PHX - Earnings call transcript Q1 2020

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Operator

Good day everyone and welcome to Panhandle Oil and Gas Inc.

First Quarter 2020 Earnings Conference Call. Today's conference is being recorded.

I would like to now turn the conference call over to Ralph D'Amico, Panhandle's Vice President, Investor Relations. Please go ahead.

Ralph D'Amico

us discuss joining quarter XXXX for results. you today our to first Thank the prepared Officer; today Stephens, me call With on for Officer; Winfield, Chief Robb remarks Chief myself. Financial and Executive Chad are

session. we remarks, the a open After prepared will call up to Q&A

Q&A also be by was During website on Investor webcasting who this session, Freda note Please at will is of also Investor the today earnings earlier Relations' that VP call issued the Operations. we press panhandleoilandgas.com. that Webb, also the on joined is we release website. The are our posted Relations'

differ I Chad, involve make and known estimates of uncertainties the everyone the remind Before statements earnings, statements call and the call, the and session, call. other expectations plans in or actual or expressed other materially filed supplemented be results those Q&A may turn revenue, amended over recent opportunities, forward-looking I'd most Exchange like by including as our plans, risks that These today's These forward-looking during to Form Commission. such annual report may with and company. quarterly XX-Q regarding to other on to or cause and may Form risks and we unknown XX-K from reports expected reports on that the Securities future are subsequent on implied detailed

based call. in known to information presented the this call Panhandle upon the of no Panhandle assumes The are statements obligation conference call. during made of date to today's this information as update

Stephens, the over Chad Chief like Panhandle's Executive turn I'd Officer. to call that, With to

Chad Stephens

sincerely in interest conference Panhandle's everyone and on to quarter line company. appreciate XXXX We in the your first fiscal continued time and participating for your call. Ralph thanks Thanks the

originally despite in of quarter increasing The we and headwinds first reflected executing XXXX. the strategy continued commodity announced momentum price XXXX

line we confident focus meaningful of that good a royalty previously discussed, clear to interest well-established should under operators, rock areas holdings sight we NAV in with moving growing accretive disciplined we free away are our return shareholders. are mineral working this proactively Over quality, on flow can from an to time, strategy implement from cash participation As development, our basis. provide

of In on acres STACK the Aventine, operated core by mineral announced a in under acquisition first quarter, and the net Marathon. of acreage our XXX previously closed largely we Devon,

We are currently interesting mainly and opportunities, actively evaluating the in other Bakken. STACK

contracts. cash around detailed a will Rob XX%. million the quarter a moment. virtually been cash Otherwise, derivative quarter approximately or $X.X a to derivatives is saw color due this $X.X swing we in But operating variance. provide $XXX,XXX a Interestingly, all flow in flat. results $X.X XXXX, first negative decline material our in booked We and quarter-over-quarter, gain of the decline an million fourth flow would loss operating million first a XXXX in and quarter have

expenditures our I would $XXX,XXX. quarter the over for just an have capital that also dropped amount, to emphasized insignificant

the seeing with volumes are working natural we interested decline working interest We in wells. and from participating continue PDP new abstain as I

minerals to be we the and sight line through development production in and by to this decline organic to we announced As our December. strategy, minerals deal transition the STACK existing should of similar able mineral-only include the acquiring that we development mitigate of

numbers. impact to Beginning only full financials. quarter acquisition days to contributed the quarter, realize first production we XX This the the of XXXX will in our second

closing flow forward deal in We and future. of We optimistic updated with acquisitions at keeping our to our more chances our have progress. the an active mineral package look you

the Ralph turn over call point, would to provide operational like to quick to I overview. At this

Ralph D'Amico

Chad. continues position. Thanks strong to activity Panhandle see its mineral on

progress Bakken converted continues to gross, this The wells focused and to the to in X.X XXst, from wells During ended in activity be majority December SCOOP/STACK the XX quarter wells. we producing had net regions. of

X.XX This progress, well gross, the At on wells prior production. which X:X the placed progress ratio basically potential in end a is quarter's base. asset the were in net of shows replacement the that we and XXX resiliency the had Panhandle of of growth quarter, organic

the had and Also nine end, predominantly -- quarter on and PHX within Bakken. XX on miles, acreage of half and present we a as focused SCOOP/STACK rigs the two again, as

our We for including continue interest to been actively working lease minerals open that participation. had minerals previously held

XX%. for leased XXX average per fiscal and first of the royalty $XXX bonus out During which XXX,XXX, quarter, to a about we net an acres of acre works

closed the acre. XXX sale Eddie mineral in we of at of average $X,XXX acres New on price and On the Northwest acquisition an divestiture predominantly County, front, per undeveloped Mexico

purchase the in on like acres previously Chad reduce flow deals minerals of close our two a portfolio to treating These of also the our high-grading net XXX philosophy core cash bookend maximize and the mineral of assets and We risk. mentioned. STACK is our

Our to deal and we're currently pipeline several continues be strong evaluating opportunities.

to the that, who over will review With financials. call turn Rob, I'll of a the provide

