WhiteHawk Income Corporation, based in Philadelphia, is buying PHX Minerals, a natural gas and oil mineral company.
WhiteHawk is the parent company of WhiteHawk Energy, a natural gas mineral and royalty company. Through this deal, WhiteHawk will add approximately 1.8 million gross unit acres of premier natural gas mineral and royalty assets. It will significantly expand its footprint in the core of the Haynesville Shale in East Texas and North Louisiana and diversify its portfolio into the SCOOP/STACK shale region in Oklahoma.
The all-cash transaction is valued at $187 million. Under the terms of the agreement, PHX stockholders will receive $4.35 in cash for each share of PHX stock. This represents a 21.8 percent premium to PHX’s closing share price as of May 7. It is also a 23.9 percent premium to PHX’s share price as of October 14, 2024, the last day prior to WhiteHawk’s proposal to acquire PHX.
“The acquisition of PHX is a significant milestone that more than doubles our gross unit acre footprint and producing natural gas wells in highly established basins with some of the country’s largest natural gas producers,” Daniel Herz, WhiteHawk’s chairman and CEO, said. “PHX will allow us to expand our presence in the core Haynesville Shale and enter the SCOOP / STACK as well. Combined with our current 1.35 million gross unit acres in the core of the Marcellus Shale and Haynesville Shale, we will have meaningful exposure to the top natural gas basins in the United States.”
Further, Herz notes that PHX’s assets are underpinned by over 6,500 producing wells and significant undeveloped inventory that will increase and diversify WhiteHawk’s cash flows while providing potential upside. It reflects the firm’s strategy to grow with assets that provide cash flow generation with no capital expenditures.
“We are excited to announce this transaction with WhiteHawk, which will provide compelling and certain value to all PHX stockholders,” Chad Stephens, president and CEO of PHX, said. “PHX’s Board of Directors conducted a robust strategic alternatives process to maximize value for our stockholders, and we unanimously determined the transaction with WhiteHawk achieves this objective.”
After the transaction closes, WhiteHawk will own royalty interests across approximately 3.1 million gross unit acres, with cash flow from approximately 10,163 producing wells, 368 wells-in-progress, 330 permitted wells and more than 7,250 undeveloped locations across its portfolio.
In addition, WhiteHawk will increase its exposure to some of its top operators, including Expand Energy, Comstock Resources, and Aethon Energy in the Haynesville Shale. It will also add other top operators, including Continental Resources and Devon Energy, in the Oklahoma region. Further, WhiteHawk’s existing Marcellus Shale assets are underpinned by top natural gas operators including EQT, Range Resources, CNX Resources, and Antero Resources.
The transaction is expected to close by early in the third quarter 2025 and is subject to customary closing conditions. Following the completion of the transaction, PHX will no longer trade on the New York Stock Exchange.