Oklahoma City-based Panhandle Oil and Gas reported a $20 million net loss or $1.21 a share in the quarter ending March 31, 2020 on top of a non-cash impairment of $29.5 million.
The $20 million loss caused a continuing hit on the company’s net income which a year ago was a loss of $1.9 million. Panhandle blamed the growing loss on the impairment associated with the Fayetteville and Eagle Ford shales and lower commodity prices.
The company’s adjusted EBITDA for the second quarter of 2020 was $3.1 million, down from the $4 million reported a year ago. Still, Panhandle managed to reduce its debt from $35.4 million as of Sept. 30, 2019 to $32 million at the end of March this year. Net debt was further reduced to $29.3 million as of the first of May.
Like many other energy companies after the coronavirus and the oil crisis hit, Panhandle cut its expenses. The company reduced its G & A between $1 million to $2 million annually.
At its meeting on May 5, 2020, the Company’s Board of Directors approved a payment of a one cent per share quarterly dividend. The dividend will be payable on June 5, 2020, to stockholders of record on May 21, 2020.
The loss for the quarter came even after the company increased its production.
Total production increased 4% in the 2020 quarter, as compared to the 2019 quarter. Total production increased due to including a full quarter of results associated with the STACK acquisition, which closed in December 2019, and additional royalty oil wells coming online primarily in the Bakken. This increase was partially offset by the natural decline of the production base. Total oil, NGL and natural gas revenue dropped 13% in the 2020 quarter.
The natural gas production decrease of 5%is the result of naturally declining production in the STACK, Arkoma Stack and Fayetteville Shale, partially offset by royalty acquisition volumes in the STACK and Bakken and volumes identified in new royalty wells in the SCOOP and Bakken.
Chad L. Stephens, President and CEO, commented, “The economic downturn associated with COVID-19 caused commodity prices to decline further and reduced new drilling activity across the energy patch, including on our minerals.”
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Source: Panhandle Oil and Gas