0000315131 false 2021 Q2 --09-30 P30D true P18M P5Y P2Y8M1D P1Y2M15D 2207500 2200500 86000 1166500 377500 84000 33500 68500 87000 59000 2.35 2.40 2.25 3.04 3.12 2.96 36.76 40.25 45.00 50.35 0000315131 2020-10-01 2021-03-31 xbrli:shares 0000315131 2021-05-06 iso4217:USD 0000315131 2021-03-31 0000315131 2020-09-30 iso4217:USD xbrli:shares 0000315131 us-gaap:OilAndGasMember 2021-01-01 2021-03-31 0000315131 us-gaap:OilAndGasMember 2020-01-01 2020-03-31 0000315131 us-gaap:OilAndGasMember 2020-10-01 2021-03-31 0000315131 us-gaap:OilAndGasMember 2019-10-01 2020-03-31 0000315131 phx:LeaseBonusesAndRentalIncomeMember 2021-01-01 2021-03-31 0000315131 phx:LeaseBonusesAndRentalIncomeMember 2020-01-01 2020-03-31 0000315131 phx:LeaseBonusesAndRentalIncomeMember 2020-10-01 2021-03-31 0000315131 phx:LeaseBonusesAndRentalIncomeMember 2019-10-01 2020-03-31 0000315131 2021-01-01 2021-03-31 0000315131 2020-01-01 2020-03-31 0000315131 2019-10-01 2020-03-31 0000315131 us-gaap:CommonStockMember 2020-09-30 0000315131 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0000315131 us-gaap:DeferredCompensationShareBasedPaymentsMember 2020-09-30 0000315131 us-gaap:RetainedEarningsMember 2020-09-30 0000315131 us-gaap:TreasuryStockMember 2020-09-30 0000315131 us-gaap:RetainedEarningsMember 2020-10-01 2020-12-31 0000315131 2020-10-01 2020-12-31 0000315131 us-gaap:CommonStockMember 2020-10-01 2020-12-31 0000315131 us-gaap:AdditionalPaidInCapitalMember 2020-10-01 2020-12-31 0000315131 us-gaap:TreasuryStockMember 2020-10-01 2020-12-31 0000315131 us-gaap:DeferredCompensationShareBasedPaymentsMember 2020-10-01 2020-12-31 0000315131 us-gaap:CommonStockMember 2020-12-31 0000315131 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0000315131 us-gaap:DeferredCompensationShareBasedPaymentsMember 2020-12-31 0000315131 us-gaap:RetainedEarningsMember 2020-12-31 0000315131 us-gaap:TreasuryStockMember 2020-12-31 0000315131 2020-12-31 0000315131 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0000315131 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0000315131 us-gaap:TreasuryStockMember 2021-01-01 2021-03-31 0000315131 us-gaap:CommonStockMember 2021-01-01 2021-03-31 0000315131 us-gaap:DeferredCompensationShareBasedPaymentsMember 2021-01-01 2021-03-31 0000315131 us-gaap:CommonStockMember 2021-03-31 0000315131 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0000315131 us-gaap:DeferredCompensationShareBasedPaymentsMember 2021-03-31 0000315131 us-gaap:RetainedEarningsMember 2021-03-31 0000315131 us-gaap:TreasuryStockMember 2021-03-31 0000315131 us-gaap:CommonStockMember 2019-09-30 0000315131 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0000315131 us-gaap:DeferredCompensationShareBasedPaymentsMember 2019-09-30 0000315131 us-gaap:RetainedEarningsMember 2019-09-30 0000315131 us-gaap:TreasuryStockMember 2019-09-30 0000315131 2019-09-30 0000315131 us-gaap:RetainedEarningsMember 2019-10-01 2019-12-31 0000315131 2019-10-01 2019-12-31 0000315131 us-gaap:TreasuryStockMember 2019-10-01 2019-12-31 0000315131 us-gaap:AdditionalPaidInCapitalMember 2019-10-01 2019-12-31 0000315131 us-gaap:DeferredCompensationShareBasedPaymentsMember 2019-10-01 2019-12-31 0000315131 us-gaap:CommonStockMember 2019-12-31 0000315131 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000315131 us-gaap:DeferredCompensationShareBasedPaymentsMember 2019-12-31 0000315131 us-gaap:RetainedEarningsMember 2019-12-31 0000315131 us-gaap:TreasuryStockMember 2019-12-31 0000315131 2019-12-31 0000315131 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0000315131 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0000315131 us-gaap:DeferredCompensationShareBasedPaymentsMember 2020-01-01 2020-03-31 0000315131 us-gaap:TreasuryStockMember 2020-01-01 2020-03-31 0000315131 us-gaap:CommonStockMember 2020-03-31 0000315131 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0000315131 