PHX MINERALS INC. Reports Second Quarter 2021 Results

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

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

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

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

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

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

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

(1)      

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

 

OPERATING HIGHLIGHTS



Second Quarter Ended



Second Quarter Ended



Six Months Ended



Six Months Ended



March 31, 2021



March 31, 2020



March 31, 2021



March 31, 2020


Mcfe Sold


2,296,802




2,373,135




4,371,139




4,651,622


Average Sales Price per Mcfe

$

3.63



$

3.04



$

3.38



$

3.18


Gas Mcf Sold


1,735,820




1,529,367




3,211,276




3,177,194


Average Sales Price per Mcf

$

2.52



$

1.64



$

2.44



$

1.89


Oil Barrels Sold


56,269




93,141




114,945




159,021


Average Sales Price per Barrel

$

55.89



$

44.99



$

47.73



$

48.14


NGL Barrels Sold


37,228




47,487




78,365




86,717


Average Sales Price per Barrel

$

22.24



$

11.05



$

18.54



$

13.14


 

Total Production for the last four quarters was as follows:


Quarter ended


Mcf Sold



Oil Bbls Sold



NGL Bbls Sold



Mcfe Sold


3/31/2021



1,735,820




56,269




37,228




2,296,802


12/31/2020



1,475,456




58,675




41,138




2,074,334


9/30/2020



1,423,602




55,626




46,737




2,037,779


6/30/2020



1,361,909




55,138




35,169




1,903,752


 

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


Quarter ended


Mcf Sold



Oil Bbls Sold



NGL Bbls Sold



Mcfe Sold


3/31/2021



924,969




31,768




19,088




1,230,105


12/31/2020



487,925




27,840




14,948




744,653


9/30/2020



491,234




27,326




20,181




776,276


6/30/2020



544,249




28,468




16,574




814,501


 

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


Quarter ended


Mcf Sold



Oil Bbls Sold



NGL Bbls Sold



Mcfe Sold


3/31/2021



810,851




24,501




18,140




1,066,697


12/31/2020



987,531




30,835




26,190




1,329,681


9/30/2020



932,368




28,300




26,556




1,261,503


6/30/2020



817,660




26,670




18,595




1,089,251


 

FINANCIAL HIGHLIGHTS




Second Quarter Ended



Second Quarter Ended



Six Months Ended



Six Months Ended




March 31, 2021



March 31, 2020



March 31, 2021



March 31, 2020


    Working Interest Sales


$

3,851,478



$

3,415,049



$

7,759,002



$

8,099,785


    Royalty Interest Sales


$

4,494,347



$

3,802,569



$

7,011,802



$

6,711,671


Natural Gas, Oil and NGL Sales


$

8,345,825



$

7,217,618



$

14,770,804



$

14,811,456



















Lease Bonuses and Rental Income


$

58,554



$

22,092



$

59,987



$

549,791


Total Revenue


$

6,079,493



$

11,311,287



$

12,272,137



$

21,887,818



















LOE per Mcfe


$

0.45



$

0.65



$

0.47



$

0.59


Transportation, Gathering and Marketing per Mcfe


$

0.57



$

0.57



$

0.59



$

0.59


Production Tax per Mcfe


$

0.19



$

0.16



$

0.16



$

0.15


G&A Expense per Mcfe


$

0.90



$

0.92



$

0.87



$

0.95


Interest Expense per Mcfe


$

0.12



$

0.15



$

0.13



$

0.15


DD&A per Mcfe


$

0.77



$

1.42



$

0.92



$

1.36


Total Expense per Mcfe


$

3.00



$

3.87



$

3.14



$

3.79



















Net Income (Loss)


$

(499,723)



$

(20,454,814)



$

(1,096,443)



$

(18,562,700)


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


$

1,333,989



$

(1,338,550)



$

1,535,619



$

2,527,231


Adjusted EBITDA (1)


$

3,379,671



$

2,381,541



$

6,143,848



$

9,573,688



















Cash Flow from Operations


$

4,205,726



$

4,009,901



$

4,677,107



$

6,108,342


CapEx - Drilling & Completing


$

297,015



$

34,490



$

425,098



$

139,755


CapEx - Mineral Acquisitions


$

64,758



$

81,422



$

7,934,504



$

10,254,016



















Borrowing Base










$

29,400,000



$

45,000,000


Debt










$

23,500,000



$

32,000,000


Debt/Adjusted EBITDA (TTM) (1)











2.34




1.14




(1)

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

SECOND QUARTER 2021 RESULTS

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

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

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

The Company had a net loss on derivative contracts of $2,348,143 in the 2021 quarter, as compared to a net gain of $4,071,577 in the 2020 quarter. The net loss on derivative contracts in the current period was principally due to the natural gas and oil collars and fixed price swaps being less beneficial in relation to their respective contracted volumes and prices at the beginning of the period, compared to such natural gas and oil collars and fixed price swaps being more beneficial in the comparative period causing a net gain.

