PHX Minerals Inc. Reports Third Quarter 2021 Results And Announces Dividend Payment
OKLAHOMA CITY, Aug. 5, 2021 – PHX MINERALS INC., “PHX” or the “Company,” (NYSE: PHX), today reported financial and operating results for the
SUMMARY OF RESULTS FOR THE PERIOD ENDED
Production volumes for the third fiscal quarter of 2021 increased31% to2,493 Mmcfe from1,904 Mmcfe in thethird fiscal quarter of 2020 andincreased 9% from2,297 Mmcfe in thesecond fiscal quarter of 2021.- Net
loss in thethird fiscal quarter of 2021 was$1.4 million , or$0.05 per share, as compared to netloss of$3.6 million , or$0.21 per share, in thethird fiscal quarter of 2020 and net loss of $0.5 million, or $0.02 per share, in thesecond fiscal quarter of 2021. - Adjusted EBITDA excluding gain/loss on asset sales(1) for the
third quarter of2021 was$4.7 million ,increased from$1.2 million in thethird fiscal quarter of 2020 andincreased from$3.4 million in thesecond fiscal quarter of 2021. - On April 30, 2021, the Company closed on the 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 common stock.
- Additionally, during the quarter ended June 30, the Company closed on two separate acquisitions totaling 393 net royalty acres in the Haynesville for an aggregate $2.3 million in cash.
- Total debt was reduced to $19.9 million as of June 30, 2021, a 15% decrease from the $23.5 million as of March 31, 2021.
- Debt to adjusted EBITDA (TTM) (1) ratio was
1.47 x atJune 30, 2021 . - A payment of a one cent per share dividend payable on Sept. 10, 2021, to stockholders of record on Aug. 26, 2021, was approved.
Chad L. Stephens, President and CEO, commented, “PHX’s third quarter 2021 reflects excellent quarterly results as we reported adjusted EBITDA of $4.7 million, an increase of 38% over the sequential prior quarter and a 292% increase compared to the year over year quarter. This is due mainly to higher volumes and improved commodity prices. Importantly, it is a direct reflection of our continued success as we execute our stated strategy of growth through mineral acquisitions in our core focus areas. During the quarter, we closed on the purchase of minerals in three different acquisitions located in the Haynesville and SCOOP for $13.25 million of total consideration, the cash portion of which was funded with proceeds from the April equity offering. This brings our total year to date acquisitions to approximately $21.2 million. We also closed on the sale of non-core/non-operated working interest in 71 well bores for approximately $225,000 as part of our strategy of constantly looking to high grade our asset base.
“Additionally, we reduced our debt to $19.9 million at quarter end, which represents a 15% reduction to sequential prior quarter and a 34% reduction compared to the year over year quarter. Current debt equates to a roughly 1.5x Debt to adjusted EBITDA (TTM) (1). Our goal is to achieve a 1.2x Debt to EBITDA (TTM) (1) by fiscal year end Sept. 30, 2021. This puts us in a strong financial position and will allow us to allocate a majority of our growing free cash flow to mineral acquisitions over the coming quarters. We look forward to informing you of our results to drive shareholder value in the future.”
- This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section.
