Le Lézard
Classified in: Oil industry, Business
Subject: ERN

Panhandle Oil and Gas Inc. Reports Fourth Quarter and Fiscal 2017 Results and Operations Update


OKLAHOMA CITY, Dec. 12, 2017 /PRNewswire/ -- PANHANDLE OIL AND GAS INC., the "Company," (NYSE: PHX) today reported financial and operating results for the fiscal year and fourth quarter ended Sept. 30, 2017, an operations update and an update on its bank line-of-credit borrowing base.

HIGHLIGHTS FOR THE PERIODS ENDED SEPT. 30, 2017

(1) This is a Non-GAAP measure. Refer to the Non-GAAP Reconciliation section.

MANAGEMENT COMMENTS

Paul F. Blanchard Jr., President and CEO, said, "Our strategy, moving forward will have three basic elements. 1) We will creatively maximize the value of the Company's existing assets, while minimizing expenses. 2) We will endeavor to prudently add attractive new assets to the Company's portfolio that we believe will be additive to long-term shareholder value. 3) We will continue to maintain a conservative balance sheet.

"Many strategic initiatives have been completed or are underway. I want to highlight a few significant initiatives that emphasize how we are maximizing the value of our existing assets.

"The Company invested $25.8 million in drilling activity in 2017, with the vast majority in the core areas of the STACK, Cana, SCOOP, SE Oklahoma Woodford and the Eagle Ford Shale. The average finding cost for the wells from this program, which began production in 2017, is estimated at an attractive $0.92 per Mcfe. This activity materially grew the Company's production as these wells began to produce in the third and fourth quarters of 2017. As a result of this investing activity, the Company's fourth quarter 2017 production exceeded second quarter 2017 production by approximately 40%. Our approach of low-risk meaningful return investment in working interest drilling on our mineral and leasehold acreage is the foundation of maximizing the value of the Company's existing assets.

"In 2017, the Company leased 2,473 acres of its mineral holdings, primarily in the expansion areas of STACK and SCOOP, for $5.2 million in lease bonuses and an average royalty of 21%. Our analysis suggests that the lease bonus plus royalty received from this leasing will exceed the value the Company would have generated from taking a working interest participation, thereby maximizing value while minimizing drilling risk. This illustrates another option available to Panhandle to maximize shareholder value in competitive leasing areas through our perpetual mineral ownership.

"Another effort to optimize our asset value and profitability is the Company's marginal well divestiture program. In 2017, the Company began the process of selling marginal working interest wells. We intend to continue this program in 2018, with the goal of materially reducing the Company's LOE per Mcfe while having a much smaller impact on cash flow and production. The vast majority of the wells sold through this program on our mineral holdings will be sold well-bore only, where we retain all our perpetual mineral rights outside those well-bores.

"On the acquisition front, we continue to screen for and evaluate attractive acquisition opportunities, with a heavy emphasis toward mineral interests. We are finding the market to be active and competitive. With our 4,500 plus gross undeveloped drilling locations identified on existing mineral and leasehold acreage, we have the ability to be patient in this process, but will continue to actively search for opportunities that meet our strategic criteria and pursue only those we believe will be accretive to long-term shareholder value.

"In October 2017, the Company renegotiated and extended its credit facility with very favorable terms and a new maturity date of Nov. 20, 2022.The borrowing base was maintained at $80 million and on Nov. 30, 2017, our debt was $49.9 million.

"In conclusion, the Company has the flexibility to creatively manage its existing assets in a manner we believe will optimize long-term shareholder value We will endeavor to prudently add attractive new assets to the Company's portfolio where we believe they will be additive to long-term per share value. We will continue our strategy to maintain a conservative balance sheet throughout all commodity cycles."

FISCAL FOURTH QUARTER 2017 RESULTS

For the 2017 fourth quarter, the Company recorded net income of $1,039,134, or $0.06 per share. This compared to net income of $737,190, or $0.05 per share, for the 2016 fourth quarter. Net cash provided by operating activities was $6,436,955 for the 2017 fourth quarter, versus $2,085,857 for the 2016 fourth quarter. Capital expenditures for the 2017 fiscal quarter totaled $7,796,176.

