919,354

 

 

Losses (gains) on asset sales and other

 

62,248

 

 

 

(174,492

)

 

 

(110,866

)

 

 

(4,369,613

)

 

Total costs and expenses

 

7,579,464

 

 

 

6,697,142

 

 

 

23,480,478

 

 

 

17,783,567

 

 

Income (loss) before provision for income taxes

 

1,557,565

 

 

 

2,484,403

 

 

 

3,067,204

 

 

 

14,897,356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

457,255

 

 

 

589,000

 

 

 

854,738

 

 

 

3,490,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

1,100,310

 

 

$

1,895,403

 

 

$

2,212,466

 

 

$

11,407,356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.03

 

 

$

0.05

 

 

$

0.06

 

 

$

0.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share

$

0.03

 

 

$

0.05

 

 

$

0.06

 

 

$

0.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

36,316,742

 

 

 

35,983,116

 

 

 

36,306,593

 

 

 

35,961,570

 

 

Diluted

 

36,983,669

 

 

 

36,656,272

 

 

 

36,731,643

 

 

 

36,670,494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per share of

 

 

 

 

 

 

 

 

 

 

 

 

common stock paid in period

$

0.0400

 

 

$

0.0225

 

 

$

0.1000

 

 

$

0.0675

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheets

 

Sept. 30, 2024

 

 

Dec. 31, 2023

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

2,601,681

 

 

$

806,254

 

Natural gas, oil, and NGL sales receivables (net of $0

 

4,080,560

 

 

 

4,900,126

 

allowance for uncollectable accounts)

 

 

 

 

 

Refundable income taxes

 

343,814

 

 

 

455,931

 

Derivative contracts, net

 

761,527

 

 

 

3,120,607

 

Other

 

417,929

 

 

 

878,659

 

Total current assets

 

8,205,511

 

 

 

10,161,577

 

 

 

 

 

 

 

Properties and equipment at cost, based on

 

 

 

 

 

   successful efforts accounting:

 

 

 

 

 

Producing natural gas and oil properties

 

219,958,671

 

 

 

209,082,847

 

Non-producing natural gas and oil properties

 

52,503,370

 

 

 

58,820,445

 

Other

 

1,361,064

 

 

 

1,360,614

 

 

 

273,823,105

 

 

 

269,263,906

 

Less accumulated depreciation, depletion and amortization

 

(120,301,196

)

 

 

(114,139,423

)

Net properties and equipment

 

153,521,909

 

 

 

155,124,483

 

 

 

 

 

 

 

Derivative contracts, net

 

33,726

 

 

 

162,980

 

Operating lease right-of-use assets

 

466,135

 

 

 

572,610

 

Other, net

 

596,830

 

 

 

486,630

 

Total assets

$

162,824,111

 

 

$

166,508,280

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

512,936

 

 

$

562,607

 

Current portion of operating lease liability

 

243,184

 

 

 

233,390

 

Accrued liabilities and other

 

1,815,758

 

 

 

1,215,275

 

Total current liabilities

 

2,571,878

 

 

 

2,011,272

 

 

 

 

 

 

 

Long-term debt

 

27,750,000

 

 

 

32,750,000

 

Deferred income taxes, net

 

7,289,591

 

 

 

6,757,637

 

Asset retirement obligations

 

1,087,416

 

 

 

1,062,139

 

Operating lease liability, net of current portion

 

512,357

 

 

 

695,818

 

Total liabilities

 

39,211,242

 

 

 

43,276,866

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

Common Stock, $0.01666 par value; 75,000,000 shares authorized and

 

 

 

 

 

36,121,723 issued at Sept. 30, 2024; 54,000,500 shares authorized

 

 

 

 

 

and 36,121,723 issued at Dec. 31, 2023

 

601,788

 

 

 

601,788

 

Capital in excess of par value

 

43,526,595

 

 

 

41,676,417

 

Deferred directors' compensation

 

