FORT
WORTH, Texas, Nov. 8, 2023
/PRNewswire/ -- PHX MINERALS INC., "PHX" or the "Company" (NYSE:
PHX), today reported financial and operating results for the
quarter ended Sept. 30, 2023.
Summary of Results for the Quarter Ended Sept. 30, 2023
- Net income was $1.9 million, or
$0.05 per diluted share, compared to
net loss of ($0.04) million, or
$0.00 per diluted share, for the
quarter ended June 30, 2023, and net
income of $9.2 million, or
$0.25 per diluted share, for the
quarter ended Sept. 30, 2022.
- Adjusted pretax net income(1) was $3.2 million, or $0.09 per diluted share, compared to $0.6 million, or $0.02 per diluted share, for the quarter ended
June 30, 2023, and $5.3 million, or $0.15 per diluted share, for the quarter ended
Sept. 30, 2022.
- Adjusted EBITDA(1) was $6.3
million, compared to $4.1
million for the quarter ended June
30, 2023, and $8.4 million for
the quarter ended Sept. 30,
2022.
- Royalty production volumes increased 3% to 2,073 Mmcfe compared
to the quarter ended June 30, 2023,
and increased 13% compared to the quarter ended Sept. 30, 2022.
- Total production volumes increased 2% to 2,348 Mmcfe compared
to the quarter ended June 30, 2023,
and decreased 9% compared to the quarter ended Sept. 30, 2022.
- Converted 71 gross (0.155 net) wells to producing status,
compared to 81 gross (0.30 net) during the quarter ended
June 30, 2023 and 49 gross (0.22 net)
during the quarter ended Sept. 30,
2022.
- Inventory of 185 gross (0.81 net) wells in progress and 93
gross (0.28 net) permits as of Sept. 30,
2023, compared to 186 gross (0.51 net) wells in progress and
86 gross (0.40 net) permits as of June 30,
2023.
- Total debt was $30.8 million and
the debt to adjusted EBITDA (TTM) (1) ratio was 1.31x at
Sept. 30, 2023.
Subsequent Events
- PHX announced a 33% increase in its fixed quarterly dividend to
$0.03 per share, payable on
Dec. 7, 2023, to stockholders of
record on Nov. 23, 2023.
- PHX entered into the fifth amendment to its credit agreement on
Nov. 6, 2023 pursuant to which, among
other changes, the borrowing base under PHX's credit facility is
increased from $45.0 million to
$50.0 million in connection with its
regularly scheduled semi-annual redetermination.
|
(1)
|
This is a non-GAAP
measure. Refer to the Non-GAAP Reconciliation section.
|
Chad L. Stephens, President and
CEO, commented, "We are pleased with this quarter's financial
results as they highlight the company's progress. There continues
to be robust drilling activity on our minerals reflecting the
high-quality nature of our assets. Royalty volume growth remains on
trend to increase approximately 20% year over year. Royalty volumes
now represent over 90% of cash flow as the nonop working interest
portion of our business has steadily become less material to our
financial performance. We continue to see active deal flow, having
completed roughly $13 million of
mineral acquisitions during the quarter and in excess of
$40 million over the trailing
12-month period."
"The Board of Directors approved an increase in our quarterly
dividend from $0.0225 to $0.03, a 33% increase, which reflects their
belief in the continued sustainability of our business model.
Additionally, our bank group increased our borrowing base from
$45.0 million to $50.0 million, which also reflects on the high
quality of our asset base and our ability to execute on our
strategy."
|
Financial
Highlights
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
Sept. 30,
2023
|
|
|
Sept. 30,
2022
|
|
|
Sept. 30,
2023
|
|
|
Sept. 30,
2022
|
|
|
Royalty Interest
Sales
|
|
$
|
7,873,297
|
|
|
$
|
15,411,544
|
|
|
$
|
24,214,701
|
|
|
$
|
36,763,953
|
|
|
Working Interest
Sales
|
|
$
|
1,025,794
|
|
|
$
|
6,416,490
|
|
|
$
|
3,772,801
|
|
|
$
|
19,409,514
|
|
|
Natural Gas, Oil and
NGL Sales
|
|
$
|
8,899,091
|
|
|
$
|
21,828,034
|
|
|
$
|
27,987,502
|
|
|
$
|
56,173,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains (Losses) on
Derivative Contracts
|
|
$
|
(337,647)
|
|
|
$
|
(4,298,614)
|
|
|
$
|
3,648,179
|
|
|
$
|
(19,669,246)
|
|
|
Lease Bonuses and
Rental Income
|
|
$
|
620,101
|
|
|
$
|
17,350
|
|
|
$
|
1,045,242
|
|
|
$
|
388,587
|
|
|
Total
Revenue
|
|
$
|
9,181,545
|
|
|
$
|
17,546,770
|
|
|
$
|
32,680,923
|
|
|
$
|
36,892,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Operating
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per Working Interest
Mcfe
|
|
$
|
1.50
|
|
|
$
|
1.28
|
|
|
$
|
1.33
|
|
|
$
|
1.12
|
|
|
Transportation,
Gathering and Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per Mcfe
|
|
$
|
0.30
|
|
|
$
|
0.68
|
|
|
$
|
0.38
|
|
|
$
|
0.63
|
|
|
Production Tax per
Mcfe
|
|
$
|
0.17
|
|
|
$
|
0.36
|
|
|
$
|
0.20
|
|
|
$
|
0.34
|
|
|
G&A Expense per
Mcfe
|
|
$
|
1.18
|
|
|
$
|
1.46
|
|
|
$
|
1.25
|
|
|
$
|
1.26
|
|
|
Cash G&A Expense
per Mcfe (1)
|
|
$
|
0.95
|
|
|
$
|
1.06
|
|
|
$
|
0.99
|
|
|
$
|
0.98
|
|
|
Interest Expense per
Mcfe
|
|
$
|
0.24
|
|
|
$
|
0.18
|
|
|
$
|
0.23
|
|
|
$
|
0.13
|
|
|
DD&A per
Mcfe
|
|
$
|
0.86
|
|
|
$
|
0.60
|
|
|
$
|
0.86
|
|
|
$
|
0.76
|
|
|
Total Expense per
Mcfe
|
|
$
|
2.93
|
|
|
$
|
3.65
|
|
|
$
|
3.10
|
|
|
$
|
3.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
|
$
|
1,895,403
|
|
|
$
|
9,158,468
|
|
|
$
|
11,407,356
|
|
|
$
|
13,727,023
|
|
|
Adjusted EBITDA
(2)
|
|
$
|
6,321,029
|
|
|
$
|
8,395,965
|
|
|
$
|
18,147,976
|
|
|
$
|
21,409,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from
Operations (3)
|
|
$
|
6,960,419
|
|
|
$
|
13,192,676
|
|
|
$
|
20,809,684
|
|
|
$
|
28,893,660
|
|
|
CapEx
(4)
|
|
$
|
45,977
|
|
|
$
|
201,114
|
|
|
$
|
321,396
|
|
|
$
|
359,961
|
|
|
CapEx - Mineral
Acquisitions
|
|
$
|
13,469,756
|
|
|
$
|
13,652,829
|
|
|
$
|
25,383,759
|
|
|
$
|
31,881,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowing
Base
|
|
|
|
|
|
|
|
$
|
45,000,000
|
|
|
$
|
50,000,000
|
|
|
Debt
|
|
|
|
|
|
|
|
$
|
30,750,000
|
|
|
$
|
28,300,000
|
|
|
Debt to Adjusted EBITDA
(TTM) (2)
|
|
|
|
|
|
|
|
|
1.31
|
|
|
|
1.10
|
|
|
|
|
(1)
|
Cash G&A expense is
G&A excluding restricted stock and deferred director's expense
from the adjusted EBITDA table in the non-GAAP Reconciliation
section.
