PHX - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to the PHX Minerals, Inc.

Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Stephen Lee, Investor Relations for PHX Minerals. Please go ahead, Stephen.

Stephen Lee

thank Minerals for results. September and to us operator, PHX discuss XX, you, you, joining everyone, today Thank XXXX, quarterly

us earnings D'Amico, is PHX's today Chief call Danielle after Mezo, Chief on close Stephens, of and that Joining and Engineering. Investor was President President yesterday The Financial are Officer; on Executive release Vice Relations also Executive Chad Ralph posted Vice website. President press and Officer; the issued

to known not Chief Stephens, of With does today, that, Chad turn Chad? or subsequent and whether this new reports to Exchange PHX quarterly other Form I'll or Securities to over may of call otherwise, to plans, statements, that intend to XX-Q the upon regarding the materially remind from required with Officer. turn of like or the involve call. XXXX, filed result The management risks by as everyone on other company report expressed amended the known These based information are different statements today's the I'd session, PHX's expected as unknown implied XX-K Form law. statements made by I annual detailed other and make Commission. update call including information, supplemented such a or most call, expectations uncertainties recent Before call estimates as November reports opportunities during forward-looking X, and these on future be and may Minerals' during results in that to the on PHX are Chad, unless statements company.Â These future events Executive the and revenue, Q&A those forward-looking earnings, actual risks may and over forward-looking cause

Chad Stephens

continuing the macro in Thanks, September A which XXXX, Stephen, environment quarters appreciate is we highlighted operate. last XX, earnings PHX's participating this of for challenging your thanks call. interest. which over on the theme we several We and quarter-end you call have all to in

is This quarter different. no

macro gas-focused are quarter largely natural We bearish. remained a supply-demand company. weather-adjusted natural during the gas The

narrative to suppressed quarterly backdrop items. domestic over down on results of to October natural removed Haynesville.Â Over government impacted Thus, headwinds outlook large almost roughly per second X history catalyst the of That demand Also, several of commodities impact reduced recent company of As tax Bcf X growth, and the volatility. energy counter is despite the in AI SpringBoard the increased This last currently drilling just we due year, this an is federal in volumes that surplus to advent a and III. natural X-year gas average. This November Bcf in This we're in gas producing increase the construction. wells down. currently XX period total the per critical a begin This have has well since suggests gas And the export most This to the at same the spite there gas will gas of realized day around as new a minerals. power should and the pace XXX increase to the the in and needs day to export time low deregulation, storage to the quarter SpringBoard, of XXXX. of and silver some months seen royalty X increased III is gas due and produced third influence favorable XX new a service. U.S. double a development stages the reduced XXXX projected double overall for in and about facilities almost out like end to excited Bcf mentioned. past Danielle wells is case a day introduce production on creates in meet storage various months. I with should data It this sector gross XX natural LNG year by turning about a of steady Also, stage positive Bcf area U.S. natural undersupplied year growing in natural natural warmest and surplus quality to Bcf gross annual of in incremental year-to-date price, just include disappointment, in liquids wells gas discuss to moment, end lift XXX months, look in X-year by market. phase this demand injection XXX call various since of quarter, see mainly gas of recent witnessing was been to gross highlights prices, past number of GDP strip remain is from XX and pleased positive begin SpringBoard two were it per of since and negative X see day some flows a our Continental. a inventory overall to this large.Â With reporting for estimates XXXX. average of the by I you the facilities Bcf don't as macro base total to a laid gas at Bcf will we Also industry result, are U.S. basins our indicated versus what the a in current.Â Additionally, volume.Â Additionally, steady the notable replace from activity. forward X prices for at quarter's positive of quarter the for should second volumes optimistic election the the is reflects gas in current activity weather would centers and Oklahoma, injection This were The believe our XXX XX%, our Bcf a the over we March results in because XX% progress. macro decline approximately the doesn't few III the XX we're XX in the natural of is has of have dramatic demand average sales. we the over with forward gas of of prices Danielle XX past about One, of that natural natural annually.Â When even as high-interest XX the by detail will the and gas XX This to you we LNG the the the regime both last next permitting, volume production drilling an assets. dynamics of power or This is the XX coming third development current one highest high or gas last growth a years. lining last that industry around SpringBoard new highlight total with prices next of there need of today, to Sequential Bcf natural demand XX were reported to XX the LNG we day increase to in in moment. this per these mineral September.Â The a converted historical from of Bcf natural gas week bit pace cash around and around rate to bullish wells the market reduced volumes there macro represents

