Sale of 257 non-operated legacy working interest wellbores for $10.7 million, advances strategy of high-grading Company's asset base to further fixed-cost royalty production model

PHX MINERALS has entered into two agreements with separate buyers to sell 257 non-operated legacy working interest wellbores in the Arkoma Basin and the Eagleford Play for total cash consideration of approximately $10.7 million. Each Agreement is subject to customary closing conditions and adjustments. The buyers of the assets will also assume approximately $879,000 of aggregate asset retirement obligations from the Company. Both transactions are expected to close by the end of January 2023.

The Arkoma Basin sale consists of 151 non-operated legacy working interest wellbores with a purchase price of approximately $5.1 million and $235,000 of assumed asset retirement obligations. The Eagleford Play sale consists of 106 non-operated legacy working interest wellbores with a purchase price of approximately $5.6 million and $644,000 of assumed asset retirement obligations.

PHX intends to use the proceeds from these divestitures to acquire additional minerals with existing production and line-of-sight development and to repay borrowings under the Company's credit facility.

On a pro forma basis, PHX will have 564 remaining legacy working interest wellbores.

Chad Stephens, President and CEO, said, 
"These transactions are a continuation of our strategy to high-grade PHX's asset base by divesting legacy working interest wellbores and reinvesting the proceeds in higher-margin minerals in our core areas of focus. Once these transactions are completed, we will have divested approximately 75% of the wellbores in which PHX owned a working interest when I became CEO in late 2019. While the remaining working interest position will represent less than 10% of our production volumes and reserves, we will continue to strive to divest them at a fair price in 2023. The mineral acquisitions funded with the proceeds from these transactions will continue to drive increased royalty volumes and cash flow in the upcoming quarters."

KeyFacts Energy Industry Directory: PHX Minerals