OKLAHOMA CITY, Feb. 6, 2017 /PRNewswire/ -- PANHANDLE OIL
AND GAS INC. (NYSE: PHX), the "Company," today reported financial
and operating results for the 2017 fiscal first quarter ending
Dec. 31, 2016.
SIGNIFICANT ITEMS FOR FIRST QUARTER 2017
- Recorded first quarter 2017 net loss of $2,238,392, $0.13
per share, compared to net loss of $2,799,118, $0.17
per share, for the 2016 first quarter.
- Recorded production of 2,517,414 Mcfe, compared to 3,143,400
Mcfe for the 2016 first quarter.
- Funded capital expenditures of $2.2
million for drilling and equipping wells for the 2017 first
quarter with cash generated by operating activities of $3.7 million during the quarter.
- Collected $0.8 million from
leasing mineral acreage in the 2017 first quarter.
- Reduced debt $0.4 million in the
2017 first quarter.
For the 2017 first quarter, the Company recorded a net loss of
$2,238,392, $0.13 per share, compared to a net loss of
$2,799,118, $0.17 per share, for the 2016 first quarter. Net
cash provided by operating activities decreased 64% to $3,683,651 for the 2017 first quarter, compared
to the 2016 first quarter. Cash flow from operating activities
fully funded all capital expenditures of $2,174,523 for drilling and equipping wells for
the quarter.
Total revenues for the 2017 first quarter were $7,051,673, compared to $11,462,125 for the 2016 first quarter. The
decrease was largely due to increased losses on derivative
contracts of $2,665,597 ($2.5 million of non-cash mark-to-market) in the
2017 quarter as NYMEX oil and natural gas futures experienced more
of an increase in price in relation to the collars and the fixed
price swaps. Oil, NGL and natural gas sales decreased $156,070 or 2% in the 2017 quarter, compared to
the 2016 quarter, as a result of a 20% decrease in Mcfe production
mostly offset by a 23% increase in the average sales price per Mcfe
of production. Sales prices for oil, NGL and natural gas increased
17%, 46% and 34%, respectively, for the 2017 first quarter when
compared to the 2016 first quarter. The average sales price per
Mcfe during the 2017 first quarter was $3.54, compared to $2.88 for the 2016 first quarter.
Compared to the 2016 first quarter, first quarter 2017 oil
production decreased 29% to 75,636 barrels, NGL production
decreased 26% to 35,651 barrels and natural gas production
decreased 17% to 1,849,692 Mcf. These production volume declines
are the result of normal decline in the Company's producing wells.
Drilling and completion capital expenditures for the last year have
been below levels required to add new production sufficient to
offset this natural decline.
Lease operating expenses decreased $517,121 in the 2017 quarter as compared to the
2016 quarter. The reduction was mostly the result of decreased
production and operating efficiencies. Depreciation, depletion and
amortization (DD&A) decreased $2,123,389 mainly due to lower production and the
DD&A rate per Mcfe decreasing $0.29 in the 2017 quarter. The rate decrease was
primarily due to impairment expense in fiscal 2016 lowering our
depreciable basis. There was no impairment expense booked in the
2017 quarter compared to approximately $3.7
million in the 2016 quarter.
OPERATIONS UPDATE
Drilling is now underway on five separate projects. Three are in
the cores of low-risk resource plays, and the other two are in
higher risk plays in the Permian Basin.
In the STACK/CANA play, the Company is participating with a
17.5% working interest and a 16.25% net revenue interest in six
Woodford Shale wells operated by Cimarex Energy. The first two
wells have been drilled, wells three and four are drilling and
wells five and six are scheduled to spud as soon as three and four
finish drilling. Cimarex plans to drill all six wells before
beginning completion operations. These wells are expected to be
completed and start producing in the third quarter of 2017.