us-gaap:DeferredCompensationShareBasedPaymentsMember 2020-03-31 0000315131 us-gaap:RetainedEarningsMember 2020-03-31 0000315131 us-gaap:TreasuryStockMember 2020-03-31 0000315131 2020-03-31 0000315131 phx:NaturalGasMember phx:RoyaltyInterestMember 2021-01-01 2021-03-31 0000315131 phx:NaturalGasMember phx:WorkingInterestMember 2021-01-01 2021-03-31 0000315131 phx:NaturalGasMember 2021-01-01 2021-03-31 0000315131 phx:OilMember phx:RoyaltyInterestMember 2021-01-01 2021-03-31 0000315131 phx:OilMember phx:WorkingInterestMember 2021-01-01 2021-03-31 0000315131 phx:OilMember 2021-01-01 2021-03-31 0000315131 srt:NaturalGasLiquidsReservesMember phx:RoyaltyInterestMember 2021-01-01 2021-03-31 0000315131 srt:NaturalGasLiquidsReservesMember phx:WorkingInterestMember 2021-01-01 2021-03-31 0000315131 srt:NaturalGasLiquidsReservesMember 2021-01-01 2021-03-31 0000315131 phx:RoyaltyInterestMember 2021-01-01 2021-03-31 0000315131 phx:WorkingInterestMember 2021-01-01 2021-03-31 0000315131 phx:NaturalGasMember phx:RoyaltyInterestMember 2020-01-01 2020-03-31 0000315131 phx:NaturalGasMember phx:WorkingInterestMember 2020-01-01 2020-03-31 0000315131 phx:NaturalGasMember 2020-01-01 2020-03-31 0000315131 phx:OilMember phx:RoyaltyInterestMember 2020-01-01 2020-03-31 0000315131 phx:OilMember phx:WorkingInterestMember 2020-01-01 2020-03-31 0000315131 phx:OilMember 2020-01-01 2020-03-31 0000315131 srt:NaturalGasLiquidsReservesMember phx:RoyaltyInterestMember 2020-01-01 2020-03-31 0000315131 srt:NaturalGasLiquidsReservesMember phx:WorkingInterestMember 2020-01-01 2020-03-31 0000315131 srt:NaturalGasLiquidsReservesMember 2020-01-01 2020-03-31 0000315131 phx:RoyaltyInterestMember 2020-01-01 2020-03-31 0000315131 phx:WorkingInterestMember 2020-01-01 2020-03-31 0000315131 phx:NaturalGasMember phx:RoyaltyInterestMember 2020-10-01 2021-03-31 0000315131 phx:NaturalGasMember phx:WorkingInterestMember 2020-10-01 2021-03-31 0000315131 phx:NaturalGasMember 2020-10-01 2021-03-31 0000315131 phx:OilMember phx:RoyaltyInterestMember 2020-10-01 2021-03-31 0000315131 phx:OilMember phx:WorkingInterestMember 2020-10-01 2021-03-31 0000315131 phx:OilMember 2020-10-01 2021-03-31 0000315131 srt:NaturalGasLiquidsReservesMember phx:RoyaltyInterestMember 2020-10-01 2021-03-31 0000315131 srt:NaturalGasLiquidsReservesMember phx:WorkingInterestMember 2020-10-01 2021-03-31 0000315131 srt:NaturalGasLiquidsReservesMember 2020-10-01 2021-03-31 0000315131 phx:RoyaltyInterestMember 2020-10-01 2021-03-31 0000315131 phx:WorkingInterestMember 2020-10-01 2021-03-31 0000315131 phx:NaturalGasMember phx:RoyaltyInterestMember 2019-10-01 2020-03-31 0000315131 phx:NaturalGasMember phx:WorkingInterestMember 2019-10-01 2020-03-31 0000315131 phx:NaturalGasMember 2019-10-01 2020-03-31 0000315131 phx:OilMember phx:RoyaltyInterestMember 2019-10-01 2020-03-31 0000315131 phx:OilMember phx:WorkingInterestMember 2019-10-01 2020-03-31 0000315131 phx:OilMember 2019-10-01 2020-03-31 0000315131 srt:NaturalGasLiquidsReservesMember phx:RoyaltyInterestMember 2019-10-01 2020-03-31 0000315131 srt:NaturalGasLiquidsReservesMember phx:WorkingInterestMember 2019-10-01 2020-03-31 0000315131 srt:NaturalGasLiquidsReservesMember 2019-10-01 2020-03-31 0000315131 phx:RoyaltyInterestMember 2019-10-01 2020-03-31 0000315131 phx:WorkingInterestMember 2019-10-01 2020-03-31 0000315131 srt:MinimumMember 2020-10-01 2021-03-31 0000315131 srt:MaximumMember 2020-10-01 2021-03-31 0000315131 us-gaap:OilAndGasMember phx:NewWellsOnPHXAcreageMember 2020-10-01 2021-03-31 0000315131 us-gaap:OilAndGasMember phx:NewWellsOnPHXAcreageMember 2019-10-01 2020-09-30 0000315131 us-gaap:OilAndGasMember phx:NewWellsOnPHXAcreageMember 2020-10-01 2020-12-31 0000315131 us-gaap:OilAndGasMember phx:NewWellsOnPHXAcreageMember 2019-10-01 2020-03-31 0000315131 us-gaap:OilAndGasMember phx:NewWellsOnPHXAcreageMember 2018-10-01 2019-09-30 0000315131 us-gaap:OilAndGasMember