Phoenix Energy Reports Q3 2026 Quarter and Year to Date Financial and Operating Results and Raises Full-Year 2026 Outlook

Phoenix Energy posts record production and revenue but swings to a Q3 net loss.

What the company is saying

Phoenix Energy One, LLC frames its Q3 2026 update around record operational performance, highlighting total revenues of $460.4 million and the highest crude oil production in company history. The company emphasizes a near doubling of producing wells to 150 and a 65.9% increase in average daily sales volumes year-over-year. CEO Adam Ferrari acknowledges that while revenue and production surged, the bottom line was negatively impacted by hedging losses as oil prices rose sharply amid Middle East conflict and market volatility. The company is transparent about the drivers of the $1.4 million net loss, citing an $89.9 million increase in derivative losses, higher depreciation, cost of sales, and interest expense, partially offset by increased product sales and royalty revenues. Phoenix Energy raises its full-year 2026 guidance, projecting revenues of $1.61–$1.78 billion and EBITDA of $525–$695 million, but cautions that net income will remain highly volatile due to mark-to-market adjustments on derivatives. The tone is confident but measured, with management openly discussing both operational gains and financial headwinds.

What the data suggests

The disclosed numbers show Phoenix Energy's Q3 2026 revenues rose 143.7% year-over-year to $460.4 million, with EBITDA up 60.6% to $148.6 million and Adjusted EBITDA up 134% to $207.8 million. Despite these operational gains, the company posted a net loss of $1.4 million for the quarter, reversing a $8.5 million profit in Q3 2025, primarily due to an $89.9 million increase in derivative losses and higher depreciation, cost of sales, and interest expense. Cash flow from operating activities for the first nine months of 2026 was $489.0 million, more than double the prior year. Production metrics set new records: 4.4 million barrels of crude oil produced in Q3, 1.5 million in August, and 52,479 barrels per day in September, making Phoenix the eighth largest oil producer in North Dakota in August. The company completed 445 gross and 53.6 net development wells year-to-date, with producing wells nearly doubling to 150. The updated 2026 outlook projects revenue up to $1.78 billion, but net income could range from a $40 million loss to a $120 million profit, reflecting continued exposure to commodity price swings and derivative impacts. The company is taking on significant new debt—$708.1–$848.1 million in 2026—while planning to repay $148 million, with total outstanding debt projected at $2.09–$2.23 billion. The data supports the narrative of rapid operational expansion but also reveals the financial volatility and capital intensity of the business.

Analysis

The announcement is proportionate in tone, with the majority of claims substantiated by realised, numerical results for Q3 2026 and the nine months ended September 30, 2026. The company discloses comprehensive financial and operational data, including revenue, EBITDA, net income/loss, cash flow, and production volumes, as well as detailed well activity. Forward-looking statements are limited to the updated full-year 2026 outlook and are clearly separated from realised results. While the company highlights record production and revenue growth, it also transparently reports a net loss and the impact of hedging losses, avoiding overstatement. The capital intensity flag is set due to the large new debt issuance planned for 2026, but this is disclosed factually and paired with immediate operational growth. There is minimal narrative inflation, and the data supports the company's claims.

Risk flags

• ●Derivative risk is high: The company’s net income is highly sensitive to mark-to-market changes on commodity derivatives, as seen in the $89.9 million increase in derivative losses driving the Q3 net loss. This volatility can obscure underlying operational performance and make earnings unpredictable.
• ●Capital intensity and leverage are increasing: Phoenix Energy plans to issue $708.1–$848.1 million in new debt during 2026, with total outstanding debt projected to reach up to $2.23 billion. High leverage and interest expense ($240–$250 million projected for 2026) could pressure cash flows if commodity prices weaken or operational issues arise.
• ●Commodity price exposure remains acute: Oil prices in 2026 have been extremely volatile, ranging from $69.60 to $112.95 per barrel, driven by geopolitical events involving Iran, Israel, and the United States. Further price swings could materially impact both revenues and derivative losses.
• ●Operational scaling risk: The company nearly doubled its producing wells and set new production records, but sustaining this pace requires continued successful drilling, completion, and integration of new wells. Any slowdown or operational misstep could impact future growth and financial results.
• ●Guidance variability: The wide range in projected 2026 net income (from a $40 million loss to a $120 million profit) signals substantial uncertainty, mainly due to non-cash derivative adjustments. This makes it difficult for investors to forecast true underlying profitability.