In the southeastern Oklahoma Woodford Shale, Panhandle is
participating with an average 20% working interest and an average
27.4% net revenue interest in eight wells operated by BP. Six wells
have been drilled and the last two are drilling. Four of these
wells are currently being completed and are expected to begin
production within the next 30 days. The remaining four wells are
projected to be completed and start producing early in the third
quarter of 2017.
Drilling has commenced with one rig on a ten-well continuous
drilling program on our Eagle Ford leasehold. The first two wells
are projected to be completed and start producing in April 2017. The next four wells are expected to
start producing in the fourth quarter of 2017 and the remaining
four wells should be on production during the first quarter of
2018. We own an average 13% working interest and 9.7% net revenue
interest in these ten wells.
The activity in these three low-risk resource plays is expected
to result in a material increase in daily oil, NGL and natural gas
production as these wells begin to produce throughout the remainder
of 2017 and into 2018. This activity will also result in a material
increase in 2017 capital expenditures as compared to 2016.
In the Permian Basin, QEP Resources is currently drilling a
two-mile lateral Woodford Shale well on our contiguous
43.6-square-mile mineral holdings in Andrews and Winkler Counties, Texas. Panhandle has leased its 2,440 net
mineral acres in the block and is entitled to a proportionately
reduced 25% royalty. We also have the right to participate with up
to 10% working interest in each unit as initial unit wells are
proposed. With full participation, Panhandle would have a 7%
working interest and a 7.5% net revenue interest in wells drilled
on the 43.6-square-mile block.
Also in the Permian Basin, Element Petroleum is evaluating the
San Andres formation on a contiguous 34.5-square-mile acreage block
in Cochran County, Texas.
Panhandle leased 4,050 net mineral acres within this block to
Element and has a proportionately reduced 25% royalty. We also have
the right to participate with up to 10% working interest in each
unit as initial unit wells are proposed. With full participation,
Panhandle would have a 10% working interest and a 12.1% net revenue
interest in wells drilled on the 34.5-square-mile block. Thus far,
Element has drilled and cored four pilot wells and completed one
salt water disposal well on and around our block. The operator has
begun the process of reentering the pilot holes and drilling
1.5-mile laterals to test the San Andres Formation. The first
lateral is being drilled and is scheduled to begin producing within
the next 60 days. Element is in the process of staking an
additional 20 locations on and around our block and plan to begin
development activities if the initial wells are successful.
HEDGING ACTIVITIES
Prices received for oil, NGL and natural gas improved during the
quarter, and recent NYMEX futures pricing suggests continued
improvement for the remainder of 2017. To protect cash flows
generated by the materially increased capital expenditures planned
for 2017 and support the returns on those investments, Panhandle
has elected to hedge a significant amount of projected 2017
production. We have 3.74 Bcf and 0.75 Bcf of natural gas volumes
for the remainder of 2017 and 2018 hedged with costless collars
with average floors of $2.87 and
$3.44 per Mcf and average ceilings of
$3.49 and $3.95 per Mcf, respectively. We also have 2.1 Bcf
and 0.38 Bcf of natural gas volumes for the remainder of 2017 and
2018 hedged with swap contracts with average prices of $3.21 and $3.63,
respectively. The Company has also hedged 183,000 barrels of
remaining 2017 oil with costless collars with an average floor
price of $49.18 per barrel and an
average ceiling price of $56.73 and
69,000 barrels of oil with swap contracts that have an average
price of $53.89. The aforementioned
timeframes are based on calendar year.
MANAGEMENT COMMENTS
Paul F. Blanchard Jr., President
and CEO said, "Like many other oil and gas companies, Panhandle
experienced declining sales in 2016, due to low capital
expenditures in the low product price environment. Prices for oil,
NGL and natural gas improved during first quarter 2017, and recent
NYMEX futures pricing suggests continued improvement for the
remainder of 2017. As a result, we are experiencing a substantial
increase in activity on our holdings.
"The Company has three low-risk high-potential projects under
development, including drilling in the STACK/CANA Woodford Shale,
the southeastern Oklahoma Woodford Shale and the Eagle Ford Shale.