phx:NewWellsOnPHXAcreageMember 2019-10-01 2019-12-31 xbrli:pure 0000315131 phx:CoronavirusAidReliefAndEconomicSecurityActMember 2020-03-27 2020-03-27 0000315131 phx:CoronavirusAidReliefAndEconomicSecurityActMember 2020-07-27 2020-07-28 0000315131 phx:CoronavirusAidReliefAndEconomicSecurityActMember 2020-07-28 0000315131 phx:CoronavirusAidReliefAndEconomicSecurityActMember 2021-01-01 2021-03-31 0000315131 phx:CoronavirusAidReliefAndEconomicSecurityActMember us-gaap:DomesticCountryMember 2020-12-31 0000315131 us-gaap:RevolvingCreditFacilityMember 2021-03-31 0000315131 us-gaap:RevolvingCreditFacilityMember 2020-10-01 2021-03-31 0000315131 srt:MinimumMember us-gaap:PrimeRateMember us-gaap:RevolvingCreditFacilityMember 2020-10-01 2021-03-31 0000315131 srt:MaximumMember us-gaap:PrimeRateMember us-gaap:RevolvingCreditFacilityMember 2020-10-01 2021-03-31 0000315131 srt:MinimumMember us-gaap:LondonInterbankOfferedRateLIBORMember us-gaap:RevolvingCreditFacilityMember 2020-10-01 2021-03-31 0000315131 srt:MaximumMember us-gaap:LondonInterbankOfferedRateLIBORMember us-gaap:RevolvingCreditFacilityMember 2020-10-01 2021-03-31 0000315131 us-gaap:RevolvingCreditFacilityMember 2020-06-23 2020-06-24 0000315131 us-gaap:RevolvingCreditFacilityMember 2020-12-04 2020-12-04 0000315131 us-gaap:RevolvingCreditFacilityMember srt:MinimumMember 2021-03-31 0000315131 us-gaap:RevolvingCreditFacilityMember 2020-12-04 0000315131 phx:TimeBasedRestrictedStockMember phx:NonEmployeeDirectorMember 2021-03-22 0000315131 phx:TimeBasedRestrictedStockMember phx:NonEmployeeDirectorMember 2021-03-22 2021-03-22 0000315131 phx:MarketBasedRestrictedStockMember srt:OfficerMember 2021-01-05 2021-01-05 0000315131 phx:MarketBasedRestrictedStockMember srt:OfficerMember 2021-01-05 0000315131 phx:MarketBasedRestrictedStockMember 2021-01-01 2021-03-31 0000315131 phx:MarketBasedRestrictedStockMember 2020-01-01 2020-03-31 0000315131 phx:MarketBasedRestrictedStockMember 2020-10-01 2021-03-31 0000315131 phx:MarketBasedRestrictedStockMember 2019-10-01 2020-03-31 0000315131 phx:TimeBasedRestrictedStockMember 2021-01-01 2021-03-31 0000315131 phx:TimeBasedRestrictedStockMember 2020-01-01 2020-03-31 0000315131 phx:TimeBasedRestrictedStockMember 2020-10-01 2021-03-31 0000315131 phx:TimeBasedRestrictedStockMember 2019-10-01 2020-03-31 0000315131 phx:MarketBasedRestrictedStockMember 2021-03-31 0000315131 phx:TimeBasedRestrictedStockMember 2021-03-31 utr:acre 0000315131 stpr:NM 2019-12-31 0000315131 stpr:NM 2019-10-01 2019-12-31 0000315131 phx:HarrisonCountyTexasMember 2021-01-21 2021-01-21 0000315131 phx:SanAugustineCountyTexasMember 2020-12-16 2020-12-17 0000315131 phx:SanAugustineCountyTexasMember 2020-11-12 2020-11-12 0000315131 stpr:OK 2020-10-08 2020-10-08 0000315131 phx:HarrisonPanolaAndNacogdochesCountiesTexasMember 2020-10-08 2020-10-08 0000315131 2020-10-08 2020-10-08 0000315131 phx:KingfisherCanadianAndGarvinCountiesOklahomaMember 2019-10-01 2019-12-31 0000315131 phx:FayettevilleShaleMember 2020-01-01 2020-03-31 0000315131 phx:EagleFordFieldsMember 2020-01-01 2020-03-31 0000315131 us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember 2020-01-01 2020-03-31 utr:MMBTU 0000315131 phx:NaturalGasCostlessCollarsMember phx:DerivativeContractPeriodOneMember 2021-03-31 0000315131 phx:NaturalGasCostlessCollarsMember phx:DerivativeContractPeriodTwoMember 2021-03-31 0000315131 phx:NaturalGasCostlessCollarsMember phx:DerivativeContractPeriodThreeMember 2021-03-31 0000315131 phx:NaturalGasFixedPriceSwapsMember phx:DerivativeContractPeriodOneMember 2021-03-31 0000315131 phx:NaturalGasFixedPriceSwapsMember phx:DerivativeContractPeriodTwoMember 2021-03-31 0000315131 phx:NaturalGasFixedPriceSwapsMember phx:DerivativeContractPeriodThreeMember 2021-03-31 iso4217:USD utr:MMBTU 0000315131 srt:MinimumMember phx:NaturalGasCostlessCollarsMember phx:DerivativeContractPeriodOneMember 2021-03-31 