PHX MINERALS INC. Reports Third Quarter 2021 Results And Announces Dividend Payment

Rhea-AI Summary

PHX Minerals (NYSE: PHX) reported a 31% increase in production volumes to 2,493 Mmcfe for Q3 2021, compared to 1,904 Mmcfe in Q3 2020. The net loss decreased to $1.36 million, or $0.05 per share, from a loss of $3.56 million, or $0.21 per share, a year earlier. Adjusted EBITDA rose to $4.7 million, up 292% year-over-year. The company also reduced total debt by 15% to $19.9 million and declared a $0.01 per share dividend payable on September 10, 2021. Recent acquisitions in Oklahoma and Haynesville have added to the company's mineral holdings, demonstrating strategic growth.

Positive

• Production volumes increased 31% year-over-year to 2,493 Mmcfe.
• Net loss decreased significantly to $1.36 million from $3.56 million YoY.
• Adjusted EBITDA surged 292% to $4.7 million compared to Q3 2020.
• Total debt reduced by 15% to $19.9 million.
• Dividend of $0.01 per share approved, payable September 10, 2021.

Negative

• Net loss on derivative contracts increased to $5.49 million from $0.84 million YoY.
• Total revenue declined to $5.94 million in Q3 2021 down from $2.70 million in Q3 2020.

OKLAHOMA CITY, Aug. 5, 2021 /PRNewswire/ -- PHX MINERALS INC., "PHX" or the "Company," (NYSE: PHX), today reported financial and operating results for the third quarter ended June 30, 2021.

SUMMARY OF RESULTS FOR THE PERIOD ENDED JUNE 30, 2021, AND SUBSEQUENT EVENTS

• Production volumes for the third fiscal quarter of 2021 increased 31% to 2,493 Mmcfe from 1,904 Mmcfe in the third fiscal quarter of 2020 and increased 9% from 2,297 Mmcfe in the second fiscal quarter of 2021.
• Net loss in the third fiscal quarter of 2021 was $1.4 million, or $0.05 per share, as compared to net loss of $3.6 million, or $0.21 per share, in the third fiscal quarter of 2020 and net loss of $0.5 million, or $0.02 per share, in the second fiscal quarter of 2021.
• Adjusted EBITDA excluding gain/loss on asset sales⁽¹⁾ for the third quarter of 2021 was $4.7 million, increased from $1.2 million in the third fiscal quarter of 2020 and increased from $3.4 million in the second 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 1.47x at June 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."

(1)	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

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

THIRD QUARTER 2021 RESULTS

The Company recorded a third quarter 2021 net loss of $1,356,594, or $0.05 per share, as compared to a net loss of $3,555,215, or $0.21 per share, in the third quarter 2020. The change in net loss was principally the result of increased natural gas, oil and NGL sales and decreased LOE, DD&A and impairment expense, partially offset by an increase in losses on derivative contracts, G&A, transportation, gathering and marketing expenses and production taxes.

Natural gas, oil and NGL revenue increased $7,382,259, or 210%, for the third quarter 2021, compared to the corresponding 2020 quarter due to increases in natural gas, oil and NGL prices of 145%, 146% and 256%, respectively, and an increase in natural gas, oil and NGL volumes of 38%, 1% and 33%, respectively.

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 loss on derivative contracts of $5,487,483 in the 2021 quarter, as compared to a net loss of $838,282 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 12% 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 $326,861, or 13%, in the 2021 quarter to $0.86 per Mcfe, as compared to $1.29 per Mcfe in the 2020 quarter. Of the DD&A decrease, $1,086,750 was a result of a $0.43 decrease in the DD&A rate per Mcfe, partially offset by an increase of $759,889 resulting from production increasing 31% in the 2021 quarter. The rate decrease was mainly due to an increase in reserves during the 2021 quarter, as compared to the 2020 quarter.

