Phoenix Energy Q1 revenue +158%, operating income +135%; net loss $140M on derivative hit

Filed May 13, 2026 · Period ending March 31, 2026 · Compared to 10-Q May 16, 2025 · ~2 min read

Key Changes

• high

  Operating income rose 135% YoY to $91.8M, but net income swung to a $140.1M loss (from $5.6M profit) as a $178.8M derivative mark-to-market loss overwhelmed operations. The below-the-line driver is the unrealized derivative loss; net income remains below operating income.

  MD&A: Operating Results verify on EDGAR →
• high

  Material weaknesses expanded from 3 to 6 categories (segregation of duties, COSO framework gaps, IT general controls, risk assessment, information accuracy). New accounting system implemented Jan 2026 as part of remediation; effectiveness still under evaluation.

  Controls & Procedures verify on EDGAR →
• high

  Fortress Credit Agreement covenant breach (current ratio) as of March 31, 2026; waiver obtained May 7, 2026. Management attributes breach to accelerated well completion spending to capitalize on higher commodity prices.

  Notes: Fortress Credit Agreement verify on EDGAR →