PHX MINERALS INC. REPORTS THIRD FISCAL QUARTER 2022 RESULTS AND ANNOUNCES DIVIDEND PAYMENT
PHX Minerals Inc. (PHX) reported a strong third fiscal quarter for 2022, achieving a net income of $8.6 million ($0.25 per share) compared to a net loss of $4.0 million in the previous quarter. Adjusted EBITDA rose to $7.2 million, up from $5.8 million. Royalty production increased by 3% to 1,595 Mmcfe, while total production slightly declined by 1% to 2,430 Mmcfe. Total debt stood at $28.3 million, with a debt-to-adjusted EBITDA ratio of 1.31x. The company also declared a $0.02 quarterly dividend, payable on September 9, 2022.
- Net income increased to $8.6 million, up from a $4.0 million loss in Q2 2022.
- Adjusted EBITDA rose to $7.2 million, a 22% increase over Q2 2022.
- Royalty production volumes grew by 3% to 1,595 Mmcfe.
- Completed acquisitions of 938 net royalty acres for $9.1 million.
- Declared a quarterly dividend of $0.02 per share.
- Total production volumes decreased by 1% to 2,430 Mmcfe.
- Increased general and administrative costs by $602,510 or 26% compared to Q3 2021.
FORT WORTH, Texas, Aug. 8, 2022 /PRNewswire/ -- PHX MINERALS INC., "PHX" or the "Company" (NYSE: PHX), today reported financial and operating results for the third fiscal quarter ended June 30, 2022.
SUMMARY OF RESULTS FOR THE QUARTER ENDED JUNE 30, 2022, AND SUBSEQUENT EVENTS
- Net income in the third fiscal quarter of 2022 was
$8.6 million , or$0.25 per share, compared to net loss of ($4.0) million , or ($0.12) per share, in the second fiscal quarter of 2022. - Adjusted EBITDA(1) of
$7.2 million for the third fiscal quarter of 2022 increased from$5.8 million in the second fiscal quarter of 2022. - Royalty production volumes for the third fiscal quarter of 2022 increased
3% to 1,595 Mmcfe, and total production volumes for the third fiscal quarter of 2022 decreased1% to 2,430 Mmcfe, compared to the second fiscal quarter of 2022. 80% of royalty production volumes and78% of total production volumes in the third fiscal quarter of 2022 were attributable to natural gas.- 96 gross (0.25 net) wells converted to PDP, including 39 gross (0.19 net) in the SCOOP and 12 gross (0.03 net) in the Haynesville, during the third fiscal quarter of 2022, compared to 108 gross (0.48 net) in the second fiscal quarter of 2022.
- 155 gross (0.79 net) wells in progress as of June 30, 2022, compared to 134 gross (0.60 net) as of March 31, 2022.
- Total debt was
$28.3 million and the debt to adjusted EBITDA (TTM) (1) ratio was 1.31x at June 30, 2022. - During the third fiscal quarter of 2022, PHX closed on acquisitions totaling 938 net royalty acres located in the SCOOP play of Oklahoma and the Haynesville play of East Texas and Louisiana for approximately
$9.1 million . - Since June 30, 2022, PHX has closed on additional acquisitions of 544 net royalty acres located in the SCOOP play of Oklahoma and the Haynesville play of Louisiana for approximately
$8.2 million . - PHX has entered into a PSA to divest the remainder of its non-operated working interest position in the Fayetteville Shale of Arkansas for approximately
$6 million subject to customary closing adjustments. - PHX announced a
$0.02 per share quarterly dividend, payable on Sept. 9, 2022, to stockholders of record on Aug. 25, 2022.
(1) This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section. |
Chad L. Stephens, President and CEO, commented, "I am pleased to report another outstanding quarter of financial results including adjusted EBITDA of
Consistent with our first and second quarter of 2022 results, we reported an increase in royalty volumes and a further decrease in working interest volumes. This is in line with our corporate strategy. We continue to allocate
In our third fiscal quarter ended June 30, 2022, and including through Aug. 4th, we have closed on a total of
Lastly, I'd like to announce that during our third fiscal quarter we opened our new corporate headquarters in Fort Worth, Texas. This move places our senior management team at the epicenter of the mineral space. We will retain our offices in Oklahoma City where our accounting and technical staff are located and do not anticipate any disruption to the business. We are excited about having new offices in Fort Worth and believe it will better position us to execute the Company's growth strategy of building shareholder value through the acquisition and ownership of high-quality mineral interest in our core areas."