|
|
(2)
|
This is a non-GAAP
measure. Refer to the Non-GAAP Reconciliation section.
|
|
(3)
|
GAAP cash flow from
operations.
|
|
(4)
|
Includes legacy working
interest expenditures and fixtures and equipment.
|
|
Operating
Highlights
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
Nine Months
Ended
|
|
|
Sept. 30,
2023
|
|
|
Sept. 30,
2022
|
|
|
Sept. 30,
2023
|
|
|
Sept. 30,
2022
|
|
|
Gas Mcf Sold
|
|
1,868,012
|
|
|
|
2,047,614
|
|
|
|
5,681,508
|
|
|
|
5,853,443
|
|
|
Average Sales Price per
Mcf before the
|
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
2.40
|
|
|
$
|
7.61
|
|
|
$
|
2.63
|
|
|
$
|
6.33
|
|
|
Average Sales Price per
Mcf after the
|
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
2.72
|
|
|
$
|
5.08
|
|
|
$
|
3.03
|
|
|
$
|
4.25
|
|
|
% of sales subject to
hedges
|
|
46
|
%
|
|
|
58
|
%
|
|
|
46
|
%
|
|
|
60
|
%
|
|
Oil Barrels
Sold
|
|
48,032
|
|
|
|
49,902
|
|
|
|
143,148
|
|
|
|
150,461
|
|
|
Average Sales Price per
Bbl before the
|
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
78.48
|
|
|
$
|
94.07
|
|
|
$
|
76.23
|
|
|
$
|
96.73
|
|
|
Average Sales Price per
Bbl after the
|
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
78.44
|
|
|
$
|
57.80
|
|
|
$
|
73.88
|
|
|
$
|
60.62
|
|
|
% of sales subject to
hedges
|
|
35
|
%
|
|
|
62
|
%
|
|
|
44
|
%
|
|
|
69
|
%
|
|
NGL Barrels
Sold
|
|
32,029
|
|
|
|
40,761
|
|
|
|
99,063
|
|
|
|
120,864
|
|
|
Average Sales Price per
Bbl(1)
|
$
|
20.35
|
|
|
$
|
37.89
|
|
|
$
|
21.48
|
|
|
$
|
37.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mcfe Sold
|
|
2,348,378
|
|
|
|
2,591,588
|
|
|
|
7,134,770
|
|
|
|
7,481,390
|
|
|
Natural gas, oil and
NGL sales before the
|
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
8,899,091
|
|
|
$
|
21,828,034
|
|
|
$
|
27,987,502
|
|
|
$
|
56,173,467
|
|
|
Natural gas, oil and
NGL sales after the
|
|
|
|
|
|
|
|
|
|
|
|
|
effects of settled
derivative contracts
|
$
|
9,502,036
|
|
|
$
|
14,832,521
|
|
|
$
|
29,896,064
|
|
|
$
|
38,519,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) There were no NGL
settled derivative contracts during the 2023 and 2022
quarters.
|
|
Total Production for the last four quarters was as follows:
|
Quarter
ended
|
|
Mcf Sold
|
|
|
Oil Bbls
Sold
|
|
|
NGL Bbls
Sold
|
|
|
Mcfe Sold
|
|
|
9/30/2023
|
|
|
1,868,012
|
|
|
|
48,032
|
|
|
|
32,029
|
|
|
|
2,348,378
|
|
|
6/30/2023
|
|
|
1,854,485
|
|
|
|
41,009
|
|
|
|
33,929
|
|
|
|
2,304,113
|
|
|
3/31/2023
|
|
|
1,959,010
|
|
|
|
54,107
|
|
|
|
33,104
|
|
|
|
2,482,276
|
|
|
12/31/2022
|
|
|
1,669,320
|
|
|
|
52,406
|
|
|
|
38,611
|
|
|
|
2,215,419
|
|
Total production volumes attributable to natural gas were 80%
for the quarter ended Sept. 30,
2023.
Royalty Interest Production for the last four quarters was as
follows:
|
Quarter
ended
|
|
Mcf Sold
|
|
|
Oil Bbls
Sold
|
|
|
NGL Bbls
Sold
|
|
|
Mcfe Sold
|
|
|
9/30/2023
|
|
|
1,689,396
|
|
|
|
43,575
|
|
|
|
20,416
|
|
|
|
2,073,342
|
|
|
6/30/2023
|
|
|
1,673,346
|
|
|
|
35,599
|
|
|
|
20,516
|
|
|
|
2,010,036
|
|
|
3/31/2023
|
|
|
1,700,974
|
|
|
|
45,395
|
|
|
|
20,063
|
|
|
|
2,093,722
|
|
|
12/31/2022
|
|
|
1,303,825
|
|
|
|
33,691
|
|
|
|
20,353
|
|
|
|
1,628,089
|
|
Royalty production volumes attributable to natural gas were 81%
for the quarter ended Sept. 30,
2023.
