Natural gas mineral and royalty company WhiteHawk Income Corporation – together with WhiteHawk Energy LLC and their respective subsidiaries – and PHX Minerals Inc. (NYSE:PHX) have entered into a definitive agreement under which WhiteHawk will acquire PHX in an all-cash transaction that values PHX at $4.35 per share, or total value of approximately $187 million, including the natural gas and oil mineral company’s net debt.
Through the transaction, WhiteHawk will add approximately 1.8 million gross unit acres of natural gas mineral and royalty assets, significantly expanding its footprint in the core of the Haynesville Shale in East Texas/North Louisiana and diversifying its portfolio into the SCOOP/STACK region in Oklahoma.
WhiteHawk said it is financing the transaction with a combination of new equity and additional debt under its existing senior secured notes.
Under the terms of the merger agreement, PHX stockholders will receive $4.35 in cash, net to the holder thereof, without interest thereon and subject to any applicable tax withholding, for each share of PHX common stock owned. This consideration represents:
- A 21.8% premium to PHX’s closing share price on May 7, 2025;
- A 15.7% and 12.2% premium to PHX’s 30- and 60-day volume weighted average share price of $3.76 and $3.88, respectively, as of May 7; and
- A 23.9% premium to PHX’s unaffected share price as of Oct. 14, 2024, the last day prior to WhiteHawk’s latest public disclosure of its proposal to acquire PHX.
“We are excited to announce this transaction with WhiteHawk, which will provide compelling and certain value to all PHX stockholders,” said Chad L. Stephens, president and chief executive officer of PHX. “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. This transaction is also a testament to the PHX team’s work to evolve our business and build a best-in-class natural gas minerals portfolio, and I thank them for their dedication.”
The acquisition of PHX isn’t the only growth activity for WhiteHawk this year. Last month, WhiteHawk Energy announced a $118 million acquisition, increasing its interest in its existing Marcellus Shale minerals and royalties position. The transaction doubled the company’s ownership interest in a portion of its Marcellus Shale royalties position across 475,000 gross unit acres – primarily focused in Washington and Greene counties in Pennsylvania. The company said the assets have continued to perform above expectations since WhiteHawk’s initial acquisition of this position in March 2022.
“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,” said Daniel C. Herz, WhiteHawk’s chairman and CEO. “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. PHX’s assets are underpinned by over 6,500 producing wells and significant undeveloped inventory that will increase and diversify our cash flows while providing potential upside. This transaction reflects our strategy to grow with assets that provide cash flow generation with no capital expenditures.”
Following the close of the transaction, 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, on a pro forma basis.
WhiteHawk will also increase its exposure to some of its operators, including Expand Energy (Nasdaq:EXE), Comstock Resources (NYSE:CRK), and Aethon Energy in the Haynesville Shale, while adding other operators including Continental Resources and Devon Energy (NYSE:DVN), in the SCOOP/STACK.
As soon as practicable following the successful completion of the offer, WhiteHawk will acquire all shares not acquired in the tender through a second-step merger for the same consideration per share paid in the offer.
WhiteHawk currently holds approximately 2.5% of the outstanding shares of PHX common stock. Additionally, concurrent with the signing of the merger agreement, directors and officers of PHX beneficially owning approximately 10% of PHX’s outstanding common stock entered into tender and support agreements, pursuant to which each individual agreed to tender PHX shares they hold into the offer.
The transaction is expected to close within the third quarter of 2025 and has been unanimously approved by PHX’s board. Following the completion of the transaction, PHX will no longer trade on the New York Stock Exchange.
WhiteHawk Energy is focused on acquiring mineral and royalty interests in top-tier natural gas resource plays, including the Marcellus Shale and Haynesville Shale. The management team has grown over $13 billion of minerals, midstream, and exploration and development companies over the last 20 years.
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