Total revenues for the 2017 fourth quarter were $12,896,932, an increase of 27% from $10,157,985 for the 2016 quarter. Oil, NGL and natural gas sales increased $3,293,913, or 37%, in the 2017 quarter, as compared to the 2016 quarter. This revenue increase was a result of increased oil, NGL and natural gas volumes of 19%, 46% and 20%, respectively, and increased oil, NGL and natural gas prices of 12%, 58% and 6%, respectively. Average sales price per Mcfe of production during the 2017 fourth quarter was $3.70, a 12% increase from $3.31 in the 2016 fourth quarter. Oil production increased in the 2017 quarter to 93,027 barrels, versus 78,398 barrels in the 2016 quarter, while gas production increased 20% to 2,330,838 Mcf, and NGL production increased 46% to 65,034 barrels. Additionally, losses on derivative contracts were $0.4 million in the 2017 quarter compared to a gain of $0.8 million in the 2016 quarter.

FISCAL YEAR 2017 RESULTS

For fiscal 2017, the Company recorded a net income of $3,531,933, or $0.21 per share. This compared to a net loss of $10,286,884, or $0.61 per share, for fiscal 2016. Net cash provided by operating activities decreased 8% to $20.8 million for 2017, versus 2016. Capital expenditures in fiscal 2017 totaled $25.8 million as compared to $4.0 million in fiscal 2016.

Total revenues for 2017 were $46,335,049, an increase of 19% from $39,060,783 for 2016. This revenue increase was a result of increased oil, NGL and natural gas prices of 26%, 58% and 41%, respectively, increased NGL volumes of 2% and was somewhat offset by decreased oil and natural gas production volumes of 15% and 1%, respectively. Overall results were a 3% decrease in Mcfe production volumes and a 32% increase in the average sales price per Mcfe to $3.60, as compared to $2.73 in 2016. Revenue from lease bonuses in 2017 was $5.1 million, compared to $7.7 million in 2016. Gains on derivative contracts totaled $1.2 million in 2017 as compared to losses of $0.1 million in 2016.

Oil, NGL and natural gas sales increased $8,524,559, or 27%, for 2017, as compared to 2016. The increase was due to increased oil, NGL and natural gas prices coupled with higher NGL production volumes and somewhat offset by lower oil and natural gas production volumes. Oil production decreased 15%, primarily the result of the production decline in the Eagle Ford Shale. To a lesser extent, declining production from various fields in western Oklahoma, the Texas Panhandle and Bakken Shale also contributed to the decrease. These decreases were partially offset by new production added in the Eagle Ford Shale on six wells in the second half of 2017. NGL production increased 2%, largely the result of new production coming online in the Anadarko Woodford and Eagle Ford Shale. This more than offset the natural decline in the Anadarko Woodford Shale in western and central Oklahoma and the Anadarko Basin Granite Wash in western Oklahoma and the Texas Panhandle. Natural gas production decreased 1%, principally due to declining production in the Fayetteville Shale. To a much lesser extent, declining production from the Anadarko Woodford Shale in western and central Oklahoma, the Anadarko Basin Granite Wash and the southeastern Oklahoma Woodford Shale also contributed to the decrease. These declines were mostly offset as a result of new well production in southeastern Oklahoma Woodford Shale and Anadarko Woodford Shale.

Total costs and expenses for 2017 decreased $14,944,551, or 26%, from 2016. Lease operating expenses declined $0.9 million, principally the result of significant new low-cost production coming on, decreased operating costs in several fields and the company selling some high operating cost wells in 2017. Provision for impairment decreased $11.3 million in 2017 as a result of severely depressed oil, NGL and natural gas prices during 2016. The Company also recorded a $0.1 million loss on asset sales in 2017, as compared to a $2.6 million gain in 2016.

BANK LINE-OF-CREDIT UPDATE

On Oct. 25, 2017, Panhandle's credit facility was renegotiated and our bank line-of-credit borrowing base was reaffirmed and remained unchanged at $80 million. The new maturity date is Nov. 30, 2022. The outstanding balance at Nov. 30, 2017, is $49.9 million with availability under the line of $30.1 million. Based on currently expected product prices, the Company anticipates funding normal operations and its drilling capital expenditures program in 2018 from internally generated cash flow and, if needed, the availability under its line-of-credit.

