OKLAHOMA CITY – Panhandle Oil and Gas Inc., “Panhandle” or the “Company,” (NYSE: PHX), recently reported financial and operating results for the fourth quarter and fiscal year ended Sept. 30, 2019.
Chad L. Stephens, Interim CEO, commented, “We are pleased to report the results reflected in our fourth quarter and full year 2019 financials. Fiscal 2019 was, in many ways, a transitional year for Panhandle.
“We made significant progress in shifting our strategy to focus solely on minerals and royalties,” he said. Panhandle elected not to participate with a working interest in any wells proposed in fiscal 2019, and management made the strategic decision at the end of 2019 to cease participating with a working interest on any of our leasehold or mineral acreage going forward.
“Royalty volumes continue to increase, particularly oil volumes. Royalty volumes now represent the highest percentage of our total volumes in the last 15 years. Our diverse portfolio continues to generate significant operating cash flow and margins.
“Our adjusted EBITDA grew 45% year over year, and we reduced our outstanding debt by 31% from $51.0 million to $35.4 million (while increasing our cash position to almost $10.0 million as of Dec. 12, 2019). The non-cash impairment and temporary increase in DD&A was associated with the Company’s strategic decision to cease working interest participation in new well development on our mineral and leasehold acreage.
“Subsequent to Sept. 30, 2019, the Company closed on a sale of 530 net mineral acres for $3.4 million. Our first sizeable acquisition is scheduled to close in the first fiscal quarter of 2020 and we plan to fund that acquisition with cash on hand (from like-kind exchange sales) and an immaterial addition to our outstanding debt.
“We have begun to execute on and are pleased with the progress of the acquisition strategy we laid out when I was named Interim CEO. I am confident that Panhandle is well positioned to grow and generate incremental value for our shareholders as a participant in the consolidation of the mineral sector.
“Total return to share holders for fiscal 2019 was $25.7 million through stock repurchases, dividends, and debt reduction. This equates to an effective annualized yield of 11.3% for that period,” Stephens said.