OPERATING HIGHLIGHTS | |||||||||||||||
Third Quarter Ended | Third Quarter Ended | Nine Months Ended | Nine Months Ended | ||||||||||||
June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | ||||||||||||
Gas Mcf Sold | 1,897,799 | 1,879,343 | 5,380,093 | 5,090,619 | |||||||||||
Average Sales Price per Mcfe before the | |||||||||||||||
effects of settled derivative contracts | $ | 6.82 | $ | 3.33 | $ | 5.61 | $ | 2.77 | |||||||
Average Sales Price per Mcfe after the | |||||||||||||||
effects of settled derivative contracts | $ | 4.32 | $ | 3.31 | $ | 3.72 | $ | 2.76 | |||||||
Oil Barrels Sold | 48,928 | 55,492 | 148,632 | 170,437 | |||||||||||
Average Sales Price per Mcfe before the | |||||||||||||||
effects of settled derivative contracts | $ | 105.23 | $ | 63.77 | $ | 90.40 | $ | 52.95 | |||||||
Average Sales Price per Mcfe after the | |||||||||||||||
effects of settled derivative contracts | $ | 60.18 | $ | 46.25 | $ | 57.63 | $ | 49.15 | |||||||
NGL Barrels Sold | 39,732 | 46,753 | 124,358 | 125,118 | |||||||||||
Average Sales Price per Barrel(1) | $ | 36.76 | $ | 23.58 | $ | 35.52 | $ | 20.42 | |||||||
Mcfe Sold | 2,429,760 | 2,492,813 | 7,018,036 | 6,863,949 | |||||||||||
Natural gas, oil and NGL sales before the | |||||||||||||||
effects of settled derivative contracts | $ | 19,561,568 | $ | 10,899,820 | $ | 48,032,597 | $ | 25,670,624 | |||||||
Natural gas, oil and NGL sales after the | |||||||||||||||
effects of settled derivative contracts | $ | 12,607,397 | $ | 9,895,130 | $ | 32,971,756 | $ | 24,981,817 | |||||||
(1) There were no NGL settled derivative contracts during the 2022 and 2021 periods. | |||||||||||||||
Total Production for the last four quarters was as follows:
Quarter ended | Mcf Sold | Oil Bbls Sold | NGL Bbls Sold | Mcfe Sold | ||||||||||||
6/30/2022 | 1,897,799 | 48,928 | 39,732 | 2,429,760 | ||||||||||||
3/31/2022 | 1,908,030 | 51,631 | 40,371 | 2,460,042 | ||||||||||||
12/31/2021 | 1,574,265 | 48,074 | 44,256 | 2,128,248 | ||||||||||||
9/30/2021 | 1,609,101 | 54,043 | 46,369 | 2,211,570 | ||||||||||||
Royalty Interest Production for the last four quarters was as follows:
Quarter ended | Mcf Sold | Oil Bbls Sold | NGL Bbls Sold | Mcfe Sold | ||||||||||||
6/30/2022 | 1,283,737 | 32,562 | 19,369 | 1,595,323 | ||||||||||||
3/31/2022 | 1,261,949 | 28,758 | 18,852 | 1,547,609 | ||||||||||||
12/31/2021 | 949,523 | 25,996 | 19,953 | 1,225,220 | ||||||||||||
9/30/2021 | 705,397 | 29,442 | 19,364 | 998,230 | ||||||||||||
Working Interest Production for the last four quarters was as follows:
Quarter ended | Mcf Sold | Oil Bbls Sold | NGL Bbls Sold | Mcfe Sold | ||||||||||||
6/30/2022 | 614,062 | 16,366 | 20,363 | 834,437 | ||||||||||||
3/31/2022 | 646,081 | 22,873 | 21,519 | 912,433 | ||||||||||||
12/31/2021 | 624,742 | 22,078 | 24,303 | 903,028 | ||||||||||||
9/30/2021 | 903,704 | 24,601 | 27,005 | 1,213,340 | ||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||
Third Quarter Ended | Third Quarter Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
Working Interest Sales | $ | 7,088,153 | $ | 5,486,978 | $ | 18,959,671 | $ | 13,245,980 | ||||||||
Royalty Interest Sales | $ | 12,473,415 | $ | 5,412,842 | $ | 29,072,926 | $ | 12,424,644 | ||||||||
Natural Gas, Oil and NGL Sales | $ | 19,561,568 | $ | 10,899,820 | $ | 48,032,597 | $ | 25,670,624 | ||||||||
Gains (Losses) on Derivative Contracts | $ | (2,387,226) | $ | (5,487,483) | $ | (12,534,464) | $ | (8,089,662) | ||||||||
Lease Bonuses and Rental Income | $ | 209,329 | $ | 259,152 | $ | 450,152 | $ | 319,139 | ||||||||