The 22% decrease in total cost per Mcfe in the 2021 quarter, relative to the 2020 quarter, was primarily driven by a decrease in DD&A. DD&A decreased $1,595,701, or 47%, in the 2021 quarter to $0.77 per Mcfe, as compared to $1.42 per Mcfe in the 2020 quarter. $108,393 of the decrease was a result of production decreasing 3% in the 2021 quarter and $1,487,308 of the decrease was as a result of a $0.65 decrease in the DD&A rate per Mcfe. The rate decrease was mainly due to impairments taken at the end of the 2020 second quarter, which lowered the basis of the assets. The rate decrease was partially offset by lower natural gas, oil and NGL prices utilized in the reserve calculations during the 2021 quarter, as compared to prices used for the 2020 quarter, shortening the economic life of wells. This resulted in lower projected remaining reserves on a significant number of wells causing increased units of production DD&A.

SIX MONTHS 2021 RESULTS

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

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

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

The Company had a net loss on derivative contracts of $2,602,179 in the 2021 period, as compared to a net gain of $3,253,683 in the 2020 period. The net loss on derivative contracts in the current period was principally due to the natural gas and oil collars and fixed price swaps being less beneficial in relation to their respective contracted volumes and prices at the beginning of the period, compared to such natural gas and oil collars and fixed price swaps being more beneficial in the 2020 period causing a net gain.

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

OPERATIONS UPDATE

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











Bakken/




































Three



Arkoma
























SCOOP



STACK



Forks



Stack



Permian



Fayetteville



Haynesville



Other



Total


Gross Wells in Progress on PHX Acreage:





































As of 12/31/20



45




32




5




2




4




-




25




7




120


Net Change



-3




-19




-2




-




-1




-




-12




-3




-40


As of 3/31/21



42




13




3




2




3




-




13




4




80


Net Wells in Progress on PHX Acreage:





































As of 12/31/20



0.09




0.16




-




-




0.14




-




0.16




0.07




0.62


Net Change



-0.01




-0.13




-




-




-




-




-0.03




-0.01




-0.18


As of 3/31/21



0.08




0.03




-




-




0.14




-




0.13




0.06




0.44


Gross Active Permits on PHX Acreage:





































As of 12/31/20



29




15




10




7




-




-




-




13




74


Net Change



-15




-4




-4




-4




-




-




-




-7




-34


As of 3/31/21



14




11




6




3




-




-




-




6




40







































As of 3/31/21:





































Rigs Present on PHX Acreage



1




1




-




-




2




-




1




-




5


Rigs Within 2.5 Miles of PHX Acreage



5




11




1




-




3




-




5




2




27


Leasing Activity

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











Bakken/




































Three



Arkoma
























SCOOP



STACK



Forks



Stack



Permian



Fayetteville



Haynesville



Other



Total


During Three Months Ended 3/31/21:





































Net Mineral Acres Leased



-




1




-




-




41




-




-




326




368


Average Bonus per Net Mineral Acre



-



$

1,100




-




-



$

483




-




-



$

148



$

173


Average Royalty per Net Mineral Acre


-



13%




-



-



25%




-




-



18%



18%


 

ACQUISITION AND DIVESTITURE UPDATE

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











Bakken/




































Three



Arkoma
























SCOOP



STACK



Forks



Stack



Permian



Fayetteville



Haynesville



Other



Total


During Three Months Ended 3/31/21:





































Net Mineral Acres Purchased



-




-




-




-




-




-




11




-




11


Net Royalty Acres Purchased



-




-




-




-




-




-




18




-




18


Price per Net Royalty Acre



-




-




-




-




-




-



$

19,772




-



$

19,772


Net Mineral Acres Sold



-




-




-




-




-




-




-




-




-


Net Royalty Acres Sold



-




-




-




-




-




-




-




-




-


Price per Net Royalty Acre



-




-




-




-




-




-




-




-




-


 

SECOND QUARTER EARNINGS CALL

PHX will host a conference call to discuss second quarter results at 5:00 p.m. EDT on May 6, 2021. Management's discussion will be followed by a question and answer session with investors. To participate on the conference call, please dial 888-506-0062 (domestic) or 973-528-0011 (international). A replay of the call will be available for seven days after the call. The number to access the replay of the conference call is 877-481-4010 and the PIN for the replay is 40717.

