PHX Minerals Inc. Reports Second Quarter 2021 Results

OKLAHOMA CITY, May 6, 2021 – PHX MINERALS INC., “PHX” or the “Company,” (NYSE: PHX), today reported financial and operating results for the second quarter ended March 31, 2021.

SUMMARY OF RESULTS FOR THE PERIOD ENDED MARCH 31, 2021, AND SUBSEQUENT EVENTS

  • Production volumes for the second fiscal quarter of 2021 were 2,297 Mmcfe, decreased from 2,373 Mmcfe in the second fiscal quarter of 2020 and increased from 2,074 Mmcfe in the first fiscal quarter of 2021.
  • Net loss in the second fiscal quarter of 2021 was $0.5 million, or $0.02 per share, as compared to net loss $20.5 million, or $1.24 per share, in the second fiscal quarter of 2020 and net loss of $0.6 million, or $0.03 per share, in the first fiscal quarter of 2021.
  • Adjusted EBITDA excluding gain on asset sales(1) for the second quarter of 2021 was $3.4 million, increased from $2.4 million in the second fiscal quarter of 2020 and $2.7 million in the first fiscal quarter of 2021.
  • On April 30, 2021, the Company closed on the previously announced acquisition of 2,514 net royalty acres in the SCOOP play of Oklahoma for approximately $8.5 million in cash and 1.2 million shares of PHX stock.
  • Reduced total debt 13% from $27.0 million as of Dec. 31, 2020, to $23.5 million as of March 31, 2021. As of April 30, 2021, debt had been further reduced by $1.75 million to $21.75 million.
  • Debt to adjusted EBITDA (TTM) (1) ratio was 2.34x at March 31, 2021.
  • Approved the payment of a one cent per share dividend payable on June 4, 2021, to stockholders of record on May 20, 2021.

Chad L. Stephens, President and CEO, commented, “PHX continues to achieve excellent results towards its stated objectives of growing the company through the strategic acquisition of producing minerals with line-of-sight development in our core focus areas, high grading our asset base by divesting of lower margin assets outside of our core focus areas and reducing our debt to strengthen our financial position.

“During the quarter, production volumes increased 11% sequentially. Significantly, for the first-time in the last 10 years, royalty production volumes exceeded working interest production volumes, which illuminates our stated mineral-only growth strategy. The increase in our volumes and the improved realized commodity prices, resulted in adjusted EBITDA(1) excluding gain on asset sales of $3.4 million, which was an increase of approximately 26%, or $0.7 million, over the first quarter of fiscal 2021.  

“With our improved financial performance, we were able to reduce our debt by $3.5 million, or 13%, from the end of the first quarter of fiscal year 2021, which continues to improve our financial strength. Since the end of the second quarter, we paid down debt an additional $1.75 million, bringing our total borrowings to $21.75 million as of April 30, 2021. We now believe that our Debt to adjusted EBITDA (TTM) (1) will approximate 1.0x by calendar year end 2021. Overall, our credit profile has significantly improved, as compared to one year ago. We believe this puts us in a stronger position to allocate more of our capital to our stated strategy.

“Further, since quarter end, we completed our second equity offering over the last seven months which allowed us to fund our previously announced SCOOP-focused mineral acquisition in Oklahoma. This acquisition closed on Friday, April 30, 2021. We continue to see good deal flow and look forward to keeping you apprised of our efforts to continue to drive shareholder value.”

  1. This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section.

 

OPERATING HIGHLIGHTS

 

Second Quarter Ended

 

 

Second Quarter Ended

 

 

Six Months Ended

 

 

Six Months Ended

 

 

March 31, 2021

 

 

March 31, 2020

 

 

March 31, 2021

 

 

March 31, 2020

 

Mcfe Sold

 

2,296,802

 

 

 

2,373,135

 

 

 

4,371,139

 

 

 

4,651,622

 

Average Sales Price per Mcfe

$

3.63

 

 

$

3.04

 

 

$

3.38

 

 

$

3.18

 

Gas Mcf Sold

 

1,735,820

 

 

 

1,529,367

 

 

 

3,211,276

 

 

 

3,177,194

 

Average Sales Price per Mcf

$

2.52

 

 

$

1.64

 

 

$

2.44

 

 

$

1.89

 