1,276,295

 

 

 

1,487,590

 

Retained earnings

 

78,492,889

 

 

 

80,022,839

 

 

 

123,897,567

 

 

 

123,788,634

 

Less treasury stock, at cost; 67,203 shares at Sept. 30,

 

 

 

 

 

2024, and 131,477 shares at Dec. 31, 2023

 

(284,698

)

 

 

(557,220

)

Total stockholders' equity

 

123,612,869

 

 

 

123,231,414

 

Total liabilities and stockholders' equity

$

162,824,111

 

 

$

166,508,280

 

 

 

 

Condensed Statements of Cash Flows

 

 

Nine Months Ended

 

 

Sept. 30, 2024

 

 

Sept. 30, 2023

 

Operating Activities

 

 

 

 

 

Net income (loss)

$

2,212,466

 

 

$

11,407,356

 

Adjustments to reconcile net income (loss) to net cash provided

 

 

 

 

 

  by operating activities:

 

 

 

 

 

Depreciation, depletion and amortization

 

7,000,635

 

 

 

6,123,031

 

Impairment of producing properties

 

-

 

 

 

38,533

 

Provision for deferred income taxes

 

531,954

 

 

 

3,256,000

 

Gain from leasing fee mineral acreage

 

(445,215

)

 

 

(1,045,242

)

Proceeds from leasing fee mineral acreage

 

451,616

 

 

 

1,108,909

 

Net (gain) loss on sales of assets

 

(518,816

)

 

 

(4,671,253

)

Directors' deferred compensation expense

 

137,617

 

 

 

165,582

 

Total (gain) loss on derivative contracts

 

(1,297,737

)

 

 

(3,648,179

)

Cash receipts (payments) on settled derivative contracts

 

3,786,071

 

 

 

2,468,724

 

Restricted stock award expense

 

1,773,789

 

 

 

1,695,637

 

Other

 

76,375

 

 

 

105,604

 

Cash provided (used) by changes in assets and liabilities:

 

 

 

 

 

Natural gas, oil and NGL sales receivables

 

819,566

 

 

 

4,369,921

 

Income taxes receivable

 

112,117

 

 

 

(712,475

)

Other current assets

 

430,119

 

 

 

408,533

 

Accounts payable

 

(68,183

)

 

 

(107,796

)

Other non-current assets

 

(81,037

)

 

 

150,515

 

Income taxes payable

 

-

 

 

 

(576,427

)

Accrued liabilities

 

286,515

 

 

 

272,711

 

Total adjustments

 

12,995,386

 

 

 

9,402,328

 

Net cash provided by operating activities

 

15,207,852

 

 

 

20,809,684

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

Capital expenditures

 

(64,628

)

 

 

(321,396

)

Acquisition of minerals and overriding royalty interests

 

(5,272,847

)

 

 

(25,383,759

)

Net proceeds from sales of assets

 

527,167

 

 

 

9,556,666

 

Net cash provided by (used in) investing activities

 

(4,810,308

)

 

 

(16,148,489

)

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

Borrowings under credit facility

 

1,000,000

 

 

 

16,000,000

 

Payments of loan principal

 

(6,000,000

)

 

 

(18,550,000

)

Payments on off-market derivative contracts

 

-

 

 

 

(560,162

)

Purchases of treasury stock

 

-

 

 

 

(669

)

Payments of dividends

 

(3,602,117

)

 

 

(2,430,823

)

Net cash provided by (used in) financing activities

 

(8,602,117

)

 

 

(5,541,654

)

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

1,795,427

 

 

 

(880,459

)

Cash and cash equivalents at beginning of period

 

806,254

 

 

 

2,115,652

 

Cash and cash equivalents at end of period

$

2,601,681

 

 

$

1,235,193

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

Interest paid (net of capitalized interest)

$

2,041,252

 

 

$

1,652,872

 

Income taxes paid (net of refunds received)

