PHX MINERALS INC., reported a turn-around in earnings in the second quarter, moving from a net loss to an actual gain of net income. But its six month earnings lagged seriously behind the first half of 2023.
The Fort Worth-based energy company recorded net income of $1.3 million or 4 cents a share compared to a net loss of $0.2 million and 1 cent a share in the first quarter of the year. Adjusted EBITDA was $6.4 million, beating the $4.6 million for the quarter ended March 31, 2024.
Natural gas, oil and NGL revenue increased $2.6 million, or 36%, for the quarter ended June 30, 2024, compared to the quarter ended June 30, 2023, due to increases in natural gas and oil volumes of 33% and 26%, respectively, and increases in natural gas, oil and NGL prices of 7%, 5%, and 25%, respectively, partially offset by a decrease in NGL volumes of 6%.
PHX reported a 46% increase in royalty production volumes in the second quarter and credited high interest high impact wells coming online in the Haynesville. During the quarter, the company converted 55 wells to producing status compared to 85 wells in the first quarter.
PHX stated it has a current inventory of 241 wells in progress compared to 230 wells during the first quarter.
The company’s total debt of $28.8 million is down $4 million since the end of 2023.
“The operational and financial results for the second quarter again provide compelling evidence about the quality of our asset base. Royalty production reached record levels during the quarter, and we had a strong conversion of high interest high impact wells driving robust quarter-over-quarter production growth,” stated Chad L. Stephens, President and CEO.
“Our wells in progress metric remains strong, including several other high interest high impact wells. This demonstrates the continued operator activity on our minerals, despite the dramatic year over year decrease in the rig count impacted by the current commodity price environment. We do not control pace of development or well completion timing, thus, we expect continued quarterly lumpiness in our volumes.”
For the past six months, PHX had net income of $1.1 million or 3 cents a share, far below the $9.5 million and 26 cents a share for the six months that ended June 30, 2023. The change in net income was principally the result of a decrease in natural gas, oil and NGL sales, a decrease in gains associated with our hedge contracts, and a decrease in gains on asset sales, partially offset by a decrease in income tax provision.