Oil Barrels Sold

 

56,269

 

 

 

93,141

 

 

 

114,945

 

 

 

159,021

 

Average Sales Price per Barrel

$

55.89

 

 

$

44.99

 

 

$

47.73

 

 

$

48.14

 

NGL Barrels Sold

 

37,228

 

 

 

47,487

 

 

 

78,365

 

 

 

86,717

 

Average Sales Price per Barrel

$

22.24

 

 

$

11.05

 

 

$

18.54

 

 

$

13.14

 

Total Production for the last four quarters was as follows:

 

Quarter ended

 

Mcf Sold

 

 

Oil Bbls Sold

 

 

NGL Bbls Sold

 

 

Mcfe Sold

 

3/31/2021

 

 

1,735,820

 

 

 

56,269

 

 

 

37,228

 

 

 

2,296,802

 

12/31/2020

 

 

1,475,456

 

 

 

58,675

 

 

 

41,138

 

 

 

2,074,334

 

9/30/2020

 

 

1,423,602

 

 

 

55,626

 

 

 

46,737

 

 

 

2,037,779

 

6/30/2020

 

 

1,361,909

 

 

 

55,138

 

 

 

35,169

 

 

 

1,903,752

 

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

 

Quarter ended

 

Mcf Sold

 

 

Oil Bbls Sold

 

 

NGL Bbls Sold

 

 

Mcfe Sold

 

3/31/2021

 

 

924,969

 

 

 

31,768

 

 

 

19,088

 

 

 

1,230,105

 

12/31/2020

 

 

487,925

 

 

 

27,840

 

 

 

14,948

 

 

 

744,653

 

9/30/2020

 

 

491,234

 

 

 

27,326

 

 

 

20,181

 

 

 

776,276

 

6/30/2020

 

 

544,249

 

 

 

28,468

 

 

 

16,574

 

 

 

814,501

 

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

 

Quarter ended

 

Mcf Sold

 

 

Oil Bbls Sold

 

 

NGL Bbls Sold

 

 

Mcfe Sold

 

3/31/2021

 

 

810,851

 

 

 

24,501

 

 

 

18,140

 

 

 

1,066,697

 

12/31/2020

 

 

987,531

 

 

 

30,835

 

 

 

26,190

 

 

 

1,329,681

 

9/30/2020

 

 

932,368

 

 

 

28,300

 

 

 

26,556

 

 

 

1,261,503

 

6/30/2020

 

 

817,660

 

 

 

26,670

 

 

 

18,595

 

 

 

1,089,251

 

FINANCIAL HIGHLIGHTS

 

 

Second Quarter Ended

 

 

Second Quarter Ended

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

March 31, 2021

 

 

March 31, 2020

 

 

March 31, 2021

 

 

March 31, 2020

 

    Working Interest Sales

 

$

3,851,478

 

 

$

3,415,049

 

 

$

7,759,002

 

 

$

8,099,785

 

    Royalty Interest Sales

 

$

4,494,347

 

 

$

3,802,569

 

 

$

7,011,802

 

 

$

6,711,671

 

Natural Gas, Oil and NGL Sales

 

$

8,345,825

 

 

$

7,217,618

 

 

$

14,770,804

 

 

$

14,811,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease Bonuses and Rental Income

 

$

58,554

 

 

$

22,092

 

 

$

59,987

 

 

$

549,791

 

Total Revenue

 

$

6,079,493

 

 

$

11,311,287

 

 

$

12,272,137

 

 

$

21,887,818

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOE per Mcfe

 

$

0.45

 

 

$

0.65

 

 

$

0.47

 

 

$

0.59

 

Transportation, Gathering and Marketing per Mcfe

 

$

0.57

 

 

$

0.57

 

 

$

0.59

 

 

$

0.59

 

Production Tax per Mcfe

 

$

0.19

 

 

$

0.16

 

 

$

0.16

 

 

$

0.15

 

G&A Expense per Mcfe

 

$

0.90

 

 

$

0.92

 

 

$

0.87

 

 

$

0.95

 

Interest Expense per Mcfe

 

$

0.12

 

 

$

0.15

 

 

$

0.13

 

 

$

0.15

 

DD&A per Mcfe

 

$

0.77

 

 

$

1.42

 

 

$

0.92

 

 