Working Interest Production for the last four quarters was as
follows:
|
Quarter
ended
|
|
Mcf Sold
|
|
|
Oil Bbls
Sold
|
|
|
NGL Bbls
Sold
|
|
|
Mcfe Sold
|
|
|
9/30/2023
|
|
|
178,616
|
|
|
|
4,457
|
|
|
|
11,613
|
|
|
|
275,036
|
|
|
6/30/2023
|
|
|
181,139
|
|
|
|
5,410
|
|
|
|
13,413
|
|
|
|
294,077
|
|
|
3/31/2023
|
|
|
258,036
|
|
|
|
8,712
|
|
|
|
13,041
|
|
|
|
388,554
|
|
|
12/31/2022
|
|
|
365,495
|
|
|
|
18,715
|
|
|
|
18,258
|
|
|
|
587,330
|
|
Quarter Ended Sept. 30, 2023
Results
The Company recorded net income of $1.9
million, or $0.05 per diluted
share, for the quarter ended Sept. 30,
2023, as compared to net income of $9.2 million, or $0.25 per diluted share, for the quarter ended
Sept. 30, 2022. The change in net
income was principally the result of a decrease in natural gas, oil
and NGL sales and a decrease in gains on asset sales, partially
offset by a decrease in losses associated with our derivative
contracts and a decrease in income tax provision.
Natural gas, oil and NGL revenue decreased $12.9 million, or 59%, for the quarter ended
Sept. 30, 2023, compared to the
quarter ended Sept. 30, 2022, due to
decreases in natural gas, oil and NGL prices of 68%, 17% and 46%,
respectively, and decreases in natural gas, oil and NGL volumes of
9%, 4% and 21%, respectively.
The increase in royalty production volumes during the quarter
ended Sept. 30, 2023, as compared to
the quarter ended Sept. 30, 2022,
resulted from new wells in the Haynesville Shale and SCOOP coming
online. The production decrease in working interest volumes during
the quarter ended Sept. 30, 2023, as
compared to the quarter ended Sept. 30,
2022, resulted from the divestiture of working interest
properties.
The Company had a net loss on derivative contracts of
($0.3) million for the quarter ended
Sept. 30, 2023, comprised of a
$0.6 million gain on settled
derivatives and a ($0.9) million
non-cash loss on derivatives, as compared to a net loss of
($4.3) million for the quarter ended
Sept. 30, 2022. The change in net
loss on derivative contracts was due to the Company's settlements
of natural gas and oil collars and fixed price swaps and the change
in valuation caused by the difference in Sept. 30, 2023 pricing relative to the strike
price on open derivative contracts.
Nine Months Ended Sept. 30,
2023 Results
The Company recorded net income of $11.4
million, or $0.31 per diluted
share, for the nine months ended Sept. 30,
2023, as compared to net income of $13.7 million, or $0.39 per diluted share, for the nine months
ended Sept. 30, 2022. The change in
net income was principally the result of a decrease in natural gas,
oil and NGL sales and a decrease in gains on asset sales, partially
offset by an increase in gains associated with our derivative
contracts and decreases in lease operating expenses and
transportation, gathering and marketing expenses.
Natural gas, oil and NGL revenue decreased $28.2 million, or 50%, for the nine months ended
Sept. 30, 2023, compared to the nine
months ended Sept. 30, 2022, due to
decreases in natural gas, oil and NGL prices of 58%, 21% and 43%,
respectively, and decreases in natural gas, oil and NGL volumes of
3%, 5% and 18%, respectively.
The increase in royalty production volumes during the nine
months ended Sept. 30, 2023, as
compared to the nine months ended Sept. 30,
2022, resulted from new wells in the Haynesville Shale and
SCOOP coming online. The production decrease in working interest
volumes during the nine months ended Sept.
30, 2023, as compared to the nine months ended Sept. 30, 2022, resulted from the divestiture of
working interest properties.
The Company had a net gain on derivative contracts of
$3.6 million for the nine months
ended Sept. 30, 2023, comprised of a
$2.3 million gain on settled
derivatives and a $1.4 million
non-cash gain on derivatives, as compared to a net loss of
($19.7) million for the nine months
ended Sept. 30, 2022. The gain on
settled derivative contracts for the nine months ended Sept. 30, 2023 excludes $0.4 million of cash paid to settle off-market
derivative contracts. The total cash received to settle hedge
contracts during the nine months ended Sept.
30, 2023 was $1.9 million. The
change in net gain on derivative contracts was due to the Company's
settlements of natural gas and oil collars and fixed price swaps
and the change in valuation caused by the difference in
September 30, 2023 pricing relative
to the strike price on open derivative contracts.
Operations Update
During the quarter ended Sept. 30,
2023, the Company converted 71 gross (0.155 net)
wells to producing status, including 22 gross (0.08 net) wells in
the Haynesville and 32 gross (0.07 net) wells in the SCOOP,
compared to 49 gross (0.22 net) wells in the quarter ended
Sept. 30, 2022.