NINE MONTHS 2021 RESULTS

The Company recorded a nine-month net loss of $2,453,037, or $0.10 per share, in the 2021 period, as compared to a net loss of $22,117,915, or $1.34 per share, in the 2020 period. The change in net loss was principally the result of increased natural gas, oil and NGL sales and decreased LOE, DD&A, impairment expense and G&A, partially offset by an increase in losses on derivative contracts, transportation, gathering and marketing expenses, production taxes and a reduction in gain on asset sales and income tax benefit.

Natural gas, oil and NGL sales increased $7,341,607, or 40%, for the 2021 period, compared to the 2020 period due to increases in natural gas, oil and NGL prices of 60%, 25% and 81%, respectively, and an increase in natural gas and NGL volumes of 12% and 3%, respectively.

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 loss on derivative contracts of $8,089,662 in the 2021 period, as compared to a net gain of $2,415,401 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.

The 16% 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 $2,617,614, or 30%, in the 2021 period to $0.90 per Mcfe, as compared to $1.34 per Mcfe in the 2020 period. Of the DD&A decrease, $3,031,099 was a result of a $0.44 decrease in the DD&A rate per Mcfe, partially offset by an increase of $413,485 resulting from production increasing 5% in the 2021 period. The rate decrease was mainly due an increase in reserves during the 2021 period, as compared to the 2020 period.

OPERATIONS UPDATE

During the quarter ended June 30, 2021, 37 gross and 0.18 net wells in progress converted to producing wells. Our inventory of wells in progress increased to 97 gross wells and 0.48 net wells.

										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				-				-				-				6				34
As of 6/30/21:
Rigs Present on PHX Acreage			6				1				2				-				-				-				3				1				13
Rigs Within 2.5 Miles of PHX Acreage			12				7				6				1				2				-				13				5				46

Leasing Activity

During the third quarter of fiscal 2021, the Company leased 518 net mineral acres for $270,890, primarily in Dawson County, TX in the Midland Basin.

										Bakken/
										Three				Arkoma
		SCOOP				STACK				Forks				Stack				Permian				Fayetteville				Haynesville				Other				Total
During Three Months Ended 6/30/21:
Net Mineral Acres Leased			-				30				-				-				307				-				-				181				518
Average Bonus per Net Mineral Acre			-			$	500				-				-			$	527				-				-			$	377			$	524
Average Royalty per Net Mineral Acre		-				20%					-			-				25%					-				-			19%				22%

ACQUISITION AND DIVESTITURE UPDATE

During the third quarter of fiscal 2021, the Company purchased 2,913 net royalty acres for $13,310,340 and sold 5,197 net royalty acres at an average price of $57 per acre.

										Bakken/
										Three				Arkoma
		SCOOP				STACK				Forks				Stack				Permian				Fayetteville				Haynesville				Other				Total
During Three Months Ended 6/30/21:
Net Mineral Acres Purchased			1,819				47				-				-				-				-				308				23				2,197
Net Royalty Acres Purchased			2,420				61				-				-				-				-				398				34				2,913
Price per Net Royalty Acre		$	4,455			$	1,624				-				-				-				-			$	5,955			$	1,754			$	4,570
Net Mineral Acres Sold			-				-				-				-				2,857				-				-				32				2,889
Net Royalty Acres Sold			-				-				-				-				5,165				-				-				32				5,197
Price per Net Royalty Acre			-				-				-				-			$	55				-				-			$	391			$	57

THIRD QUARTER EARNINGS CALL

PHX will host a conference call to discuss third quarter results at 5:00 p.m. EDT on Aug. 5, 2021. 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 13720096.