$

1.36

 

Total Expense per Mcfe

 

$

3.00

 

 

$

3.87

 

 

$

3.14

 

 

$

3.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

(499,723

)

 

$

(20,454,814

)

 

$

(1,096,443

)

 

$

(18,562,700

)

Adj. Pre-Tax Net Income (Loss) (1)

 

$

1,333,989

 

 

$

(1,338,550

)

 

$

1,535,619

 

 

$

2,527,231

 

Adjusted EBITDA (1)

 

$

3,379,671

 

 

$

2,381,541

 

 

$

6,143,848

 

 

$

9,573,688

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow from Operations

 

$

4,205,726

 

 

$

4,009,901

 

 

$

4,677,107

 

 

$

6,108,342

 

CapEx - Drilling & Completing

 

$

297,015

 

 

$

34,490

 

 

$

425,098

 

 

$

139,755

 

CapEx - Mineral Acquisitions

 

$

64,758

 

 

$

81,422

 

 

$

7,934,504

 

 

$

10,254,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowing Base

 

 

 

 

 

 

 

 

 

$

29,400,000

 

 

$

45,000,000

 

Debt

 

 

 

 

 

 

 

 

 

$

23,500,000

 

 

$

32,000,000

 

Debt/Adjusted EBITDA (TTM) (1)

 

 

 

 

 

 

 

 

 

 

2.34

 

 

 

1.14

 

  1. This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section.

SECOND QUARTER 2021 RESULTS

The Company recorded a second quarter 2021 net loss of $499,723, or $0.02 per share, as compared to a net loss of $20,454,814, or $1.24 per share, in the second quarter 2020. This change in net loss was principally the result of increased natural gas, oil and NGL sales and decreased general and administrative expenses (G&A), lease operating expenses (LOE), transportation, gathering and marketing expenses, depreciation, depletion and amortization (DD&A) and impairment expense, partially offset by a decrease in gain (losses) on derivative contracts and income tax benefit.

Natural gas, oil and NGL revenue increased $1,128,207, or 16%, for the second quarter 2021, compared to the corresponding 2020 quarter due to increases in natural gas, oil and NGL prices of 54%, 24% and 101%, respectively, and an increase in natural gas production volumes of 13%, partially offset by decrease in oil and NGL production volumes of 40% and 22%, respectively.

The decrease in oil production was primarily due to naturally declining production in high-interest wells brought online during the first quarter of 2020 in the Bakken play, as well as reduced drilling and completion activity in 2021, compared to 2020 in the Eagle Ford and SCOOP plays due to prevailing economic conditions. The decrease in NGL production was primarily attributable to production downtime and curtailments in high-interest wells in response to market conditions in the SCOOP and STACK plays, as well as naturally declining production in liquid-rich gas areas of the Anadarko Granite Wash play. Natural gas volumes increased as a result of acquisitions in the Haynesville Shale, which were partially offset by naturally declining production in the Fayetteville Shale, production downtime and curtailments in high-interest wells in response to market conditions in the STACK and SCOOP plays.

The Company had a net loss on derivative contracts of $2,348,143 in the 2021 quarter, as compared to a net gain of $4,071,577 in the 2020 quarter. The net loss on derivative contracts in the current period 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 period, compared to such natural gas and oil collars and fixed price swaps being more beneficial in the comparative period causing a net gain.

The 22% 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 $1,595,701, or 47%, in the 2021 quarter to $0.77 per Mcfe, as compared to $1.42 per Mcfe in the 2020 quarter. $108,393 of the decrease was a result of production decreasing 3% in the 2021 quarter and $1,487,308 of the decrease was as a result of a $0.65 decrease in the DD&A rate per Mcfe. The rate decrease was mainly due to impairments taken at the end of 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. This resulted in lower projected remaining reserves on a significant number of wells causing increased units of production DD&A.

SIX MONTHS 2021 RESULTS

The Company recorded a six-month net loss of $1,096,443, or $0.05 per share, in the 2021 period, as compared to a net loss of $18,562,700, or $1.12 per share, in the 2020 period. The change in net loss was principally the result of decreased G&A, LOE, transportation, gathering and marketing expenses, DD&A and impairment expense, partially offset by a decrease in natural gas, oil and NGL sales, gain (losses) on derivative contracts, gain on asset sales and income tax benefit.

