Financial Performance & Valuation - As of December 31, 2024, the company's market capitalization was $151.7 million[9], and its enterprise value was $179 million[9] - The company's liquidity as of December 31, 2024, was $27.1 million[9] - The company's dividend yield was 4%[9], based on an annualized dividend of $0.16 per share[12] - The company's leverage ratio was 1.38x[9], calculated as total debt divided by TTM Adjusted EBITDA[12] - The company's LTM Adjusted EBITDA was $21.3 million[9], with a discretionary cash flow yield of approximately 12%[9] and an LTM ROCE of approximately 8%[9] Asset Base & Strategy - Approximately 70% of the company's 3P reserves are natural gas[9] - The company holds 89,135 net leased royalty acres with an average royalty rate of approximately 16%[9] - The company has completed approximately $139 million in mineral acquisitions[15] - Royalty production volumes are up approximately 278%[15], and 2P royalty reserves are up approximately 130%[15] Debt & Liquidity - Since December 31, 2024, the company has paid down $9.8 million of debt, bringing the debt balance to $19.8 million as of March 5, 2025[12]

Financial Data and Key Metrics Changes - Total production volumes increased approximately 5% year over year, with royalty volume up 8% for the year [3][9] - EBITDA was down slightly year over year, supported by a traditional hedging program [4] - Natural gas, oil, and NGL sales revenues increased 13% to $8.9 million for the quarter, but decreased 8% to $33.7 million for the full year compared to 2023 [17] - Adjusted EBITDA for the quarter was $5.4 million, up from $4.9 million in the previous quarter, while for the full year it was $21.3 million compared to $22.7 million in 2023 [23] Business Line Data and Key Metrics Changes - Royalty production increased 8% to 8,760 million CFE, with quarterly royalty production remaining flat from the previous quarter [10][11] - Oil represented 11% of production volumes, while NGL represented 9% [11] - Total proved reserves decreased 11% to 63.7 BCFE, with improved royalty reserves decreasing 9% to 52.5 BCFE [12] Market Data and Key Metrics Changes - Realized natural gas prices for Q4 2024 averaged $2.64 per Mcf, compared to $2.00 in Q3 2024 [18] - Realized oil prices averaged $69.82, down 7% from the previous quarter, while NGLs averaged $23.01, up 17% [18] - For the full year 2024, natural gas prices averaged $2.19 compared to $2.61 in 2023, and oil averaged $74.59 compared to $76.76 in 2023 [18] Company Strategy and Development Direction - The company is committed to maintaining a strong conservative balance sheet and has applied proceeds from the sale of non-core minerals to reduce debt [6][7] - The company is evaluating strategic alternatives to unlock value, with a focus on high-quality assets and improving financial position [7][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by lower rig counts and reduced industry capex budgets, but expressed optimism about improving natural gas fundamentals [2][3] - The company remains optimistic about prospects for 2025, citing a solid foundation of high-quality assets and a commitment to exploring strategic opportunities [28] Other Important Information - The company sold non-producing minerals for $8 million, which were old legacy assets with no production cash flow [6] - Total debt as of December 31, 2024, was $29.5 million, with a trailing debt to twelve-month adjusted EBITDA of 1.38 times [25] Q&A Session Summary Question: Insights on the strategic alternatives review process - Management stated that they do not comment on ongoing processes [35] Question: Approach to M&A and ground game leasing during the review - Management confirmed that the business continues to operate as usual, with no changes to their approach [37] Question: Production guidance for 2025 - Management indicated that while they are not providing guidance, trends from the past two years suggest a continuation of current production levels [39]