At Sept. 30, 2023, the Company had
a total of 185 gross (0.81 net) wells in progress across its
mineral positions and 93 gross (0.28 net) active permitted wells,
compared to 186 gross (0.51 net) wells in progress and 86 gross
(0.40 net) active permitted wells at June
30, 2023. As of October 9,
2023, 14 rigs were operating on the Company's acreage and 56
rigs operating within 2.5 miles of its acreage.
|
|
|
|
|
|
|
Bakken/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
Arkoma
|
|
|
|
|
|
|
|
|
|
|
|
SCOOP
|
|
|
STACK
|
|
|
Forks
|
|
|
Stack
|
|
|
Haynesville
|
|
|
Other
|
|
|
Total
|
|
|
As of Sept. 30,
2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Wells in Progress
on PHX Acreage (1)
|
|
52
|
|
|
|
13
|
|
|
|
8
|
|
|
|
4
|
|
|
|
97
|
|
|
|
11
|
|
|
|
185
|
|
|
Net Wells in Progress
on PHX Acreage (1)
|
|
0.159
|
|
|
|
0.034
|
|
|
|
0.043
|
|
|
|
0.003
|
|
|
|
0.538
|
|
|
|
0.031
|
|
|
|
0.808
|
|
|
Gross Active Permits on
PHX Acreage
|
|
43
|
|
|
|
7
|
|
|
|
5
|
|
|
|
5
|
|
|
|
28
|
|
|
|
5
|
|
|
|
93
|
|
|
Net Active Permits on
PHX Acreage
|
|
0.128
|
|
|
|
0.031
|
|
|
|
0.006
|
|
|
|
0.002
|
|
|
|
0.095
|
|
|
|
0.021
|
|
|
|
0.283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of Oct. 9,
2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rigs Present on PHX
Acreage
|
|
6
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
5
|
|
|
|
2
|
|
|
|
14
|
|
|
Rigs Within 2.5 Miles
of PHX Acreage
|
|
11
|
|
|
|
13
|
|
|
|
5
|
|
|
|
-
|
|
|
|
19
|
|
|
|
8
|
|
|
|
56
|
|
|
|
(1) Wells in progress
includes drilling wells and drilled but uncompleted wells,
or DUCs.
|
Leasing Activity
During the quarter ended Sept. 30,
2023, the Company leased 357 net mineral acres to
third-party exploration and production companies for an average
bonus payment of $2,075 per net
mineral acre and an average royalty of 24%.
Acquisition and Divestiture Update
During the quarter ended Sept. 30,
2023, the Company purchased 974 net royalty acres for
approximately $13.4 million and had
no significant divestitures.
|
|
Acquisitions
|
|
|
|
SCOOP
|
|
|
Haynesville
|
|
|
Other
|
|
|
Total
|
|
|
During Three Months
Ended Sept. 30, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Mineral Acres
Purchased
|
|
|
102
|
|
|
|
459
|
|
|
|
-
|
|
|
|
561
|
|
|
Net Royalty Acres
Purchased
|
|
|
159
|
|
|
|
815
|
|
|
-
|
|
|
|
974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outlook
PHX is providing an updated operational outlook for 2023 as
follows:
|
|
Calendar Year
2022
Actual
|
|
Calendar Year
2023
YTD Actual
|
|
Calendar
Year 2023
Outlook
|
|
Mineral & Royalty
Production (Mmcfe)
|
|
6,613
|
|
6,177
|
|
8,000 -
8,400
|
|
Working Interest
Production (Mmcfe)
|
|
3,084
|
|
958
|
|
1,200 -
1,400(1)
|
|
Total Production
(Mmcfe)
|
|
9,697
|
|
7,135
|
|
9,200 -
9,800
|
|
Percentage Natural
Gas
|
|
78 %
|
|
80 %
|
|
79% - 81%
|
|
|
|
|
|
|
|
|
Transportation,
Gathering & Marketing (per Mcfe)
|
|
$0.63
|
|
$0.38
|
|
$0.37 -
$0.42
|
|
Production Tax (as % of
pre-hedge sales volumes)
|
|
4.50 %
|
|
5.10 %
|
|
5.00% -
5.50%
|
|
LOE Expenses (on an
absolute basis in 000's)
|
|
$3,807
|
|
$1,274
|
|
$1,500 -
$1,700
|
|
Cash G&A (per
Mcfe)
|
|
$1.01
|
|
$0.99
|
|
$0.99 -
$1.02
|
|
|
(1) Pro-forma
divestitures of Eagle Ford and Arkoma working interest assets,
excludes potential future sales of additional working interest
assets.
|
Quarterly Conference Call
PHX will host a conference call to discuss the Company's results
for the quarter ended Sept. 30,
2023, at 11 a.m. EST tomorrow,
Nov. 9, 2023. 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
(toll-free domestic) or 201-389-0927. 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 13742254.
A live audio webcast of the conference call will be accessible
from the "Investors" section of PHX's website at
https://phxmin.com/events. The webcast will be archived for at
least 90 days.
|
FINANCIAL
RESULTS
|
|
|
Statements of
Operations
|
|
|
Three Months Ended
Sept. 30,
|
|
|
Nine Months Ended Sept.