FINANCIAL RESULTS


Statements of Operations



Three Months Ended March 31,



Six Months Ended March 31,



2021



2020



2021



2020


Revenues:






Natural gas, oil and NGL sales

$

8,345,825



$

7,217,618



$

14,770,804



$

14,811,456


Lease bonuses and rental income


58,554




22,092




59,987




549,791


Gains (losses) on derivative contracts


(2,348,143)




4,071,577




(2,602,179)




3,253,683


Gain on asset sales


23,257




-




43,525




3,272,888




6,079,493




11,311,287




12,272,137




21,887,818


Costs and expenses:
















Lease operating expenses


1,030,651




1,542,199




2,035,063




2,723,870


Transportation, gathering and marketing


1,319,514




1,356,628




2,600,479




2,739,629


Production taxes


443,154




373,754




719,180




701,035


Depreciation, depletion and amortization


1,777,817




3,373,518




4,038,466




6,329,219


Provision for impairment


-




29,545,702




-




29,545,702


Interest expense


267,865




346,573




569,763




717,238


General and administrative


2,059,476




2,174,661




3,790,573




4,397,689


Other expense (income)


(102,261)




40,066




(98,944)




29,136




6,796,216




38,753,101




13,654,580




47,183,518


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


(716,723)




(27,441,814)




(1,382,443)




(25,295,700)


















Provision (benefit) for income taxes


(217,000)




(6,987,000)




(286,000)




(6,733,000)


















Net income (loss)

$

(499,723)



$

(20,454,814)



$

(1,096,443)



$

(18,562,700)


















































Basic and diluted earnings (loss) per common share

$

(0.02)



$

(1.24)



$

(0.05)



$

(1.12)


















Basic and diluted weighted average shares outstanding:
















Common shares


22,429,777




16,384,687




22,403,678




16,362,057


Unissued, directors' deferred compensation shares


178,597




139,390




177,923




186,443




22,608,374




16,524,077




22,581,601




16,548,500


















Dividends declared per share of
















common stock and paid in period

$

0.01



$

0.04



$

0.02



$

0.08


















Dividends declared per share of
















common stock and to be paid in quarter ended June 30

$

0.01



$

-


























 

Balance Sheets



March 31, 2021



Sept. 30, 2020


Assets








Current assets:








Cash and cash equivalents

$

1,270,482



$

10,690,395


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


4,712,793




2,943,220


allowance for uncollectable accounts)








Refundable income taxes


2,448,871




3,805,227


Other


752,248




351,088


Total current assets


9,184,394




17,789,930










Properties and equipment at cost, based on








   successful efforts accounting:








Producing natural gas and oil properties


329,708,071




324,886,491


Non-producing natural gas and oil properties


21,012,897




18,993,814


Other


582,444




582,444




351,303,412




344,462,749


Less accumulated depreciation, depletion and amortization


(265,863,136)




(263,590,801)


Net properties and equipment


85,440,276




80,871,948










Operating lease right-of-use assets


649,500




690,316


Other, net


593,150




669,641


Total assets

$

95,867,320



$

100,021,835










Liabilities and Stockholders' Equity








Current liabilities:








Accounts payable

$

672,507



$

997,637


Derivative contracts, net


3,000,530




281,942


Current portion of operating lease liability


129,672




127,108


Accrued liabilities and other


1,382,066




1,297,363


Short-term debt


-




1,750,000


Total current liabilities


5,184,775




4,454,050










Long-term debt


23,500,000




27,000,000


Deferred income taxes, net


1,041,007




1,329,007


Asset retirement obligations


2,927,662




2,897,522


Derivative contracts, net


625,179




425,705


Operating lease liability, net of current portion


856,142




921,625










Stockholders' equity:








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








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








Class A voting common stock, $0.01666 par value;








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


380,268




377,304


Capital in excess of par value


11,150,749




10,649,611


Deferred directors' compensation


1,633,939




1,874,007


Retained earnings


54,402,724




56,244,100




67,567,680




69,145,022


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








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


(5,835,125)




(6,151,096)


Total stockholders' equity


61,732,555




62,993,926


Total liabilities and stockholders' equity

$

95,867,320



$

100,021,835


 