OPERATIONS UPDATE

The 2017 drilling capital expenditures of $25.8 million were primarily invested in the cores of three low-risk resource plays: southeastern Oklahoma Woodford, STACK/Cana Woodford and the Eagle Ford. The first material production response from this program was seen in the third quarter, when production grew 26% from the prior quarter. Production in the fourth quarter grew another 11% above the third quarter to 36.0 Mmcfe per day. This is the highest quarterly production for the Company since the third quarter of 2015.

Panhandle participated in eight significant wells operated by BP in the southeastern Oklahoma Woodford in 2017. Four of the wells began producing late in the second quarter, and the remaining four began producing in the third quarter. These eight wells, which have an average 20% working interest and 27.4% net revenue interest, produced 6,340 Mcf per day net to Panhandle in September.

The Company participated in six significant STACK/Cana Woodford wells operated by Cimarex, with a 17.5% working interest and 16.25% net revenue interest. The six wells began producing in late July and produced 8,258 Mcfe per day net to Panhandle in September.

The Company also participated in 10 wells in the Eagle Ford Shale in south Texas. Two wells started producing in April, four wells began producing in August and the four remaining wells began producing in mid-November. September production from the first six wells totaled 421 Boe per day net to Panhandle. The four wells that began producing in mid-November are currently producing 181 Boe per day net to Panhandle.

In the Permian basin, QEP sold leasehold rights, including its rights on our contiguous 43.6-square-mile mineral holdings in Andrews and Winkler Counties, Texas. The new operator has begun drilling a Barnett Shale horizontal test on our mineral position and has also indicated intent to test the Wolfcamp. Panhandle elected not to participate with a working interest and to maintain a royalty interest in the Barnett Shale test.

Also in the Permian Basin, Element Petroleum has drilled seven San Andres wells on our contiguous 34.5-square-mile mineral acreage block in Cochran County Texas. Panhandle elected not to participate with a working interest and to maintain a royalty interest in the seven wells. Three of the wells are currently producing, and the remaining four wells are being completed and prepared for production. Production from each of the three producing wells progressively improved as compared to the prior wells, with the most recent well producing an average of 255 Boe per day in the last 30 days.

Twelve rigs are currently drilling on our mineral holdings in STACK/Cana/SCOOP and southeastern Oklahoma Woodford. Panhandle has a working interest in one well and a royalty interest in the remaining eleven.

 

FINANCIAL HIGHLIGHTS

Statements of Operations




Three Months Ended Sept. 30,



Year Ended Sept. 30,




2017



2016



2017



2016


Revenues:

















Oil, NGL and natural gas sales


$

12,147,894



$

8,853,981



$

39,935,912



$

31,411,353


Lease bonuses and rentals



1,157,545




547,633




5,149,297




7,735,785


Gains (losses) on derivative contracts



(408,507)




756,371




1,249,840




(86,355)





12,896,932




10,157,985




46,335,049




39,060,783


Costs and expenses:

















Lease operating expenses



3,136,979




3,316,004




12,682,969




13,590,089


Production taxes



418,614




323,918




1,548,399




1,071,632


Depreciation, depletion and amortization



4,743,280




5,524,548




18,397,548




24,487,565


Provision for impairment



652,202




152,207




662,990




12,001,271


Loss (gain) on asset sales and other



7,385




(2,388,545)




105,830




(2,576,237)


Interest expense



390,210




310,592




1,275,138




1,344,619


General and administrative



2,083,128




2,006,071




7,441,242




7,139,728





11,431,798




9,244,795




42,114,116




57,058,667


Income (loss) before provision (benefit) for income taxes



















1,465,134




913,190




4,220,933




(17,997,884)


Provision (benefit) for income taxes



426,000




176,000




689,000




(7,711,000)



















Net income (loss)


$

1,039,134



$

737,190



$

3,531,933



$

(10,286,884)





















































Basic and diluted earnings per common share:

















Net income (loss)


$

0.06



$

0.05



$

0.21



$

(0.61)




































Weighted average shares outstanding:

















Common shares



16,668,814




16,402,172




16,646,582




16,577,799


Unissued, vested directors' shares



259,301




269,461




253,603




263,057





16,928,115




16,671,633




16,900,185




16,840,856



















Dividends declared per share of common stock and paid in period


















$

0.04



$

0.04



$

0.16



$

0.16


 

