Adobe Stock
Fort Worth-based PHX Minerals Inc. (NYSE: PHX) on Wednesday announced that it had closed on the sale of all its remaining legacy nonoperated working interest wellbores in the Fayetteville Shale play in Arkansas to an undisclosed buyer for a total of $6,050,000.
The divestiture represents 210 gross legacy wellbores and removes approximately $212,000 in asset retirement obligation from the company's balance sheet. On a pro forma basis, PHX has 789 gross legacy nondoperated working interest wellbores remaining.
Additionally, PHX completed the acquisition of approximately 575 net royalty acres located primarily in Caddo and DeSoto Parishes, Louisiana, for $6,226,489. These acquisitions are predominately located in the same focus area of the Haynesville Shale as the company's previously closed royalty acreage acquisitions where drilling activity continues to accelerate.
The new royalty acreage acquisitions represent a full redeployment of net proceeds received by the company for the working interest divestiture.
“These transactions are a continuation of our strategy to high grade PHX's asset base by divesting legacy nonoperated working interest wellbores and reinvesting the proceeds in higher margin royalty minerals in our core areas of focus,” says PHX President and CEO Chad Stephens in a statement.
PHX owns mineral acreage principally located in Oklahoma, Texas, Louisiana, North Dakota, and Arkansas.
“Also, we anticipate the core focus areas in which we are acquiring minerals to be the leading basins in U.S. natural gas production growth over the next several years,” Stephens says. “Reputable, well-capitalized operators are actively developing these areas. As such, we expect royalty volumes to continue to increase from the development of acquired minerals in future quarters, which will drive higher future cash flows.”