It took nearly two years but Philadelphia-based WhiteHawk Income Corporation has finally succeeded in acquiring Fort Worth-based PHX Minerals Inc. and as a result will have more than 10,000 operating wells across the U.S.
In an all-cash deal involving WhiteHawk offering $4.35 per share and worth a total value of approximately $187 million, it will add 1.8 million gross unit acres of premier natural gas mineral and royalty assets. The acquisition greatly expands WhiteHawk’s footprint in the core of the Haynesville Shale in East Texas/North Louisiana. It also makes WhiteHawk a player in Oklahoma’s STACK/SCOOP region.
For PHX Mineral shareholders, they will receive $4.35 in cash without interest for each share of PHX common stock owned. The announce explained the consideration represents:
- a 21.8% premium to PHX’s closing share price Wednesday, May 7, 2025;
- a 15.7% and 12.2% premium to PHX’s 30- and 60-Day volume weighted average share price of $3.76 and $3.88, respectively, as of May 7, 2025; and
- a 23.9% premium to PHX’s unaffected share price as of October 14, 2024, the last day prior to WhiteHawk’s latest public disclosure of its proposal to acquire PHX.
“We are excited to announce this transaction with WhiteHawk, which will provide compelling and certain value to all PHX stockholders,” said Chad L. Stephens, President and CEO of PHX.
“PHX’s Board of Directors conducted a robust strategic alternatives process to maximize value for our stockholders, and we unanimously determined the transaction with WhiteHawk achieves this objective. This transaction is also a testament to the PHX team’s work to evolve our business and build a best-in-class natural gas minerals portfolio, and I thank them for their dedication.”
“The WhiteHawk transaction represents the culmination of our mineral only strategy which we embarked on in early 2020,” said Mark T. Behrman, Chairman of PHX. “The Board of Directors commends the management team for the successful transition of PHX’s business strategy over the last five years and the value created over that period of time.”
“The acquisition of PHX is a significant milestone that more than doubles our gross unit acre footprint and producing natural gas wells in highly established basins with some of the country’s largest natural gas producers,” said Daniel C. Herz, WhiteHawk’s Chairman and Chief Executive Officer.
“PHX will allow us to expand our presence in the core Haynesville Shale and enter the SCOOP / STACK as well. Combined with our current 1.35 million gross unit acres in the core of the Marcellus Shale and Haynesville Shale, we will have meaningful exposure to the top natural gas basins in the United States. PHX’s assets are underpinned by over 6,500 producing wells and significant undeveloped inventory that will increase and diversify our cash flows while providing potential upside. This transaction reflects our strategy to grow with assets that provide cash flow generation with no capital expenditures.”
Mr. Herz continued, “We look forward to working closely with the PHX team in Oklahoma City as we integrate our operations and unlock the value of our combined portfolio.”
Following the close of the transaction, WhiteHawk will own royalty interests across approximately 3.1 million gross unit acres, with cash flow from approximately 10,163 producing wells, 368 wells-in-progress, 330 permitted wells and more than 7,250 undeveloped locations across its portfolio, on a pro forma basis.
WhiteHawk will also increase its exposure to some of its top operators, including Expand Energy, Comstock Resources and Aethon Energy in the Haynesville Shale, while adding other top operators including Continental Resources and Devon Energy, in the SCOOP / STACK. WhiteHawk’s existing Marcellus Shale assets are underpinned by top natural gas operators including EQT, Range Resources, CNX Resources, and Antero Resources.
Terms of the Agreement
WhiteHawk will, through a subsidiary, commence a cash tender offer to acquire all outstanding shares of common stock of PHX for a purchase price of $4.35 per share of common stock, net to the holder thereof, in cash, without interest thereon and subject to any applicable tax withholding. As soon as practicable following the successful completion of the Offer, WhiteHawk will acquire all shares not acquired in the tender through a second-step merger for the same consideration per share paid in the Offer.
WhiteHawk currently holds approximately 2.5% of the outstanding shares of PHX common stock. Additionally, concurrent with the signing of the merger agreement, directors and officers of PHX beneficially owning approximately 10% of PHX’s outstanding common stock entered into Tender and Support Agreements, pursuant to which each individual agreed to tender PHX shares they hold into the Offer.
The transaction is expected to close by early in the third quarter 2025 and is subject to customary closing conditions, including the tender into the Offer of a minimum amount of PHX’s common stock and other conditions as set forth in the merger agreement. The transaction has been unanimously approved by PHX’s Board of Directors. Following the completion of the transaction, PHX will no longer trade on the New York Stock Exchange.
WhiteHawk will finance this transaction with a combination of new equity and additional debt under its existing senior secured notes.