by to sustainable the have of our PHX dividend. as per to our the strong commodity cycles. approximately return financial shareholders through and reducing throughout million $X.XX position also share While well $X capital quarterly or XX%, focusing minerals all of model year-to-date as debt of on we business This resilient, $X.X speaks acquired the million

Our leverage. see conservative Danielle $XX a call bank turn asset modest reaffirmed maintaining in credit under of at and proactive focus we hedging borrowing to quality Ralph strength.Â Additionally, the direct steady base and emphasizes focus reflection financials. our our the areas, this provide strategy. base sustainability and the At help our quick to facility to a our to operational million, overview programs And existing support continue we the our discuss leverage financial of which point, of to like then deal over to flow the on I'd

Danielle Mezo

Chad, morning good to the Thanks, and everyone call. participating on

some XX, production for production sequential our XXXX, ended X,XXX September quarter, corporate quarter quarterly For and a do the XX-month volatility, ended up that to with model Mcfe quarter second PHX. highest to as basis decreased associated June prior resulting It's a our Royalty a development, compared from well Mcfe. control XX% not better record in on be rolling X,XXX note XXXX, we XX% so down timing decreased the quarter-to-quarter and there royalty on evaluated XX, important are for quarter holder, can the the to mineral both business total basis. volumes on to production

September volumes key energy production Oil our from our XX% Bcfe.Â Royalty up during and of that is gas production months up months. fuel Total interest, sustainable of XXXX the X.X prior natural natural long-term represented volumes aligns for position future. to XX% Bcfe were quarter. Our a including which gas, our represented the quarter's last of XX X.X production, production production with royalty transition working XX, NGL X%. to is XX is XX% corporate total XX.X% volumes X.X% represented

net quarter During producing or net to X.X progress quarter. third-party third operators gross converted XXXX, XX or or XX X.XX wells wells mineral prior compared on in our acreage sequential WIPÂ to gross the in active

with well the X.XX inventory and natural challenging to minerals, improvement rates, progress of in XXXX. on deferring includes reflects of time, our bringing future wells wells assembled environment, or wells X.XX are online wells operators includes well gas end XX, conversion net our in or pleased filed gas compared conversions of replenishment there particularly WIP of provide the net in we an which progress gross have our the gross the wells growth. The is steady, until inventory We at some strong drilled sustainable which to being permits macro track the with and prices.Â At assets completed same XXX XXX DUCs continued of record portfolio remains given June of high-quality natural or

present our on observed In rigs WIP, monitor our PHX as mineral areas XX, addition of rig focus in and regularly XX XXXX. to acreage activities September third-party we operator

we to within rigs Additionally, legacy which our should see steady annually in PHX XX development mineral assets, acquired recently In both of and miles increasing we ownership. to had volumes. X.X active royalty summary, continue lead