Bottom line

Phoenix Energy delivered record production and revenue in Q3 2026, with operational metrics and cash flow showing strong year-over-year growth. Despite these gains, the company reported a net loss due to large derivative losses as oil prices spiked, highlighting the earnings volatility inherent in its hedging strategy. The updated 2026 outlook projects continued operational expansion but also anticipates high financial variability, with net income guidance spanning a $160 million range. The business is capital intensive, with significant new debt issuance planned and leverage rising. For investors, the key takeaway is that Phoenix is executing on growth but faces substantial financial risk from commodity price swings, derivative exposure, and leverage. Sustained profitability and cash generation will depend on stable oil prices and disciplined capital management. The next major update will come with the Q4 and full-year 2026 results, where the impact of late-year price movements and derivative positions will be fully realized.

Announcement summary

(NYSE:PHXE-P) Phoenix Energy One, LLC reported financial and operating results for the third quarter ended September 30, 2026, and raised its full-year 2026 outlook. The company generated total revenues of $460.4 million, a net loss of $1.4 million, EBITDA of $148.6 million, and Adjusted EBITDA of $207.8 million in Q3 2026, compared to total revenues of $189.0 million, net income of $8.5 million, EBITDA of $92.6 million, and Adjusted EBITDA of $88.9 million in Q3 2025. Cash flow provided by operating activities was $489.0 million for the nine months ended September 30, 2026, compared to $204.7 million for the same period in 2025. The company achieved its highest quarterly gross crude oil production to date with 4.4 million barrels in Q3 2026, the highest monthly gross crude oil production with 1.5 million barrels in August 2026, and the highest daily gross crude oil production with 52,479 barrels in September 2026. In August 2026, Phoenix Energy was the eighth largest producer of crude oil in North Dakota. The company released rigs on 22 Bakken production wells, including 19 three-mile lateral wells, two four-mile lateral wells, and one switchback well with an average lateral length of approximately 16,144 feet. Hydraulic fracturing was completed on 15 wells (11 four-mile lateral and 4 three-mile lateral), and 5 wells were placed into production, including the company's first four-mile lateral switchback wells, the first such wells drilled in Montana. Phoenix Energy received the first permits ever issued for five-mile lateral wells in the Williston Basin. The company produced approximately 14.2 million barrels of water and injected approximately 14.2 million barrels through its saltwater disposal wells, with about 99.5% of total produced water volumes handled internally. For the year ending December 31, 2026, the updated outlook projects revenue between $1,610,000,000 and $1,780,000,000, total operating expenses between $1,060,000,000 and $1,120,000,000, net income (loss) between $(40,000,000) and $120,000,000, EBITDA between $525,000,000 and $695,000,000, Adjusted EBITDA between $725,000,000 and $850,000,000, and total outstanding debt between $2,090,000,000 and $2,230,000,000. Projected production for 2026 includes 13,100,000 to 13,700,000 barrels of crude oil, 17,500,000 to 18,200,000 Mcf of natural gas, and 1,550,000 to 1,640,000 barrels of NGLs, with total production of 17,566,667 to 18,373,333 Boe and average daily production of 48,128 to 50,338 Boe/d. The outlook assumes interest expense between $240.0 million and $250.0 million and depreciation, depletion, and amortization expense between $315.0 million and $335.0 million. The company expects to repay $148.0 million of debt maturing before December 31, 2026, and to issue between $708.1 million and $848.1 million of new debt during 2026. For Q3 2026, net oil-equivalent sales volumes were 4,229,601 BOE, and average daily sales volumes were 45,974 BOE/d, up 65.9% from Q3 2025. For the nine months ended September 30, 2026, net oil-equivalent sales volumes were 11,248,689 BOE, and average daily sales volumes were 41,204 BOE/d, up 73.7% from the same period in 2025. During the nine months ended September 30, 2026, operators drilled 445 gross and 53.6 net productive development wells, and the company had 150 producing wells in service as of September 30, 2026, compared to 78 as of September 30, 2025. CEO Adam Ferrari stated that the company produced more oil than ever, revenue grew nearly two and a half times to $460 million, and the number of producing wells nearly doubled, while hedging losses impacted the bottom line as oil prices rose. Oil prices in 2026 were volatile, reaching a high of $112.95 per barrel on April 7, 2026, and ranging from $69.60 to $107.02 per barrel in Q3 2026. Net income projections are subject to significant variability due to the accounting treatment of derivative instruments, with reported net income potentially impacted by unrealized gains or losses from changes in forward commodity price curves. The company will hold a public earnings call on November 11, 2026 at 1:30 PM PT.

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