30,
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
Revenues:
|
|
|
|
|
|
|
Natural gas, oil and
NGL sales
|
$
|
8,899,091
|
|
|
$
|
21,828,034
|
|
|
$
|
27,987,502
|
|
|
$
|
56,173,467
|
|
|
Lease bonuses and
rental income
|
|
620,101
|
|
|
|
17,350
|
|
|
|
1,045,242
|
|
|
|
388,587
|
|
|
Gains (losses) on
derivative contracts
|
|
(337,647)
|
|
|
|
(4,298,614)
|
|
|
|
3,648,179
|
|
|
|
(19,669,246)
|
|
|
|
9,181,545
|
|
|
|
17,546,770
|
|
|
|
32,680,923
|
|
|
|
36,892,808
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
413,643
|
|
|
|
961,148
|
|
|
|
1,273,560
|
|
|
|
2,791,409
|
|
|
Transportation,
gathering and marketing
|
|
693,915
|
|
|
|
1,758,132
|
|
|
|
2,729,044
|
|
|
|
4,676,786
|
|
|
Production
taxes
|
|
387,624
|
|
|
|
929,330
|
|
|
|
1,430,950
|
|
|
|
2,551,920
|
|
|
Depreciation,
depletion and amortization
|
|
2,022,709
|
|
|
|
1,550,410
|
|
|
|
6,123,031
|
|
|
|
5,694,358
|
|
|
Provision for
impairment
|
|
36,460
|
|
|
|
2,703
|
|
|
|
38,533
|
|
|
|
8,980
|
|
|
Interest
expense
|
|
556,941
|
|
|
|
471,716
|
|
|
|
1,638,708
|
|
|
|
988,273
|
|
|
General and
administrative
|
|
2,760,342
|
|
|
|
3,783,159
|
|
|
|
8,919,354
|
|
|
|
9,405,037
|
|
|
Losses (gains) on
asset sales and other
|
|
(174,492)
|
|
|
|
(3,499,296)
|
|
|
|
(4,369,613)
|
|
|
|
(6,390,978)
|
|
|
Total costs and
expenses
|
|
6,697,142
|
|
|
|
5,957,302
|
|
|
|
17,783,567
|
|
|
|
19,725,785
|
|
|
Income (loss) before
provision (benefit) for income taxes
|
|
2,484,403
|
|
|
|
11,589,468
|
|
|
|
14,897,356
|
|
|
|
17,167,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for
income taxes
|
|
589,000
|
|
|
|
2,431,000
|
|
|
|
3,490,000
|
|
|
|
3,440,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
1,895,403
|
|
|
$
|
9,158,468
|
|
|
$
|
11,407,356
|
|
|
$
|
13,727,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share
|
$
|
0.05
|
|
|
$
|
0.26
|
|
|
$
|
0.32
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss)
per common share
|
$
|
0.05
|
|
|
$
|
0.25
|
|
|
$
|
0.31
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
35,983,116
|
|
|
|
35,573,813
|
|
|
|
35,961,570
|
|
|
|
34,833,427
|
|
|
Diluted
|
|
36,656,272
|
|
|
|
35,916,878
|
|
|
|
36,670,494
|
|
|
|
35,204,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share
of
|
|
|
|
|
|
|
|
|
|
|
|
|
common stock paid in
period
|
$
|
0.0225
|
|
|
$
|
0.02
|
|
|
$
|
0.0675
|
|
|
$
|
0.055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
Sheets
|
|
|
Sept. 30,
2023
|
|
|
Dec. 31,
2022
|
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,235,193
|
|
|
$
|
2,115,652
|
|
|
Natural gas, oil, and
NGL sales receivables (net of $0
|
|
5,414,075
|
|
|
|
9,783,996
|
|
|
allowance for
uncollectable accounts)
|
|
|
|
|
|
|
Refundable income
taxes
|
|
712,475
|
|
|
|
-
|
|
|
Derivative contracts,
net
|
|
577,381
|
|
|
|
-
|
|
|
Held for sale
assets
|
|
-
|
|
|
|
6,420,051
|
|
|
Other
|
|
438,524
|
|
|
|
1,543,956
|
|
|
Total current
assets
|
|
8,377,648
|
|
|
|
19,863,655
|
|
|
|
|
|
|
|
|
Properties and
equipment at cost, based on
|
|
|
|
|
|
|
successful
efforts accounting:
|
|
|
|
|
|
|
Producing natural gas
and oil properties
|
|
202,915,457
|
|
|
|
181,431,139
|
|
|
Non-producing natural
gas and oil properties
|
|
61,096,631
|
|
|
|
57,781,644
|
|
|
Other
|
|
1,353,686
|
|
|
|
1,122,436
|
|
|
|
265,365,774
|
|
|
|
240,335,219
|
|
|
Less accumulated
depreciation, depletion and amortization
|
|
(112,095,510)
|
|
|
|
(107,085,212)
|
|
|
Net properties and
equipment
|
|
153,270,264
|
|
|
|
133,250,007
|
|
|
|
|
|
|
|
|
Derivative contracts,
net
|
|
-
|
|
|
|
141,345
|
|
|
Operating lease
right-of-use assets
|
|
606,978
|
|
|
|
706,871
|
|
|
Other, net
|
|
540,402
|
|
|
|
695,399
|
|
|
Total assets
|
$
|
162,795,292
|
|
|
$
|
154,657,277
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
$
|
387,460
|
|
|
$
|
504,466
|
|
|
Derivative contracts,
net
|
|
-
|
|
|
|
1,534,034
|
|
|
Income taxes
payable
|
|
-
|
|
|
|
576,427
|
|
|
Current portion of
operating lease liability
|
|
230,347
|
|
|
|
217,656
|
|
|
Held for sale
liabilities
|
|
-
|
|
|
|
889,155
|
|
|
Accrued liabilities
and other
|
|
2,024,369
|
|
|
|
3,121,522
|
|
|
Total current
liabilities
|
|
2,642,176
|
|
|
|
6,843,260
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
30,750,000
|
|
|
|
33,300,000
|
|
|
Deferred income taxes,
net
|
|
5,709,906
|
|
|
|
2,453,906
|
|
|
Asset retirement
obligations
|
|
1,051,224
|
|
|
|
1,027,777
|
|
|
Derivative contracts,
net
|
|
230,453
|
|
|
|
-
|
|
|
Operating lease
liability, net of current portion
|
|
755,541
|
|
|
|
929,208
|
|
|
Total
liabilities
|
|
41,139,300
|
|
|
|
44,554,151
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Common Stock, $0.01666
par value; 54,000,500 shares authorized and
|
|
|
|
|
|
|
35,938,900 issued at
Sept. 30, 2023; 54,000,500 shares authorized
|
|
|
|
|
|
|
and 35,938,206 issued
at Dec. 31, 2022
|
|
598,742
|
|
|
|
598,731
|
|
|
Capital in excess of
par value
|
|
44,249,366
|
|
|
|
43,344,916
|
|
|
Deferred directors'
compensation
|
|
1,425,155
|
|
|
|
1,541,070
|
|
|
Retained
earnings
|
|
78,618,090
|
|
|
|
68,925,774
|
|
|
|
124,891,353
|
|
|
|
114,410,491
|
|
|
Less treasury stock,
at cost; 225,723 shares at Sept. 30,
|
|
|
|
|
|
|
2023, and 300,272
shares at Dec. 31, 2022
|
|
(3,235,361)
|
|
|
|
(4,307,365)
|
|
|
Total stockholders'
equity
|
|
121,655,992
|
|
|
|
110,103,126
|
|
|
Total liabilities and
stockholders' equity
|
$
|
162,795,292
|
|
|
$
|
154,657,277
|
|
|
Condensed Statements of
Cash Flows
|
|
|
Nine Months Ended Sept.