0000315131 srt:MinimumMember phx:NaturalGasCostlessCollarsMember phx:DerivativeContractPeriodTwoMember 2021-03-31 0000315131 srt:MinimumMember phx:NaturalGasCostlessCollarsMember phx:DerivativeContractPeriodThreeMember 2021-03-31 0000315131 srt:MaximumMember phx:NaturalGasCostlessCollarsMember phx:DerivativeContractPeriodOneMember 2021-03-31 0000315131 srt:MaximumMember phx:NaturalGasCostlessCollarsMember phx:DerivativeContractPeriodTwoMember 2021-03-31 0000315131 srt:MaximumMember phx:NaturalGasCostlessCollarsMember phx:DerivativeContractPeriodThreeMember 2021-03-31 utr:bbl 0000315131 phx:OilCostlessCollarsMember phx:DerivativeContractPeriodOneMember 2021-03-31 0000315131 phx:OilCostlessCollarsMember phx:DerivativeContractPeriodTwoMember 2021-03-31 0000315131 phx:OilFixedPriceSwapsMember phx:DerivativeContractPeriodOneMember 2021-03-31 0000315131 phx:OilFixedPriceSwapsMember phx:DerivativeContractPeriodTwoMember 2021-03-31 iso4217:USD utr:bbl 0000315131 srt:MinimumMember phx:OilCostlessCollarsMember phx:DerivativeContractPeriodOneMember 2021-03-31 0000315131 srt:MinimumMember phx:OilCostlessCollarsMember phx:DerivativeContractPeriodTwoMember 2021-03-31 0000315131 srt:MaximumMember phx:OilCostlessCollarsMember phx:DerivativeContractPeriodOneMember 2021-03-31 0000315131 srt:MaximumMember phx:OilCostlessCollarsMember phx:DerivativeContractPeriodTwoMember 2021-03-31 0000315131 phx:NaturalGasCostlessCollarsMember 2021-01-01 2021-03-31 0000315131 phx:NaturalGasCostlessCollarsMember 2020-10-01 2021-03-31 0000315131 phx:NaturalGasFixedPriceSwapsMember 2021-01-01 2021-03-31 0000315131 phx:NaturalGasFixedPriceSwapsMember 2020-01-01 2020-03-31 0000315131 phx:NaturalGasFixedPriceSwapsMember 2020-10-01 2021-03-31 0000315131 phx:NaturalGasFixedPriceSwapsMember 2019-10-01 2020-03-31 0000315131 phx:OilCostlessCollarsMember 2021-01-01 2021-03-31 0000315131 phx:OilCostlessCollarsMember 2020-01-01 2020-03-31 0000315131 phx:OilCostlessCollarsMember 2020-10-01 2021-03-31 0000315131 phx:OilCostlessCollarsMember 2019-10-01 2020-03-31 0000315131 phx:OilFixedPriceSwapsMember 2021-01-01 2021-03-31 0000315131 phx:OilFixedPriceSwapsMember 2020-01-01 2020-03-31 0000315131 phx:OilFixedPriceSwapsMember 2020-10-01 2021-03-31 0000315131 phx:OilFixedPriceSwapsMember 2019-10-01 2020-03-31 0000315131 phx:NaturalGasCostlessCollarsMember 2020-01-01 2020-03-31 0000315131 phx:NaturalGasCostlessCollarsMember 2019-10-01 2020-03-31 0000315131 us-gaap:FairValueInputsLevel2Member us-gaap:SwapMember 2021-03-31 0000315131 us-gaap:FairValueInputsLevel2Member phx:CollarsMember 2021-03-31 0000315131 us-gaap:SwapMember 2021-03-31 0000315131 phx:CollarsMember 2021-03-31 0000315131 us-gaap:RevolvingCreditFacilityMember us-gaap:SubsequentEventMember phx:BOKFNADbaBankOfOklahomaMember 2021-04-07 0000315131 us-gaap:RevolvingCreditFacilityMember us-gaap:SubsequentEventMember phx:BOKFNADbaBankOfOklahomaMember 2021-04-07 2021-04-07 0000315131 us-gaap:RevolvingCreditFacilityMember us-gaap:SubsequentEventMember phx:BOKFNADbaBankOfOklahomaMember 2021-04-14 2021-04-14 0000315131 us-gaap:RevolvingCreditFacilityMember us-gaap:SubsequentEventMember phx:BOKFNADbaBankOfOklahomaMember 2021-04-15 2021-04-15 0000315131 us-gaap:RevolvingCreditFacilityMember us-gaap:SubsequentEventMember phx:BOKFNADbaBankOfOklahomaMember 2021-04-06 2021-04-06 phx:Ratio 0000315131 us-gaap:RevolvingCreditFacilityMember us-gaap:SubsequentEventMember srt:MaximumMember phx:BOKFNADbaBankOfOklahomaMember 2021-04-07 2021-04-07 0000315131 us-gaap:SubsequentEventMember us-gaap:RevolvingCreditFacilityMember 2021-04-28 2021-04-28 0000315131 us-gaap:SubsequentEventMember us-gaap:RevolvingCreditFacilityMember 2021-04-28 0000315131 phx:UnderwrittenPublicOfferingMember us-gaap:SubsequentEventMember us-gaap:CommonStockMember 2021-04-23 2021-04-23 0000315131 us-gaap:SubsequentEventMember phx:SellersMember 2021-04-30 2021-04-30