Balance Sheets




Sept. 30, 2017



Sept. 30, 2016


Assets









Current Assets:









Cash and cash equivalents


$

557,791



$

471,213


Oil, NGL and natural gas sales receivables,









net of allowance for uncollectable accounts



7,585,485




5,287,229


Refundable income taxes



489,945




83,874


Derivative contracts, net



544,924




-


Assets held for sale



557,750




-


Other



253,480




419,037


Total current assets



9,989,375




6,261,353











Properties and equipment at cost, based on successful efforts accounting:

















Producing oil and natural gas properties



434,571,516




434,469,093


Non-producing oil and natural gas properties



7,428,927




7,574,649


Other



1,067,894




1,069,658





443,068,337




443,113,400


Less accumulated depreciation, depletion and amortization











(246,483,979)




(251,707,749)


Net properties and equipment



196,584,358




191,405,651











Investments



170,486




157,322


Total assets


$

206,744,219



$

197,824,326











Liabilities and Stockholders' Equity









Current Liabilities:









Accounts payable


$

1,847,230



$

2,351,623


Derivative contracts, net



-




403,612


Accrued liabilities and other



1,690,789




1,718,558


Total current liabilities



3,538,019




4,473,793











Long-term debt



52,222,000




44,500,000


Deferred income taxes



31,051,007




30,676,007


Asset retirement obligations



3,196,889




2,958,048


Derivative contracts, net



28,765




24,659











Stockholders' equity:









Class A voting common stock, $0.0166 par value; 24,000,000 shares authorized; 16,863,004 issued at Sept. 30, 2017 and 2016











280,938




280,938


Capital in excess of par value



2,726,444




3,191,056


Deferred directors' compensation



3,459,909




3,403,213


Retained earnings



113,330,216




112,482,284





119,797,507




119,357,491


Treasury stock, at cost; 184,988 shares at Sept. 30, 2017, and 262,708 shares at Sept. 30, 2016











(3,089,968)




(4,165,672)


Total stockholders' equity



116,707,539




115,191,819


Total liabilities and stockholders' equity


$

206,744,219



$

197,824,326


 

Condensed Statements of Cash Flows




Year ended Sept. 30,




2017



2016


Operating Activities









Net income (loss)


$

3,531,933



$

(10,286,884)


Adjustments to reconcile net income (loss) to net









cash provided by operating activities:









Depreciation, depletion and amortization



18,397,548




24,487,565


Impairment



662,990




12,001,271


Provision for deferred income taxes



375,000




(9,960,000)


Gain from leasing of fee mineral acreage



(5,147,957)




(7,732,023)


Proceeds from leasing fee mineral acreage



5,194,290




8,049,434


Net (gain) loss on sales of assets



94,889




(2,688,408)


Common stock contributed to ESOP



312,380




200,158


Common stock (unissued) to Directors'









Deferred Compensation Plan



358,658




329,465


Restricted stock awards



597,940




781,479


Other



(5,783)




81,606


Cash provided (used) by changes in assets









and liabilities:









Oil, NGL and natural gas sales receivables



(2,298,256)




2,589,146


Fair value of derivative contracts



(944,430)




4,639,035


Refundable income taxes



(406,071)




262,023


Other current assets



165,557




308,980


Accounts payable



(103,389)




(811,749)


Accrued liabilities



(27,107)




388,053


Total adjustments



17,226,259




32,926,035


Net cash provided by operating activities



20,758,192




22,639,151











Investing Activities









Capital expenditures, including dry hole costs



(25,807,897)




(3,986,235)


Investments in partnerships



(23,563)




50,126


Proceeds from sales of assets



723,700




4,501,726


Net cash used in investing activities



(25,107,760)




565,617











Financing Activities









Borrowings under debt agreement



27,809,185




12,339,101


Payments of loan principal



(20,087,185)




(32,839,101)


Purchases of treasury stock



(601,853)




(117,165)


Payments of dividends



(2,684,001)




(2,677,305)


Excess tax benefit on stock-based compensation



-




(43,000)


Net cash provided by (used in) financing activities



4,436,146




(23,337,470)


Increase (decrease) in cash and cash equivalents



86,578




(132,702)