$

210,668

 

 

$

1,522,904

 

 

 

 

 

 

 

Supplemental Schedule of Noncash Investing and Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

Dividends declared and unpaid

$

140,300

 

 

$

94,587

 

 

 

 

 

 

 

Gross additions to properties and equipment

$

5,386,597

 

 

$

26,392,844

 

Net increase (decrease) in accounts receivable for properties

 

 

 

 

 

and equipment additions

 

(49,122

)

 

 

(687,689

)

Capital expenditures and acquisitions

$

5,337,475

 

 

$

25,705,155

 

 

 

 

Derivative Contracts as of Sept. 30, 2024

 

 

Production volume

 

 

 

 

Contract period

 

covered per month

 

Index

 

Contract price

Natural gas costless collars

 

 

 

 

 

 

October 2024 - June 2025

 

30,000 Mmbtu

 

NYMEX Henry Hub

 

$3.00 floor / $5.00 ceiling

November 2024 - March 2025

 

90,000 Mmbtu

 

NYMEX Henry Hub

 

$3.25 floor / $5.25 ceiling

November - December 2024

 

35,000 Mmbtu

 

NYMEX Henry Hub

 

$3.50 floor / $5.15 ceiling

December 2024

 

75,000 Mmbtu

 

NYMEX Henry Hub

 

$3.00 floor / $3.37 ceiling

January - March 2025

 

25,000 Mmbtu

 

NYMEX Henry Hub

 

$3.00 floor / $3.37 ceiling

January - March 2025

 

30,000 Mmbtu

 

NYMEX Henry Hub

 

$3.50 floor / $5.15 ceiling

January 2025

 

55,000 Mmbtu

 

NYMEX Henry Hub

 

$3.50 floor / $4.40 ceiling

February 2025

 

25,000 Mmbtu

 

NYMEX Henry Hub

 

$3.50 floor / $4.40 ceiling

March 2025

 

35,000 Mmbtu

 

NYMEX Henry Hub

 

$3.50 floor / $4.40 ceiling

April 2025 - September 2025

 

55,000 Mmbtu

 

NYMEX Henry Hub

 

$3.00 floor / $3.75 ceiling

November 2025 - March 2026

 

100,000 Mmbtu

 

NYMEX Henry Hub

 

$3.50 floor / $4.85 ceiling

November 2025 - March 2026

 

75,000 Mmbtu

 

NYMEX Henry Hub

 

$3.50 floor / $4.72 ceiling

November 2025 - March 2026

 

15,000 Mmbtu

 

NYMEX Henry Hub

 

$3.50 floor / $5.15 ceiling

Natural gas fixed price swaps

 

 

 

 

 

 

October 2024

 

50,000 Mmbtu

 

NYMEX Henry Hub

 

$3.17

October 2024

 

75,000 Mmbtu

 

NYMEX Henry Hub

 

$3.47

October 2024

 

25,000 Mmbtu

 

NYMEX Henry Hub

 

$3.47

October 2024

 

105,000 Mmbtu

 

NYMEX Henry Hub

 

$3.24

November 2024

 

25,000 Mmbtu

 

NYMEX Henry Hub

 

$2.80

November - December 2024

 

70,000 Mmbtu

 

NYMEX Henry Hub

 

$4.16

December 2024

 

50,000 Mmbtu

 

NYMEX Henry Hub

 

$3.39

January - March 2025

 

60,000 Mmbtu

 

NYMEX Henry Hub

 

$4.16

January - March 2025

 

50,000 Mmbtu

 

NYMEX Henry Hub

 

$3.51

April - May 2025

 

25,000 Mmbtu

 

NYMEX Henry Hub

 

$3.23

April - August 2025

 

125,000 Mmbtu

 

NYMEX Henry Hub

 

$3.01

April - October 2025

 

100,000 Mmbtu

 

NYMEX Henry Hub

 

$3.28

June 2025

 

