PHX Minerals recorded a slight drop in net income in the third quarter, slipping from $1.3 million and 4 cents a share in the second quarter to $1.1 million and 3 cents a share as the company also saw declines in production and converting wells in production.
The Fort Worth-based company said earnings compared to $1.9 million and 5 cents a share a year earlier. Adjusted EBITDA totaled $4.9 million compared to $6.4 million in the second quarter and $6.3 million from a year ago.
Royalty production volumes also decreased 23% to 2,098 Mmcfe compared to the second quarter but were up 1% from the third quarter of 2023. Total production volumes were down 20% from the second quarter of 2024.
PHX reported it converted 46 gross wells to producing status compared to 55 wells at the end of the second quarter and 71 wells at the end of the third quarter 2023. The firm’s inventory totaled 278 wells in progress compared to 241 at the end of the second quarter.
PHX reported its debt declined $5 million to $27.8 million since the end of 2023.
“PHX generated our second-highest quarter for royalty volumes in our history, validating the quality of our asset base even amidst continued volatility in commodity pricing. We remain positive on natural gas prices as we move into a seasonal stronger period and are seeing sequential increased rig activities on and around our mineral acreage, further bolstering our longer-term outlook,” stated Chad L. Stephens, President and CEO.
“We purchased 325 net royalty acres for $3.0 million and replaced 100% of the wells in progress that converted to production. We also reduced our debt by $1.0 million sequentially with cashflow generated from our production. With a strong balance sheet, and a proven track record of acquiring attractive mineral assets that produce cash flow even during challenging pricing, we are well-positioned for continued success.”
