PHX Minerals Inc.

Good morning and thank you for attending today's PHX Minerals June 30th, 2024 Quarter End Earnings Conference Call. At this time, all lines will be muted during the presentation of the call with an opportunity for a Q&A session at the end. As a reminder, this call is being recorded. I would now like to turn the call over to Stephen Lee with FNK IR. Please go ahead, sir.

Thank you, operator. Good morning, and thank you for joining us today to discuss PHX Minerals, June 30th, 2024 quality results. Joining us on the call today are Chad Stephens, President and Chief Executive Officer, Ralph D'Amico, Executive Vice President and Chief Financial Officer, and Danielle Mezzo, Vice President of Engineering. The earnings press release that was issued yesterday after the close is also posted on PHX Investor Relations website. Before I turn the call over to Chad, I'd like to remind everyone that during today's call, including the Q&A session, management may make forward-looking statements regarding expected revenue, earnings, future plans, opportunities, and other expectations of the company. These estimates and other forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those expressed or implied on the call. These risks are detailed in PHX Minerals' most recent annual report on Form 10-K, as such may be amended or supplemented by subsequent quality reports on Form 10-Q and other reports filed with the Security and Exchange Commission. The statements made during this call are based upon information known to PHX as of today, August 8, 2024, and the company does not intend to update these forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law. With that, I'd like to turn the call over to Chet Stephens, PHX Chief Executive Officer. Chet?

Thanks, Stephen. And thanks to all of you on this call for participating in PHX's June 30, 2024 quarter-end earnings conference call. We appreciate your interest in the company. The macro environment in which we are operating continues to be challenging. Commodity prices remain suppressed. Total rig activity in the lower 48 is down, especially in the natural gas patients, while the supply-demand fundamentals for both oil and gas appear to be nearing equilibrium. For natural gas, the pending demand for new LNG export facilities, as well as increased demand for natural gas to meet growing AI-generated power demand, is clearly on the horizon. This forecasted increase in demand provides optimism reflected in the natural gas NIMAC strip price contango, longer-dated prices higher than near-term prices. Even in the near-term rather challenging environment, which obviously includes the sudden onset of market volatility and interest rate uncertainty, PHX is achieving noticeable results. To put today's reported results in context, I would like to remind you that four years ago, PHX's production volume and reserve mix was almost 70% non-op working interest and 30% royalty. Over the last four years, the company has divested of a material portion of its non-op working interest. Today, that mix has flipped with royalty volumes and reserves representing approximately 90% and non-op working interest about 10%. This has been consistent with our stated strategy to transition to a mineral-only focus, which we have regularly communicated to the market. As we divested of the non-off-working interest, we redeployed the sale proceeds into minerals in our core focus areas. During this four-year transition, we were growing royalty volumes, achieving a CAGR for royalty volumes of almost 30%. But during this period of significant working interest divestiture, our total reported corporate volumes remain basically flat. Royalty volume growth offset by working interest divestiture. For this June 30 quarter, two things really stand out. Total corporate volumes are the highest quarterly volumes since Q2 of 2018. which reflects the successful replacement of the divested working interest volumes with high-quality, high-margin royalty interest volumes. Two, our continued steady annual royalty volume growth of that 30 percent I just spoke demonstrates the quality of minerals we have acquired that includes a deep inventory of undeveloped locations that are being actively developed and contributing to our annual volume growth. I call out slides 13, 14, and 15 in our most recent IR slide deck that explains this development of our undeveloped inventory. The impressive quarter over sequential quarter volume growth of about 40% that we are reporting this quarter is in part due to high-interest, high-impact wells turned to sales in both the Haynesville and Scoop of Oklahoma. Absent these somewhat anomalous wells, we would have still reported compelling double digit percent quarter over quarter volume growth from development across our portfolio, reflecting the quality of our deep undeveloped location inventory I just mentioned. The challenging environment highlights the flexibility of our business model and the ability to quickly allocate more capital toward reducing debt. Since year end 2023, The company has reduced debt from $32.75 million to $28.75 million, providing a strong leverage metric under 1.5. Maintaining a strong balance sheet is a priority focus for us. Given the demonstrable value of our assets that we feel is not reflected in our stock price, every dollar of debt reduction should be a direct benefit to our equity value. This balance sheet focus includes an active hedging program to protect fixed costs and the ability to execute our annual budget. Ralph will provide more detail on hedges in a moment. We have also closed on approximately three and a half million of mineral acquisitions year to date in both the Scoop and Haynesville, with several other opportunities currently being evaluated. Another highlight this quarter is the Board's decision to increase our dividend by a penny a quarter or an annual increase of 33% to 16 cents per share. Since March 2020, we have now increased the dividend by 400%. This demonstrates the conviction management and the board share in the ability to execute on our strategy and the quality of our existing assets, regardless of the macro environment. As Danielle will discuss in a moment, activity on and around our minerals continue to drive year-over-year steady volume growth. We are especially excited about the material increase in development activity we are witnessing in our Springboard 3 area of the Scoop in Oklahoma. To recap this quarter's highlights, A, highest corporate volume since 2018, B, quarter-over-quarter royalty volume increase of 46%, reduced debt by 4 million or 12%, and increased dividend by 33%, which represents a 400% increase since March of 2020. At this point, I'd like to turn the call over to Danielle to provide a quick operational overview, and then Ralph to discuss the financials. Danielle?