Q2 2024 PHX Minerals Inc Earnings Call Transcript
Key Points
- PHX Minerals Inc (PHX) reported the highest corporate production volumes since Q2 2018, reflecting successful replacement of divested working interest volumes with high-quality royalty interest volumes.
- The company achieved a 46% increase in royalty production for the quarter, setting an all-time quarterly record for PHX.
- PHX reduced its debt by $4 million or 12% since year-end 2023, maintaining a strong balance sheet with a leverage metric under $1.5 million.
- The Board decided to increase the dividend by 33% to $0.16 per share, marking a 400% increase since March 2020.
- PHX closed on approximately $3.5 million of mineral acquisitions year-to-date in key areas like SCOOP and Haynesville, with more opportunities being evaluated.
- The macro environment remains challenging with suppressed commodity prices and reduced rig activity, particularly in natural gas basins.
- There is volatility in production volumes due to the company's lack of control over well development timing, leading to potential quarter-to-quarter fluctuations.
- Transportation, gathering, and marketing fees increased by 83% sequentially, driven by higher volumes and cost-bearing leases.
- Production and ad valorem taxes rose by 52% due to higher production volumes, particularly in Louisiana where taxes are volume-based.
- The company faces a greater than 25% annual decline rate in its royalty interest wells, necessitating continuous replacement and growth efforts.
Good morning, and thank you for attending today's PHX Minerals' June 30, 2024, quarter end earnings conference call. (Operator Instruction) As a reminder, this call is being recorded.
I would now like to turn the call over to Stephen Lee with FNK IR. Please go ahead, sir.
Thank you, operator. Good morning, and thank you for joining us today to discuss PHX Minerals' June 30, 2024, quarterly results. Joining us on the call today are Chad Stephens, President and Chief Executive Officer; Ralph D'Amico, Executive Vice President and Chief Financial Officer; and Danielle Mezo, Vice President of Engineering. The earnings press release that was issued yesterday after the close is also posted on PHX Investor Relations website.
Before I turn the call over to Chad, I would like to remind everyone that during today's call, including the Q&A session, management may make forward-looking statements regarding expected revenue, earnings, future plans, opportunities, and other expectation of the company. These
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