FINANCIAL RESULTS
Statements of Operations
	Three Months Ended June 30,								Nine Months Ended June 30,
	2021				2020				2021				2020
Revenues:
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
Gains (losses) on derivative contracts		(5,487,483)				(838,282)				(8,089,662)				2,415,401
Gain on asset sales		270,070				3,108				313,595				3,275,996
		5,941,559				2,705,383				18,213,696				24,593,201
Costs and expenses:
Lease operating expenses		1,064,989				1,147,948				3,100,052				3,871,818
Transportation, gathering and marketing		1,538,174				956,653				4,138,653				3,696,282
Production taxes		596,858				134,249				1,316,038				835,284
Depreciation, depletion and amortization		2,137,707				2,464,568				6,176,173				8,793,787
Provision for impairment		45,855				358,826				45,855				29,904,528
Interest expense		220,439				241,191				790,202				958,429
General and administrative		2,275,104				1,908,790				6,065,677				6,306,479
Other expense (income)		235,027				(73,687)				136,083				(44,551)
Total costs and expenses		8,114,153				7,138,538				21,768,733				54,322,056
Income (loss) before provision (benefit) for income taxes		(2,172,594)				(4,433,155)				(3,555,037)				(29,728,855)
Provision (benefit) for income taxes		(816,000)				(877,940)				(1,102,000)				(7,610,940)
Net income (loss)	$	(1,356,594)			$	(3,555,215)			$	(2,453,037)			$	(22,117,915)
Basic and diluted earnings (loss) per common share	$	(0.05)			$	(0.21)			$	(0.10)			$	(1.34)
Basic and diluted weighted average shares outstanding:
Common shares		28,117,199				16,403,243				24,308,185				16,375,736
Unissued, directors' deferred compensation shares		192,059				141,799				174,454				152,500
		28,309,258				16,545,042				24,482,639				16,528,236
Dividends declared per share of
common stock and paid in period	$	0.01			$	0.01			$	0.03			$	0.09

 

Balance Sheets
	June 30, 2021				Sept. 30, 2020
Assets
Current assets:
Cash and cash equivalents	$	2,908,500			$	10,690,395
Natural gas, oil, and NGL sales receivables (net of $0		5,114,387				2,943,220
allowance for uncollectable accounts)
Refundable income taxes		2,379,756				3,805,227
Other		480,600				351,088
Total current assets		10,883,243				17,789,930
Properties and equipment at cost, based on
successful efforts accounting:
Producing natural gas and oil properties		323,187,303				324,886,491
Non-producing natural gas and oil properties		32,894,588				18,993,814
Other		681,125				582,444
		356,763,016				344,462,749
Less accumulated depreciation, depletion and amortization		(259,018,926)				(263,590,801)
Net properties and equipment		97,744,090				80,871,948
Operating lease right-of-use assets		628,617				690,316
Other, net		558,659				669,641
Total assets	$	109,814,609			$	100,021,835
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,173,258			$	997,637
Derivative contracts, net		6,754,328				281,942
Current portion of operating lease liability		130,973				127,108
Accrued liabilities and other		1,324,482				1,297,363
Short-term debt		-				1,750,000
Total current liabilities		9,383,041				4,454,050
Long-term debt		19,900,000				27,000,000
Deferred income taxes, net		212,007				1,329,007
Asset retirement obligations		2,845,919				2,897,522
Derivative contracts, net		1,354,174				425,705
Operating lease liability, net of current portion		822,907				921,625
Total liabilities		34,518,048				37,027,909
Stockholders' equity:
Class A voting common stock, $0.01666 par value; 36,000,500
shares authorized and 30,200,226 issued at June 30, 2021;
24,000,500 shares authorized and 22,647,306 issued at Sept. 30, 2020		503,136				377,304
Capital in excess of par value		25,844,372				10,649,611
Deferred directors' compensation		1,701,110				1,874,007
Retained earnings		53,033,376				56,244,100
		81,081,994				69,145,022
Less treasury stock, at cost; 388,545 shares at June 30,
2021, and 411,487 shares at Sept. 30, 2020		(5,785,433)				(6,151,096)
Total stockholders' equity		75,296,561				62,993,926
Total liabilities and stockholders' equity	$	109,814,609			$	100,021,835

 