Cash and cash equivalents at beginning of year



471,213




603,915


Cash and cash equivalents at end of year


$

557,791



$

471,213



Supplemental Disclosures of Cash Flow









Information


















Interest paid (net of capitalized interest)


$

1,212,878



$

1,365,474


Income taxes paid, net of refunds received


$

720,072



$

2,029,977











Supplemental schedule of noncash









investing and financing activities:









Additions and revisions, net, to asset









retirement obligations


$

624,893



$

14,095











Gross additions to properties and equipment


$

25,406,894



$

5,118,733


Net (increase) decrease in accounts payable for properties and equipment additions











401,003




(1,132,498)


Capital expenditures, including dry hole costs


$

25,807,897



$

3,986,235


 

 

OPERATING HIGHLIGHTS



Fourth Quarter Ended



Fourth Quarter Ended



Year Ended



Year Ended



Sept. 30, 2017



Sept. 30, 2016



Sept. 30, 2017



Sept. 30, 2016


MCFE Sold


3,279,204




2,678,725




11,101,739




11,496,249


Average Sales Price per MCFE

$

3.70



$

3.31



$

3.60



$

2.73


Barrels of Oil Sold


93,027




78,398




310,677




364,252


Average Sales Price per Barrel

$

46.75



$

41.62



$

46.27



$

36.70


MCF of Natural Gas Sold


2,330,838




1,940,749




8,194,529




8,284,377


Average Sales Price per MCF

$

2.71



$

2.55



$

2.70



$

1.92


Barrels of NGL Sold


65,034




44,598




173,858




171,060


Average Sales Price per Barrel

$

22.85



$

14.43



$

19.87



$

12.60


 

Quarterly Production Levels


Quarter ended


Oil Bbls Sold



MCF Sold



NGL Bbls Sold



MCFE Sold


9/30/17



93,027




2,330,838




65,034




3,279,204


6/30/17



75,467




2,265,091




39,337




2,953,915


3/31/17



66,547




1,748,909




33,836




2,351,207


12/31/16



75,636




1,849,692




35,651




2,517,414


9/30/16



78,398




1,940,749




44,598




2,678,725


6/30/16



88,732




2,112,567




40,477




2,887,821


3/31/16



90,760




2,014,139




37,934




2,786,303


12/31/15



106,362




2,216,922




48,051




3,143,400


 

