PHX Minerals Inc. turned its financial situation around as first fiscal quarter results of 2022 showed net income of $6.7 million rather than losses that it experienced in the fourth quarter of 2021 and a year earlier as well.
Net income amounted to 20 cents a share compared to a $3.8 million and 14 cent a share net loss in the fourth quarter of 2021. A year ago, PHX also reported a net loss of $0.6 million and 3 cents a share.
The company’s adjusted EBITDA grew to $4.4 million from the $2.9 million in the first quarter of 2021 and increased from the $4.2 million reported in the fourth fiscal quarter of 2021.
PHX also reported a 23% increase in royalty production volumes for the first fiscal quarter of 2022, moving from 998 MMcfe in the fourth quarter of 2021 to 1,225 MMcfe.
The company’s total debt also increased to $20 million due to its acquisition of developed minerals in the Haynesville. That’s a 14% increase from $17.5 million as of Sept. 30, 2021. Borrowing base also increased 16% to $32 million as of Dec. 31, 2021.
PHX managed to close on its acquisition of 2,151 net royalty acres in Oklahoma’s SCOOP play and in the Haynesville play of East Texas and Louisiana. The acquisition totaled $13.8 million in cash and 1.5 million shares of PHX common stock. The company also reported it sold 7,201 of predominantly undeveloped and unleased net mineral acres for $2,088,856.
“As we move into PHX’s fiscal year 2022, you will note our first quarter 2022 results clearly demonstrate the traction we continue to gain from our mineral acquisition strategy, with royalty volumes increasing and working interest volumes declining,” said Chad L. Stephens, President and CEO.
He said the improvements are a direct result of the company’s mineral acquisitions.
“These mineral acquisitions provide immediate royalty volumes and cash flow along with an inventory of drilling locations that, as these locations are developed in the near future, will contribute additional growing royalty volumes and cash flow,” he added.
PHX operations showed the company converted 68 gross wells to producing status and another 54 gross wells were in the process of being added across its mineral position.
At Jan. 31, 2022, the company had a total of 65 gross wells in progress across its mineral positions and 18 gross active permitted wells. As of Jan. 31, 2022, there were 20 rigs operating on the company’s acreage and 92 rigs operating within 2.5 miles of its acreage.
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