OKLAHOMA CITY, Nov. 9 /PRNewswire-FirstCall/ -- Panhandle Oil and
Gas Inc. (NYSE: PHX, "the Company"), a growing independent oil and
natural gas company with reserves and production in the
Southeastern Oklahoma Woodford Shale, the Arkansas Fayetteville
Shale, the Anadarko Basin (Cana) Woodford Shale and western
Oklahoma, today announced estimated total proved reserve volumes
for the Company's fiscal year ended September 30, 2009. Total
Proved Reserves Increase 10% Panhandle's estimated total proved
reserves at September 30, 2009 increased 10% to 59.6 Bcfe from 54.1
Bcfe reported on September 30, 2008, based on SEC mandated pricing
in effect on September 30, 2009 of $2.86 per Mcf for natural gas
and $66.96 per barrel for oil. Panhandle delivered this growth in
reserve volumes despite the challenges of lower gas prices used to
calculate reserves, which dropped from $4.51 per Mcf at September
30, 2008 to $2.86 per Mcf this year. Since 2005, Panhandle's total
proved reserves have grown 91% from 31.2 Bcfe to 59.6 Bcfe, at a
compound annual growth rate of 17.5%, principally through reserves
added from drilling in the Southeastern Oklahoma Woodford Shale and
the Arkansas Fayetteville Shale. Panhandle's total estimated proved
reserves are 91% natural gas. Because Panhandle's fiscal year-end
is September 30, 2009, the use of the SEC's Modernization of Oil
and Gas Reporting Rules cannot be adopted by the Company until its
September 30, 2010 year-end. Approximately 9.2 Bcfe of the 2009
total proved reserves, or 15%, are categorized as Proved
Undeveloped (PUD). A substantial number of PUD locations are not
included in the September 30, 2009 Reserve Report as the use of the
$2.86 per Mcf price caused many of the Company's PUD locations to
calculate uneconomic, and as such, could not be included as
reserves in the Report. The Proved Reserves Chart below delineates
and compares SEC pricing reserves with the Company's in-house
normalized pricing reserves. The normalized price case allows
comparison of year to year reserves at a constant price. Using the
normalized pricing case Proved Reserves increased 34% year over
year to 73.3 Mcfe at September 30, 2009 and include 17.7 Bcfe of
PUD reserves, representing 24% of total reserves. Proved Reserves
--------------- In-House Normalized SEC Pricing Pricing (2)
September 30, September 30, September 30, September 30, 2009 2008
2009 2008 (1) ---- ---- ---- -------- Proved Developed Reserves:
Barrels of Oil 882,987 895,426 852,766 800,124 Mcf of Gas
45,036,460 35,970,442 50,484,900 37,036,924 ------------
------------ ------------ ------------ Mcfe (1) 50,334,382
41,342,998 55,601,496 41,837,668 Proved Undeveloped Reserves:
Barrels of Oil 37,886 94,532 56,147 93,806 Mcf of Gas 8,991,350
12,180,226 17,389,127 12,373,039 ------------ ------------
------------ ------------ Mcfe (1) 9,218,666 12,747,418 17,726,009
12,935,875 Total Proved Reserves: Barrels of Oil 920,873 989,958
908,913 893,930 Mcf of Gas 54,027,810 48,150,668 67,874,027
49,409,963 ------------ ------------ ------------ ------------ Mcfe
(1) 59,553,048 54,090,416 73,327,505 54,773,543 ============
============ ============ ============ 10% Discounted Estimated
Future Net Cash Flows (before federal income taxes) Proved
Developed $74,756,140 $104,840,854 $141,840,030 $111,248,070 Proved
Undeveloped 6,800,080 15,068,040 29,060,100 22,244,110 ------------
------------ ------------ ------------ Total $81,556,220
$119,908,894 $170,900,130 $133,492,180 ============ ============
============ ============ Pricing At Date Shown Oil/Barrels
(constant) $66.96 $97.74 $45.00 $45.00 Gas/Mcf (constant) $2.86
$4.51 $6.00 $6.00 (1) Crude oil converted to a thousand cubic feet
of natural gas equivalent by using the ratio of one barrel of crude
oil to six Mcf of natural gas. (2) Pricing used by Company for year
to year comparisons of reserves. Mcf, thousand cubic feet of
natural gas Bcfe, billion cubic feet of natural gas equivalent
Mcfe, thousand cubic feet of natural gas equivalent Probable and
Possible Reserves The Company has calculated probable and possible
undeveloped reserves for certain interests owned in the two
Woodford Shale plays in Oklahoma, the Fayetteville Shale in
Arkansas and the Colony Granite Wash play in western Oklahoma.
Estimates of reserves were prepared in accordance with the
definitions and guidance used by the Society Of Petroleum Engineers
for estimating probable and possible reserves. Estimated Net
Probable And Possible Reserves
-------------------------------------------- Anadarko Southeastern
Arkansas Basin Oklahoma Fayette- (Cana) Colony Woodford ville
Woodford Granite Shale Shale Shale Wash Other Total ----- -----
----- ---- ----- ----- Probable, Bcfe 55.6 16.7 12.5 1.7 0.9 87.4
Possible, Bcfe 58.6 48.4 34.8 5.5 0.6 147.9 ------- ------- -------
------- ------- ------- Total, Bcfe 114.2 65.1 47.3 7.2 1.5 235.3
======= ======= ======= ======= ======= ======= Average Reserves
per Undeveloped Location, Bcfe 2.3 1.8 3.4 2.5 ======= =======
======= ======= Management Comments Michael C. Coffman, Panhandle's
President and CEO said: "Fiscal 2009 increases in reserves and
production are the continuing result of Panhandle's commitment to a
more aggressive operating strategy of taking larger total interests
in wells drilled on our mineral acreage to maximize the value of
the underlying hydrocarbon assets for our shareholders. Our
drilling program over the last three plus years continues to build
on the Company's reserve base and production volumes. The majority
of this increased capital expenditure level has been financed from
cash flow with only a minor increase in debt and no issuances of
Company equity securities. We are committed to continuing these
strategies to build our reserve base and production volumes in
fiscal 2010 and beyond. We currently expect our capital expenditure
level for 2010 to be reduced as compared to 2009 assuming natural
gas prices remain under downward pressure; however, our experienced
management team and the proven operators with efficient operations
in world class plays are capable of deploying additional capital to
accelerate growth should natural gas prices escalate." Paul F.
Blanchard, Panhandle's Vice-President and COO added: "We continue
to see new resource plays develop in areas in which the Company
owns its 250,000 plus acres of perpetual minerals. These new
resource plays continue to provide Panhandle with additional
probable and possible reserves. In total, the Company now has over
3,400 probable and possible drilling locations in these resource
plays. The emergence of the Anadarko Basin (Cana) Woodford Shale
and the Colony Granite Wash plays in Western Oklahoma added 54.5
Bcf of probable and possible reserves to the Company's base in
fiscal 2009. With the rapid development of additional resource
plays over the last several years we expect the emergence of
additional plays and/or the expansion of existing plays to develop
on the Company's substantial mineral acreage holdings." 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 http://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 2008 Form
10-K filed with the Securities and Exchange Commission. These "Risk
Factors" include the volatility of oil and gas prices; Panhandle'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;
declines 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; and drilling and operating risks. Do
not place undue reliance on these forward-looking statements, which
speak only as of the date of this release, and 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.
DATASOURCE: Panhandle Oil and Gas Inc. CONTACT: Michael C. Coffman,
+1-405-948-1560, for Panhandle Oil and Gas Inc. Web Site:
http://www.panhandleoilandgas.com/
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