PHX Minerals (PHX) Snaps Up Royalty Assets in Core Areas
PHX Minerals PHX has agreed to acquire around 988 net royalty acres in the Haynesville play in Louisiana and Texas, as well as the SCOOP play in Oklahoma. The company, which is primarily focused on natural gas royalty production and reserves, is set to acquire these assets from five distinct sellers, marking a substantial step forward in its growth strategy. Entailing an aggregate consideration of $13.6 million in cash, the transaction has received unanimous approval from the board of directors and is set to close in mid-September.
The to-be-acquired properties are estimated to hold approximately 6.9 billion cubic feet equivalent (Bcfe) in total reserves — 94% natural gas. These assets are located at the heart of the Haynesville and SCOOP regions, and are operated by key industry players. Importantly, PHX is already a stakeholder in 50 out of the 108 total locations slated for purchase, which is likely to boost net revenue interests per well.
As far as production outlook is concerned, PHX foresees a promising trajectory. The company estimates production over the next 12 months (September 2023-September 2024) between 1.2 Bcfe and 1.4 Bcfe, comprising 99% natural gas and generating a projected cash flow ranging from $4-$4.3 million.
PHX management stressed that the accretive acquisition fortifies the company’s presence in its core arears and expands its business scale. Moreover, the deal is a testament to PHX’s financial discipline and solid liquidity.
Zacks Rank & Stock Picks
Fort Worth, TX-based PHX Minerals carries a Zacks Rank #4 (Sell) at present.
Meanwhile, investors interested in the energy space might consider the operators mentioned below. These companies currently sport a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
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