Financial Performance - Net income for the fourth quarter ended Dec. 31, 2024, was $0.1 million, or $0.00 per diluted share, compared to $2.5 million, or $0.07 per diluted share, for the same quarter in 2023[5] - The company recorded a net income of $2.3 million, or $0.06 per diluted share, for the year ended Dec. 31, 2024, a decrease from $13.9 million, or $0.39 per diluted share, for the year ended Dec. 31, 2023[18] - Net income for the year ended December 31, 2024, was $2,321,866, a decrease of 83.3% from $13,920,800 in 2023[40] - The company reported a net income of $109,400 for the three months ended December 31, 2024, compared to $2,513,444 for the same period in 2023[47] - Net income for the TTM ended December 31, 2024, was $2,321,866, a decrease from $13,920,800 for the TTM ended December 31, 2023[51] Revenue and Production - Natural gas, oil, and NGL revenue increased by $0.3 million, or 4%, for the quarter ended Dec. 31, 2024, driven by a 7% increase in natural gas volumes and a 10% increase in oil volumes[15] - Natural gas, oil, and NGL revenue decreased by $2.8 million, or 8%, for the year ended Dec. 31, 2024, due to a 16% decrease in natural gas prices and a 3% decrease in oil prices[19] - Revenues for the three months ended December 31, 2024, were $8,885,922, compared to $8,548,783 for the same period in 2023, representing an increase of 3.9%[36] - Total production volumes for the year ended Dec. 31, 2024, increased by 5% to 9,841 Mmcfe compared to the year ended Dec. 31, 2023[5] - Royalty production volumes for the year ended Dec. 31, 2024, increased by 8% to 8,760 Mmcfe compared to the year ended Dec. 31, 2023[5] Adjusted EBITDA - Adjusted EBITDA for the fourth quarter ended Dec. 31, 2024, was $5.4 million, compared to $4.9 million for the quarter ended Sept. 30, 2024, and $22.7 million for the year ended Dec. 31, 2023[5] - Adjusted EBITDA for the three months ended December 31, 2024, was $5,385,515, an increase from $4,504,288 in the previous year[47] - Adjusted EBITDA for the TTM ended December 31, 2024, was $21,324,050, compared to $22,652,263 for the TTM ended December 31, 2023, reflecting a decline of approximately 5.8%[51] Debt and Liabilities - Total debt was $29.5 million at Dec. 31, 2024, down $3.25 million since Dec. 31, 2023, with a debt-to-adjusted EBITDA ratio of 1.38x[5] - The company's total debt decreased from $32,750,000 in 2023 to $29,500,000 in 2024, resulting in a debt-to-adjusted EBITDA (TTM) ratio of 1.38, down from 1.45[51] - Long-term debt decreased to $29,500,000 as of December 31, 2024, from $32,750,000 in 2023, a reduction of 6.9%[38] - Total liabilities decreased to $41,965,913 as of December 31, 2024, from $43,276,866 in 2023, a decline of 3.0%[38] Assets and Equity - Total current assets decreased to $9,556,933 as of December 31, 2024, from $10,161,577 in 2023, a decline of 6.0%[38] - Cash and cash equivalents increased to $2,242,102 as of December 31, 2024, from $806,254 in 2023, a growth of 177.5%[40] - Total stockholders' equity decreased to $121,949,853 as of December 31, 2024, from $123,231,414 in 2023, a decline of 1.0%[38] Capital Expenditures and Dividends - Capital expenditures for the year ended December 31, 2024, were $87,579, significantly lower than $325,983 in 2023[40] - The company paid dividends of $5,229,547 in 2024, compared to $3,520,366 in 2023, an increase of 48.6%[40] - The company announced a quarterly dividend of $0.04 per share, payable on Mar. 28, 2025[5] Operational Highlights - The company converted 71 gross (0.22 net) wells to producing status in the fourth quarter ended Dec. 31, 2024, compared to 46 gross (0.18 net) wells in the previous quarter[5] - The percentage of total production volumes attributable to natural gas was 80% for the quarter ended Dec. 31, 2024[11] - The company converted 71 gross (0.22 net) wells to producing status during the quarter ended Dec. 31, 2024, compared to 46 gross (0.10 net) wells in the same quarter of 2023[22] - The company purchased 363 net royalty acres for approximately $2.5 million during the quarter ended Dec. 31, 2024[26] - The company leased 265 net mineral acres to third-party exploration and production companies for an average bonus payment of $760 per net mineral acre during the quarter ended Dec. 31, 2024[25] Market and Future Outlook - Forward-looking statements indicate the company anticipates challenges related to oil and natural gas price volatility and production levels[53] - The company does not guarantee future performance based on forward-looking statements, which are subject to various risks and uncertainties[54] - The company continues to focus on expanding its mineral position in core areas, including Oklahoma, Texas, Louisiana, North Dakota, and Arkansas[51] Derivative Contracts - The company has a total of 1,000 Bbls of oil fixed price swaps at $68.80 for the period from December 2024 to August 2025[43] - The company has contracted 100,000 Mmbtu of natural gas at a fixed price of $3.50 floor and $4.85 ceiling for the period from November 2025 to March 2026[42] - The company has a natural gas costless collar with a contract price of $3.00 floor and $5.00 ceiling for 30,000 Mmbtu per month from January to June 2025[42] - The company has a total of 125,000 Mmbtu of natural gas fixed price swaps at $3.01 for the period from April to August 2025[42] Expenses - The company incurred an interest expense of $573,920 for the three months ended December 31, 2024[47] - Interest expense increased slightly from $2,362,393 in 2023 to $2,563,268 in 2024[51] - Depreciation, depletion, and amortization (DD&A) rose from $8,566,185 in 2023 to $9,606,444 in 2024, an increase of approximately 12.1%[51] - The company had a net gain on derivative contracts of $0.3 million for the year ended Dec. 31, 2024, compared to a net gain of $6.9 million for the year ended Dec. 31, 2023[21] - Non-cash losses on derivatives for the TTM ended December 31, 2024, were $(3,997,995), contrasting with gains of $4,302,531 in 2023[51]

