Executive Summary

Q4 2024 revenue was $8.02M and diluted EPS was $0.00; revenue rose 4% vs Q4 2023, but non‑cash hedge losses drove a sharp EPS decline vs Q3 2024 ($0.03) .
Adjusted EBITDA increased to $5.39M in Q4 (from $4.91M in Q3), supported by higher realized gas/NGL prices; net income fell to $0.11M due to a $1.5M non‑cash mark‑to‑market hedge loss .
Royalty volumes were flat QoQ at 2.10 Bcfe; annual production reached 9.84 Bcfe (+5% YoY). Post‑quarter, PHX sold ~165,326 non‑producing acres for ~$8.0M and paid down debt to $19.8M, improving leverage to under 1x (pro forma) .
Catalysts: ongoing strategic alternatives review (initiated Dec. 12, 2024), stable rig activity on and near PHX acreage, and improving natural gas macro (LNG and power demand) per management commentary .

What Went Well and What Went Wrong

What Went Well
- Q4 Adjusted EBITDA increased QoQ to $5.39M as realized commodity prices improved and costs decreased sequentially; management highlighted resilience amid macro headwinds .
- Royalty production held at 2.096 Bcfe (second‑highest levels in company history during 2024) and 71 gross well conversions in Q4 demonstrate strong operator activity on PHX minerals (SCOOP/Haynesville) .
- Balance sheet actions post‑quarter: ~$8.0M sale of legacy non‑producing minerals and ~$9.8M debt paydown to $19.8M; dividend maintained at $0.04/share .
Quote: “PHX delivered solid results in 2024… generated strong cash flow, reduced debt and returned capital to stockholders through our dividend.” – CEO Chad Stephens .
What Went Wrong
- Net income declined to $0.11M in Q4 (from $1.10M in Q3) primarily due to a ~$1.5M unrealized hedge loss despite higher realized prices; diluted EPS fell to $0.00 .
- SEC‑price reserve PV‑10 declined on lower gas pricing; proved reserves fell 11% to 63.7 Bcfe and proved royalty PV‑10 decreased to $71.9M at SEC pricing .
- Transportation expenses increased YoY (+18% to $4.51M) with cost‑bearing leases in Haynesville and DD&A rose YoY, pressuring GAAP earnings .

Financial Results

Metric	Q2 2024 (Jun 30)	Q3 2024 (Sep 30)	Q4 2024 (Dec 31)
Total Revenue ($USD Millions)	$9.54	$9.14	$8.02
Net Income ($USD Millions)	$1.30	$1.10	$0.11
Diluted EPS ($USD)	$0.04	$0.03	$0.00
Adjusted EBITDA ($USD Millions)	$6.43	$4.91	$5.39
Net Income Margin (%)	13.6% (calc from $1.30M/$9.54M)	12.0% (calc from $1.10M/$9.14M)	1.4% (calc from $0.11M/$8.02M)
Adjusted EBITDA Margin (%)	67.3% (calc from $6.43M/$9.54M)	53.7% (calc from $4.91M/$9.14M)	67.1% (calc from $5.39M/$8.02M)

Segment breakdown

Segment Sales ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
Royalty Interest Sales	$8.82	$6.98	$7.87
Working Interest Sales	$1.01	$0.91	$1.01
Natural Gas, Oil & NGL Sales	$9.83	$7.89	$8.89

KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Mcfe Sold	2,967,779	2,378,622	2,378,569
Gas Mcf Sold	2,464,846	1,898,442	1,906,552
Oil Barrels Sold	51,828	45,698	43,571
NGL Barrels Sold	31,994	34,332	35,099
Avg Gas Price ($/Mcf, pre/after hedge)	$2.05 / $2.57	$2.00 / $2.54	$2.64 / $2.92
Avg Oil Price ($/Bbl, pre/after hedge)	$77.38 / $75.38	$74.83 / $72.95	$69.82 / $69.50
Avg NGL Price ($/Bbl)	$23.75	$19.60	$23.01
% Gas Sales Hedged	38%	48%	46%
% Oil Sales Hedged	25%	31%	39%
Wells Converted (gross/net)	55 / 0.40	46 / 0.18	71 / 0.22
Wells in Progress + Permits (gross/net)	241 / 0.927	278 / 0.93	225 / 0.91
Rigs on PHX Acreage	15 (as of 7/8/24)	18 (as of 9/30/24)	16 (as of 2/3/25)
Rigs within 2.5 miles	60	70	62