30,
|
|
|
2023
|
|
|
2022
|
|
|
Operating
Activities
|
|
|
|
Net income
(loss)
|
$
|
11,407,356
|
|
|
$
|
13,727,023
|
|
|
Adjustments to
reconcile net income (loss) to net cash provided
|
|
|
|
|
|
|
by operating
activities:
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
6,123,031
|
|
|
|
5,694,358
|
|
|
Impairment of
producing properties
|
|
38,533
|
|
|
|
8,980
|
|
|
Provision for deferred
income taxes
|
|
3,256,000
|
|
|
|
876,000
|
|
|
Gain from leasing fee
mineral acreage
|
|
(1,045,242)
|
|
|
|
(387,419)
|
|
|
Proceeds from leasing
fee mineral acreage
|
|
1,108,909
|
|
|
|
593,168
|
|
|
Net (gain) loss on
sales of assets
|
|
(4,671,253)
|
|
|
|
(6,587,005)
|
|
|
Directors' deferred
compensation expense
|
|
165,582
|
|
|
|
124,281
|
|
|
Total (gain) loss on
derivative contracts
|
|
(3,648,179)
|
|
|
|
19,669,246
|
|
|
Cash receipts
(payments) on settled derivative contracts
|
|
2,468,724
|
|
|
|
(2,796,250)
|
|
|
Restricted stock award
expense
|
|
1,695,637
|
|
|
|
1,955,829
|
|
|
Other
|
|
105,604
|
|
|
|
50,215
|
|
|
Cash provided (used)
by changes in assets and liabilities:
|
|
|
|
|
|
|
Natural gas, oil and
NGL sales receivables
|
|
4,369,921
|
|
|
|
(5,132,207)
|
|
|
Other current
assets
|
|
408,533
|
|
|
|
576,348
|
|
|
Accounts
payable
|
|
(107,796)
|
|
|
|
85,344
|
|
|
Income taxes
receivable
|
|
(712,475)
|
|
|
|
-
|
|
|
Other non-current
assets
|
|
150,515
|
|
|
|
(391,217)
|
|
|
Income taxes
payable
|
|
(576,427)
|
|
|
|
(4,081)
|
|
|
Accrued
liabilities
|
|
272,711
|
|
|
|
831,047
|
|
|
Total
adjustments
|
|
9,402,328
|
|
|
|
15,166,637
|
|
|
Net cash provided by
operating activities
|
|
20,809,684
|
|
|
|
28,893,660
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
Capital
expenditures
|
|
(321,396)
|
|
|
|
(359,961)
|
|
|
Acquisition of
minerals and overriding royalty interests
|
|
(25,383,759)
|
|
|
|
(31,881,409)
|
|
|
Net proceeds from
sales of assets
|
|
9,556,666
|
|
|
|
8,631,352
|
|
|
Net cash provided
(used) by investing activities
|
|
(16,148,489)
|
|
|
|
(23,610,018)
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
Borrowings under
credit facility
|
|
16,000,000
|
|
|
|
17,300,000
|
|
|
Payments of loan
principal
|
|
(18,550,000)
|
|
|
|
(9,000,000)
|
|
|
Net proceeds from
equity issuance
|
|
-
|
|
|
|
5,039,045
|
|
|
Cash receipts from
(payments on) off-market derivative contracts
|
|
(560,162)
|
|
|
|
(14,857,682)
|
|
|
Purchases of treasury
stock
|
|
(669)
|
|
|
|
(1,855)
|
|
|
Payments of
dividends
|
|
(2,430,823)
|
|
|
|
(1,925,691)
|
|
|
Net cash provided
(used) by financing activities
|
|
(5,541,654)
|
|
|
|
(3,446,183)
|
|
|
|
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
|
(880,459)
|
|
|
|
1,837,459
|
|
|
Cash and cash
equivalents at beginning of period
|
|
2,115,652
|
|
|
|
1,559,350
|
|
|
Cash and cash
equivalents at end of period
|
$
|
1,235,193
|
|
|
$
|
3,396,809
|
|
|
|
|
|
|
|
|
Supplemental
Disclosures of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid (net of
capitalized interest)
|
$
|
1,652,872
|
|
|
$
|
888,720
|
|
|
Income taxes paid (net
of refunds received)
|
$
|
1,522,904
|
|
|
$
|
2,568,081
|
|
|
|
|
|
|
|
|
Supplemental
Schedule of Noncash Investing and Financing
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared and
unpaid
|
$
|
94,587
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
Gross additions to
properties and equipment
|
$
|
26,392,844
|
|
|
$
|
31,607,517
|
|
|
Net increase
(decrease) in accounts receivable for properties
|
|
|
|
|
|
|
and equipment
additions
|
|
(687,689)
|
|
|
|
633,853
|
|
|
Capital expenditures
and acquisitions
|
$
|
25,705,155
|
|
|
$
|
32,241,370
|
|
|
Derivative Contracts as
of October 31, 2023
|
|
|
|
Production
volume
|
|
|
|
|
|
Contract
period
|
|
covered per
month
|
|
Index
|
|
Contract
price
|
|
Natural gas costless
collars
|
|
|
|
|
|
|
|
October - December
2023
|
|
20,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.00 floor / $4.70
ceiling
|
|
October - December
2023
|
|
25,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $7.00
ceiling
|
|
November 2023 - March
2024
|
|
30,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.25 floor / $5.25
ceiling
|
|
December 2023 -
September 2024
|
|
30,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.00 floor / $3.60
ceiling
|
|
January 2024
|
|
135,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$4.50 floor / $7.90
ceiling
|
|
February
2024
|
|
125,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$4.50 floor / $7.90
ceiling
|
|
March 2024
|
|
130,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$4.50 floor / $7.90
ceiling
|
|
April 2024
|
|
90,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $4.70
ceiling
|
|
May 2024
|
|
95,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $4.70
ceiling
|
|
June 2024
|
|
90,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $4.70
ceiling
|
|
January - March
2024
|
|
30,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.00 floor / $6.00
ceiling
|
|
October 2024 - June
2025
|
|
30,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.00 floor / $5.00
ceiling
|
|
November 2024 - March
2025
|
|
90,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.25 floor / $5.25
ceiling
|
|
November - December
2024
|
|
35,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $5.15
ceiling
|
|
January - March
2025
|
|
30,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $5.15