Natural gas, oil and NGL sales remained relatively consistent with decreases in oil and NGL volumes of 28% and 10%, respectively, partially offset by increases in natural gas and NGL prices of 29% and 41%, respectively.

The decrease in oil production was primarily due to naturally declining production in high-interest wells brought online during the first quarter of 2020 in the Bakken play, as well as reduced drilling and completion activity in 2021, compared to 2020 in the Eagle Ford and SCOOP plays due to prevailing economic conditions. The decrease in NGL production was primarily attributable to production downtime and curtailments in high-interest wells in response to market conditions in the SCOOP play as well as naturally declining production in liquid-rich gas areas of the Anadarko Granite Wash play. Natural gas volumes increased as a result of acquisitions in the Haynesville Shale, which were partially offset by naturally declining production in the Fayetteville Shale, production downtime and curtailments in high-interest wells in response to market conditions in the STACK and SCOOP plays.

The Company had a net loss on derivative contracts of $2,602,179 in the 2021 period, as compared to a net gain of $3,253,683 in the 2020 period. The net loss on derivative contracts in the current period 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 period, compared to such natural gas and oil collars and fixed price swaps being more beneficial in the 2020 period causing a net gain.

The 17% decrease in total cost per Mcfe in the 2021 period, relative to the 2020 period, was primarily driven by a decrease in DD&A. DD&A decreased $2,290,753, or 36%, in the 2021 period to $0.92 per Mcfe, as compared to $1.36 per Mcfe in the 2020 period. $381,457 of the decrease was a result of production decreasing 6% in the 2021 period and $1,909,296 of the decrease was as a result of a $0.44 decrease in the DD&A rate per Mcfe. The rate decrease was mainly due to impairments taken at the end of 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 period, as compared to prices used for the 2020 period, shortening the economic life of wells. This resulted in lower projected remaining reserves on a significant number of wells causing increased units of production DD&A.

OPERATIONS UPDATE

During the quarter ended March 31, 2021, we converted 37 gross and 0.16 net wells in progress to producing wells. Our inventory of wells in progress decreased to 80 gross wells and 0.44 net wells.

 

 

 

 

 

 

 

 

 

 

Bakken/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three

 

 

Arkoma

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCOOP

 

 

STACK

 

 

Forks

 

 

Stack

 

 

Permian

 

 

Fayetteville

 

 

Haynesville

 

 

Other

 

 

Total

 

Gross Wells in Progress on PHX Acreage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of 12/31/20

 

 

45

 

 

 

32

 

 

 

5

 

 

 

2

 

 

 

4

 

 

 

-

 

 

 

25

 

 

 

7

 

 

 

120

 

Net Change

 

 

-3

 

 

 

-19

 

 

 

-2

 

 

 

-

 

 

 

-1

 

 

 

-

 

 

 

-12

 

 

 

-3

 

 

 

-40

 

As of 3/31/21

 

 

42

 

 

 

13

 

 

 

3

 

 

 

2

 

 

 

3

 

 

 

-

 

 

 

13

 

 

 

4

 

 

 

80

 

Net Wells in Progress on PHX Acreage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of 12/31/20

 

 

0.09

 

 

 

0.16

 

 

 

-

 

 

 

-

 

 

 

0.14

 

 

 

-

 

 

 

0.16

 

 

 

0.07

 

 

 

0.62

 

Net Change

 

 

-0.01

 

 

 

-0.13

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-0.03

 

 

 

-0.01

 

 

 

-0.18

 

As of 3/31/21

 

 

0.08

 

 

 

0.03

 

 

 

-

 

 

 

-

 

 

 

0.14

 

 

 

-

 

 

 

0.13

 

 

 

0.06

 

 

 

0.44

 

Gross Active Permits on PHX Acreage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of 12/31/20

 

 

29

 

 

 

15

 

 

 

10

 

 

 

7

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

13

 

 

 

74

 

Net Change

 

 

-15

 

 

 

-4

 

 

 

-4

 

 

 

-4

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-7

 

 

 

-34

 

As of 3/31/21

 

 

14

 

 

 

11

 

 

 

6

 

 

 

3

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6

 

 

 

40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of 3/31/21:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rigs Present on PHX Acreage

 

 

1

 

 

 

1

 

 

 

-

 

 

 

-

 

 

 

2

 

 

 

-

 

 

 

1

 

 

 

-

 

 

 

5

 

Rigs Within 2.5 Miles of PHX Acreage

 

 

5

 

 

 

11

 

 

 

1

 

 

 

-

 

 

 

3

 

 

 

-

 

 

 

5

 

 

 

2

 

 

 

27

 

Leasing Activity

During the second quarter of fiscal 2021, the Company leased 368 net mineral acres for $63,815.