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the period ended  March 31, 2021

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                        

Commission File Number 001-31759

PHX MINERALS INC.

(Exact name of registrant as specified in its charter)

 

Oklahoma

73-1055775

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

Valliance Bank Tower, Suite 1100, 1601 NW Expressway, Oklahoma City, Oklahoma  73118

(Address of principal executive offices)

Registrant's telephone number including area code (405) 948-1560

Securities registered pursuant in Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock, $0.01666 par value

 

PHX

 

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☑    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

  ☐  

Accelerated filer

  ☐  

Non-accelerated filer

  ☑  

Smaller reporting company

    

Emerging growth company    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  

Outstanding shares of Class A Common stock (voting) at May 6, 2021: 30,401,168 shares


INDEX

 

 

Part I

 

Financial Information

Page

 

 

 

 

 

 

 

 

Item 1

 

Condensed Financial Statements

1

 

 

 

 

 

 

 

 

 

 

Condensed Balance Sheets – March 31, 2021, and September 30, 2020

1

 

 

 

 

 

 

 

 

 

 

Condensed Statements of Operations – Three and six months ended March 31, 2021 and 2020

2

 

 

 

 

 

 

 

 

 

 

Statements of Stockholders’ Equity – Six months ended March 31, 2021 and 2020

3

 

 

 

 

 

 

 

 

 

 

Condensed Statements of Cash Flows – Six months ended March 31, 2021 and 2020

4

 

 

 

 

 

 

 

 

 

 

Notes to Condensed Financial Statements

5

 

 

 

 

 

 

 

 

Item 2

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

14

 

 

 

 

 

 

 

 

Item 3

 

Quantitative and Qualitative Disclosures about Market Risk

24

 

 

 

 

 

 

 

 

Item 4

 

Controls and Procedures

25

 

 

 

 

 

 

Part II

 

Other Information

 

 

 

 

 

 

 

 

 

Item 1

 

Legal Proceedings

25

 

 

 

 

 

 

 

 

Item 1A

 

Risk Factors

25

 

 

 

 

 

 

 

 

Item 2

 

Unregistered Sales of Equity Securities and Use of Proceeds

25

 

 

 

 

 

 

 

 

Item 6

 

Exhibits

26

 

 

 

 

 

 

 

 

Signatures

26

 



 

Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q (“Form 10-Q”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements in this Form 10-Q by words such as “anticipate,” “project,” “intend,” “estimate,” “expect,” “believe,” “predict,” “budget,” “projection,” “goal,” “plan,” “forecast,” “target” or similar expressions.