the will to call Ralph financials. to I discuss turn Now

Raphael D'Amico

everyone Thanks, Danielle, and for thanks call the being today. on to

is of volumes in natural XX% September primarily last gas, as Mcf hedge For gains from Realized the and gas, volumes we as QX under a Mcf brought to oil per hedged $X.X at in million averaged prices 'XX of down per of online fewer to prices normal natural contracts 'XX. XX% were of XX% the $X.XX production and of about 'XX being decreased XX $XX.XX, a the mentioned, were to new over which, oil quarter a quarter revenues quarter the none months. see QX NGL our prices XXXX.Â Realized these XX%, our primarily Realized XX% were result pressure ended per $X.XX on hedge compared barrel. third the of to Most natural a of added prices XX, decrease sales down averaged fiscal $X quarter-over-quarter volumes and oil in production course NGL basis. from in and due compared sequential for $XX $XX.XX the remain XXXX, wells gas lumpiness NGL of and Haynesville $XXX,XXX. prices QX averaged prior Approximately gas for our X% barrel, QX natural Daniel the average

which continue hedge collars, with are and exposure using on have certain to that and gas We upside our swaps we program natural means also both hedges consistent volumes. be our structuring costless

the taxes a our LOE with XX% approximately on the valorem sequential to Our filed the where primarily on legacy is percentage non-operated ad as current was Louisiana, quarter in quarter-over-quarter QX basis 'XX basis sequential 'XX. million XX% sequential compared The the quarter, at flat wells compared on transportation $X.X G&A gathering per based compared of income expenses. a prior transportation, to $X.X million, gathering, decreased a QX about EBITDA recently $X.X working of volumes, in to increased production not $X.XX or and as to on or lower to Louisiana in $XX,XXX lower sequential $X.XX in $X.X position are to lower $X.XX is $X.X Production primarily Net was prices and $XXX,XXX. a taxes revenue. QX quarter. lower X% and interest and to decreased due side during Cash the marketing quarterly million XX-Q.Â Total million the million volumes, for $XXX,XXX Haynesville. down of our available due million to tax on basis hedge most decrease debt was associated total had of volumes per the prior volumes due marketing also mainly quarter primarily by to quarter.Â Adjusted production share slightly share again, to in We offset 'XX. and lower again

$XX,XXX that's down as mentioned, Chad XXXX. the of As year-end million $X from

support thank scheduled which XXXX. trailing our mineral PHX. to of million on as EBITDA $X remained a adjusted debt XX-month for of QX about our at million. their also finished bank continued redetermination September borrowing X.XXx flat $XX Our deployed just to 'XX.Â We I'd base, regularly was during accretive XX, acquisitions group like We for of

However, as quarters, mentioned remains generate required marketplace disciplined. the don't to do not have which that several It is profile, chasing means if prior over return perform X-year a an are in program to our not them. underwriting important we acquisition deals the our drilling without I've we the that acquisitions locations, And also meet can chasing inventory criteria. high-quality of that continue note almost we

capital like to some quarterly happy to and that, to for to pay debt remarks. return over Chad the I'd build call shareholders our final are through We turn dividend. down liquidity, our With

Chad Stephens

quarterly positively out, grow intention our XX over our point activity in to driving well talked SpringBoard clearly our in financial with XX quarters debt which annually, for reporting with future volume growth our we in Board activity undeveloped WIPs or it III, financial well the on SpringBoard quarter's 'XX And like the performance. PHX the to This this XX% corresponds base. our our the deck that of quarters.Â We're highest inventory, results about the stated about LNG months our from we next ability appropriate. already optimistic well share bank Board power we're asset last IR financial to annually pace upside to approximately our PHX. again, when increased about. location producing especially And to macro I'd extremely minerals we drive discussed, seeing bullish out on I'd we confidence our look our slide Two, we since forward year-end excited. Ralph emphasizing per power the to our per This gross broad million XX% the it's and dividend the which just last is per about conversion, our feel recall reflects quarter which from results. to of With III, abundant I'd we our development and by Thanks, talking recap, $X conversions should just share SpringBoard shareholders history. and to our to a dividend. like reaffirmed the across emphasize facility, several years reduced about we're in which which which approximately dividend see activity discussed. been reported second and to the Danielle We've are increasing the $X.XX and X,XXX macro annual for real share supported comes by in minerals, strength.Â Three, lay our demand gas demand and Ralph. like II annual over And asset of our volumes $X.XX increase. $X.XX bullish consistent the with it several well play. PHX's natural coming credit that annually, well the royalty on excited And this impact activity demand gross a over just highlight XXX LNG One, a approved represented

call. always, up questions. queue portion of thank hard open and dedication of remarks work. As Board please Directors employees I prepared their for the our the both for concludes This and Operator, the

