PHX Minerals Inc. (NYSE:PHX), a player in the crude petroleum and natural gas industry, announced amendments to its bylaws and the settlement of a shareholder lawsuit, as per its latest 8-K filing with the Securities and Exchange Commission.
The board of PHX Minerals approved the Second Amended and Restated Bylaws on Monday, June 17, 2024, which introduced changes to the stockholder consent provisions. Previously, written consent from holders of seventy-five percent of outstanding shares was required for corporate actions without a meeting. The revised bylaw now aligns with Section 228(a) of the Delaware General Corporation Law (DGCL), requiring a minimum number of votes necessary to authorize actions at meetings where all shares entitled to vote are present.
Additionally, the company disclosed a legal settlement related to a class action complaint filed on April 24, 2024, by plaintiff William Schilling. Schilling's lawsuit alleged violations of the DGCL in the company's bylaws. Although PHX Minerals and its board denied all allegations, they amended the bylaws, leading to the mootness of the plaintiff's claims. Consequently, the company agreed to pay $150,000 in fees and expenses to the plaintiff's counsel. The case was dismissed with prejudice concerning the plaintiff on Sunday, July 15, 2024, and the court has yet to pass judgment on the fee amount.
This legal development, which includes the updated bylaws and the lawsuit settlement, could be of interest to investors and stakeholders of PHX Minerals. The information is based solely on the SEC filing and aims to provide shareholders with transparent updates on corporate governance and legal proceedings involving the company.
In other recent news, PHX Minerals showcased its financial resilience amid a downturn in natural gas prices. Despite a 40% drop in these prices and a 6% decrease in total corporate production, the company managed to maintain a steady positive adjusted EBITDA and cash flow for the quarter ending in March 2024. The company's banks have reaffirmed a borrowing base at $50 million and extended loan maturity, demonstrating their faith in PHX's financial stability.
Looking forward, PHX expects an uptick in royalty volumes and cash flow due to active operations in core areas and favorable natural gas supply-demand dynamics. This projection, however, does not ignore the fact that the company witnessed a decline in sales revenues from natural gas, oil, and NGL by 17% due to lower production volumes and prices.
Moreover, the company's total debt was reduced to $30.75 million, with a debt to trailing 12-month adjusted EBITDA ratio of 1.58x. These recent developments underscore the company's capacity to navigate challenging market conditions while setting the stage for potential growth in the future.
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