Acquisition Highlights

• Expected to be immediately accretive on a cash flow per share basis
• Builds upon our existing mineral and royalty positions in the Haynesville and the SCOOP
• Approximately 988 net royalty acres (~86% targeting the Haynesville play)
• Anticipated next 12-month production of between 1.2 and 1.4 Bcfe (99% natural gas, 1% oil, 0% NGL), generating an estimated $4.0 to $4.3 million of cash flow at NYMEX strip pricing as of Aug. 9, 2023 (implies a transaction multiple of 3.3x)
• Expected to add approximately 31 gross (0.27 net) wells in progress; increasing our net inventory by approximately 31%
• Expected to reduce G&A per mcfe of production by approximately 13% over the next 12 months
• Maintains a conservative balance sheet with expected pro forma leverage as measured by debt to EBITDA of under 1.50x following closing

PHX Minerals has agreed to acquire approximately 988 net royalty acres targeting the Haynesville play in Louisiana and Texas and the SCOOP play in Oklahoma from five separate sellers for aggregate consideration of $13.6 million in cash, subject to certain closing conditions and adjustments. The Acquisitions will be funded using a combination of cash on hand and borrowings under the Company's existing credit facility and are expected to close in mid-September.  The Acquisitions have been unanimously approved by the Board of Directors.

PHX estimates total reserves associated with the Acquisitions to be approximately 6.9 Bcfe (94% natural gas, 6% oil, 0% NGL). The assets associated with the Acquisitions include high interest locations concentrated in the core of the Haynesville and SCOOP under active operators including Aethon and Chesapeake Energy. PHX already owns interests in 50 of the 108 total locations being acquired, increasing our net revenue interests per well. Estimated next 12-month production, as of Sept. 1, 2023, is between 1.2 and 1.4 Bcfe (99% natural gas, 1% oil, 0% NGL), generating approximately $4.0 to $4.3 million of cash flow at NYMEX strip pricing as of Aug. 9, 2023.

Chad Stephens, President and Chief Executive Officer, said, 
"These acquisitions demonstrate our team's ability to source and execute on accretive transactions targeting our core areas in the Haynesville and SCOOP. As I have previously stated, PHX has always been keenly focused on maintaining financial discipline while evaluating acquisition opportunities. This discipline allowed us to build liquidity during the downturn in commodity prices we saw in the first half of 2023, which we can now deploy to fund these attractive acquisitions. We believe similar opportunities to this transaction and its return profile will continue to be accessible to PHX. Additionally, as these acquisitions demonstrate, our focus on internally aggregating transactions allows us to achieve significantly better risk adjusted returns compared to broadly marketed asset packages while still scaling up the business."  

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