PHX Minerals Inc. recently disclosed a pair of transactions as part of its transformation into a pure play mineral and royalty company, says President and CEO Chad Stephens.
The transactions, announced in a Nov. 1 company release, included the sale of a nonoperated working interest in the Fayetteville Shale and the acquisition by PHX of mineral rights in Oklahoma’s SCOOP play.
“These transactions are an important step in the execution of our corporate strategy that we embarked on almost two years ago when I became CEO,” Stephens commented in the release.
The divestiture comprised of a package of 499 nonoperated legacy working interest wellbores in Arkansas. An undisclosed buyer agreed to acquire the nonop interest for about $2.1 million plus the assumption of asset retirement obligation.
As part of the transaction, PHX said it retains all mineral rights underlying the divested working interest wellbores and will continue to receive royalties where applicable.
Based in Oklahoma City, PHX currently owns approximately 251,000 net mineral acres principally located in Oklahoma, Texas, North Dakota, New Mexico and Arkansas, according to the company website. The company, formerly Panhandle Oil and Gas, is targeting to proactively grow its mineral position in its core areas of focus as part of its strategy.
“As we divest our nonoperated low margin working interest assets and redeploy the proceeds along with our free cash flow into higher margin minerals,” Stephens continued, “we will see our corporate margins improve and our royalty production volumes grow.”
Additionally, PHX completed the acquisition of approximately 220 net royalty acres located primarily in Oklahoma’s Stephens County for about $1.2 million. The acquisition is predominately in the same area of the SCOOP Springboard III play as the company’s previously closed April 2021 acquisition where current drilling activity continues to accelerate, according to the release.
“We continue to see interest in the market place for our other nonoperated working interest assets and are exploring additional divestiture opportunities,” Stephens said. “Our mineral and royalty acquisition pipeline remains strong.”
“These transactions reflect the momentum we are gaining in the execution of this strategy,” he added.
2023-02-01 - Atlas Energy, based in Austin, Texas, was reported last year to be preparing for a public listing that could value it at between $2 billion and $3 billion, including debt.
2023-01-20 - Today's featured 25 Influential Women in Energy honoree is Serena Buck, vice president of land at Ascent Resources.
2022-12-12 - By investing in lower carbon intensity gas, CNX Resources plans to turn Appalachia into an energy, manufacturing and technology hub.
2022-12-14 - PHX has added roughly 1,800 royalty acres in the SCOOP and Haynesville since July.
2022-12-08 - Exxon Mobil is also expanding its share program to $50 billion through 2024 from its previous $30 billion goal.