Financial Performance and Projections - The fiscal year ended December 31, 2024, includes forward-looking statements that may differ from actual results due to various risks and uncertainties[7]. - The company anticipates volatility in realized natural gas and oil prices, which could impact financial performance[8]. - The company has not disclosed specific financial performance metrics in this summary, but detailed financial statements are available in the report[8]. - Future capital raising efforts may be influenced by market conditions and investor sentiment[8]. - The company anticipates a revenue growth of 30% in the upcoming quarter due to increased market demand and production capabilities[14]. - Future guidance indicates a projected EBITDA margin improvement to 40% as a result of cost-cutting measures and increased production[14]. Operational Efficiency and Strategies - The company plans to execute business strategies that may include market expansion and new product development[8]. - The company is focused on maintaining operational efficiency to manage lease operating expenses[8]. - Lease operating expenses (LOE) have decreased by 10% year-over-year, reflecting improved operational efficiencies[14]. - A new hydraulic fracturing technique has been successfully implemented, which is expected to enhance production efficiency by 25%[14]. - The company has allocated $50 million for research and development of new technologies aimed at improving extraction processes[14]. Reserves and Production - Estimates of natural gas, oil, and NGL reserves are subject to change based on market conditions and operational factors[8]. - The company reported a significant increase in proved reserves, with a total of 1.5 billion cubic feet equivalent (Bcfe) of natural gas and crude oil[13]. - The production volumes for the last quarter reached 10 million cubic feet per day (MCFD), representing a 15% increase compared to the previous quarter[14]. - The company plans to expand its operations into three new regions, targeting an increase in production capacity by 20% over the next fiscal year[14]. Risks and Compliance - Risks associated with exploration and production activities could affect the company's operational outcomes[9]. - The company emphasizes the importance of compliance with regulatory requirements and market conditions in its operations[8]. Strategic Acquisitions - A strategic acquisition of a smaller competitor is expected to close by the end of the fiscal year, which will add approximately 200,000 gross acres to the company's portfolio[14]. - The company has set a target to achieve a net revenue interest (NRI) of 75% in its new projects, enhancing profitability[14].

Core Insights - PHX Minerals Inc. reported solid financial and operational results for 2024, achieving the highest total corporate production volumes since 2019 and two record quarters for royalty production volumes [4][18]. Financial Highlights - For the fourth quarter of 2024, net income was $0.1 million, or $0.00 per diluted share, compared to $2.5 million, or $0.07 per diluted share, for the same quarter in 2023 [14]. - Adjusted EBITDA for the fourth quarter was $5.4 million, up from $4.9 million in the previous quarter but down from $22.7 million for the year ended December 31, 2023 [7]. - Total revenue for the fourth quarter was $8.0 million, a decrease from $11.8 million in the same quarter of 2023 [38]. - Natural gas, oil, and NGL sales increased by $0.3 million, or 4%, for the fourth quarter compared to the same quarter in 2023, driven by a 7% increase in natural gas volumes and a 10% increase in oil volumes [15]. Production and Operational Highlights - Royalty production volumes for the fourth quarter remained flat at 2,096 Mmcfe compared to the previous quarter, but increased by 8% to 8,760 Mmcfe for the year [7]. - Total production volumes for the fourth quarter were 2,379 Mmcfe, unchanged from the previous quarter, and increased by 5% to 9,841 Mmcfe for the year [7]. - The company converted 71 gross (0.22 net) wells to producing status in the fourth quarter, compared to 46 gross (0.10 net) wells in the same quarter of 2023 [22]. Reserves and Acquisitions - Proved royalty reserves decreased by 9% to 52.5 Bcfe as of December 31, 2024, compared to 57.8 Bcfe at the end of 2023 [29]. - The company purchased 363 net royalty acres for approximately $2.5 million during the fourth quarter [27]. Debt and Cash Flow - Total debt was $29.5 million at December 31, 2024, down from $32.8 million at the end of 2023, with a debt-to-adjusted EBITDA ratio of 1.38x [7][39]. - Cash flow from operations for the year was $18.1 million, down from $24.2 million in 2023 [40]. Strategic Initiatives - The company is evaluating strategic alternatives to maximize stockholder value in collaboration with RBC [4].