Condensed Statements of Cash Flows
	Nine Months Ended June 30,
	2021				2020
Operating Activities
Net income (loss)	$	(2,453,037)			$	(22,117,915)
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation, depletion and amortization		6,176,173				8,793,787
Impairment of producing properties		45,855				29,904,528
Provision for deferred income taxes		(1,117,000)				(6,158,000)
Gain from leasing fee mineral acreage		(316,541)				(567,975)
Proceeds from leasing fee mineral acreage		334,938				582,458
Net (gain) loss on sales of assets		(136,596)				(3,258,994)
Directors' deferred compensation expense		167,425				184,188
Total (gain) loss on derivative contracts		8,089,662				(2,415,401)
Cash receipts (payments) on settled derivative contracts		(688,807)				3,230,034
Restricted stock awards		542,674				619,812
Other		72,126				3,718
Cash provided (used) by changes in assets and liabilities:
Natural gas, oil and NGL sales receivables		(2,134,395)				2,194,430
Other current assets		(89,957)				(121,635)
Accounts payable		209,014				31,755
Income taxes receivable		1,425,471				(134,908)
Other non-current assets		87,065				6,544
Accrued liabilities		26,263				(950,686)
Total adjustments		12,693,370				31,943,655
Net cash provided by operating activities		10,240,333				9,825,740
Investing Activities
Capital expenditures		(696,759)				(196,168)
Acquisition of minerals and overriding royalty interests		(19,337,265)				(10,304,016)
Proceeds from sales of assets		533,371				3,457,500
Net cash provided (used) by investing activities		(19,500,653)				(7,042,684)
Financing Activities
Borrowings under Credit Facility		-				6,061,725
Payments of loan principal		(8,850,000)				(11,486,725)
Net proceeds from equity issuance		11,088,858				-
Purchases of treasury stock		(2,741)				(7,635)
Payments of dividends		(757,692)				(1,486,031)
Net cash provided (used) by financing activities		1,478,425				(6,918,666)
Increase (decrease) in cash and cash equivalents		(7,781,895)				(4,135,610)
Cash and cash equivalents at beginning of period		10,690,395				6,160,691
Cash and cash equivalents at end of period	$	2,908,500			$	2,025,081
Supplemental Schedule of Noncash Investing and Financing Activities
Additions to asset retirement obligations	$	-			$	4
Gross additions to properties and equipment	$	23,794,178			$	10,335,534
Equity offering used for acquisitions		(3,718,000)				-
Net (increase) decrease in accounts payable for properties
and equipment additions		(42,154)				164,650
Capital expenditures and acquisitions	$	20,034,024			$	10,500,184

 

Derivative Contracts as of Aug. 1, 2021
Period												Collar Average				Collar Average
(Calendar Year)		Product		Volume Mcf/Bbl				Swap Price				Floor Price				Ceiling Price
Remaining 2021		Natural Gas			1,193,500							$	2.38			$	3.07
Remaining 2021		Natural Gas			600,500			$	2.82
2022		Natural Gas			2,540,500							$	2.42			$	3.17
2022		Natural Gas			547,500			$	2.73
2023		Natural Gas			166,000							$	2.37			$	3.26
2023		Natural Gas			84,000			$	2.56
Remaining 2021		Crude Oil			9,000							$	37.00			$	46.69
Remaining 2021		Crude Oil			55,000			$	40.75
2022		Crude Oil			68,500							$	40.25			$	50.35
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, 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:

	Third Quarter Ended				Third Quarter Ended				Nine Months Ended				Nine Months Ended
	June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Net Income (Loss)	$	(1,356,594)			$	(3,555,215)			$	(2,453,037)			$	(22,117,915)
Plus:
Unrealized (gains) losses on derivatives		4,482,793				2,537,404				7,400,855				814,633
Income Tax Expense (Benefit)		(816,000)				(877,940)				(1,102,000)				(7,610,940)
Interest Expense		220,439				241,191				790,202				958,429
DD&A		2,137,707				2,464,568				6,176,173				8,793,787
Impairment		45,855				358,826				45,855				29,904,528
Adjusted EBITDA	$	4,714,200			$	1,168,834			$	10,858,048			$	10,742,522