All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements may include, but are not limited to, statements relating to: our ability to execute our business strategies; the volatility of realized natural gas and oil prices; the level of production on our properties; estimates of quantities of natural gas, oil and NGL reserves and their values; general economic or industry conditions; public health crises, such as the COVID-19 pandemic, and any related actions taken by businesses and governments; legislation or regulatory requirements; conditions of the securities markets; our ability to raise capital; changes in accounting principles, policies or guidelines; financial or political instability; acts of war or terrorism; title defects in the properties in which we invest; and other economic, competitive, governmental, regulatory or technical factors affecting our properties, operations or prices.

We caution you that the forward-looking statements contained in this Form 10-Q are subject to risks and uncertainties, many of which are beyond our control, incident to the exploration for and development, production and sale of natural gas, oil, and NGLs. These risks include, but are not limited to, the risks described in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020 (“Annual Report”), and all quarterly reports on Form 10-Q filed subsequently thereto, including the risks described in Item 1A of this Form 10-Q. Investors should also read the other information in this Form 10-Q and the Annual Report where risk factors are presented and further discussed.

Should one or more of the risks or uncertainties described above or elsewhere in this Form 10-Q occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. Any forward-looking statement speaks only as of the date of which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except required by applicable law.

Except as required by applicable law, all forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement. This cautionary statement should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.



 

Glossary of Certain Terms

 

The following is a glossary of certain accounting, oil and natural gas industry and other defined terms used in this Form 10-Q:

 

ASC

Accounting Standards Codification.

ASU

Accounting Standards Update.

Bbl

barrel.

Board

board of directors of the Company.

BTU

British Thermal Units.

completion

the process of treating a drilled well followed by the installation of permanent equipment for the production of crude oil and/or natural gas.

DD&A

depreciation, depletion and amortization.

EBITDA

earnings before interest, taxes, depreciation and amortization (including impairment). This is a Non-GAAP measure.

ESOP

the Panhandle Oil and Gas Inc. Employee Stock Ownership and 401(k) Plan, a tax qualified, defined contribution plan.

FASB

the Financial Accounting Standards Board.

field

an area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

G&A

general and administrative costs.

GAAP

generally accepted accounting principles.

Independent Consulting Petroleum Engineer(s)

DeGolyer and MacNaughton of Dallas, Texas.

LOE

lease operating expense.

Mcf

thousand cubic feet.

Mcfe

natural gas stated on an Mcf basis and crude oil and natural gas liquids converted to a thousand cubic feet of natural gas equivalent by using the ratio of one Bbl of crude oil or natural gas liquids to six Mcf of natural gas.

Mmbtu

million BTU.

minerals, mineral acres or mineral interests

fee mineral acreage owned in perpetuity by the Company.

NGL

natural gas liquids.

NYMEX

New York Mercantile Exchange.

play

term applied to identified areas with potential oil and/or natural gas reserves.

proved reserves

the quantities of crude oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs and under existing economic conditions, operating methods, and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates renewal is reasonably certain.

royalty interest

well interests in which the Company does not pay a share of the costs to drill, complete and operate a well, but receives a smaller proportionate share (as compared to a working interest) of production.

SEC

the United States Securities and Exchange Commission.

undeveloped acreage

acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of crude oil and/or natural gas.

working interest

well interests in which the Company pays a share of the costs to drill, complete and operate a well and receives a proportionate share of production.

WTI

West Texas Intermediate.

 

Fiscal year references

All references to years in this Form 10-Q, unless otherwise noted, refer to the Company’s fiscal year end of September 30. For example, references to 2021 mean the fiscal year ended September 30, 2021.

Fiscal quarter references

All references to quarters in this Form 10-Q, unless otherwise noted, refer to the Company’s fiscal quarter based on a fiscal year end of September 30. For example, references to first quarter mean the quarter of October 1 through December 31.

References to natural gas and oil properties

References to natural gas and oil properties in this Form 10-Q inherently include NGL associated with such properties.

 


 

 

 

PART I FINANCIAL INFORMATION

 

ITEM 1 CONDENSED FINANCIAL STATEMENTS

 

PHX MINERALS INC.