Derivative contracts in place as of Dec. 1, 2017




Production volume


Indexed



Contract period


covered per month


pipeline


Fixed price

Natural gas costless collars







January - December 2017


50,000 Mmbtu


NYMEX Henry Hub


$2.80 floor / $3.47 ceiling

January - December 2017


50,000 Mmbtu


NYMEX Henry Hub


$3.00 floor / $3.35 ceiling

April - December 2017


50,000 Mmbtu


NYMEX Henry Hub


$2.80 floor / $3.35 ceiling

April - December 2017


50,000 Mmbtu


NYMEX Henry Hub


$2.75 floor / $3.35 ceiling

April - December 2017


30,000 Mmbtu


NYMEX Henry Hub


$3.00 floor / $3.65 ceiling

May - December 2017


50,000 Mmbtu


NYMEX Henry Hub


$3.00 floor / $3.60 ceiling

May - December 2017


50,000 Mmbtu


NYMEX Henry Hub


$3.20 floor / $3.65 ceiling

January - March 2018


100,000 Mmbtu


NYMEX Henry Hub


$3.50 floor / $3.95 ceiling

January - March 2018


150,000 Mmbtu


NYMEX Henry Hub


$3.40 floor / $3.95 ceiling

January - December 2018


40,000 Mmbtu


NYMEX Henry Hub


$2.75 floor / $3.35 ceiling

January - December 2018


40,000 Mmbtu


NYMEX Henry Hub


$2.75 floor / $3.30 ceiling

April - December 2018


50,000 Mmbtu


NYMEX Henry Hub


$2.80 floor / $3.15 ceiling








Natural gas fixed price swaps







January - December 2017


25,000 Mmbtu


NYMEX Henry Hub


$3.100

April - December 2017


50,000 Mmbtu


NYMEX Henry Hub


$3.070

April - December 2017


50,000 Mmbtu


NYMEX Henry Hub


$3.210

April - December 2017


30,000 Mmbtu


NYMEX Henry Hub


$3.300

July - December 2017


50,000 Mmbtu


NYMEX Henry Hub


$3.510

August - December 2017


100,000 Mmbtu


NYMEX Henry Hub


$3.095

January - March 2018


50,000 Mmbtu


NYMEX Henry Hub


$3.700

January - March 2018


75,000 Mmbtu


NYMEX Henry Hub


$3.575

January - March 2018


100,000 Mmbtu


NYMEX Henry Hub


$3.520

January - December 2018


50,000 Mmbtu


NYMEX Henry Hub


$3.080

April - December 2018


40,000 Mmbtu


NYMEX Henry Hub


$2.910








Oil costless collars







January - December 2017


3,000 Bbls


NYMEX WTI


$50.00 floor / $55.00 ceiling

January - December 2017


3,000 Bbls


NYMEX WTI


$52.00 floor / $58.00 ceiling

January - December 2017


3,000 Bbls


NYMEX WTI


$53.00 floor / $57.75 ceiling

April - December 2017


2,000 Bbls


NYMEX WTI


$50.00 floor / $57.50 ceiling

July - December 2017


5,000 Bbls


NYMEX WTI


$45.00 floor / $56.25 ceiling

January - June 2018


2,000 Bbls


NYMEX WTI


$47.50 floor / $52.75 ceiling

January - December 2018


2,000 Bbls


NYMEX WTI


$47.50 floor / $52.50 ceiling

January - December 2018


2,000 Bbls


NYMEX WTI


$48.00 floor / $53.25 ceiling

January - December 2018


2,000 Bbls


NYMEX WTI


$50.00 floor / $55.75 ceiling

July - December 2018


3,000 Bbls


NYMEX WTI


$50.00 floor / $58.00 ceiling








Oil fixed price swaps







January - December 2017


3,000 Bbls


NYMEX WTI


$53.89

April - December 2017


2,000 Bbls


NYMEX WTI


$54.20

January - March 2018


4,000 Bbls


NYMEX WTI


$54.00

January - June 2018


4,000 Bbls


NYMEX WTI


$51.25

January - December 2018


3,000 Bbls


NYMEX WTI


$50.72

January - December 2018


2,000 Bbls


NYMEX WTI


$52.02

April - December 2018


4,000 Bbls


NYMEX WTI


$54.14








 

Non-GAAP Reconciliation

This news release includes certain "non-GAAP financial measures" under the rules of the Securities and Exchange Commission, including Regulation G. These non-GAAP measures are calculated using GAAP amounts in our financial statements.

EBITDA Reconciliation

EBITDA is defined as net income (loss) plus interest expense, provision for impairment, depreciation, depletion and amortization of properties and equipment (which includes amortization of other assets), and provision (benefit) for income taxes. We recognize that certain investors consider EBITDA a useful means of measuring our ability to meet our debt service obligations and evaluating our financial performance. EBITDA has limitations and should not be considered in isolation or as a substitute for net income, operating income, cash flow from operations or other consolidated income or cash flow data prepared in accordance with GAAP. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to a similarly titled measure of other companies. The following table provides a reconciliation of net income (loss) to EBITDA for the periods indicated.

 


Fourth Quarter Ended



Fiscal Year Ended



Sept. 30, 2017



Sept. 30, 2017


Net Income (Loss)

$

1,039,134



$

3,531,933


Plus:








    Income Tax Expense (Benefit)


426,000




689,000


    Interest Expense


390,210




1,275,138


    DD&A


4,743,280




18,397,548


    Impairment


652,202




662,990


EBITDA

$

7,250,826



$

24,556,609


 

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 2017 Form 10-K filed with the Securities and Exchange Commission. These "Risk Factors" include Panhandle's hedging activities may reduce the realized prices received for natural gas sales; 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; unsuccessful exploration and development drilling; decreases in the values of Panhandle's oil and gas properties resulting in write-downs; the negative impact lower oil and gas prices could have on the Company's ability to borrow; drilling and operating risks; uncertainty regarding potential changes to the rules and regulations which affect the oil and gas industry; and Panhandle's inability to control activities on its 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. 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.

 

SOURCE PANHANDLE OIL AND GAS INC.


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