Why did PHX's earnings decline in late 2023?

The decline in PHX Minerals' earnings in late 2023 can be attributed to several key factors:

1. **Decrease in Natural Gas and Oil Prices**: PHX Minerals experienced a significant drop in natural gas prices, which fell by 17% compared to the previous year. This decrease in price resulted in lower sales and contributed to the overall decline in earnings.
2. **Lower Royalty Production Volumes**: Although there was a 23% increase in royalty production volumes, reaching 8,123 Mmcfe for FY 2023, the total production volumes decreased by 3% to 9,379 Mmcfe for FY 2023 compared to the previous year. This mixed trend of increased royalty volumes but decreased total production volumes likely had an impact on the company's earnings.
3. **Increased Transportation, Gathering, and Marketing Expenses**: PHX Minerals faced higher costs related to transportation, gathering, and marketing of their production, which contributed to the decline in earnings. These increased expenses can erode profitability even with higher production volumes.
4. **Derivative Gains Reduction**: The company reported a decrease in derivative gains, which also contributed to the decline in earnings. Derivative gains can be a significant source of income for companies in the energy sector, and a reduction in these gains can have a substantial impact on financial results.

In summary, the decline in PHX Minerals' earnings in late 2023 was likely a result of a combination of factors including decreased natural gas prices, lower royalty production volumes, increased operational costs, and reduced derivative gains. These factors, either directly or indirectly, affected the company's financial performance, leading to a decline in earnings.