Company Overview - PHX Minerals Inc. is a natural gas and oil mineral company focused on proactively growing its mineral position in core areas [3] - The company owns mineral acreage primarily located in Oklahoma, Texas, Louisiana, North Dakota, and Arkansas [3] Upcoming Financial Results - PHX Minerals will release its financial results for the year ended December 31, 2024, after the market closes on March 12, 2025 [1] - A conference call to discuss the results will be held on March 13, 2025, at 11 a.m. ET [2] Access to Conference Call - Interested parties can join the conference call by dialing 877-407-3088 (U.S. Toll-Free) or 201-389-0927 [2] - A replay of the conference call will be available for 14 days using the access code 13751358 [2] - A live audio webcast of the conference call will be accessible from the "Investors" section of the PHX website and archived for at least 90 days [2]

Core Insights - PHX Energy achieved its highest quarterly revenue in history for Q4 2024, generating $178.7 million, an 8% increase from $165.3 million in Q4 2023 [3][9][32] - The US division's revenue reached a record $132.3 million, up 8% from $122.1 million in the same quarter of 2023, while the Canadian division reported $46.3 million, a 7% increase from $43.3 million [10][11] - Despite increased revenue, adjusted EBITDA declined to $29.6 million (17% of revenue) from $35.4 million (21% of revenue) in Q4 2023, primarily due to higher equipment repair costs and weaker activity in high-margin revenue streams [12][41] Financial Highlights - For the year ended December 31, 2024, consolidated revenue was $659.7 million, a 1% increase from $656.3 million in 2023 [13][14] - Annual earnings decreased to $54.6 million ($1.16 per share) from $98.6 million ($1.96 per share) in 2023, with adjusted EBITDA at $123.7 million (19% of revenue) compared to $150.7 million (23% of revenue) in 2023 [14][16] - The corporation's cash flow from operating activities was $96.9 million for the year, with excess cash flow of $47.6 million after net capital expenditures of $46.5 million [5][20] Capital Expenditures and Shareholder Returns - Capital expenditures for 2024 totaled $83.3 million, with $73.4 million allocated to growing the drilling equipment fleet [24][26] - The corporation paid $37.6 million in dividends for the year, a 24% increase from 2023, and continued its Normal Course Issuer Bid (NCIB), repurchasing 2,141,232 shares for $20.6 million [19][22] - The board approved a preliminary capital expenditure budget of $50 million for 2025, with expectations to spend $55 million including carryover from 2024 [26] Operational Performance - The corporation's consolidated operating days increased by 7% to 7,807 days in Q4 2024, outperforming industry trends where the US rig count declined by 6% [33][34] - The Canadian division's operating days grew by 6%, reflecting a strong market position and demand for high-margin services [11][35] - The average revenue per day for directional drilling services slightly decreased by 1% to $20,930 in Q4 2024 [36] Outlook and Strategic Focus - The corporation anticipates continued strong performance in 2025, particularly in the US division, driven by increased RSS utilization and proprietary technology [8] - Plans to expand the Atlas motor rental business are in place, with expectations for revenue growth aligned with customer fleet expansions [8] - The corporation remains committed to its Return of Capital Strategy (ROCS), targeting up to 70% of excess cash flow for shareholder returns [19]

Core Viewpoint - PHX Energy Services Corp. is undergoing a leadership transition with John Hooks moving to Executive Board Chair and Michael Buker appointed as the new CEO effective March 1, 2025, as part of a long-term succession plan to ensure continuity in business strategy and operations [1][2][3] Leadership Transition - John Hooks, the founder and current CEO, will transition to Executive Board Chair, continuing to provide mentorship and guidance to the executive team [1][3] - Michael Buker, who has been with the Corporation since 1998 and has served as President, will take over as CEO and is expected to be nominated for election to the Board at the next Annual General Meeting [1][2] Executive Team Changes - Alongside the CEO transition, Jeffery Shafer has been promoted to Chief Operating Officer and Craig Brown to Chief Technology Officer, both of whom have extensive experience within the Corporation [4][5] - The new executive team will focus on operational growth, business development, and technology strategies to maintain the Corporation's market position [4][6] Company Background - PHX Energy Services Corp. specializes in providing horizontal and directional drilling technology and services primarily in Canada and the US, and is recognized as the largest independent directional drilling company in North America [7]

Core Viewpoint - PHX Minerals Inc. has initiated a process to evaluate strategic alternatives aimed at maximizing shareholder value, which may include a potential merger or sale of the company [1]. Company Overview - PHX Minerals Inc. is a natural gas and oil mineral company focused on growing its mineral position in key areas, owning mineral acreage primarily in Oklahoma, Texas, Louisiana, North Dakota, and Arkansas [2].

Group 1 - PHX Minerals Inc. has received a proposal from WhiteHawk Energy, LLC to acquire the company [1][2] - The Board of Directors of PHX has decided to decline the acquisition proposal, believing it is in the best interest of the stockholders [2] - PHX Minerals focuses on growing its mineral position in key areas, owning mineral acreage primarily in Oklahoma, Texas, Louisiana, North Dakota, and Arkansas [3]