ABOUT
PHX
ABOUT PHX
Panhandle Oil and Gas Inc. (NYSE-PHX) is a non-operating
Independent Oil & Gas Company that was founded in 1926 and
went public in 1979. PHX is engaged in the exploration for and
production of natural gas, NGL and oil. The company has drilling
projects in the Eagle Ford Shale, Anadarko Basin, Fayetteville Shale,
and three Oklahoma Woodford Shale plays, including the SCOOP
(WoodFord and Springer) and STACK plays. PHX has 255,000
mineral acres with approximately 68,000 of those acres in
development.
INVESTMENTDATA
DATA(As
(Asof
of 5/18/15)
5/7/14)
INVESTMENT
(NYSE:PHX)
Recent Price
52-Week Range
Fiscal Year End
Shares Outstanding
Average Daily Trading Volume
Market Capitalization
$21.30
$15.68-34.45
Sept. 30
16.5 M
69,389
$352M
Net Debt
$69.0M
Ownership
INVESTMENT MERITS
Long-Term Track Record of Shareholder Value Creation
 No shareholder dilution or secondary offering in
Company history.
 Over a 50 year dividend payment history.
Low Cost Provider
 Ranked in the top 10 of the 100 largest public domestic
O&G companies in terms of all-source finding and development
cost based on Global Hunter Sec. 2014 “Finding & Development
Cost Study”.
Capital Efficient Business Model
 Only 21 total employees.
 Growth financed through operating cash flow generation and
low cost bank debt financing.
High Barriers to Entry
 Ownership of 255,000 mineral acres (almost 400 square miles)
across 10 states
 The mineral acreage is perpetually owned and has an average
cost of approximately $90 per acre.
Risk Reduction through the Business Model
 Significant activity is in shale plays which materially lowers the
Company’s drilling risk.
 Able to leverage large independents technology to optimize
development and the value of acreage.
 Able to mitigate commodity price risk through hedging.
Seasoned Management Team
Insider
Institutional
≈11%
≈41%
Management
Mr. Michael C. Coffman
President, Chief Executive Officer
Mr. Paul F. Blanchard Jr.
Sr. Vice President, Chief Operating Officer
Mr. Lonnie Joe Lowry
Vice-President, Chief Financial Officer & Secretary
Investor Relations Contact
Steven Hooser
Three Part Advisors, LLC
214-872-2710
Panhandle Oil & Gas Inc. (NYSE: PHX) 5400 North Grand Blvd. Grand Centre Bldg., Suite 300 Oklahoma City, Oklahoma 73112
(405) 948-1560 Fax (405) 948-2038 or (405) 948-1063
PANHANDLE’s NON OPERATOR SELECTIVE PARTICIPATION OPTIONS
Selective Participation with Working Interest in Most Economically Attractive Opportunities
Royalty Interest
PHX leases its acreage and receives a non-cost
bearing royalty production and income stream
from the wells drilled on our mineral acreage. We
currently have 3,846 royalty interest wells.
Advantage: No Risk Profile
1. No costs or operating expense.
2. May receive cash payment (Bonus) for the
lease.
Royalty and Working Interest (WI)
PHX partners with Top Tier Producers and receives a
working interest percentage of production as well as
the royalty interest for the wells that are drilled on
our mineral acreage. We currently have 2,173 WI
wells.
Advantage: Low Risk Profile
1. PHX is not responsible for project
development costs i.e. Operator pays for the
seismic, geological, geophysical, engineering,
etc.
2. PHX only pays our percentage of ownership
to drill, complete and operate the well.
*On Average PHX takes a Royalty and WI on about 70% of the wells it gets proposed.
3P - Reserves
Non-proved undeveloped reserves on fee mineral acres and held by
production leasehold in the Eagle Ford Shale, Fayetteville Shale, Oklahoma
Woodford Shales and Western Oklahoma/Texas Panhandle horizontal plays
(superior economics due to royalty retention on mineral acres)
~ 6,000 producing wells, 50% of revenue from gas, 50% from oil and liquids
in Fiscal Year 2015
PUD 40% of total proved reserves, principally on fee mineral acreage and
held by production leasehold in shale plays
Perpetually owned 186,800 open acres, 68,400 producing or leased acres
*Proven, probable and possible reserve appraisal performed by DeGolyer and MacNaughton
Forward-Looking Statements and Risk Factors – This presentation 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 or mineral acreage
acquisitions, 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 2014 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 larger independent oil and gas companies; 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; the amount and timing of development expenditures; 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; current economic conditions worldwide; future legislative or regulating changes;
shortages
of
oilfield
equipment,
services
and
qualified
personnel;
and
drilling
and
operating
risks.
As Panhandle does not operate any of the properties in which it has an interest, we have very limited ability to exercise any influence over operations of these properties,
associated costs or the timing of drilling on its properties.
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.
Panhandle Oil & Gas Inc. (NYSE: PHX) 5400 North Grand Blvd. Grand Centre Bldg., Suite 300 Oklahoma City, Oklahoma 73112
(405) 948-1560 Fax (405) 948-2038 or (405) 948-1063