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Mineral & Royalty Production (Mmcfe)	FY 2024	8,700 – 9,100	Actual: 8,760	Maintained; achieved within range
Working Interest Production (Mmcfe)	FY 2024	1,000 – 1,200	Actual: 1,082 (calc from table)	Maintained; achieved within range
Total Production (Mmcfe)	FY 2024	9,700 – 10,300	Actual: 9,842	Maintained; achieved within range
% Natural Gas	FY 2024	79% – 82%	Actual: 80% (Q4)	Maintained
Transportation, Gathering & Marketing ($/mcfe)	FY 2024	$0.40 – $0.50	Actual: $0.46 (FY)	Maintained
Cash G&A ($000s)	FY 2024	$9,500 – $9,900	Actual: $9,200	Lower than guided (positive)
Dividend per Share	Q4 2024	$0.04 (raised in Q3)	$0.04 (paid Mar 28, 2025)	Maintained
Borrowing Base	Q4 2024	$50M (reaffirmed Nov 6, 2024)	$50M (unchanged)	Maintained

Note: Management did not provide new 2025 quarterly guidance amid strategic alternatives; they emphasized rolling 12‑month evaluation and macro sensitivity .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
Natural gas macro (LNG exports, power demand/AI)	CEO noted LNG demand and AI/data center power demand emerging driver	Management reiterated bullish outlook: LNG capacity doubling by 2028; AI/power adds ~7 Bcf/d demand by 2030	Positive macro narrative strengthening
Activity on PHX acreage (SCOOP/Haynesville)	Q2 record volumes from Haynesville; strong WIP inventory	Q4: 71 gross conversions; rigs present 16; strong SCOOP liquids and Haynesville IPs	Sustained development; inventory replenished
Hedging program	Consistent collars/swaps, upside exposure	Q4 hedge gains $0.51M; non‑cash MTM loss $1.5M; detailed forward hedges	Maintains disciplined protection
Strategic alternatives / M&A	Strategic process initiated Dec 12, 2024	Active review; no commentary on outcomes; ground game continues	Ongoing; potential corporate catalyst
Cost structure and cash G&A	Q2/Q3 highlighted cost controls	FY cash G&A down 4%; T,G&M mixed (Haynesville cost‑bearing leases)	Efficiency gains; mix‑driven costs

Management Commentary

“Our results in calendar 2024 were largely influenced by natural gas macro fundamentals… Despite slower industry activity, our total production volumes were up approximately 5% year over year with royalty volume up 8% for the year.” – CEO Chad Stephens, Q4 call .
“For the quarter, volumes remained relatively flat… realized prices increased 13% compared to the prior sequential quarter… Adjusted EBITDA for the quarter was up to $5.4 million.” – CFO Ralph D’Amico .
“We reaffirmed the borrowing base… at $50 million… We are happy to build liquidity, pay down debt and return capital to our shareholders through our quarterly dividend.” – CFO Ralph D’Amico, Q3 call .
“We continue to see steady development… 278 gross wells in progress and permits at Sept. 30, 2024… should lead to annually increasing royalty volumes.” – VP Engineering Danielle Mezo, Q3 call .

Q&A Highlights

Strategic alternatives: Management declined to comment on the ongoing review; business operations and M&A “ground game” continue as usual .
Production outlook: Management prefers rolling 12‑month framing; did not provide quarterly guidance; implied stability based on recent conversions and activity .
Commodity mix/liquids: SCOOP liquids‑rich exposure can lift realized gas pricing via higher BTU gas; Haynesville initial rates remain robust, balancing mix .
Activity signals: Some smaller operators expected to turn on Haynesville wells seasonally (winter pricing), though timing remains operator‑determined .

Estimates Context

Wall Street consensus (S&P Global) for PHX’s Q4 2024 EPS and revenue was unavailable via our S&P Global tool due to a ticker mapping issue; as a result, estimate comparisons and beat/miss analysis cannot be provided at this time. We attempted to fetch “Revenue Consensus Mean” and “Primary EPS Consensus Mean” for Q4/FY periods, but the SPGI mapping for PHX was missing in the CIQ company map. Values retrieved from S&P Global were not available.

Key Takeaways for Investors

Q4 2024 delivered stronger Adjusted EBITDA QoQ despite flat volumes; headline EPS was depressed by a non‑cash hedge MTM loss, not operations, suggesting underlying cash generation remains intact .
Royalty volume stability and high well conversion rates in SCOOP/Haynesville indicate durable organic growth potential into 2025 absent quarterly guidance .
Post‑quarter deleveraging (to ~$19.8M debt) and the ~$8M non‑core divestiture materially improve balance sheet flexibility; dividend support remains intact at $0.04/share .
Strategic alternatives process (with RBC) introduces a corporate action catalyst; maintain awareness of potential outcomes (sale/merger) and timing .
Cost discipline persists; FY cash G&A down 4% YoY; monitor Haynesville cost‑bearing leases’ impact on T,G&M and overall margins .
Macro tailwinds: management expects LNG and AI/power demand to lift gas fundamentals over 12–24 months, a key driver for royalty cash flows and reserves economics .
Hedge book provides downside protection with upside exposure; watch non‑cash MTM impacts on GAAP earnings versus cash flow realities .

PHX MINERALS INC. (PHX)·Q4 2024 Earnings Summary