Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| The volume growth over the last 12 months is a result of the successful execution of our mineral acquisition program |
| The sequential improvement in our financial results and the continued strengthening of our portfolio reflect the steady normalization of the natural gas macro environment, which has recovered from historically low prices |
| So, yes, we're very pleased with Continental's results |
| Just over the last few weeks, the 12-month strip price has shown steady improvement |
| There has been some increased activity up there, but more than that was some of these wells that we continue to talk about, the Continental is completed in the Springboard III area that have a higher oil component to it and we're really excited about the performance of those, the early performance of those wells |
| As we draw closer to the commissioning of these additional LNG facilities, we believe it will drive improvement in sentiment as well as prices in mid to late 2024 |
| Our royalty volume growth remains on trend for double digit production growth in 2024 and we continue to generate good acquisition deal flow |
| I believe this improving environment bodes well for our business in future quarters |
| We have good current rig activity on and around our mineral position in both the SCOOP and Haynesville |
| We have consistently talked about this play being a catalyst for PHX and while we are still in the early stages of development, the results to date have exceeded our expectations |
| Our Haynesville Minerals also continued to be actively developed and we are encouraged about our current, well in progress inventory which Danielle will talk about in a moment, which is at as high as it has ever been and will continue to drive production growth in the coming quarters |
| We remain confident in meeting the updated 2023 production forecast we communicated last quarter which represents year-over-year annual growth rate for royalty production exceeding 20% |
| As I commented in my opening remarks, we are very pleased with our achievements over the last year and the momentum it provides us moving into 2024 |
| With our strong margins, PHX continues to generate significant cash flow |
| I'd also like to point out that our EBITDA margins are higher than they have been in at least the last five years as we continue to show success in our minerals only strategy and we expect margins to continue to expand as we scale up the business |
| We feel a lot better about what our cash flow is going to be |
| In summary, we continue to see steady development in both our legacy and recently acquired mineral assets, which should lead to annually increasing royalty volumes |
| The continued track record of well conversions and replenishment of the inventory of wells in progress shows the repeatability of our business strategy |
| We're seeing good activity |
| As we have high graded our asset base, this provides a much stronger collateral base with which to support our bank credit facility |
| As we have grown our royalty volumes and divested of our non-op working interest, the quality of our asset base is enhanced with improving margins which Ralph will talk about shortly |
| This reflects the benefits of the strategy we implemented when I took over as full time CEO in spite of periods of challenging commodity prices |
| And it's certainly a better quarter on the M&A front |
| The commentary on the call today seems very optimistic about deal flow and kind of future potential opportunities |
| Breaking down this number further, royalty sales revenues increased 27% to $7.9 million due to a 3% increase in royalty production volumes and 23% higher realized commodity prices |
| Even if it's whipsawing $3, $4, whatever it may be, at that price, there's still the ability to go find pretty good opportunities where sellers expectations are reasonable |
| So it gives us a whole lot more confidence and conviction around allocating a higher portion of our free cash flow, operating cash flow toward a dividend |
| So, yes, we're very pleased with the results of that test, and we expect them to fully take that development bottle and start walking it across the field there |
| As I said in my prepared remarks, we're seeing that double digit greater than 20% year-over-year growth with all of the rig activity, the ducks and the WIPs |
| So I'm pleased with the activity and the stuff that's in the queue |
| Statement |
|---|
| On the working interest side, production volumes declined 7% sequentially to 275 MMcfe in the September 30, 2023 quarter as a result of natural decline and some wells being worked over by the operators |
| They were good assets but at that price it was difficult for us to make a decent return |
| And the weather forecast flipped to warmer and the price just collapsed over a two or three day trading period |
| And in Danielle's notes today, we highlighted the fact that our year-over-year corporate volumes were down 9% because we had sold a material amount of our non-op working interest assets |
| Our total corporate volumes were down 9% year-over-year, which is due to the sale of our non-op working interest assets in early 2023 |
| It was difficult for us to meaningfully allocate capital toward an increasing dividend |
| And today it's down, back down to right around I think $3, so a dramatic drop |
| DD&A was down 9% to $2 million compared to the prior sequential quarter |
| Cash G&A was down 10% to $2.24 million compared to the prior sequential quarter |
| Note that we are not participating in new working interest wells, so working interest volumes will continue to decrease relative to our total volumes and become less relevant to the business |
| I wonder if you could characterize for us, I guess the baseline or the conventional wisdom is that when we see volatility in commodity prices, it's harder to get deals done because it's harder to get, there's just less of a chance to get buyers expectations and sellers expectations to overlap |
| Net income for the quarter was $1.9 million or $0.05 per share compared to a net loss of $40,000 or effectively $0.00 per share for the prior sequential quarter |
| So, I guess would seem to imply that the rest of the quarter was a bit quieter for you guys |
| So this increase doesn't mean that the acquisition deal flow isn't good |
| Working interest sales revenues increased 1% to $1 million as a result of lower production volumes and 8% higher realized commodity prices |
| But if the -- if much like in the spring, if the M&A market slows down for whatever reason, we're not going to force it |
| That there is not enough |
| What happens after that 14 day period? And really when winter sets in, in early December and who knows? These days weather is a wild card and El Nino is a wild card |
| However, underlying fundamentals including weekly EIA storage data shows a tight or undersupplied market on a weather adjusted basis |
| On a per Mcfe basis, G&A decreased by 11% |
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