OPERATING HIGHLIGHTS
|
Third Quarter Ended |
|
|
Third Quarter Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
||||
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
||||
Mcfe Sold |
|
2,492,813 |
|
|
|
1,903,752 |
|
|
|
6,863,949 |
|
|
|
6,555,378 |
|
Average Sales Price per Mcfe |
$ |
4.37 |
|
|
$ |
1.85 |
|
|
$ |
3.74 |
|
|
$ |
2.80 |
|
Gas Mcf Sold |
|
1,879,343 |
|
|
|
1,361,909 |
|
|
|
5,090,619 |
|
|
|
4,539,103 |
|
Average Sales Price per Mcf |
$ |
3.33 |
|
|
$ |
1.36 |
|
|
$ |
2.77 |
|
|
$ |
1.73 |
|
Oil Barrels Sold |
|
55,492 |
|
|
|
55,138 |
|
|
|
170,437 |
|
|
|
214,159 |
|
Average Sales Price per Barrel |
$ |
63.77 |
|
|
$ |
25.94 |
|
|
$ |
52.95 |
|
|
$ |
42.43 |
|
NGL Barrels Sold |
|
46,753 |
|
|
|
35,169 |
|
|
|
125,118 |
|
|
|
121,887 |
|
Average Sales Price per Barrel |
$ |
23.58 |
|
|
$ |
6.62 |
|
|
$ |
20.42 |
|
|
$ |
11.26 |
|
Total Production for the last four quarters was as follows:
Quarter ended |
|
Mcf Sold |
|
|
Oil Bbls Sold |
|
|
NGL Bbls Sold |
|
|
Mcfe Sold |
|
||||
6/30/2021 |
|
|
1,879,343 |
|
|
|
55,492 |
|
|
|
46,753 |
|
|
|
2,492,813 |
|
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 |
|
Royalty Interest Production for the last four quarters was as follows:
Quarter ended |
|
Mcf Sold |
|
|
Oil Bbls Sold |
|
|
NGL Bbls Sold |
|
|
Mcfe Sold |
|
||||
6/30/2021 |
|
|
908,471 |
|
|
|
31,095 |
|
|
|
18,255 |
|
|
|
1,204,571 |
|
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 |
|
Working Interest Production for the last four quarters was as follows:
Quarter ended |
|
Mcf Sold |
|
|
Oil Bbls Sold |
|
|
NGL Bbls Sold |
|
|
Mcfe Sold |
|
||||
6/30/2021 |
|
|
970,872 |
|
|
|
24,397 |
|
|
|
28,498 |
|
|
|
1,288,242 |
|
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 |
|
FINANCIAL HIGHLIGHTS
|
|
Third Quarter Ended |
|
|
Third Quarter Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
||||
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
||||
Working Interest Sales |
|
$ |
5,486,978 |
|
|
$ |
1,876,489 |
|
|
$ |
13,245,980 |
|
|
$ |
9,976,274 |
|
Royalty Interest Sales |
|
$ |
5,412,842 |
|
|
$ |
1,641,072 |
|
|
$ |
12,424,644 |
|
|
$ |
8,352,743 |
|
Natural Gas, Oil and NGL Sales |
|
$ |
10,899,820 |
|
|
$ |
3,517,561 |
|
|
$ |
25,670,624 |
|
|
$ |
18,329,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Bonuses and Rental Income |
|
$ |
259,152 |
|
|
$ |
22,996 |
|
|
$ |
319,139 |
|
|
$ |
572,787 |
|
Total Revenue |
|
$ |
5,941,559 |
|
|
$ |
2,705,383 |
|
|
$ |
18,213,696 |
|
|
$ |
24,593,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOE per Mcfe |
|
$ |
0.43 |
|
|
$ |
0.60 |
|
|
$ |
0.45 |
|
|
$ |
0.59 |
|
Transportation, Gathering and Marketing per Mcfe |
|
$ |
0.62 |
|
|
$ |
0.50 |
|
|
$ |
0.60 |
|
|
$ |
0.56 |
|
Production Tax per Mcfe |
|
$ |
0.24 |
|
|
$ |
0.07 |
|
|
$ |
0.19 |
|
|
$ |
0.13 |
|
G&A Expense per Mcfe |
|
$ |
0.91 |
|
|
$ |
1.00 |
|
|
$ |
0.88 |
|
|
$ |
0.96 |
|
Interest Expense per Mcfe |
|
$ |
0.09 |
|
|
$ |
0.13 |
|
|
$ |
0.12 |
|
|
$ |
0.15 |
|
DD&A per Mcfe |
|
$ |
0.86 |
|
|
$ |
1.29 |
|
|
$ |
0.90 |
|
|
$ |
1.34 |
|
Total Expense per Mcfe |
|
$ |
3.15 |
|
|
$ |
3.59 |
|
|
$ |
3.14 |
|
|
$ |
3.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
(1,356,594 |
) |
|
$ |
(3,555,215 |
) |
|
$ |
(2,453,037 |
) |
|
$ |
(22,117,915 |
) |
Adj. Pre-Tax Net Income (Loss) (1) |
|
$ |
2,356,054 |
|
|
$ |
(1,536,925 |
) |
|
$ |
3,891,673 |
|
|
$ |
990,306 |
|
Adjusted EBITDA (1) |
|
$ |
4,714,200 |
|
|
$ |
1,168,834 |
|
|
$ |
10,858,048 |
|
|
$ |
10,742,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from Operations |
|
$ |
5,563,226 |
|
|
$ |
3,717,398 |
|
|
$ |
10,240,333 |
|
|
$ |
9,825,740 |
|
CapEx - Drilling & Completing |
|
$ |
271,661 |
|
|
$ |
56,413 |
|
|
$ |
696,759 |
|
|
$ |
196,168 |
|
CapEx - Mineral Acquisitions |
|
$ |
11,402,761 |
|
|
$ |
50,000 |
|
|
$ |
19,337,265 |
|
|
$ |
10,304,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowing Base |
|
|
|
|
|
|
|
|
|
$ |
28,500,000 |
|
|
$ |
32,000,000 |
|
Debt |
|
|
|
|
|
|
|
|
|
$ |
19,900,000 |
|
|
$ |
30,000,000 |
|
Debt/Adjusted EBITDA (TTM) (1) |
|
|
|
|
|
|
|
|
|
|
1.47 |
|
|
|
1.48 |
|
- This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section.