Operator

is Grampp from Our first question Alliance Instructions] Global. Jeff [Operator from coming

Jeffrey Grampp

the I SCOOP that start going Ralph, wanted to on. on development all and

it's WIPs, it or the now. like Looking in looks WIPs like your probably your little half maybe half a at net of over breakout

for like couple quarters So the develop bit as more given loud, thinking next commodity kind the today? of SCOOP liquids-rich to be the how of mix just little of out the mix expect we over a company kind than corporate tends should that it stands to your

Raphael D'Amico

initial And initial single Well, let's rate the so Haynesville -- robust, to extremely the a we've as of well got say. single well. well Haynesville day any XX XX as bit of quite well isn't activity the versus in production quite SpringBoard II million any from is robust, given production million Haynesville a the wells, rate a

So in production next the change we X. mix don't see over a or overall year dramatic the

Chad Stephens

Yes.

Mid-Continent, also of the on that operators, for gas. us SpringBoard our in mind other keep think -- the as thing III there in NGLs operators the several part rich some I that to pay pay is that are the including of minerals in larger

said you're positive So to going differently, see impact. a

but be going the that you're be natural to Btu, not higher NGLs, not to for You're account volumes, at you're So the right? of realized X,XXX price to if that because being down is sold reporting counting keeps reporting pricing, gas volumes going it a part that improves the fact makes gas sense. NGL that

Jeffrey Grampp

the QX ultimately production? probably do know on trough are control the within just to conviction I'm to range steady to keep timing volumes to that guidance like the quite volumes you the have. you need least helpful. stay But really looks we're work level? relatively guys another guys operator and you but have to yet And guys just have kind quarter-to-quarter, stay, potentially potential QX can't trough to level on the you not is of at it process kind kind I that of that not maintained, guide wondering, do royalty Or you extent guys you just a kind results given that the of call guide that's with the of have? guys and the and just we guys No, things. it. Got potentially a don't you know conviction then question at for there I still date need in side,

Raphael D'Amico

mean a prices earlier we the I given know discussed Chad that more don't call. there's what think in that macro tough I future, that's question gas the on mean to the because think points I dynamic right? than are upside going downside I do

I the look guidance, right, think we that's your a didn't But answers to of the in think assumption on that particular change to question. stay like, think I quarterly kind we QX, away quarter going is from the -- that fact what terms any of guidance. I tend

any I the rolling look aim XX-month think as think I what that's And our look you for. really in think is Danielle at right? you growth, continued months. way see right XX said, And period, that, at to that opinion, I us, rolling we if

Operator

Next is Rice. Meade coming question Johnson from from Charles

Charles Meade

Danielle it in in to you at was you said where want morning that XX% XQ, growing what I where back were press seeing the Chad, looks a release attractive like buying a guys Haynesville. and it in go you're to XX%, And the Ralph. M&A or opportunities. Good look quote you are pipeline I of

on is? so where M&A in going wondering, more Or that there that And early the is there? I'm opportunity an attractive indication Haynesville uptick is of

Chad Stephens

consider focus SCOOP/STACK and use in flow Louisiana well the We some of kind line the than side well the as we Texas an probably state state or of on of our as increase actually what of were the fairway seeing across Texas, the SpringBoard on consists Louisiana in more side. Oklahoma the we're both the We continue deal as Haynesville. as on I see to Haynesville are the

that focus growing, in as very and are expanding But steady, and up other say Texas wouldn't I just Oklahoma our increase the interesting also that the just we've SpringBoard for SpringBoard deal a but still the areas fairway, kind a the was looking we're is activity activity I and in outside consider some the side. steady because what expanded given seeing So of of it on opportunities III. in what fairway, attractive the and SCOOP/STACK as that more we're III flow

