PHX Minerals (PHX) Q1 2025 earnings summary

Executive summary

• Net income of $4.4 million ($0.12 per diluted share) for Q1 2025, up from a net loss of $0.18 million ($-0.01 per share) in Q1 2024, driven by higher natural gas, oil, and NGL sales and gains on asset sales, partially offset by derivative losses and higher G&A expenses.

• Adjusted EBITDA was $6.2 million, up from $4.6 million in Q1 2024.

• Announced definitive agreement on May 8, 2025, to be acquired in an all-cash transaction at $4.35 per share, valuing the company at $182 million including debt.

• Strong cash flow and reduced debt, with a focus on maintaining a flexible balance sheet.

Financial highlights

• Total revenue for Q1 2025 was $10.43 million, a 47% increase year-over-year, driven by higher natural gas and NGL prices and increased volumes.

• Lease bonuses and rental income rose 116% to $0.33 million.

• Net gain on asset sales of $6.52 million in Q1 2025, compared to a $24,000 loss in Q1 2024, due to significant divestitures.

• Losses on derivative contracts totaled $3.16 million, compared to a $0.63 million gain in Q1 2024, reflecting unfavorable price movements.

• Net cash provided by operating activities was $5.4 million, up from $4.3 million in Q1 2024.

Outlook and guidance

• Management expects to fund overhead, acquisitions, and dividends from operating cash flow, cash on hand, and available credit facility, with $30.3 million available as of March 31, 2025.

• No significant capital expenditures planned for new wells, consistent with the strategy to cease working interest participation.

• Anticipates continued improvement in natural gas markets due to tightening supply-demand, colder winter weather, and increased LNG export demand.

• Expects heightened operator activity and increased production volumes throughout 2025 and into 2026.

• Sufficient liquidity is expected for ongoing operations based on anticipated cash flow and credit facility access.