Total Revenue | $ | 17,383,671 | $ | 5,671,489 | $ | 35,948,285 | $ | 17,900,101 | ||||||||
Lease Operating Expense | ||||||||||||||||
per Working Interest Mcfe | $ | 1.08 | $ | 0.83 | $ | 1.16 | $ | 0.84 | ||||||||
Transportation, Gathering and Marketing | ||||||||||||||||
per Mcfe | $ | 0.59 | $ | 0.62 | $ | 0.59 | $ | 0.60 | ||||||||
Production Tax per Mcfe | $ | 0.38 | $ | 0.24 | $ | 0.33 | $ | 0.19 | ||||||||
Cash G&A Expense per Mcfe (1) | $ | 0.95 | $ | 0.78 | $ | 0.90 | $ | 0.78 | ||||||||
G&A Expense per Mcfe | $ | 1.18 | $ | 0.91 | $ | 1.10 | $ | 0.88 | ||||||||
Interest Expense per Mcfe | $ | 0.12 | $ | 0.09 | $ | 0.10 | $ | 0.12 | ||||||||
DD&A per Mcfe | $ | 0.83 | $ | 0.86 | $ | 0.82 | $ | 0.90 | ||||||||
Total Expense per Mcfe | $ | 3.47 | $ | 3.15 | $ | 3.38 | $ | 3.14 | ||||||||
Net Income (Loss) | $ | 8,589,010 | $ | (1,356,594) | $ | 11,250,804 | $ | (2,453,037) | ||||||||
Adjusted EBITDA (2) | $ | 7,194,102 | $ | 5,008,654 | $ | 17,429,579 | $ | 11,506,346 | ||||||||
Cash Flow from Operations | $ | 8,404,654 | $ | 5,563,226 | $ | 24,338,974 | $ | 10,240,333 | ||||||||
CapEx | $ | 72,176 | $ | 271,661 | $ | 351,524 | $ | 696,759 | ||||||||
CapEx - Mineral Acquisitions | $ | 8,954,133 | $ | 11,402,761 | $ | 29,872,407 | $ | 19,337,265 | ||||||||
Borrowing Base | $ | 50,000,000 | $ | 28,500,000 | ||||||||||||
Debt | $ | 28,300,000 | $ | 19,900,000 | ||||||||||||
Debt to Adjusted EBITDA (TTM) (2) | 1.31 | 1.45 | ||||||||||||||
(1) G&A excluding restricted stock and deferred director's expense. |
(2) This is a non-GAAP measure. Refer to the Non-GAAP Reconciliation section. |
THIRD FISCAL QUARTER ENDED JUNE 30, 2022, RESULTS
The Company recorded third fiscal quarter 2022 net income of
Natural gas, oil and NGL revenue increased
The production increase in royalty volumes during the three months ended June 30, 2022, as compared to the three months ended June 30, 2021, resulted from new wells associated with 2021 and 2022 acquisitions in the Haynesville Shale and SCOOP plays coming online. The decrease in working interest volumes resulted from the divestiture of low-value legacy working interests in Oklahoma and the Fayetteville Shale in Arkansas, naturally declining production in high-interest wells in the Arkoma Stack and STACK plays, and legacy wells shut in in the Eagle Ford play while the operator completes new offset wells.
The Company had a net loss on derivative contracts of (
The
NINE MONTHS ENDED JUNE 30, 2022, RESULTS
The Company recorded net income of
Natural gas, oil and NGL sales increased
Natural gas volumes increased during the nine months ended June 30, 2022, as compared to the nine months ended June 30, 2021, primarily as a result of new wells associated with recent acquisitions in the Haynesville Shale and SCOOP plays coming online. These gas volumes were partially offset by naturally declining production in high-interest wells in the Arkoma Stack and divestitures in the Fayetteville. NGL production decreased slightly as a result of naturally declining production from liquids-rich gas wells in the STACK. The decrease in oil production was a result of naturally declining production in working interest wells and the Company's strategy of no longer participating with working interests in new drilling in the Eagle Ford play and reduced drilling activity of royalty wells in the Bakken play, as well as naturally declining production in high-interest wells brought online in the STACK during fiscal year 2021. Oil production decreases were partially offset by new wells in the SCOOP.