CONDENSED BALANCE SHEETS

 

 

 

March 31, 2021

 

 

September 30, 2020

 

Assets

 

(unaudited)

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,270,482

 

 

$

10,690,395

 

Natural gas, oil, and NGL sales receivables (net of $0 allowance for uncollectable accounts)

 

 

4,712,793

 

 

 

2,943,220

 

Refundable income taxes

 

 

2,448,871

 

 

 

3,805,227

 

Other

 

 

752,248

 

 

 

351,088

 

Total current assets

 

 

9,184,394

 

 

 

17,789,930

 

 

 

 

 

 

 

 

 

 

Properties and equipment at cost, based on successful efforts accounting:

 

 

 

 

 

 

 

 

Producing natural gas and oil properties

 

 

329,708,071

 

 

 

324,886,491

 

Non-producing natural gas and oil properties

 

 

21,012,897

 

 

 

18,993,814

 

Other

 

 

582,444

 

 

 

582,444

 

 

 

 

351,303,412

 

 

 

344,462,749

 

Less accumulated depreciation, depletion and amortization

 

 

(265,863,136

)

 

 

(263,590,801

)

Net properties and equipment

 

 

85,440,276

 

 

 

80,871,948

 

 

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

649,500

 

 

 

690,316

 

Other, net

 

 

593,150

 

 

 

669,641

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

95,867,320

 

 

$

100,021,835

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

672,507

 

 

$

997,637

 

Derivative contracts, net

 

 

3,000,530

 

 

 

281,942

 

Current portion of operating lease liability

 

 

129,672

 

 

 

127,108

 

Accrued liabilities and other

 

 

1,382,066

 

 

 

1,297,363

 

Short-term debt

 

 

-

 

 

 

1,750,000

 

Total current liabilities

 

 

5,184,775

 

 

 

4,454,050

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

23,500,000

 

 

 

27,000,000

 

Deferred income taxes, net

 

 

1,041,007

 

 

 

1,329,007

 

Asset retirement obligations

 

 

2,927,662

 

 

 

2,897,522

 

Derivative contracts, net

 

 

625,179

 

 

 

425,705

 

Operating lease liability, net of current portion

 

 

856,142

 

 

 

921,625

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Class A voting common stock, $0.01666 par value; 36,000,500 shares authorized;

  22,825,226 issued at March 31, 2021, and Class A voting common stock, $0.01666 par value; 24,000,500 shares authorized; 22,647,306 issued at September 30, 2020

 

 

380,268

 

 

 

377,304

 

Capital in excess of par value

 

 

11,150,749

 

 

 

10,649,611

 

Deferred directors' compensation

 

 

1,633,939

 

 

 

1,874,007

 

Retained earnings

 

 

54,402,724

 

 

 

56,244,100

 

 

 

 

67,567,680

 

 

 

69,145,022

 

Less treasury stock, at cost; 390,267 shares at March 31, 2021, and 411,487 shares

   at September 30, 2020

 

 

(5,835,125

)

 

 

(6,151,096

)

Total stockholders' equity

 

 

61,732,555

 

 

 

62,993,926

 

Total liabilities and stockholders' equity

 

$

95,867,320

 

 

$

100,021,835

 

 

(The accompanying notes are an integral part of these condensed financial statements.)

(1)


 

PHX MINERALS INC.

CONDENSED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended March 31,

 

 

Six Months Ended March 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues:

 

(unaudited)

 

 

(unaudited)

 

Natural gas, oil and NGL sales

 

$

8,345,825

 

 

$

7,217,618

 

 

$

14,770,804

 

 

$

14,811,456

 

Lease bonuses and rental income

 

 

58,554

 

 

 

22,092

 

 

 

59,987

 

 

 

549,791

 

Gains (losses) on derivative contracts

 

 

(2,348,143

)

 

 

4,071,577

 

 

 

(2,602,179

)

 

 

3,253,683

 

Gain on asset sales

 

 

23,257

 

 

 

-

 

 

 

43,525

 

 

 

3,272,888

 

 

 

 

6,079,493

 

 

 

11,311,287

 

 

 

12,272,137

 

 

 

21,887,818

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

 

1,030,651

 

 

 

1,542,199

 

 

 

2,035,063

 

 

 

2,723,870

 

Transportation, gathering and marketing

 

 

1,319,514

 

 

 

1,356,628

 

 

 

2,600,479

 

 

 

2,739,629

 

Production taxes

 

 

443,154

 

 

 

373,754

 

 

 

719,180

 

 

 

701,035

 

Depreciation, depletion and amortization

 

 

1,777,817

 

 

 

3,373,518

 

 

 

4,038,466

 

 

 

6,329,219

 

Provision for impairment

 

 

-

 

 

 

29,545,702

 

 

 

-

 

 

 

29,545,702

 

Interest expense

 

 

267,865

 

 

 

346,573

 