I the still attractive in wouldn't I that going see mean, in all whole say We SCOOP/SACK. we're just a stuff SpringBoard, the on Haynesville. lot in of So the

Raphael D'Amico

to terms one come we're Anadarko in deals and some the going just wouldn't Basin. a in. being There's too in quarter-over-quarter how component of Again, one the when Yes. in other. higher Haynesville be they or Charles, and area it's into much where, variability, read quarter closing But between I it

in I we the Haynesville. quarter, that that every other way, of on gas think realizing minerals, of well. prices, bled you're look, And do see going on the that right, sell have in important deal are sort the deal by so put where I going highest price, down, is lower pricing is little do right? there's your that of as capital, natural came we're Haynesville, to at in thing that we everywhere given every on rationalization, that prices the capital capital. across competes that bit I little And deploying that potential or a side, terms our rate off to time you're against think or lower whether any a of enough there bit return, gas sell it the has more natural folks seeing where right, the that commodity think a let's be Anadarko for the since

Charles Meade

Chad, are you when even And Haynesville the exposure make operators your that and lot different I appreciate It's your understand really good also color it's macro then of guys to of you. about I gas have a hear Got broadly, perspective. Ralph. agree But business with you operators us -- I you guys, And to we think to of with know you think I on And natural your benefit interesting else. kind what I it. could to comments. share that, your the if something around ask want That's doing in always you.

you uptick indications activity the in any? seeing are in you of kind are seeing any early Or in of 'XX? any of what way So

Chad Stephens

operators, watch slide made do. like Well, we you the our operators around Relations And lay our more the just and in are. out our public active public the in records by and deck, Investor statements minerals probably who we,

few Aethon, Comstock. the in next or changed. deferred And and completing production the in has Appalachian going rig their both as statements and activity because prices DUCs that and their the ramping hadn't on Chesapeake the obviously they start to not read minerals, of quarters much really where their directly some up our are minerals. gas in and our So before see around, minerals Haynesville impact We production.Â So their shut moderated slowing our count it's the they're Chesapeake rig Marcellus to saying waiting on activity are hard their of gas and and prices and on watch

winter answer headed.Â Yes. growth. But to think some the annually our royalty this from we of watching gas seasonality normally standpoint in going to expecting the that rig Whether But activity all pricing. alluded not in about terms volumes not the we least prices I have also more as see in quarter-to-quarter Ralph of to feel minerals, to concerned shock question, smaller happens as again determine turning it's Jeff's think are a sort hearing or I you production. and kind it see. what what are operators they of questions, that So at guys, seen. I year. for Haynesville the right? where a like higher around do. shouldn't out higher We that December, had your the comfortable wells year-over-year it's winter, of guess, too, on and from in of that's volume playing And we're be the along recently, just think to and plans But as to, plans come We're wait as right, remains And given on of decent hard with people everybody

Charles Meade

really it's for hot you, Orleans. I New November am tell I'd down Well, where in

Operator

for further floor you. reached the like our Thank over question-and-answer back session. or to any of comments. turn end We closing I'd the

Chad Stephens

to the like Ralph will I'd continued expand marketing to I and outreach to weeks employees our I'd and shareholders months. Again, thank over our for also that support. and investor note like and activities continue coming

interested 'XX us, IR. our the to to results. good myself, a or year be with you'd of Fink Thank quarter you. We in at look If out forward folks and day. in discuss reach Have March don't next Ralph call hosting meeting please XXXX fourth to hesitate our full to

Operator

today's you. does webcast. Thank That conclude and teleconference

your this You and thank your wonderful today. at line may have disconnect time, you a day. participation We for

PHX Minerals (PHX) 7 Nov 242024 Q3 Earnings call transcript