Phoenix Energy One, LLC (PHXE-P)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered a step‑change as PhoenixOp’s operated production drove consolidated revenue to $115.7M and EBITDA to $72.0M, with net income of $5.6M as product sales comprised ~73% of revenue .
• Consolidated volumes surged: total production rose 134% y/y to 1.76MMboe and average daily production reached 19,548 boe/d (+137% y/y), supported by 37 producing wells in service at quarter‑end .
• Balance sheet leverage remains the key watchpoint: total debt was ~$1.084B, negative working capital was ~$157.3M, and management plans to raise ~$400M additional capital in 2025 to fund capex of $750–$850M for 75–85 gross operated wells over the next 12 months .
• No Wall Street consensus estimates were available via S&P Global for PHXE‑P; consequently, no beat/miss assessment can be made. Estimates data unavailable from S&P Global due to missing CIQ mapping.
• Near‑term catalysts: continued ramp of operated wells, hedge profile (~4.6MMbbl hedged at ~$63.57/bbl) and covenant compliance could support credit perception; conversely, sustained commodity price weakness and higher interest costs (Fortress SOFR+7.10%) are risks to liquidity and equity‑like securities appetite .

What Went Well and What Went Wrong

What Went Well

• Rapid operating scale-up: Operating segment revenue jumped to $85.8M from $6.7M (+1,184% y/y) as PhoenixOp placed 37 producing wells into service by March 31, 2025 .
• Strong EBITDA: EBITDA reached $72.0M (vs. $21.9M y/y), reflecting higher consolidated revenues and favorable derivative gains amid commodity price curve changes .
• Management strategic focus: “Product sales accounted for over 72% of our total revenues… and we expect to derive a greater portion of our total revenues from product sales of crude oil, natural gas, and NGL to PhoenixOp’s customers in the future” .

What Went Wrong

• Interest burden doubled: Net interest expense rose to $35.8M (from $16.9M y/y) on higher unsecured bonds and Fortress borrowings; depletion also increased to $31.2M (+133% y/y) with higher operated production and depletable base .
• Mineral/non‑operating softness: Mineral and royalty revenues fell 12% y/y to $29.9M on lower crude oil production volumes despite higher realized prices .
• Liquidity strain: Negative working capital (~$157.3M), planned capex ($750–$850M next 12 months) and targeted ~$400M incremental capital in 2025 underscore funding reliance amid commodity price volatility .

Financial Results

Consolidated Performance vs Prior Year and (Estimates not available)

Note: EPS not presented; company is an LLC and does not report EPS in Q1 2025 10‑Q .

Segment Breakdown (Revenue and Operating Profit)

KPIs (Volumes, Realized Prices, Costs)

Guidance Changes

No explicit revenue, margin, OpEx, OI&E, tax rate or dividend guidance provided in Q1 materials .

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript or press releases were found after searching; analysis relies on 8‑K and 10‑Q filings.

Management Commentary

• “Product sales accounted for over 72% of our total revenues for the three months ended March 31, 2025, and we expect to derive a greater portion of our total revenues from product sales… in the future.”
• “As of March 31, 2025, PhoenixOp had placed 37 wells into production and had an additional 41 wells in various stages of development.”
• “We believe the company is well‑positioned to navigate a lower‑price environment… we may determine to adjust our business plan by adjusting capital expenditures, decreasing drilling operations, and/or reducing production plans.”
• “We are in compliance with all debt covenants as of March 31, 2025.”

Q&A Highlights

No public Q&A available; no earnings call transcript found. Key clarifications come from MD&A: hedge coverage and covenant compliance , capital needs and drilling plan , commodity price sensitivity and potential plan adjustments .

Estimates Context

• Wall Street consensus estimates via S&P Global were unavailable for PHXE‑P due to missing CIQ mapping; therefore, no beat/miss determination can be made.

Key Takeaways for Investors

• Operated production is now the growth engine: PhoenixOp’s contribution transformed the P&L and EBITDA; continued well turn‑in‑line cadence is the central driver of 2025 cash generation .
• Funding path matters: with ~$1.084B debt, negative working capital, and ~$400M incremental debt targeted for 2025, access to credit markets and execution on the Registered Notes program are pivotal .
• Hedge book supports cash flows: ~4.6MMbbl hedged at ~$63.57/bbl dampens downside but limits upside; monitor basis differentials and derivative mark‑to‑market .
• Watch interest expense and depletion: rising operated volumes bring higher DD&A and lease operating costs; Fortress SOFR+7.10% and unsecured bonds elevate cash interest outlays .
• Operational delivery commitments: PhoenixOp committed to deliver 2.2MMbbl through 2030; failure incurs shortfall fees—execution in ND counties is critical .
• Risk governance: internal control remediation underway; continued improvements should reduce reporting risk over time .
• Trading implications: credit investors should track monthly production, covenant ratios, hedging coverage, and capital raise pace; equity‑like securities sentiment hinges on commodity prices and the company’s ability to fund the aggressive drilling plan at reasonable cost .