PHX Minerals (PHX)2024-11-06 21:32Financial Performance - Net income for the quarter ended Sept. 30, 2024, was $1.1 million, a decrease of 15.4% from $1.3 million in the previous quarter and a decrease of 42.1% from $1.9 million in the same quarter last year[2]. - Adjusted EBITDA for the quarter was $4.9 million, down 23.4% from $6.4 million in the previous quarter and down 22.1% from $6.3 million in the same quarter last year[2]. - The Company recorded net income of $1.1 million, or $0.03 per diluted share, for the quarter ended Sept. 30, 2024, a decrease from $1.90 million, or $0.05 per diluted share, for the same quarter in 2023[11]. - For the nine months ended Sept. 30, 2024, net income was $2.2 million, or $0.06 per diluted share, down from $11.4 million, or $0.31 per diluted share, for the same period in 2023[15]. - Net income for the nine months ended September 30, 2024, was $2,212,466, down from $11,407,356 for the same period in 2023, representing a decrease of about 80.6%[26]. - Net income for the TTM ended September 30, 2024, was $4,725,910, a decrease from $14,753,489 for the TTM ended September 30, 2023[32]. Production and Sales - Royalty production volumes decreased by 23% to 2,098 Mmcfe compared to the previous quarter, but increased by 1% compared to the same quarter last year[2]. - Total production volumes decreased by 20% to 2,379 Mmcfe compared to the previous quarter, but increased by 1% compared to the same quarter last year[2]. - The company converted 46 gross (0.18 net) wells to producing status, a decrease from 55 gross (0.40 net) wells in the previous quarter and 71 gross (0.16 net) wells in the same quarter last year[2]. - The percentage of total production volumes attributable to natural gas was 80% for the quarter ended Sept. 30, 2024[8]. - Natural gas, oil, and NGL revenue decreased by $1.0 million, or 11%, for the quarter ended Sept. 30, 2024, primarily due to a 17% decrease in natural gas prices and a 5% decrease in oil volumes[12]. - Natural gas, oil, and NGL revenue decreased by $3.2 million, or 11%, for the nine months ended Sept. 30, 2024, due to a 22% decrease in natural gas prices[15]. Debt and Equity - Total debt was $27.8 million, down $5.0 million since Dec. 31, 2023, with a debt-to-adjusted EBITDA (TTM) ratio of 1.36x as of Sept. 30, 2024[2]. - Long-term debt decreased from $32,750,000 to $27,750,000, a reduction of about 15.3%[25]. - Total liabilities decreased from $43,276,866 to $39,211,242, a decline of approximately 9.6%[25]. - Total stockholders' equity increased from $123,231,414 to $123,612,869, a rise of about 0.3%[25]. - The company reported a total of $1,000,000 in borrowings under the credit facility, compared to $16,000,000 in the previous year, indicating a significant reduction in reliance on debt financing[26]. Cash Flow and Investments - Cash provided by operating activities was $15,207,852, compared to $20,809,684 in the prior year, a decrease of approximately 27.0%[26]. - The company reported a net cash used in investing activities of $(4,810,308), compared to $9,556,666 in the previous year, indicating a shift in investment strategy[26]. - Cash and cash equivalents increased from $806,254 to $2,601,681, an increase of approximately 223.5%[26]. - Capital expenditures for the nine months ended September 30, 2024, were $(64,628), significantly lower than $(321,396) in the prior year[26]. Derivative Contracts and Risk Management - The Company had a net gain on derivative contracts of $1.1 million for the quarter ended Sept. 30, 2024, compared to a net loss of $0.3 million for the same quarter in 2023[14]. - The Company had a net gain on derivative contracts of $1.3 million for the nine months ended Sept. 30, 2024, compared to a net gain of $3.6 million for the same period in 2023[16]. - The company has established natural gas costless collars with a production volume of 30,000 Mmbtu per month at a price range of $3.00 floor / $5.00 ceiling from October 2024 to June 2025[27]. - The company has fixed price swaps for oil with a volume of 1,000 Bbls at a price of $68.80 from October 2024 to August 2025[28]. - The company has a natural gas fixed price swap for 125,000 Mmbtu at a price of $3.01 from April to August 2025[27]. Operational Strategy - The company has a strategy to proactively grow its mineral position in core focus areas, primarily located in Oklahoma, Texas, Louisiana, North Dakota, and Arkansas[32]. - The company acknowledges the limitations of the debt-to-adjusted EBITDA (TTM) ratio and advises against using it in isolation for financial performance evaluation[32]. - Forward-looking statements indicate potential risks related to operational outlook, market conditions, and the company's ability to execute business strategies[33].