The Company recorded a
Natural gas, oil and NGL revenue
Production increased across all three product categories during the three months ended June 30, 2021, as compared to the three months ended June 30, 2020, due to improved market conditions, resulting in (i) previously curtailed, high interest wells being worked over and brought fully back online in the STACK, Arkoma Stack, and Fayetteville Shale, (ii) acquisitions in the STACK and Haynesville, and (iii) increased drilling and completions activity in the STACK and SCOOP. These were partially offset by plays with naturally declining production in high interest wells, such as the Eagle Ford Shale.
The Company had a net
The
The Company recorded a
Natural gas, oil and NGL sales
Natural gas volumes increased during the nine months ended June 30, 2021, as compared to the nine months ended June 30, 2020, primarily as a result of (i) acquisitions in the Haynesville Shale, (ii) maintenance workovers on high-interest wells in the Arkoma Stack, and (iii) increased drilling and completion activity in the STACK. These gas volumes were partially offset by naturally declining production in the Fayetteville Shale and production downtime and curtailments in response to market conditions in the SCOOP. 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, as well as reduced drilling and completion activity in 2021 due to prevailing economic conditions compared to 2020 in the Eagle Ford and SCOOP. Oil production decreases were partially offset by increased drilling and completion activity in the STACK. The increased activity in the STACK also resulted in increased NGL production, which was partially offset by production downtime and curtailments in high-interest wells in in the SCOOP as well as naturally declining production in liquid-rich gas areas of the Anadarko Granite Wash.
The Company had a net
The
OPERATIONS UPDATE
During the quarter ended
|
|
|
|
|
|
|
|
|
|
Bakken/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three |
|
|
Arkoma |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
SCOOP |
|
|
STACK |
|
|
Forks |
|
|
Stack |
|
|
Permian |
|
|
Fayetteville |
|
|
Haynesville |
|
|
Other |
|
|
Total |
|
|||||||||
Gross Wells in Progress on PHX Acreage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 3/31/21 |
|
|
42 |
|
|
|
13 |
|
|
|
3 |
|
|
|
2 |
|
|
|
3 |
|
|
|
- |
|
|
|
13 |
|
|
|
4 |
|
|
|
80 |
|
Net Change |
|
|
18 |
|
|
|
1 |
|
|
|
-2 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
-1 |
|
|
|
1 |
|
|
|
17 |
|
As of 6/30/21 |
|
|
60 |
|
|
|
14 |
|
|
|
1 |
|
|
|
2 |
|
|
|
3 |
|
|
|
- |
|
|
|
12 |
|
|
|
5 |
|
|
|
97 |
|
Net Wells in Progress on PHX Acreage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 3/31/21 |
|
|
0.08 |
|
|
|
0.03 |
|
|
|
- |
|
|
|
- |
|
|
|
0.14 |
|
|
|
- |
|
|
|
0.13 |
|
|
|
0.06 |
|
|
|
0.44 |
|
Net Change |
|
|
0.05 |
|
|
|
0.01 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
-0.01 |
|
|
|
-0.01 |
|
|
|
0.04 |
|
As of 6/30/21 |
|
|
0.13 |
|
|
|
0.04 |
|
|
|
- |
|
|
|
- |
|
|
|
0.14 |
|
|
|
- |
|
|
|
0.12 |
|
|
|
0.05 |
|
|
|
0.48 |
|
Gross Active Permits on PHX Acreage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 3/31/21 |
|
|
14 |
|
|
|
11 |
|
|
|
6 |
|
|
|
3 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6 |
|
|
|
40 |
|
Net Change |
|
|
-1 |
|
|
|
-4 |
|
|
|
-1 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
-6 |
|
As of 6/30/21 |
|
|
13 |
|
|
|
7 |
|
|
|
5 |
|
|
|
3 |
|
|
|