This activity is expected to produce material increases in daily
oil, NGL and natural gas production as these wells come on line in
2017 and into 2018. This activity will also result in a material
increase in 2017 capital expenditures as compared to 2016.
"We are evaluating higher risk exploration areas on our mineral
acreage in the Woodford Shale in Andrews and Winkler Counties, Texas, and the San Andres formation in
Cochran County, Texas. In both of
these projects, we have the right to participate with up to 10%
working interest in each unit as initial unit wells are proposed in
addition to our proportionately reduced 25% royalty. If successful,
these two Permian Basin plays have the potential to become
Panhandle core areas.
"Going forward, we expect improved product prices along with
material new oil, NGL and natural gas production from the low-risk
drilling in the cores of our existing resource plays in 2017. We
also have the possibility of adding two high-potential plays in the
Permian Basin, which are currently being evaluated, as new active
core areas. This multi-project and balanced-risk approach continues
to demonstrate the value of Panhandle's proven operating
strategies, which have positioned the Company to prosper as the
industry begins to recover."
FINANCIAL
HIGHLIGHTS
Statements of Operations
|
|
|
|
|
|
|
|
|
|
Three Months Ended
Dec 31,
|
|
|
2016
|
|
|
2015
|
|
Revenues:
|
|
|
Oil, NGL and natural
gas sales
|
$
|
8,899,218
|
|
|
$
|
9,055,288
|
|
Lease bonuses and
rentals
|
|
837,958
|
|
|
|
2,425,504
|
|
Gains (losses) on
derivative contracts
|
|
(2,700,533)
|
|
|
|
(34,936)
|
|
Income (loss) from
partnerships
|
|
15,030
|
|
|
|
16,269
|
|
|
|
7,051,673
|
|
|
|
11,462,125
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
3,049,415
|
|
|
|
3,566,536
|
|
Production
taxes
|
|
367,845
|
|
|
|
321,841
|
|
Exploration
costs
|
|
(2,243)
|
|
|
|
27,790
|
|
Depreciation,
depletion and amortization
|
|
4,834,263
|
|
|
|
6,957,652
|
|
Provision for
impairment
|
|
-
|
|
|
|
3,733,273
|
|
Loss (gain) on asset
sales and other
|
|
12,934
|
|
|
|
(269,706)
|
|
Interest
expense
|
|
292,369
|
|
|
|
360,562
|
|
General and
administrative
|
|
1,842,482
|
|
|
|
1,912,079
|
|
Bad debt expense
(recovery)
|
|
-
|
|
|
|
19,216
|
|
|
|
10,397,065
|
|
|
|
16,629,243
|
|
Income (loss) before
provision (benefit) for income taxes
|
|
(3,345,392)
|
|
|
|
(5,167,118)
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
(1,107,000)
|
|
|
|
(2,368,000)
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(2,238,392)
|
|
|
$
|
(2,799,118)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per common share
|
$
|
(0.13)
|
|
|
$
|
(0.17)
|
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted average shares outstanding:
|
|
|
|
|
|
|
|
Common
shares
|
|
16,604,149
|
|
|
|
16,563,942
|
|
Unissued, directors'
deferred compensation shares
|
|
274,035
|
|
|
|
255,060
|
|
|
|
16,878,184
|
|
|
|
16,819,002
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share of common stock and paid
in period
|
|
|
|
|
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share of common stock and to
be paid in quarter ended March 31
|
|
|
|
|
|
|
|
|
0.04
|
|
|
|
0.04
|
|
Balance
Sheets
|
|
|
|
|
|
|
|
|
|
|
Dec. 31,