The Company had a net loss on derivative contracts of (
The
OPERATIONS UPDATE
During the third fiscal quarter of 2022, the Company converted 96 gross (0.25 net) wells to producing status, including 39 gross (0.19 net) in the SCOOP and 12 gross (0.03 net) in the Haynesville, compared to 108 gross (0.48 net) wells, including 35 gross (0.04 net) in the SCOOP and 31 gross (0.33 net) in the Haynesville, during the second fiscal quarter of 2022.
At June 30, 2022, the Company had a total of 155 gross (0.79 net) wells in progress across its mineral positions and 65 gross (0.21 net) active permitted wells, compared to 134 gross (0.60 net) wells in progress and 52 gross (0.23 net) active permitted wells at March 31, 2022. As of June 30, 2022, 25 rigs were operating on the Company's acreage with 96 rigs operating within 2.5 miles of its acreage, compared to 18 rigs operating on the Company's acreage with 86 rigs operating within 2.5 miles of its acreage as of March 31, 2022.
Bakken/ | ||||||||||||||||||||||||||||||||||
Three | Arkoma | |||||||||||||||||||||||||||||||||
SCOOP | STACK | Forks | Stack | Fayetteville | Haynesville | Other | Total | |||||||||||||||||||||||||||
As of June 30, 2022: | ||||||||||||||||||||||||||||||||||
Gross Wells in Progress on PHX Acreage | 46 | 20 | 11 | 9 | - | 62 | 7 | 155 | ||||||||||||||||||||||||||
Net Wells in Progress on PHX Acreage | 0.17 | 0.09 | 0.05 | 0.01 | - | 0.43 | 0.04 | 0.79 | ||||||||||||||||||||||||||
Gross Active Permits on PHX Acreage | 20 | 17 | 2 | - | - | 16 | 10 | 65 | ||||||||||||||||||||||||||
As of June 30, 2022: | ||||||||||||||||||||||||||||||||||
Rigs Present on PHX Acreage | 6 | 2 | 3 | - | - | 12 | 2 | 25 | ||||||||||||||||||||||||||
Rigs Within 2.5 Miles of PHX Acreage | 21 | 20 | 6 | 4 | - | 36 | 9 | 96 | ||||||||||||||||||||||||||
Leasing Activity
During the third quarter of fiscal 2022, the Company leased 395 net mineral acres for an average bonus payment of
Bakken/ | ||||||||||||||||||||||||||||||||
Three | Arkoma | |||||||||||||||||||||||||||||||
SCOOP | STACK | Forks | Stack | Fayetteville | Haynesville | Other | Total | |||||||||||||||||||||||||
During Three Months Ended June 30, 2022: | ||||||||||||||||||||||||||||||||
Net Mineral Acres Leased | 15 | 112 | - | - | - | 68 | 200 | 395 | ||||||||||||||||||||||||
Average Bonus per Net Mineral Acre | $ | 325 | $ | 1,000 | - | - | - | $ | 500 | $ | 355 | $ | 512 | |||||||||||||||||||
Average Royalty per Net Mineral Acre | 23 % | 23 % | - | - | - | 23 % | 21 % | 22 % | ||||||||||||||||||||||||
ACQUISITION AND DIVESTITURE UPDATE
During the third quarter of fiscal year 2022, the Company purchased 938 net royalty acres for approximately
Bakken/ | ||||||||||||||||||||||||||||||||
Three | Arkoma | |||||||||||||||||||||||||||||||
SCOOP | STACK | Forks | Stack | Fayetteville | Haynesville | Other | Total | |||||||||||||||||||||||||
During Three Months Ended June 30, 2022: | ||||||||||||||||||||||||||||||||
Net Mineral Acres Purchased | 208 | - | - | - | - | 448 | - | 656 | ||||||||||||||||||||||||
Net Royalty Acres Purchased | 216 | - | - | - | - | 722 | - | 938 | ||||||||||||||||||||||||
Price per Net Royalty Acre | $ | 9,394 | - | - | - | - | $ | 9,830 | - | $ | 9,730 | |||||||||||||||||||||
Net Mineral Acres Sold | - | - | - | - | - | - | 2,387 | 2,387 | ||||||||||||||||||||||||
Net Royalty Acres Sold | - | - | - | - | - | - | 2,387 | 2,387 | ||||||||||||||||||||||||
Price per Net Royalty Acre | - | - | - | - | - | - | $ | 214 | $ | 214 | ||||||||||||||||||||||
THIRD QUARTER EARNINGS CALL
PHX will host a conference call to discuss the Company's third fiscal quarter results at 11:00 a.m. EDT tomorrow Aug. 9, 2022. 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 (domestic) or 201-389-0927 (international). 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 13731836.