 

 

 

 

 

 

 

 

 

 

Bakken/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three

 

 

Arkoma

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCOOP

 

 

STACK

 

 

Forks

 

 

Stack

 

 

Permian

 

 

Fayetteville

 

 

Haynesville

 

 

Other

 

 

Total

 

During Three Months Ended 3/31/21:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Mineral Acres Leased

 

 

-

 

 

 

1

 

 

 

-

 

 

 

-

 

 

 

41

 

 

 

-

 

 

 

-

 

 

 

326

 

 

 

368

 

Average Bonus per Net Mineral Acre

 

 

-

 

 

$

1,100

 

 

 

-

 

 

 

-

 

 

$

483

 

 

 

-

 

 

 

-

 

 

$

148

 

 

$

173

 

Average Royalty per Net Mineral Acre

 

-

 

 

13%

 

 

 

-

 

 

-

 

 

25%

 

 

 

-

 

 

 

-

 

 

18%

 

 

18%

 

ACQUISITION AND DIVESTITURE UPDATE

During the second quarter of fiscal 2021, the Company purchased 18 net royalty acres for $362,486.

 

 

 

 

 

 

 

 

 

 

Bakken/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three

 

 

Arkoma

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCOOP

 

 

STACK

 

 

Forks

 

 

Stack

 

 

Permian

 

 

Fayetteville

 

 

Haynesville

 

 

Other

 

 

Total

 

During Three Months Ended 3/31/21:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Mineral Acres Purchased

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

11

 

 

 

-

 

 

 

11

 

Net Royalty Acres Purchased

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

18

 

 

 

-

 

 

 

18

 

Price per Net Royalty Acre

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

$

19,772

 

 

 

-

 

 

$

19,772

 

Net Mineral Acres Sold

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net Royalty Acres Sold

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Price per Net Royalty Acre

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

SECOND QUARTER EARNINGS CALL

PHX will host a conference call to discuss second quarter results at 5:00 p.m. EDT on May 6, 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 40717.

 

FINANCIAL RESULTS

Statements of Operations

 

Three Months Ended March 31,

 

 

Six Months Ended March 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

Natural gas, oil and NGL sales

$

8,345,825

 

 

$

7,217,618

 

 

$

14,770,804

 

 

$

14,811,456

 

Lease bonuses and rental income

 

58,554

 

 

 

22,092

 

 

 

59,987

 

 

 

549,791

 

Gains (losses) on derivative contracts

 

(2,348,143

)

 

 

4,071,577

 

 

 

(2,602,179

)

 

 

3,253,683

 

Gain on asset sales

 

23,257

 

 

 

-

 

 

 

43,525

 

 

 

3,272,888

 

 

 

6,079,493

 

 

 

11,311,287

 

 

 

12,272,137

 

 

 

21,887,818

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

1,030,651

 

 

 

1,542,199

 

 

 

2,035,063

 

 

 

2,723,870

 

Transportation, gathering and marketing

 

1,319,514

 

 

 

1,356,628

 

 

 

2,600,479

 

 

 

2,739,629

 

Production taxes

 

443,154

 

 

 

373,754

 

 

 

719,180

 

 

 

701,035

 

Depreciation, depletion and amortization

 

1,777,817

 

 

 

3,373,518

 

 

 

4,038,466

 

 

 

6,329,219

 

Provision for impairment

 

-

 

 

 

29,545,702

 

 

 

-

 

 

 

29,545,702

 

Interest expense

 

267,865

 

 

 

346,573

 

 

 

569,763

 

 

 

717,238

 

General and administrative

 

2,059,476

 

 

 

2,174,661

 

 

 

3,790,573

 

 

 

4,397,689

 

Other expense (income)

 

(102,261

)

 

 

40,066

 

 

 

(98,944

)