2016
|
|
|
Sept. 30,
2016
|
|
Assets
|
(unaudited)
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
484,989
|
|
|
$
|
471,213
|
|
Oil, NGL and natural
gas sales receivables (net of allowance for uncollectable accounts)
|
|
5,526,787
|
|
|
|
5,287,229
|
|
|
|
|
|
|
|
|
Refundable income
taxes
|
|
98,040
|
|
|
|
83,874
|
|
Other
|
|
273,397
|
|
|
|
419,037
|
|
Total current
assets
|
|
6,383,213
|
|
|
|
6,261,353
|
|
|
|
|
|
|
|
|
|
Properties and
equipment, at cost, based on successful efforts accounting:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Producing oil and
natural gas properties
|
|
437,851,114
|
|
|
|
434,469,093
|
|
Non-producing oil and
natural gas properties
|
|
7,538,806
|
|
|
|
7,574,649
|
|
Other
|
|
1,068,778
|
|
|
|
1,069,658
|
|
|
|
446,458,698
|
|
|
|
443,113,400
|
|
Less accumulated
depreciation, depletion and amortization
|
|
(256,491,564)
|
|
|
|
(251,707,749)
|
|
Net properties and
equipment
|
|
189,967,134
|
|
|
|
191,405,651
|
|
|
|
|
|
|
|
|
|
Investments
|
|
172,352
|
|
|
|
157,322
|
|
Total
assets
|
$
|
196,522,699
|
|
|
$
|
197,824,326
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
3,457,200
|
|
|
$
|
2,351,623
|
|
Derivative contracts,
net
|
|
2,933,947
|
|
|
|
403,612
|
|
Accrued liabilities
and other
|
|
1,968,967
|
|
|
|
1,718,558
|
|
Total current
liabilities
|
|
8,360,114
|
|
|
|
4,473,793
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
44,100,000
|
|
|
|
44,500,000
|
|
Deferred income
taxes
|
|
29,569,007
|
|
|
|
30,676,007
|
|
Asset retirement
obligations
|
|
2,990,823
|
|
|
|
2,958,048
|
|
Derivative contracts,
net
|
|
10,587
|
|
|
|
24,659
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Class A voting common
stock, $.0166 par value; 24,000,000 shares authorized, 16,863,004 issued at
Dec. 31, 2016, and Sept. 30,
2016
|
|
280,938
|
|
|
|
280,938
|
|
Capital in excess of
par value
|
|
2,476,066
|
|
|
|
3,191,056
|
|
Deferred directors'
compensation
|
|
3,509,031
|
|
|
|
3,403,213
|
|
Retained
earnings
|
|
108,903,533
|
|
|
|
112,482,284
|
|
|
|
115,169,568
|
|
|
|
119,357,491
|
|
Less treasury stock,
at cost; 223,661 shares at Dec. 31, 2016, and 262,708 shares at Sept. 30, 2016
|
|
|
|
|
|
|
|
|
(3,677,400)
|
|
|
|
(4,165,672)
|
|
Total stockholders'
equity
|
|
111,492,168
|
|
|
|
115,191,819
|
|
Total liabilities and
stockholders' equity
|
$
|
196,522,699
|
|
|
$
|
197,824,326
|
|
Condensed Statements
of Cash Flows
|
|
|
|
|
|
|
|
|
|
Three months ended
Dec. 31,
|
|
|
2016
|
|
|
2015
|
|
Operating
Activities
|
|
|
Net income
(loss)
|
$
|
(2,238,392)
|
|
|
$
|
(2,799,118)
|
|
Adjustments to
reconcile net income (loss) to net cash provided
by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
4,834,263
|
|
|
|
6,957,652
|
|
Impairment
|
|
-
|
|
|
|
3,733,273
|
|
Provision for deferred
income taxes
|
|
(1,107,000)
|
|
|
|
(3,747,000)
|
|
Exploration
costs
|
|
(2,243)
|
|
|
|
27,790
|
|
Gain from leasing of
fee mineral acreage
|
|
(837,732)
|
|
|
|
(2,425,131)
|
|
Proceeds from leasing
of fee mineral acreage
|
|
847,578
|
|
|
|
2,693,812
|
|
Net (gain) loss on
sale of assets
|
|
-
|
|
|
|
(271,080)
|
|
Amortization of
partnerships
|
|
2,541
|
|
|
|
19,984
|
|
Directors' deferred
compensation expense
|
|
105,818
|
|
|
|
85,930
