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PHX Minerals Reports Strong Financial Results for Q1 2025 and Dividend Announcement

PHX Minerals Inc. (NYSE: PHX), headquartered in Fort Worth, Texas, has recently published its financial results for the quarter ending March 31, 2025. This report comes alongside a significant announcement regarding the company’s dividend payment, affirming its commitment to returning value to shareholders.

Key Financial Highlights

For the first quarter of 2025, PHX reported a net income of $4.4 million, which translates to $0.12 per diluted share. This marked a substantial improvement compared to the $0.1 million net income, or $0.00 per diluted share, reported in the previous quarter, and a notable reversal from a loss of $0.2 million or ($0.01) per diluted share in the same quarter last year. The solid net income performance largely resulted from an increase in revenues, driven by heightened natural gas, oil, and NGL (natural gas liquids) sales.

Adjusted EBITDA also showed positive growth, coming in at $6.2 million, up from $5.4 million in the prior quarter and $4.6 million in Q1 2024. However, total revenues fell slightly to $7.6 million, down from $7.9 million year-over-year, primarily due to losses associated with derivative contracts amounting to ($3.2 million).

Production Insights

PHX's operational efficiency was highlighted with a change in royalty production. The company achieved royalty production volumes of 1,910 Mmcfe, marking a 9% decrease from the previous quarter yet a 3% increase year-on-year. Overall production also saw a 9% decline from the preceding quarter to 2,159 Mmcfe, but a marginal 2% increase in comparison to Q1 2024. The decrease was attributed to a strategic focus on well conversion, with 65 gross (0.113 net) wells converted to producing status during the quarter, lower than the previous quarter’s 71 gross (0.22 net) wells and 85 (0.32 net) wells during the same quarter last year.

In terms of ongoing projects, PHX had 247 gross (1.017 net) wells in various stages of progress or permitting, further indicating robust future production capabilities.

Financial Management

The company's efforts to strengthen its balance sheet were also evident, with total debt reducing to $19.8 million, down from $29.6 million at the end of December 2024. This resulted in a debt-to-adjusted EBITDA ratio of 0.86 at the end of March, showcasing improved financial flexibility and operational cash flow management.

Dividend Announcement

In light of strong financial performance and consistent cash generation, PHX is set to pay a quarterly dividend of $0.04 per share on June 4, 2025. The record date for this dividend will be May 20, 2025, demonstrating the company’s intention to reward its shareholders while also reinforcing its operational stability.

Future Perspectives

Chad L. Stephens, President and CEO, expressed optimism regarding the company's trajectory, attributing positive financial outcomes to enhanced cash flow management and resilient market conditions. The outlook for natural gas remains favorable due to tighter supply-demand dynamics and increasing LNG export demand, providing a competitive advantage for PHX in its mineral operations.

This trend, along with ongoing operational activity, suggests that PHX is well-positioned to increase production volumes and further enhance cash flow into 2025 and 2026.

In conclusion, PHX Minerals Inc.’s latest financial report reflects a favorable quarter bolstered by sound operational choices and robust market conditions. Stakeholders and investors can look forward to continued growth and value creation in the upcoming periods.

Conclusion

As PHX transitions further into 2025, all eyes will be on how the company manages its minerals and production targets amid changing market dynamics. The recent agreement to be acquired by WhiteHawk Income Corporation also introduces additional strategic considerations moving forward.