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:

	Third Quarter Ended				Third Quarter Ended				Nine Months Ended				Nine Months Ended				Second Quarter Ended
	June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020				March 31, 2021
Net Income (Loss)	$	(1,356,594)			$	(3,555,215)			$	(2,453,037)			$	(22,117,915)			$	(499,723)
Plus:
Unrealized (gains) losses
on derivatives		4,482,793				2,537,404				7,400,855				814,633				2,050,712
Income Tax Expense
(Benefit)		(816,000)				(877,940)				(1,102,000)				(7,610,940)				(217,000)
Interest Expense		220,439				241,191				790,202				958,429				267,865
DD&A		2,137,707				2,464,568				6,176,173				8,793,787				1,777,817
Impairment		45,855				358,826				45,855				29,904,528				-
Adjusted EBITDA	$	4,714,200			$	1,168,834			$	10,858,048			$	10,742,522			$	3,379,671
Less:
Gain on asset sales		270,070				3,108				313,595				3,275,996				23,257
Loss on asset sales(1)		(238,827)				(4,345)				(248,301)				(11,849)				(5,681)
Adjusted EBITDA excluding
Gain/loss on asset sales	$	4,682,957			$	1,170,071			$	10,792,754			$	7,478,375			$	3,362,095
(1) Included in other expense (income) line item on the Company's Statements of Operations

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 ratios 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
	June 30, 2021				June 30, 2020
Net Income (Loss)	$	(4,287,159)			$	(78,271,695)
Plus:
Unrealized (gains) losses on derivatives		9,788,013				1,031,998
Income Tax Expense (Benefit)		(1,780,060)				(25,847,940)
Interest Expense		1,118,561				1,402,387
DD&A		8,696,169				15,169,665
Impairment		45,855				106,728,865
Adjusted EBITDA	$	13,581,379			$	20,213,280
Debt	$	19,900,000			$	30,000,000
Debt/Adjusted EBITDA		1.47				1.48

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:

	Third Quarter Ended				Third Quarter Ended				Nine Months Ended				Nine Months Ended
	June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Net Income (Loss)	$	(1,356,594)			$	(3,555,215)			$	(2,453,037)			$	(22,117,915)
Plus:
Impairment		45,855				358,826				45,855				29,904,528
Unrealized (gains) losses on derivatives		4,482,793				2,537,404				7,400,855				814,633
Income Tax Expense (Benefit)		(816,000)				(877,940)				(1,102,000)				(7,610,940)
Adjusted Pre-Tax Net Income (Loss)	$	2,356,054			$	(1,536,925)			$	3,891,673			$	990,306

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 its core areas of focus. PHX owns approximately 251,000 net mineral acres principally located in Oklahoma, Texas, North Dakota, New Mexico 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 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.

 

View original content:https://www.prnewswire.com/news-releases/phx-minerals-inc-reports-third-quarter-2021-results-and-announces-dividend-payment-301349692.html

SOURCE PHX MINERALS INC.

FAQ

What were the production volumes for PHX Minerals in Q3 2021?

PHX Minerals reported production volumes of 2,493 Mmcfe, a 31% increase from Q3 2020.

What is the net loss for PHX Minerals in Q3 2021?

The net loss for Q3 2021 was $1.36 million, or $0.05 per share.

What was PHX Minerals' Adjusted EBITDA for Q3 2021?

The Adjusted EBITDA for Q3 2021 was $4.7 million, up 292% year-over-year.

What is the company’s debt status as of June 30, 2021?

The total debt was reduced by 15% to $19.9 million.

What is the dividend amount and payment date for PHX Minerals?

PHX Minerals declared a dividend of $0.01 per share, payable on September 10, 2021.