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.”

  1. 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

 

  1. 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/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

   Income Tax Expense (Benefit)

 

(69,000

)

 

 

254,000

 

Adjusted Pre-Tax Net Income (Loss)

$

201,630

 

 

$

3,865,781

 

PHX Minerals Inc. (NYSE: PHX) Oklahoma City-based, PHX Minerals Inc. is a natural gas and oil mineral company with a strategy to proactively grow its mineral position in our core areas of focus. PHX owns approximately 253,000 net mineral acres principally located in Oklahoma, Texas, North Dakota, New Mexico and Arkansas. Approximately 71% of this mineral count is unleased and undeveloped. Additional information on PHX 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 and Section 21E of the Securities Exchange Act of 1934. 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 the Company’s current views about future events. Forward-looking statements may include, but are not limited to, statements relating to: our ability to execute our business strategies; the volatility of realized natural gas and oil prices; the level of production on our 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; our 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 we invest; and other economic, competitive, governmental, regulatory or technical factors affecting our properties, operations or prices. Although the Company believes the expectations reflected in these and other forward-looking statements are reasonable, we can give no assurance they 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 the 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 Securities and Exchange Commission, 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.