ceiling
|
|
Natural gas fixed
price swaps
|
|
|
|
|
|
|
|
October - December
2023
|
|
100,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.37
|
|
October - December
2023
|
|
20,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.57
|
|
December 2023 -
February 2024
|
|
135,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.65
|
|
October 2023
|
|
20,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.58
|
|
October 2023
|
|
50,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$2.52
|
|
March 2024
|
|
127,500
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.65
|
|
April - June
2024
|
|
10,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.21
|
|
April - October
2024
|
|
50,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.17
|
|
April - July
2024
|
|
127,500
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.24
|
|
July - October
2024
|
|
75,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.47
|
|
July - October
2024
|
|
25,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.47
|
|
August - September
2024
|
|
120,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.24
|
|
October 2024
|
|
105,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.24
|
|
November - December
2024
|
|
70,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$4.16
|
|
January - March
2025
|
|
60,000 Mmbtu
|
|
NYMEX Henry
Hub
|
|
$4.16
|
|
Oil costless
collars
|
|
|
|
|
|
|
|
January 2024
|
|
1,850 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
|
February
2024
|
|
1,700 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
|
March 2024
|
|
1,750 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
|
April 2024
|
|
1,700 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
|
May 2024
|
|
1,750 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
|
June 2024
|
|
1,650 Bbls
|
|
NYMEX WTI
|
|
$63.00 floor / $76.00
ceiling
|
|
January - March
2024
|
|
1,650 Bbls
|
|
NYMEX WTI
|
|
$65.00 floor / $76.50
ceiling
|
|
April - June
2024
|
|
500 Bbls
|
|
NYMEX WTI
|
|
$65.00 floor / $76.50
ceiling
|
|
July - October
2024
|
|
1,650 Bbls
|
|
NYMEX WTI
|
|
$65.00 floor / $76.50
ceiling
|
|
Oil fixed price
swaps
|
|
|
|
|
|
|
|
October - December
2023
|
|
1,500 Bbls
|
|
NYMEX WTI
|
|
$67.55
|
|
October - December
2023
|
|
750 Bbls
|
|
NYMEX WTI
|
|
$70.05
|
|
October - December
2023
|
|
1,500 Bbls
|
|
NYMEX WTI
|
|
$80.80
|
|
October - December
2023
|
|
1,000 Bbls
|
|
NYMEX WTI
|
|
$80.74
|
|
December 2023 - March
2024
|
|
750 Bbls
|
|
NYMEX WTI
|
|
$71.75
|
|
April - October
2024
|
|
1,000 Bbls
|
|
NYMEX WTI
|
|
$66.10
|
|
April - June
2024
|
|
1,300 Bbls
|
|
NYMEX WTI
|
|
$70.59
|
|
November 2024 - March
2025
|
|
1,600 Bbls
|
|
NYMEX WTI
|
|
$64.80
|
|
April - June
2025
|
|
1,000 Bbls
|
|
NYMEX WTI
|
|
$68.00
|
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
The Company defines "adjusted EBITDA" as earnings before
interest, taxes, depreciation and amortization, or EBITDA,
excluding non-cash 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. The Company has included a presentation of adjusted EBITDA
because it recognizes that certain investors consider this amount
to be a useful means of measuring the Company's ability to meet its
debt service obligations and evaluating its 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 quarters indicated:
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
Nine Months
Ended
|
|
|
Three Months
Ended
|
|
|
Sept. 30,
2023
|
|
|
Sept. 30,
2022
|
|
|
Sept. 30,
2023
|
|
|
Sept. 30,
2022
|
|
|
June 30,
2023
|
|
|
Net Income
(Loss)
|
$
|
1,895,403
|
|
|
$
|
9,158,468
|
|
|
$
|
11,407,356
|
|
|
$
|
13,727,023
|
|
|
$
|
(41,291)
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(benefit)
|
|
589,000
|
|
|
|
2,431,000
|
|
|
|
3,490,000
|
|
|
|
3,440,000
|
|
|
|
(166,000)
|
|
|
Interest
expense
|
|
556,941
|
|
|
|
471,716
|
|
|
|
1,638,708
|
|
|
|
988,273
|
|
|
|
524,294
|
|
|
DD&A
|
|
2,022,709
|
|
|
|
1,550,410
|
|
|
|
6,123,031
|
|
|
|
5,694,358
|
|
|
|
2,210,332
|
|
|
Impairment
expense
|
|
36,460
|
|
|
|
2,703
|
|
|
|
38,533
|
|
|
|
8,980
|
|
|
|
-
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash gains
(losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
on
derivatives
|
|
(940,592)
|
|
|
|
1,639,703
|
|
|
|
1,365,872
|
|
|
|
(6,850,017)
|
|
|
|
(865,935)
|
|
|
Gains (losses) on asset
sales
|
|
243,041
|
|
|
|
3,558,611
|
|
|
|
4,671,254
|
|
|
|
6,544,575
|
|
|
|
10,230
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash receipts from
(payments on)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
off-market derivative
contracts(1)
|
|
-
|
|
|
|
(1,057,197)
|
|
|
|
(373,745)
|
|
|
|
(4,834,703)
|
|
|
|
-
|
|
|
Restricted stock and
deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
director's
expense
|
|
522,965
|
|
|
|
1,037,179
|
|
|
|
1,861,219
|
|
|
|
2,080,110
|
|
|
|
703,667
|
|
|
Adjusted
EBITDA
|
$
|
6,321,029
|
|
|
$
|
8,395,965
|
|
|
$
|
18,147,976
|
|
|
$
|
21,409,483
|
|
|
$
|
4,086,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The initial receipt
of $8.8 million of cash from BP Energy Company, or BP, for entering
into the off-market derivative contracts had no effect on the
Company's statement of operations and was considered cash flow from
financing activities. A portion of subsequent settlements with BP
had no effect on the Company's statement of operations.