|
|
Restricted stock
awards
|
|
180,412
|
|
|
|
371,407
|
|
Bad debt expense
(recovery)
|
|
-
|
|
|
|
19,216
|
|
Cash provided (used)
by changes in assets and liabilities:
|
|
|
|
|
|
|
|
Oil, NGL and natural
gas sales receivables
|
|
(239,558)
|
|
|
|
2,335,449
|
|
Fair value of
derivative contracts
|
|
2,516,263
|
|
|
|
3,574,650
|
|
Refundable production
taxes
|
|
-
|
|
|
|
1,162
|
|
Other current
assets
|
|
145,640
|
|
|
|
(659,324)
|
|
Accounts
payable
|
|
(90,474)
|
|
|
|
(484,882)
|
|
Income taxes
receivable
|
|
(14,166)
|
|
|
|
345,897
|
|
Income taxes
payable
|
|
-
|
|
|
|
1,073,551
|
|
Accrued
liabilities
|
|
(419,299)
|
|
|
|
(509,208)
|
|
Total
adjustments
|
|
5,922,043
|
|
|
|
13,143,148
|
|
Net cash provided by
operating activities
|
|
3,683,651
|
|
|
|
10,344,030
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Capital expenditures,
including dry hole costs
|
|
(2,174,523)
|
|
|
|
(1,286,114)
|
|
Investments in
partnerships
|
|
(17,571)
|
|
|
|
44,842
|
|
Proceeds from sales of
assets
|
|
-
|
|
|
|
627,547
|
|
Net cash provided
(used) by investing activities
|
|
(2,192,094)
|
|
|
|
(613,725)
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Borrowings under debt
agreement
|
|
4,436,304
|
|
|
|
2,958,515
|
|
Payments of loan
principal
|
|
(4,836,304)
|
|
|
|
(10,958,515)
|
|
Purchase of treasury
stock
|
|
(407,677)
|
|
|
|
(117,165)
|
|
Payments of
dividends
|
|
(670,104)
|
|
|
|
(668,364)
|
|
Excess tax benefit on
stock-based compensation
|
|
-
|
|
|
|
(45,000)
|
|
Net cash provided
(used) by financing activities
|
|
(1,477,781)
|
|
|
|
(8,830,529)
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
|
13,776
|
|
|
|
899,776
|
|
Cash and cash
equivalents at beginning of period
|
|
471,213
|
|
|
|
603,915
|
|
Cash and cash
equivalents at end of period
|
$
|
484,989
|
|
|
$
|
1,503,691
|
|
|
|
|
|
|
|
|
|
Supplemental
Schedule of Noncash Investing and Financing
Activities
|
|
|
|
|
|
|
|
Dividends declared and
unpaid
|
$
|
670,255
|
|
|
$
|
669,618
|
|
Additions to asset
retirement obligations
|
$
|
594
|
|
|
$
|
4,524
|
|
|
|
|
|
|
|
|
|
Gross additions to
properties and equipment
|
$
|
3,370,574
|
|
|
$
|
3,455,245
|
|
Net (increase)
decrease in accounts payable for properties and equipment additions
|
|
|
|
|
|
|
|
|
(1,196,051)
|
|
|
|
(2,169,131)
|
|
Capital expenditures
and acquisitions, including dry hole costs
|
$
|
2,174,523
|
|
|
$
|
1,286,114
|
|
PRODUCTION
|
|
|
|
|
|
|
|
|
|
First Quarter
Ended
|
|
|
First Quarter
Ended
|
|
|
Dec. 31,
2016
|
|
|
Dec. 31,
2015
|
|
Mcfe Sold
|
|
2,517,414
|
|
|
|
3,143,400
|
|
Average Sales Price
per Mcfe
|
$
|
3.54
|
|
|
$
|
2.88
|
|
Oil Barrels
Sold
|
|
75,636
|
|
|
|
106,362
|
|
Average Sales Price
per Barrel
|
$
|
46.09
|
|
|
$
|
39.34
|
|
Mcf Sold
|
|
1,849,692
|
|
|
|
2,216,922
|
|
Average Sales Price
per Mcf
|
$
|
2.57
|
|
|
$
|
1.92
|
|
NGL Barrels
Sold
|
|
35,651
|
|
|
|
48,051
|
|
Average Sales Price
per Barrel
|
$
|
18.65
|
|
|
$
|
12.78
|
|
Quarter
ended
|
|
Oil Bbls
Sold
|
|
|
Mcf Sold
|
|
|
NGL Bbls
Sold
|
|
|
Mcfe Sold
|
|
12/31/2016
|
|
|
75,636
|
|
|
|
1,849,692
|
|
|
|
35,651
|
|
|
|
2,517,414
|
|
9/30/2016
|
|
|
78,398
|
|
|
|
1,940,749
|
|
|
|
44,598
|
|
|
|
2,678,725
|
|
6/30/2016
|
|
|
88,732
|
|
|
|