10,000 Mmbtu

 

NYMEX Henry Hub

 

$3.23

July 2025

 

45,000 Mmbtu

 

NYMEX Henry Hub

 

$3.23

August 2025

 

40,000 Mmbtu

 

NYMEX Henry Hub

 

$3.23

September 2025

 

50,000 Mmbtu

 

NYMEX Henry Hub

 

$3.23

September - October 2025

 

100,000 Mmbtu

 

NYMEX Henry Hub

 

$3.01

October 2025

 

100,000 Mmbtu

 

NYMEX Henry Hub

 

$3.23

April - June 2026

 

50,000 Mmbtu

 

NYMEX Henry Hub

 

$3.10

Oil costless collars

 

 

 

 

 

 

September 2024

 

500 Bbls

 

NYMEX WTI

 

$70.00 floor / $78.10 ceiling

September - October 2024

 

1,650 Bbls

 

NYMEX WTI

 

$65.00 floor / $76.50 ceiling

October - December 2024

 

500 Bbls

 

NYMEX WTI

 

$67.00 floor / $77.00 ceiling

Oil fixed price swaps

 

 

 

 

 

 

September - October 2024

 

1,000 Bbls

 

NYMEX WTI

 

$66.10

September - October 2024

 

1,500 Bbls

 

NYMEX WTI

 

$69.50

September 2024

 

500 Bbls

 

NYMEX WTI

 

$76.46

October 2024

 

500 Bbls

 

NYMEX WTI

 

$76.12

October 2024 - August 2025

 

1,000 Bbls

 

NYMEX WTI

 

$68.80

November 2024

 

500 Bbls

 

NYMEX WTI

 

$75.49

November - December 2024

 

2,000 Bbls

 

NYMEX WTI

 

$69.50

November 2024 - March 2025

 

1,600 Bbls

 

NYMEX WTI

 

$64.80

December 2024

 

500 Bbls

 

NYMEX WTI

 

$74.94

January 2025

 

500 Bbls

 

NYMEX WTI

 

$74.48

January - March 2025

 

500 Bbls

 

NYMEX WTI

 

$69.50

January - June 2025

 

2,000 Bbls

 

NYMEX WTI

 

$70.90

February 2025

 

500 Bbls

 

NYMEX WTI

 

$74.10

 

March 2025

 

500 Bbls

 

NYMEX WTI

 

$73.71

April 2025

 

500 Bbls

 

NYMEX WTI

 

$73.30

April - June 2025

 

750 Bbls

 

NYMEX WTI

 

$69.50

April - June 2025

 

1,000 Bbls

 

NYMEX WTI

 

$68.00

May 2025

 

500 Bbls

 

NYMEX WTI

 

$72.92

June 2025

 

500 Bbls

 

NYMEX WTI

 

$72.58

July 2025

 

500 Bbls

 

NYMEX WTI

 

$72.24

July - August 2025

 

1,250 Bbls

 

NYMEX WTI

 

$70.81

July - September 2025

 

500 Bbls

 

NYMEX WTI

 

$69.50

July - December 2025

 

1,500 Bbls

 

NYMEX WTI

 

$68.90

August 2025

 

500 Bbls

 

NYMEX WTI

 

$71.88

September 2025

 

500 Bbls

 

NYMEX WTI

 

$71.60

September 2025

 

1,500 Bbls

 

NYMEX WTI

 

$68.80

October 2025

 

750 Bbls

 

NYMEX WTI

 

$71.12

October 2025

 

2,000 Bbls

 

NYMEX WTI

 

$68.80

November 2025

 

750 Bbls

 

NYMEX WTI

 

$70.99

November 2025 - March 2026

 

1,500 Bbls

 

NYMEX WTI

 

$68.80

December 2025

 

750 Bbls

 

NYMEX WTI

 

$70.66

January 2026

 

1,500 Bbls

 

NYMEX WTI

 

$70.53

February 2026