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Panhandle Oil and Gas Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 7, 2012 12:23PM
Panhandle Oil and Gas Inc (PHX) filed Quarterly Report for the period ended 2012-03-31. Panhandle Oil&g has a market cap of $225 million; its shares were traded at around $26.38 with a P/E ratio of 21.8 and P/S ratio of 5. The dividend yield of Panhandle Oil&g stocks is 1%. Panhandle Oil&g had an annual average earning growth of 15% over the past 10 years.
Highlight of Business Operations:The Company recorded a second quarter 2012 net income of $675,966, or $.08 per share, compared to a net income of $1,772,253, or $.21 per share, in the 2011 quarter. The decrease in net income was principally due to decreased oil and natural gas revenues, increased DD&A expense, partially offset by increased gains on derivative contracts, decreased impairment expense and a decrease in exploration costs. These items are further discussed below.
Oil and natural gas sales decreased $1,342,037 or 12% for the 2012 quarter. The decrease was due to lower natural gas sales prices of 44%, offset by increased oil volumes of 16%, increased natural gas volumes of 16% and increased oil sales prices of 11%. The following table outlines the Companys sales volumes and average sales prices for oil, natural gas and NGL for the three month periods of fiscal 2012 and 2011:
Production taxes decreased $78,576 or 19% in the 2012 quarter as compared to the 2011 quarter. Production taxes as a percentage of oil and natural gas sales decreased from 3.9% in the 2011 quarter to 3.6% in the 2012 quarter. This decrease in rate is a result of increased gas production in Arkansas, where the production tax rate is lower. The low overall production tax rate is due to a large proportion of the Companys natural gas revenues coming from horizontally drilled wells, which are eligible for reduced Oklahoma and Arkansas production tax rates.
The Company recorded a six month period 2012 net income of $4,088,076, or $.49 per share, as compared to a net income of $3,199,102, or $.38 per share, in the 2011 period. Major contributing factors were increased lease bonuses, increased gains on derivative contracts and higher oil and natural gas sales, partially offset by increased DD&A and increased G&A expense. These items are further discussed below.
Oil and natural gas sales increased $670,666 as a result of increased oil volumes of 34%, increased natural gas volumes of 12% and increasing oil sales prices of 11%, partially offset by lower natural gas sales prices of 28%. The table below outlines the Companys sales volumes and average sales prices for oil, natural gas and NGL for the six month periods of fiscal 2012 and 2011:
Stocks Discussed: PHX,