 

 

29,136

 

 

 

6,796,216

 

 

 

38,753,101

 

 

 

13,654,580

 

 

 

47,183,518

 

Income (loss) before provision (benefit) for income taxes

 

(716,723

)

 

 

(27,441,814

)

 

 

(1,382,443

)

 

 

(25,295,700

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for income taxes

 

(217,000

)

 

 

(6,987,000

)

 

 

(286,000

)

 

 

(6,733,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(499,723

)

 

$

(20,454,814

)

 

$

(1,096,443

)

 

$

(18,562,700

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings (loss) per common share

$

(0.02

)

 

$

(1.24

)

 

$

(0.05

)

 

$

(1.12

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares

 

22,429,777

 

 

 

16,384,687

 

 

 

22,403,678

 

 

 

16,362,057

 

Unissued, directors' deferred compensation shares

 

178,597

 

 

 

139,390

 

 

 

177,923

 

 

 

186,443

 

 

 

22,608,374

 

 

 

16,524,077

 

 

 

22,581,601

 

 

 

16,548,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

common stock and paid in period

$

0.01

 

 

$

0.04

 

 

$

0.02

 

 

$

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

common stock and to be paid in quarter ended June 30

$

0.01

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheets

 

March 31, 2021

 

 

Sept. 30, 2020

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

1,270,482

 

 

$

10,690,395

 

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

 

4,712,793

 

 

 

2,943,220

 

allowance for uncollectable accounts)

 

 

 

 

 

 

 

Refundable income taxes

 

2,448,871

 

 

 

3,805,227

 

Other

 

752,248

 

 

 

351,088

 

Total current assets

 

9,184,394

 

 

 

17,789,930

 

 

 

 

 

 

 

 

 

Properties and equipment at cost, based on

 

 

 

 

 

 

 

   successful efforts accounting:

 

 

 

 

 

 

 

Producing natural gas and oil properties

 

329,708,071

 

 

 

324,886,491

 

Non-producing natural gas and oil properties

 

21,012,897

 

 

 

18,993,814

 

Other

 

582,444

 

 

 

582,444

 

 

 

351,303,412

 

 

 

344,462,749

 

Less accumulated depreciation, depletion and amortization

 

(265,863,136

)

 

 

(263,590,801

)

Net properties and equipment

 

85,440,276

 

 

 

80,871,948

 

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

649,500

 

 

 

690,316

 

Other, net

 

593,150

 

 

 

669,641

 

Total assets

$

95,867,320

 

 

$

100,021,835

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

672,507

 

 

$

997,637

 

Derivative contracts, net

 

3,000,530

 

 

 

281,942

 

Current portion of operating lease liability

 

129,672

 

 

 

127,108

 

Accrued liabilities and other

 

1,382,066

 

 

 

1,297,363

 

Short-term debt

 

-

 

 

 

1,750,000

 

Total current liabilities

 

5,184,775

 

 

 

4,454,050

 

 

 

 

 

 

 

 

 

Long-term debt

 

23,500,000

 

 

 

27,000,000

 

Deferred income taxes, net

 

1,041,007

 

 

 

1,329,007

 

Asset retirement obligations

 

2,927,662

 

 

 

2,897,522

 

Derivative contracts, net

 

625,179

 

 

 

425,705

 

Operating lease liability, net of current portion

 

856,142

 

 

 

921,625

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Class A voting common stock, $0.01666 par value; 36,000,500

 

 

 

 

 

 

 

shares authorized; 22,825,226 issued at March 31, 2021, and

 

 

 

 

 

 

 

Class A voting common stock, $0.01666 par value;

 

 

 

 

 

 

 

24,000,500 shares authorized; 22,647,306 issued at September 30, 2020

 

380,268

 

 

 

377,304

 

Capital in excess of par value

 

11,150,749

 

 

 

10,649,611

 

Deferred directors' compensation

 

1,633,939

 

 

 

1,874,007

 

Retained earnings

 

54,402,724

 

 

 

56,244,100

 

 

 

67,567,680

 

 

 

69,145,022

 

Less treasury stock, at cost; 390,267 shares at March 31,

 

 

 

 

 

 

 

2021, and 411,487 shares at Sept. 30, 2020

 

(5,835,125

)

 

 

(6,151,096