|
|
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. The Company has included a presentation of debt to adjusted
EBITDA (TTM) because it recognizes that certain investors consider
such ratios to be a useful means of measuring the Company's ability
to meet its debt service obligations and for evaluating its
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 reconciliation 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
|
|
|
Sept. 30,
2023
|
|
|
Sept. 30,
2022
|
|
|
Net Income
(Loss)
|
$
|
14,753,489
|
|
|
$
|
20,409,272
|
|
|
Plus:
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
4,471,000
|
|
|
|
4,202,000
|
|
|
Interest
expense
|
|
2,276,406
|
|
|
|
1,164,992
|
|
|
DD&A
|
|
7,925,145
|
|
|
|
7,278,118
|
|
|
Impairment
expense
|
|
6,139,229
|
|
|
|
14,565
|
|
|
Less:
|
|
|
|
|
|
|
Non-cash gains
(losses)
|
|
|
|
|
|
|
on
derivatives
|
|
7,630,914
|
|
|
|
(2,299,518)
|
|
|
Gains (losses) on asset
sales
|
|
5,605,461
|
|
|
|
4,423,648
|
|
|
Plus:
|
|
|
|
|
|
|
Cash receipts from
(payments on)
|
|
|
|
|
|
|
off-market derivative
contracts(1)
|
|
(1,277,206)
|
|
|
|
(7,522,794)
|
|
|
Restricted stock and
deferred
|
|
|
|
|
|
|
director's
expense
|
|
2,430,303
|
|
|
|
2,403,525
|
|
|
Adjusted
EBITDA
|
$
|
23,481,991
|
|
|
$
|
25,825,548
|
|
|
|
|
|
|
|
|
Debt
|
$
|
30,750,000
|
|
|
$
|
28,300,000
|
|
|
Debt to Adjusted
EBITDA (TTM)
|
|
1.31
|
|
|
|
1.10
|
|
|
|
|
|
|
|
|
(1) The initial receipt
of $8.8 million of cash from BP for entering into the off-market
derivative contracts had no effect on the Company's statement of
operations and was considered cash flow from financing activities.
A portion of subsequent settlements with BP had no effect on the
Company's statement of operations.
|
|
Adjusted Pretax Net Income
(Loss) Reconciliation
"Adjusted pretax net income (loss)" is defined as earnings
before taxes and impairment expense, excluding non-cash gains
(losses) on derivatives and gains (losses) on asset sales and
including cash receipts from (payments on) off-market derivatives.
The Company has included a presentation of adjusted pretax net
income (loss) because it recognizes that certain investors consider
this amount to be a useful means of measuring the Company's ability
to meet its debt service obligations and evaluating its financial
performance. Adjusted pretax 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 pretax 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 pretax net income (loss) for the periods indicated:
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
Nine Months
Ended
|
|
|
Three Months
Ended
|
|
|
Sept. 30,
2023
|
|
|
Sept. 30,
2022
|
|
|
Sept. 30,
2023
|
|
|
Sept. 30,
2022
|
|
|
June 30,
2023
|
|
|
Net Income
(Loss)
|
$
|
1,895,403
|
|
|
$
|
9,158,468
|
|
|
$
|
11,407,356
|
|
|
$
|
13,727,023
|
|
|
$
|
(41,291)
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
589,000
|
|
|
|
2,431,000
|
|
|
|
3,490,000
|
|
|
|
3,440,000
|
|
|
|
(166,000)
|
|
|
Impairment
expense
|
|
36,460
|
|
|
|
2,703
|
|
|
|
38,533
|
|
|
|
8,980
|
|
|
|
-
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash gains
(losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
on
derivatives
|
|
(940,592)
|
|
|
|
1,639,703
|
|
|
|
1,365,872
|
|
|
|
(6,850,017)
|
|
|
|
(865,935)
|
|
|
Gains (losses) on asset
sales
|
|
243,041
|
|
|
|
3,558,611
|
|
|
|
4,671,254
|
|
|
|
6,544,575
|
|
|
|
10,230
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash receipts from
(payments on)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
off-market derivative
contracts(1)
|
|
-
|
|
|
|
(1,057,197)
|
|
|
|
(373,745)
|
|
|
|
(4,834,703)
|
|
|
|
-
|
|
|
Adjusted Pretax Net
Income (Loss)
|
$
|
3,218,414
|
|
|
$
|
5,336,660
|
|
|
$
|
8,525,018
|
|
|
$
|
12,646,742
|
|
|
$
|
648,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
35,983,116
|
|
|
|
35,573,813
|
|
|
|
35,961,570
|
|
|
|
34,833,427
|
|
|
|
35,965,281
|
|
|
Diluted
|
|
36,656,272
|
|
|
|
35,916,878
|
|
|
|
36,670,494
|
|
|
|
35,204,241
|
|
|
|
35,965,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Pretax Net
Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per basic
share
|
$
|
0.09
|
|
|
$
|
0.15
|
|
|
$
|
0.24
|
|
|
$
|
0.36
|
|
|
$
|
0.02
|
|
|
Adjusted Pretax Net
Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
per diluted
share
|
$
|
0.09
|
|
|
$
|
0.15
|
|
|
$
|
0.23
|
|
|
$
|
0.36
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The initial receipt
of $8.8 million of cash from BP for entering into the off-market
derivative contracts had no effect on the Company's statement of
operations and was considered cash flow from financing activities.
A portion of subsequent settlements with BP had no effect on the
Company's statement of operations.
|
|
PHX Minerals Inc. (NYSE: PHX) Fort
Worth-based, PHX Minerals Inc. is a natural gas and oil mineral
company with a strategy to proactively grow its mineral position in
its core focus areas. PHX owns mineral acreage principally located
in Oklahoma, Texas, Louisiana, North
Dakota and Arkansas.
Additional information on the Company 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 operational outlook; 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 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 forward-looking statements
are not guarantees of future performance and that actual results or
developments may differ materially from those projected. 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-reports-results-for-the-quarter-ended-sept-30-2023-increases-fixed-quarterly-dividend-33-and-expands-borrowing-base-301982161.html
SOURCE PHX MINERALS INC.