 

 

569,763

 

 

 

717,238

 

General and administrative

 

 

2,059,476

 

 

 

2,174,661

 

 

 

3,790,573

 

 

 

4,397,689

 

Other expense (income)

 

 

(102,261

)

 

 

40,066

 

 

 

(98,944

)

 

 

29,136

 

 

 

 

6,796,216

 

 

 

38,753,101

 

 

 

13,654,580

 

 

 

47,183,518

 

Income (loss) before provision (benefit) for income taxes

 

 

(716,723

)

 

 

(27,441,814

)

 

 

(1,382,443

)

 

 

(25,295,700

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for income taxes

 

 

(217,000

)

 

 

(6,987,000

)

 

 

(286,000

)

 

 

(6,733,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(499,723

)

 

$

(20,454,814

)

 

$

(1,096,443

)

 

$

(18,562,700

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings (loss) per common share (Note 4)

 

$

(0.02

)

 

$

(1.24

)

 

$

(0.05

)

 

$

(1.12

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares

 

 

22,429,777

 

 

 

16,384,687

 

 

 

22,403,678

 

 

 

16,362,057

 

Unissued, directors' deferred compensation shares

 

 

178,597

 

 

 

139,390

 

 

 

177,923

 

 

 

186,443

 

 

 

 

22,608,374

 

 

 

16,524,077

 

 

 

22,581,601

 

 

 

16,548,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share of common stock and paid in period

 

$

0.01

 

 

$

0.04

 

 

$

0.02

 

 

$

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

common stock and to be paid in quarter ended June 30

 

$

0.01

 

 

$

-

 

 

 

 

 

 

 

 

 

 

(The accompanying notes are an integral part of these condensed financial statements.)

(2)


 

PHX MINERALS INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

Six Months Ended March 31, 2021

 

 

 

Class A voting

 

 

Capital in

 

 

Deferred

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Excess of

 

 

Directors'

 

 

Retained

 

 

Treasury

 

 

Treasury

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Par Value

 

 

Compensation

 

 

Earnings

 

 

Shares

 

 

Stock

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at September 30, 2020

 

 

22,647,306

 

 

$

377,304

 

 

$

10,649,611

 

 

$

1,874,007

 

 

$

56,244,100

 

 

 

(411,487

)

 

$

(6,151,096

)

 

$

62,993,926

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(596,720

)

 

 

-

 

 

 

-

 

 

 

(596,720

)

Equity offering

 

 

153,375

 

 

 

2,555

 

 

 

223,203

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

225,758

 

Restricted stock awards

 

 

-

 

 

 

-

 

 

 

122,978

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

122,978

 

Dividends ($0.02 per share)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(454,936

)

 

 

-

 

 

 

-

 

 

 

(454,936

)

Distribution of restricted stock

   to officers and directors

 

 

-

 

 

 

-

 

 

 

(316,886

)

 

 

-

 

 

 

-

 

 

 

21,220

 

 

 

317,239

 

 

 

353

 

Increase in deferred directors'

   compensation charged to

   expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

44,527

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

44,527

 

Balances at December 31, 2020

 

 

22,800,681

 

 

$

379,859

 

 

$

10,678,906

 

 

$

1,918,534

 

 

$

55,192,444

 

 

 

(390,267

)

 

$

(5,833,857

)

 

$

62,335,886

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(499,723

)

 

 

-

 

 

 

-

 

 

 

(499,723

)

Equity offering

 

 

-

 

 

 

-

 

 

 

(29,240

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(29,240

)

Restricted stock awards

 

 

-

 

 

 

-

 

 

 

161,170

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

161,170

 

Dividends ($0.01 per share)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(289,997

)

 

 

-

 

 

 

-

 

 

 

(289,997

)

Distribution of restricted stock

   to officers and directors

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,268

)

 

 

(1,268

)

Distribution of deferred

   directors' compensation

 

 

24,545

 

 

 

409

 

 

 

339,913

 

 

 

(340,322

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Increase in deferred directors'

   compensation charged to

   expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

55,727

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

55,727

 

Balances at March 31, 2021

 

 

22,825,226

 

 

$

380,268

 

 

$

11,150,749

 

 

$

1,633,939

 

 

$

54,402,724

 

 

 

(390,267

)

 

$

(5,835,125

)

 

$

61,732,555

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended March 31, 2020

 

 

 

Class A voting

 

 

Capital in

 

 

Deferred

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Excess of

 

 

Directors'

 

 

Retained

 

 

Treasury

 

 

Treasury

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Par Value

 

 

Compensation

 

 

Earnings

 

 

Shares

 

 

Stock

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at September 30, 2019