FINANCIAL RESULTS
Statements of Operations | |||||||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Revenues: | |||||||||||||||
Natural gas, oil and NGL sales | $ | 19,561,568 | $ | 10,899,820 | $ | 48,032,597 | $ | 25,670,624 | |||||||
Lease bonuses and rental income | 209,329 | 259,152 | 450,152 | 319,139 | |||||||||||
Gains (losses) on derivative contracts | (2,387,226) | (5,487,483) | (12,534,464) | (8,089,662) | |||||||||||
17,383,671 | 5,671,489 | 35,948,285 | 17,900,101 | ||||||||||||
Costs and expenses: | |||||||||||||||
Lease operating expenses | 900,807 | 1,064,989 | 3,086,272 | 3,100,052 | |||||||||||
Transportation, gathering and marketing | 1,430,136 | 1,538,174 | 4,132,258 | 4,138,653 | |||||||||||
Production taxes | 925,197 | 596,858 | 2,301,537 | 1,316,038 | |||||||||||
Depreciation, depletion and amortization | 2,022,832 | 2,137,707 | 5,727,708 | 6,176,173 | |||||||||||
Provision for impairment | 6,277 | 45,855 | 11,862 | 45,855 | |||||||||||
Interest expense | 286,345 | 220,439 | 693,276 | 790,202 | |||||||||||
General and administrative | 2,877,614 | 2,275,104 | 7,717,435 | 6,065,677 | |||||||||||
Losses (gains) on asset sales and other | (630,547) | (35,043) | (743,867) | (177,512) | |||||||||||
Total costs and expenses | 7,818,661 | 7,844,083 | 22,926,481 | 21,455,138 | |||||||||||
Income (loss) before provision (benefit) for income taxes | 9,565,010 | (2,172,594) | 13,021,804 | (3,555,037) | |||||||||||
Provision (benefit) for income taxes | 976,000 | (816,000) | 1,771,000 | (1,102,000) | |||||||||||
Net income (loss) | $ | 8,589,010 | $ | (1,356,594) | $ | 11,250,804 | $ | (2,453,037) | |||||||
Basic and diluted earnings (loss) per common share | $ | 0.25 | $ | (0.05) | $ | 0.33 | $ | (0.10) | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 34,652,155 | 28,309,258 | 34,009,105 | 24,482,639 | |||||||||||
Diluted | 34,851,214 | 28,309,258 | 34,009,105 | 24,482,639 | |||||||||||
Dividends per share of | |||||||||||||||
common stock paid in period | $ | 0.02 | $ | 0.01 | $ | 0.045 | $ | 0.03 | |||||||
Balance Sheets | |||||||
June 30, 2022 | Sept. 30, 2021 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 4,489,282 | $ | 2,438,511 | |||
Natural gas, oil, and NGL sales receivables (net of | 11,780,557 | 6,428,982 | |||||
allowance for uncollectable accounts) | |||||||
Refundable income taxes | 860,416 | 2,413,942 | |||||
Other | 1,276,942 | 942,082 | |||||
Total current assets | 18,407,197 | 12,223,517 | |||||
Properties and equipment at cost, based on | |||||||
successful efforts accounting: | |||||||
Producing natural gas and oil properties | 265,800,998 | 319,984,874 | |||||
Non-producing natural gas and oil properties | 50,204,756 | 40,466,098 | |||||
Other | 972,770 | 794,179 | |||||
316,978,524 | 361,245,151 | ||||||
Less accumulated depreciation, depletion and amortization | (193,551,159) | (257,643,661) | |||||
Net properties and equipment | 123,427,365 | 103,601,490 | |||||
Operating lease right-of-use assets | 770,952 | 607,414 | |||||
Other, net | 764,068 | 578,593 | |||||
Total assets | $ | 143,369,582 | $ | 117,011,014 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 486,034 | $ | 772,717 | |||
Derivative contracts, net | 10,189,546 | 12,087,988 | |||||
Income taxes payable | - | 334,050 | |||||
Current portion of operating lease liability | 190,604 | 132,287 | |||||
Accrued liabilities and other | 1,489,127 | 1,809,337 | |||||
Total current liabilities | 12,355,311 | 15,136,379 | |||||
Long-term debt | 28,300,000 | 17,500,000 | |||||
Deferred income taxes, net | 550,906 | 343,906 | |||||
Asset retirement obligations | 2,116,246 | 2,836,172 | |||||
Derivative contracts, net | 1,068,544 | 1,696,479 | |||||
Operating lease liability, net of current portion | 1,015,405 | 789,339 | |||||
Total liabilities | 45,406,412 | 38,302,275 | |||||
Stockholders' equity: | |||||||
Common Stock, | |||||||