Condensed Statements of Cash Flows



Six Months Ended March 31,



2021



2020


Operating Activities



Net income (loss)

$

(1,096,443)



$

(18,562,700)


Adjustments to reconcile net income (loss) to net cash provided








  by operating activities:








Depreciation, depletion and amortization


4,038,466




6,329,219


Impairment of producing properties


-




29,545,702


Provision for deferred income taxes


(288,000)




(4,711,000)


Gain from leasing fee mineral acreage


(57,493)




(544,979)


Proceeds from leasing fee mineral acreage


64,047




559,462


Net (gain) loss on sales of assets


(62,097)




(3,265,449)


Directors' deferred compensation expense


100,254




140,130


Total (gain) loss on derivative contracts


2,602,179




(3,253,683)


Cash receipts (payments) on settled derivative contracts


315,883




1,530,912


Restricted stock awards


284,148




491,616


Other


31,544




7,225


Cash provided (used) by changes in assets and liabilities:








Natural gas, oil and NGL sales receivables


(1,732,801)




1,168,943


Other current assets


(388,864)




(232,349)


Accounts payable


(340,404)




117,561


Income taxes receivable


1,356,356




(2,072,428)


Other non-current assets


56,545




50,010


Accrued liabilities


(206,213)




(1,189,850)


Total adjustments


5,773,550




24,671,042


Net cash provided by operating activities


4,677,107




6,108,342










Investing Activities








Capital expenditures


(425,098)




(139,755)


Acquisition of minerals and overrides


(7,934,504)




(10,254,016)


Proceeds from sales of assets


21,000




3,376,049


Net cash provided (used) by investing activities


(8,338,602)




(7,017,722)










Financing Activities








Borrowings under Credit Facility


-




5,561,725


Payments of loan principal


(5,250,000)




(8,986,725)


Net proceeds from equity issuance


(53,482)




-


Purchases of treasury stock


-




(7,635)


Payments of dividends


(454,936)




(1,319,899)


Net cash provided (used) by financing activities


(5,758,418)




(4,752,534)










Increase (decrease) in cash and cash equivalents


(9,419,913)




(5,661,914)


Cash and cash equivalents at beginning of period


10,690,395




6,160,691


Cash and cash equivalents at end of period

$

1,270,482



$

498,777










Supplemental Schedule of Noncash Investing and Financing Activities
















Dividends declared and unpaid

$

289,997



$

-


Additions to asset retirement obligations

$

-



$

4


















Gross additions to properties and equipment

$

8,759,616



$

10,229,121


Equity offering used for acquisitions


(250,000)




-


Net (increase) decrease in accounts payable for properties








and equipment additions


(150,014)




164,650


Capital expenditures and acquisitions

$

8,359,602



$

10,393,771



 

Proved Reserves



Proved Reserves SEC Pricing



March 31, 2021



Sept. 30, 2020


Proved Developed Reserves:



Mcf of Gas


47,482,766




40,924,083


Barrels of Oil


1,096,654




1,148,989


Barrels of NGL


1,170,146




1,135,864


Mcfe (2)


61,083,566




54,633,201


Proved Undeveloped Reserves:








Mcf of Gas


2,403,400




1,448,690


Barrels of Oil


91,910




184,668


Barrels of NGL


27,920




83,993


Mcfe (2)


3,122,380




3,060,656


Total Proved Reserves:








Mcf of Gas


49,886,166




42,372,773


Barrels of Oil


1,188,564




1,333,657


Barrels of NGL


1,198,066




1,219,857


Mcfe (2)


64,205,946




57,693,857










10% Discounted Estimated Future








Net Cash Flows (before income taxes):








Proved Developed

$

40,765,559



$

33,270,804


Proved Undeveloped


3,913,169




5,659,479


Total

$

44,678,728



$

38,930,283


SEC Pricing








Gas/Mcf

$

1.96



$

1.62


Oil/Barrel

$

37.52



$

40.18


NGL/Barrel

$

10.95



$

9.95










Proved Reserves - Projected Future Pricing (3)










10% Discounted Estimated Future

Proved Reserves


Net Cash Flows (before income taxes):

March 31, 2021



Sept. 30, 2020


Proved Developed

$

73,345,570



$

63,648,347


Proved Undeveloped


5,830,561




7,197,350


Total

$

79,176,131



$

70,845,697










(2) Crude oil and NGL converted to natural gas on a one barrel of crude oil or NGL equals six Mcf of natural gas basis


