Panhandle Oil & Gas posts a net loss
Curtailed production and r educed commodity prices kept Panhandle Oil & Gas's quarterly results in the red, it reported this week.
The Oklahoma City-head quartered company reported posting a net loss of about $3.5 million, or 21 cents per share, on total revenues of about $2.7 million for the third quarter of its fiscal year.
In its third quarter of 2019, the company had reported a net income of about $4.6 million, or 28 cents per share, on total revenues of about $16.3 million.
Still, results for the company were better than they were for its second quarter of 2020, when it posted a net loss of $20.5 million.
Chad L. Stephens, Panhandle's CEO, noted the energy market's collapse and subsequent slow down by operators earlier this year as major issues for the company.
"Clearly, the third quarter was challenging, given the effects of the global pandemic on the economy and the energy markets,” Stephens said. "Our sales volumes were down as operators curtailed production and brought fewer wells online due to l ow commodity prices. While we have made significant strides in reducing costs in the quarter, it was not enough to offset lower revenue.”
Compared to its second quarter of 2020, officials said Panhandle' s total volume of oil, natural gas and natural gas liquids sold decreased this quarter by .47 billion cubic feet (equivalent), or 20%, while its royalties fell by 16%.
The company's adjusted earnings before interest, taxes, depreciation and amortization was $1.2 million, compared to $8.9 million a year earlier and $2.4 million in its second quarter of 2020.
However, he highlighted that Panhandle used free cash flow during the quarter to reduce its debt. As of earlier this week, it owed creditors about $26.9 million.
Stephens said Panhandle will continue to focus on areas it can control such as cost discipline, debt reduction and sourcing mineral acquisition opportunities it believes create long-term shareholder value.
Panhandle's board of directors has approved a 1 cent dividend, payable to shareholders of record as of Aug. 27 on Sept. 11, officials said.
“The energy sector is stabilizing as the rig count seems to have found a floor and operators are talking about bringing curtailed wells back on line and setting reasonable drilling plans, going forward,” Stephens said. "The deal flow for mineral assets is also picking up, and we expect more opportunities to come to market in the second half of 2020.”