shares authorized and 35,680,970 issued at June 30, 2022; | |||||||
36,000,500 shares authorized and 32,770,433 issued at Sept. 30, 2021 | 594,445 | 545,956 | |||||
Capital in excess of par value | 42,849,595 | 33,213,645 | |||||
Deferred directors' compensation | 1,451,690 | 1,768,151 | |||||
Retained earnings | 58,676,047 | 48,966,420 | |||||
103,571,777 | 84,494,172 | ||||||
Less treasury stock, at cost; 377,232 shares at June 30, | |||||||
2022, and 388,545 shares at Sept. 30, 2021 | (5,608,607) | (5,785,433) | |||||
Total stockholders' equity | 97,963,170 | 78,708,739 | |||||
Total liabilities and stockholders' equity | $ | 143,369,582 | $ | 117,011,014 | |||
Condensed Statements of Cash Flows | |||||||
Nine Months Ended June 30, | |||||||
2022 | 2021 | ||||||
Operating Activities | |||||||
Net income (loss) | $ | 11,250,804 | $ | (2,453,037) | |||
Adjustments to reconcile net income (loss) to net cash provided | |||||||
by operating activities: | |||||||
Depreciation, depletion and amortization | 5,727,708 | 6,176,173 | |||||
Impairment of producing properties | 11,862 | 45,855 | |||||
Provision for deferred income taxes | 207,000 | (1,117,000) | |||||
Gain from leasing fee mineral acreage | (449,053) | (316,541) | |||||
Proceeds from leasing fee mineral acreage | 545,920 | 334,938 | |||||
Net (gain) loss on sales of assets | (865,035) | (136,596) | |||||
Directors' deferred compensation expense | 147,298 | 167,425 | |||||
Total (gain) loss on derivative contracts | 12,534,464 | 8,089,662 | |||||
Cash receipts (payments) on settled derivative contracts | (1,215,245) | (688,807) | |||||
Restricted stock awards | 1,219,047 | 542,674 | |||||
Other | 55,653 | 72,126 | |||||
Cash provided (used) by changes in assets and liabilities: | |||||||
Natural gas, oil and NGL sales receivables | (5,351,575) | (2,134,395) | |||||
Other current assets | (78,262) | (89,957) | |||||
Accounts payable | (251,059) | 209,014 | |||||
Income taxes receivable | 1,553,526 | 1,425,471 | |||||
Other non-current assets | (393,492) | 87,065 | |||||
Income taxes payable | (334,050) | - | |||||
Accrued liabilities | 23,463 | 26,263 | |||||
Total adjustments | 13,088,170 | 12,693,370 | |||||
Net cash provided by operating activities | 24,338,974 | 10,240,333 | |||||
Investing Activities | |||||||
Capital expenditures | (351,524) | (696,759) | |||||
Acquisition of minerals and overriding royalty interests | (29,872,407) | (19,337,265) | |||||
Net proceeds from sales of assets | 7,852,389 | 533,371 | |||||
Net cash provided (used) by investing activities | (22,371,542) | (19,500,653) | |||||
Financing Activities | |||||||
Borrowings under credit facility | 14,300,000 | - | |||||
Payments of loan principal | (3,500,000) | (8,850,000) | |||||
Net proceeds from equity issuance | 4,670,112 | 11,088,858 | |||||
Cash receipts from (payments on) off-market derivative contracts | (13,845,596) | - | |||||
Purchases of treasury stock | - | (2,741) | |||||
Payments of dividends | (1,541,177) | (757,692) | |||||
Net cash provided (used) by financing activities | 83,339 | 1,478,425 | |||||
Increase (decrease) in cash and cash equivalents | 2,050,771 | (7,781,895) | |||||
Cash and cash equivalents at beginning of period | 2,438,511 | 10,690,395 | |||||
Cash and cash equivalents at end of period | $ | 4,489,282 | $ | 2,908,500 | |||
Supplemental Schedule of Noncash Investing and Financing Activities | |||||||
Gross additions to properties and equipment | $ | 33,431,875 | $ | 23,794,178 | |||
Value of shares used for acquisitions | (3,510,001) | (3,718,000) | |||||
Net (increase) decrease in accounts payable for properties | |||||||
and equipment additions | 302,057 | (42,154) | |||||
Capital expenditures and acquisitions | $ | 30,223,931 | $ | 20,034,024 | |||
Derivative Contracts as of Aug. 5, 2022 | ||||||||||||||||||
Collar Average | Collar Average | |||||||||||||||||