(3) Projected futures pricing as of March 31, 2021 and Sept. 30, 2020 basis adjusted to Company wellhead price


 


Derivative Contracts as of May 3, 2021


Period












Collar Average



Collar Average


(Calendar Year)


Product


Volume Mcf/Bbl



Swap Price



Floor Price



Ceiling Price


Remaining 2021


Natural Gas



1,961,000







$

2.35



$

3.04


Remaining 2021


Natural Gas



1,025,000



$

2.81










2022


Natural Gas



2,200,500







$

2.40



$

3.12


2022


Natural Gas



377,500



$

2.61










2023


Natural Gas



86,000







$

2.25



$

2.96


2023


Natural Gas



84,000



$

2.56





























Remaining 2021


Crude Oil



27,500







$

36.78



$

45.14


Remaining 2021


Crude Oil



79,000



$

39.61










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:


Second Quarter Ended



Second Quarter Ended



Six Months Ended



Six Months Ended



March 31, 2021



March 31, 2020



March 31, 2021



March 31, 2020


Net Income (Loss)

$

(499,723)



$

(20,454,814)



$

(1,096,443)



$

(18,562,700)


Plus:
















    Unrealized (gains) losses on derivatives


2,050,712




(3,442,438)




2,918,062




(1,722,771)


    Income Tax Expense (Benefit)


(217,000)




(6,987,000)




(286,000)




(6,733,000)


    Interest Expense


267,865




346,573




569,763




717,238


    DD&A


1,777,817




3,373,518




4,038,466




6,329,219


    Impairment


-




29,545,702




-




29,545,702


Adjusted EBITDA

$

3,379,671



$

2,381,541



$

6,143,848



$

9,573,688


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:


Second Quarter Ended



Second Quarter Ended



Six Months Ended



Six Months Ended



First Quarter Ended



March 31, 2021



March 31, 2020



March 31, 2021



March 31, 2020



Dec. 30, 2020


Net Income (Loss)

$

(499,723)



$

(20,454,814)



$

(1,096,443)



$

(18,562,700)



$

(596,720)


Plus:




















    Unrealized (gains) losses




















    on derivatives


2,050,712




(3,442,438)




2,918,062




(1,722,771)




867,350


    Income Tax Expense




















 (Benefit)


(217,000)




(6,987,000)




(286,000)




(6,733,000)




(69,000)


    Interest Expense


267,865




346,573




569,763




717,238




301,898


    DD&A


1,777,817




3,373,518




4,038,466




6,329,219




2,260,649


Impairment


-




29,545,702




-




29,545,702




-


Adjusted EBITDA

$

3,379,671



$

2,381,541



$

6,143,848



$

9,573,688



$

2,764,177






















Gain on asset sales


23,257




-




43,525




3,272,888




20,268


Adjusted EBITDA excluding




















Gain on asset sales

$

3,356,414



$

2,381,541



$

6,100,323



$

6,300,800



$

2,743,909


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



March 31, 2021



March 31, 2020


Net Income (Loss)

$

(6,485,780)



$

(70,112,244)


Plus:








    Unrealized (gains) losses on derivatives


7,842,624




(3,399,709)


    Income Tax Expense (Benefit)


(1,842,000)




(23,655,000)


    Interest Expense


1,139,313




1,687,873


    DD&A


9,023,030




17,088,140


    Impairment


358,826




106,370,039


Adjusted EBITDA

$

10,036,013



$

27,979,099










Debt

$

23,500,000



$

32,000,000


Debt/Adjusted EBITDA


2.34




1.14


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:


Second Quarter Ended



Second Quarter Ended



Six Months Ended



Six Months Ended



March 31, 2021



March 31, 2020



March 31, 2021



March 31, 2020


Net Income (Loss)

$

(499,723)



$

(20,454,814)



$

(1,096,443)



$

(18,562,700)


Plus:
















Impairment


-




29,545,702




-




29,545,702


Unrealized (gains) losses on derivatives


2,050,712




(3,442,438)




2,918,062




(1,722,771)


   Income Tax Expense (Benefit)


(217,000)




(6,987,000)




(286,000)




(6,733,000)


Adjusted Pre-Tax Net Income (Loss)

$

1,333,989



$

(1,338,550)



$

1,535,619



$

2,527,231


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 255,000 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.

 

Cision View original content:http://www.prnewswire.com/news-releases/phx-minerals-inc-reports-second-quarter-2021-results-301285983.html

SOURCE PHX MINERALS INC.

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