Robb Winfield

Ralph. Thanks

details call more Chad First, some results our then for today. the make some and with will call to the quarter everyone XX/XX/XXXX I over you I comments. back want for final share our to being ended regarding turn first to financial on thank

the For was our our the following; total one, XX% quarter This million a XXXX. million and which of the $X.X of million XXXX $X.X first minerals in by assets a sold a $XX.X sale of a quarter for decrease of quarter company on in million, from decrease gain ended $XX.X $X.X the caused in fourth million, on of is in the mineral XXXX quarter change sale revenues. first sold revenues December were the fourth XX, XXXX, company gain the for

a our quarter $X.X XXXX a loss turned million the that to earlier, mentioned XXXX, we and of revenues. of in in derivative million first $X.X quarter $X.X contracts of Two, fourth the as a decrease in on gain Chad million had

first and XXXX the the natural partially XXXX. NGL production that $X.X or of compared quarter Arkoma, and and quarter quarter NGL, first offset prices oil, from the products by Three, gas in to of of gas our natural decrease the XXXX in Eagle was and million Ford to all X.X% fourth due during decreases revenues higher

to the of total in excluding The compared decrease XXXX impairment XXXX when of decrease Our previously quarter due XX-K the XXXX. or expenses our to fourth majority XX% million quarter the was $X.X of first discussed Mcfe the $X.XX in DD&A million was of reduction compared quarter XXXX. company's to $X.XX quarter first as per or XX%. of Mcfe The the XXXX in rate $X.X of in DD&A fourth the per in

primarily overall lower or fourth production. in lower company's decreased XX% the well the XXXX the to This of expenses expenses work as Eagle due to as Ford $XXX,XXX The and of LOE first quarter in quarter was over XXXX. as compared lower

the That by was mainly as of the to fourth XXXX. in XX% $XXX,XXX to fourth quarter of decreased the consulting or of and G&A approximately to CEO in XXXX legal severance technical former the XXXX, due paid quarter offset higher expenses first the one-time first of partially quarter in quarter compared XXXX. the

gain quarter compared in per net include of in to XXXX. first first Adjusted million $XX.X income of the in $X.XX XXXX EBITDA compared the per million pretax million and of $X.XX or fourth $X.X Our adjusted as XXXX. share $X.X million as EBITDA income XXXX fourth pretax net share the quarter sale adjusted was of of to asset. the Both on quarter quarter adjusted in was $X.X or

of calendar We Currently, into continue calendar which extends approximately oil per have to early XXX,XXX hedging out XXXX. we for deploy an $XX XXXX. commodity program the hedge of barrels barrel active price to

price approximately X.X per calendar for have at of Bcf also natural gas hedge of $X.XX Mcf a We XXXX.

able been shareholders this and program in plan favorable to through returns have to our lock We hedging for continue. we

for final that, like to remarks. I'd over Chad With call some to turn the

Chad Stephens

the reiterate company how to like direction would to you, of the quarters. progress excited I you in look Thank and the coming Rob. forward strategic new am set about have keeping for apprised I our we

queue open questions. let's This call. concludes the the portion the for up prepared remarks of Operator, please

Operator

The you. Instructions] open [Operator now lines are Thank questions. for

from Howard with comes Question Resources. ahead. Boiling Point Please Richard go

Richard Howard

Good afternoon.

Chad Stephens

Good afternoon.

Richard Howard

Two questions.

the all, make of the continued have to in see First Permian? ability to we sales

Chad Stephens

you referring to--? Are

Richard Howard

the Eddie The the Eddie -- there that done are is -- or and sale way to last still County opportunities down? slowed sell County was

Ralph D'Amico

did last closed. Ralph. sale, the its Rich the Eddie that one No, that County we that's last was one Hey, the

but there's right that's now, and We continue burner. on nothing have the about to the on discussions think front opportunities,

Richard Howard

we are three sales the in Okay. cash activities? will depend of sort our we those And -- and if from or to by past exchange typically going purchases, money generated use exchanges we that's the have the

Chad Stephens

Yes, is Richard, Chad. this

fund kind exchange minerals our like we do were structured extent equity. deals So, on we XXXX minerals, cash the and from purchases, potentially it to if to to able acquire tax similar funds would we deferred sell sell hand, do for we minerals, to source type the more would debt, not But advantage.

Richard Howard

not with Got repurchases share it. Do making difficulty]? the [technical foresee you then

Chad Stephens

going we allocation that use forward. best of think -- capital point at the No, this that's or best the don't our

you active for the So, will an repurchase. see foreseeable share future not probably

Richard Howard

give capacity, to production much one the extended thoroughly question I although for it. a is us -- my how our feel two-thirds-- There difficulty] production? royalty how part question or second to you second relates that [technical about But My relates working Okay. interest first much of could and of

Chad Stephens

sorry? The first you you broke I'm of part up. repeat? your quickly Can question,

Richard Howard

of in that and $XX our say now? working as relationship right should at have that interest it's being million Sure. sales approximate look we The base, borrowing the the two-thirds one-third I and royalty

Chad Stephens

in reduced been out $XX the Q, to laid as and recent Well, has borrowing most base million. the

Richard Howard

Okay.

Chad Stephens

PED because Ford, the well, also [ph] of we we it with we locations which triggered PEDs. the associated But And those the eliminated -- at the impairment of Eagle you'll recall, the reduced all end if CapEx because year, that's future the million on was drilling announced of eliminated $XX impairment.

base. So, it reduced the borrowing

if associated So, standpoint be from at borrowing with working much point, associated how associated that virtually a answer a the have to is base might this you interest, of PDP. sense Freda reverse question. able is with is our you

Freda Webb

our Yes, line in it's I probably production. with think

royalty. one-third So, working two-thirds interest,

Richard Howard

you Thank very much.

Chad Stephens

you. Thank

Operator

[Operator Instructions]

apologize out to I and any for of I it time. we like turn ladies And closing it are will Ralph comments. back looks D'Amico gentlemen,

Ralph D'Amico

and for look everybody us. at We Thanks to the quarter. your joining Christy. of next you, again Thanks the participating guys in Panhandle. Thank you end updating for interest forward

Operator

participation. today's concludes We thank that for you And your teleconference.

lines a and You please great day. have may now disconnect your

PHX Minerals (PHX) 5 Feb 202020 Q1 Earnings call transcript