Fiscal Period | Product | Volume Mcf/Bbl | Swap Price | Floor Price | Ceiling Price | |||||||||||||
Remaining 2022 | Natural Gas | 135,000 | $ | 4.15 | $ | 6.53 | ||||||||||||
Remaining 2022 | Natural Gas | 250,000 | $ | 3.01 | ||||||||||||||
2023 | Natural Gas | 890,000 | $ | 4.49 | $ | 8.10 | ||||||||||||
2023 | Natural Gas | 2,100,000 | $ | 3.24 | ||||||||||||||
2024 | Natural Gas | 60,000 | $ | 3.00 | $ | 4.70 | ||||||||||||
2024 | Natural Gas | 380,000 | $ | 3.41 | ||||||||||||||
Remaining 2022 | Crude Oil | 19,000 | $ | 46.89 | ||||||||||||||
2023 | Crude Oil | 15,000 | $ | 75.00 | $ | 96.00 | ||||||||||||
2023 | Crude Oil | 72,750 | $ | 63.65 | ||||||||||||||
2024 | Crude Oil | 14,250 | $ | 74.91 | ||||||||||||||
Non-GAAP Reconciliation
This press release includes certain "non-GAAP financial measures" as defined under the rules and regulations of the U.S. Securities and Exchange Commission, or the SEC, including Regulation G. These non-GAAP financial measures are calculated using GAAP amounts in the Company's financial statements. These measures, detailed below, are provided in addition to, not as an alternative for, and should be read in conjunction with, the information contained in the Company's financial statements prepared in accordance with GAAP (including the notes thereto), included in the Company's SEC filings and posted on its website.
Adjusted EBITDA Reconciliation
We define "adjusted EBITDA" as earnings before interest, taxes, depreciation and amortization, or EBITDA, excluding unrealized gains (losses) on derivatives and gains (losses) on asset sales and including cash receipts from (payments on) off-market derivatives and restricted stock and deferred directors' expense. We have included a presentation of adjusted EBITDA because we recognize that certain investors consider this amount to be 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 presentation of net income (loss) to adjusted EBITDA for the periods indicated:
Third Quarter | Third Quarter | Nine Months | Nine Months | Second Quarter | |||||||||||||||
June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | March 31, 2022 | |||||||||||||||
Net Income (Loss) | $ | 8,589,010 | $ | (1,356,594) | $ | 11,250,804 | $ | (2,453,037) | $ | (4,020,455) | |||||||||
Plus: | |||||||||||||||||||
Income tax expense | |||||||||||||||||||
(benefit) | 976,000 | (816,000) | 1,771,000 | (1,102,000) | 33,000 | ||||||||||||||
Interest expense | 286,345 | 220,439 | 693,276 | 790,202 | 230,212 | ||||||||||||||
DD&A | 2,022,832 | 2,137,707 | 5,727,708 | 6,176,173 | 2,121,116 | ||||||||||||||
Impairment | 6,277 | 45,855 | 11,862 | 45,855 | - | ||||||||||||||
Less: | |||||||||||||||||||
Unrealized gains (losses) | |||||||||||||||||||
on derivatives | 3,282,921 | (4,482,793) | (3,939,218) | (7,400,855) | (11,772,640) | ||||||||||||||
Gains (losses) on asset sales | 693,750 | 31,243 | 865,038 | 61,801 | 2,292,215 | ||||||||||||||
Plus: | |||||||||||||||||||
Cash receipts from (payments on) | |||||||||||||||||||
off-market derivative contracts(1) | (1,284,024) | - | (6,465,597) | - | (2,493,481) | ||||||||||||||
Restricted stock and deferred | |||||||||||||||||||
director's expense | 574,333 | 325,697 | 1,366,346 | 710,099 | 468,598 | ||||||||||||||
Adjusted EBITDA | $ | 7,194,102 | $ | 5,008,654 | $ | 17,429,579 | $ | 11,506,346 | $ | 5,819,415 | |||||||||
(1) The initial receipt of | |||||||||||||||||||
Debt to Adjusted EBITDA (TTM) Reconciliation
"Debt to 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 to adjusted EBITDA (TTM) because we recognize that certain investors consider such ratios to be useful means of measuring our ability to meet our debt service obligations and for evaluating our financial performance. The debt to 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 to 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 to adjusted EBITDA (TTM) ratio:
TTM Ended | TTM Ended | ||||||
June 30, 2022 | June 30, 2021 | ||||||
Net Income (Loss) | $ | 7,486,604 | $ | (4,287,159) | |||
Plus: | |||||||
Income tax expense (benefit) | 2,221,949 | (1,780,060) | |||||
Interest expense | 898,201 | 1,118,561 | |||||
DD&A | 7,297,339 | 8,696,169 | |||||
Impairment | 16,482 | 45,855 | |||||
Less: | |||||||
Unrealized gains (losses) | |||||||
on derivatives | (815,184) | (9,788,013) | |||||
Gains (losses) on asset sales | 1,112,581 | 770,911 | |||||
Plus: | |||||||
Cash receipts from (payments on) | |||||||
off-market derivative contracts(1) | 2,334,403 | - | |||||
Restricted stock and deferred | |||||||
director's expense | 1,691,912 | 878,405 | |||||
Adjusted EBITDA | $ | 21,649,493 | $ | 13,688,873 | |||
Debt | $ | 28,300,000 | $ | 19,900,000 | |||
Debt to Adjusted EBITDA (TTM) | 1.31 | 1.45 | |||||
(1) The initial receipt of | |||||||
Pretax Net Income (Loss) Excluding Non-cash Derivative Gains (Losses) Reconciliation
"Pretax net income (loss) excluding non-cash derivative gains (losses)" is defined as earnings before taxes, excluding unrealized gains (losses) on derivatives. We have included a presentation of pretax net income (loss) excluding non-cash derivative gains (losses) because we recognize that certain investors consider this amount to be a useful means of measuring our ability to meet our debt service obligations and evaluating our financial performance. Pretax net income (loss) excluding non-cash derivative gains (losses) 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 pretax net income (loss) excluding non-cash derivative gains (losses) may not be comparable to a similarly titled measure of other companies. The following table provides a presentation of net income (loss) to pretax net income (loss) excluding non-cash derivative gains (losses) for the periods indicated:
Third Quarter Ended | Second Quarter Ended | ||||||
June 30, 2022 | March 31, 2022 | ||||||
Net Income (Loss) | $ | 8,589,010 | $ | (4,020,455) | |||
Plus: | |||||||
Income tax expense (benefit) | 976,000 | 33,000 | |||||
Less: | |||||||
Unrealized gains (losses) | |||||||
on derivatives | 3,282,921 | (11,772,640) | |||||
Pretax Net Income (Loss) excluding | |||||||
Non-cash Derivative Gains (Losses) | $ | 6,282,089 | $ | 7,785,185 | |||
Weighted average shares outstanding | |||||||
Basic | 34,652,155 | 34,292,455 | |||||
Diluted | 34,851,214 | 34,292,455 | |||||
Pretax Net Income (Loss) excluding Non-cash | |||||||
Derivative Gains (Losses) per basic and diluted share | $ | 0.18 | $ | 0.23 | |||
PHX Minerals Inc. (NYSE: PHX) Fort Worth, Texas, based, PHX Minerals Inc. is a natural gas and oil mineral company with a strategy to proactively grow its mineral position in its core areas of focus. PHX owns approximately 75,000 leased mineral acres principally located in Oklahoma, Texas, Louisiana, North Dakota, and Arkansas. 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 PHX's current views about future events. Forward-looking statements may include, but are not limited to, statements relating to: the Company's ability to execute its business strategies; the volatility of realized natural gas and oil prices; the level of production on the Company's 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; the Company's 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 the Company invests; and other economic, competitive, governmental, regulatory or technical factors affecting properties, operations or prices. Although the Company believes expectations reflected in these and other forward-looking statements are reasonable, the Company can give no assurance such expectations 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 SEC, 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.
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SOURCE PHX MINERALS INC.
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