2,112,567
|
|
|
|
40,477
|
|
|
|
2,887,821
|
|
3/31/2016
|
|
|
90,760
|
|
|
|
2,014,139
|
|
|
|
37,934
|
|
|
|
2,786,303
|
|
12/31/2015
|
|
|
106,362
|
|
|
|
2,216,922
|
|
|
|
48,051
|
|
|
|
3,143,400
|
|
The Company's derivative contracts in place for oil and natural
gas at Dec. 31, 2016, are outlined in
its Form 10-Q for the period ending Dec. 31,
2016.
Panhandle Oil and Gas Inc. (NYSE: PHX) is
engaged in the exploration for and production of natural gas and
oil. Additional information on the Company can be found at
www.panhandleoilandgas.com.
Forward-Looking Statements and Risk Factors
– This report includes "forward-looking statements," within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements include current expectations or forecasts of future
events. They may include estimates of oil and gas reserves,
expected oil and gas production and future expenses, projections of
future oil and gas prices, planned capital expenditures for
drilling, leasehold acquisitions and seismic data, statements
concerning anticipated cash flow and liquidity, and Panhandle's
strategy and other plans and objectives for future operations.
Although Panhandle believes the expectations reflected in these and
other forward-looking statements are reasonable, we can give no
assurance they will prove to be correct. They can be affected by
inaccurate assumptions or by known or unknown risks and
uncertainties. Factors that could cause actual results to differ
materially from expected results are described under "Risk Factors"
in Part 1, Item 1 of Panhandle's 2016 Form 10-K filed with the
Securities and Exchange Commission. These "Risk Factors" include
the worldwide economic recession's continuing negative effects on
the natural gas business; Panhandle's hedging activities may reduce
the realized prices received for natural gas sales; the volatility
of oil and gas prices; the Company's ability to compete effectively
against strong independent oil and gas companies and majors; the
availability of capital on an economic basis to fund reserve
replacement costs; Panhandle's ability to replace reserves and
sustain production; uncertainties inherent in estimating quantities
of oil and gas reserves and projecting future rates of production
and the amount and timing of development expenditures;
uncertainties in evaluating oil and gas reserves; unsuccessful
exploration and development drilling; decreases in the values of
our oil and gas properties resulting in write-downs; the negative
impact lower oil and gas prices could have on our ability to
borrow; drilling and operating risks; and we cannot control
activities on our properties as the Company is a non-operator.
Do not place undue reliance on these forward-looking statements,
which speak only as of the date of this release, as Panhandle
undertakes no obligation to update this information. Panhandle
urges you to carefully review and consider the disclosures made in
this presentation and Panhandle's filings with the Securities and
Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect Panhandle's business.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/panhandle-oil-and-gas-inc-reports-fiscal-2017-first-quarter-results-300402843.html
SOURCE PANHANDLE OIL AND GAS INC.