Oklahoma City-based Panhandle Oil and Gas says it recorded a net loss of nearly $41 million in fiscal 2019 or $2.43 per share while at the same time its adjusted earnings grew 45 percent in the year.
The company recently announced its earnings, indicating the net loss of $40.7 million in fiscal 2019 compared to net income of $14.6 million or 86 cents a share in fiscal 2018.
Panhandle’s adjusted EBITDA was up 45% to $37.6 million compared to $26 million in 2018 including a $19 million gain on asset sales. The adjusted earnings for the 2019 fourth quarter was $10.1 million compared to $5.6 million in the fourth quarter of 2018.
Chad L. Stephens, Interim CEO, commented, “We are pleased to report the results reflected in our fourth quarter and full-year 2019 financials. Fiscal 2019 was, in many ways, a transitional year for Panhandle. We made significant progress in shifting our strategy to focus solely on minerals and royalties. Panhandle elected not to participate with a working interest in any wells proposed in fiscal 2019, and management made the strategic decision at the end of 2019 to cease participating with a working interest on any of our leasehold or mineral acreage going forward.”
Stephens said royalty volumes increased and now represent the highest percentage of the firm’s total volumes in the last 15 years. At the same time, Panhandle reduced outstanding debt by 31% from $51 million to $35.4 million.
“Subsequent to Sept. 30, 2019, the Company closed on a sale of 530 net mineral acres for $3.4 million. Our first sizeable acquisition is scheduled to close in the first fiscal quarter of 2020 and we plan to fund that acquisition with cash on hand and an immaterial addition to our outstanding debt.”
The sale involved 530 net mineral acres in Eddy County, New Mexico for $3.4 million. Closing was in November and a week later, Panhandle signed a purchase agreement to acquire 704 net mineral areas in the core of Oklahoma’s STACK for $9.65 million. Closing on the purchase is expected by the end of the calendar year.
“Total return to shareholders for fiscal 2019 was $25.7 million through stock repurchases, dividends and debt reduction. This equates to an effective annualized yield of 11.3% for that period,” added Stephens.