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Panhandle Oil and Gas Inc Reports Operating Results (10-K)

December 11, 2012 | About:

10qk

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Panhandle Oil and Gas Inc (PHX) filed Annual Report for the period ended 2012-09-30.

Panhandle Oil And Gas Inc. has a market cap of $5.76166 million; its shares were traded at around $28.38 with and P/S ratio of 2.1075. Panhandle Oil And Gas Inc. had an annual average earning growth of 15.3% over the past 10 years.

Highlight of Business Operations:

The Company recorded net income of $7,370,996, or $0.88 per share, in 2012, compared to net income of $8,493,912, or $1.01 per share, in 2011. Revenues increased in 2012 primarily due to increased lease bonuses and higher oil and natural gas sales volumes, partially offset by lower natural gas prices.

Oil, NGL and natural gas sales revenues decreased $2,650,696 or 6% for 2012, as compared to 2011. The decrease was due to lower natural gas prices of 37%, partially offset by increased oil volumes of 47%, increased natural gas volumes of 9% and a 2% increase in oil prices in 2012.

The Company recorded net income of $8,493,912, or $1.01 per share, in 2011, compared to net income of $11,419,690, or $1.36 per share, in 2010. Decreased revenues in 2011 were primarily due to lower realized and unrealized gains on derivative contracts and lower lease bonuses and rentals. Actual and forward looking prices were lower than the Companys derivative contracts during 2011, resulting in net gains on derivative contracts; however, the variation during 2011 was not as significant as in 2010, therefore, gains on derivative contracts during 2011 were significantly less. The renewal of leases on certain of the Companys Arkansas undeveloped mineral acreage generated significant lease bonuses during 2010; whereas there were no such renewals in 2011.

Oil and natural gas sales revenues decreased $599,817 or 1% for 2011, as compared to 2010. A decline in natural gas prices of 6% from 2010 to 2011, partially offset by a 21% increase in oil prices in 2011, caused the reduction of oil and natural gas sales revenues. Production from wells that came on line in 2011 offset the natural decline of existing wells such that oil and natural gas production volume in 2011 was relatively flat compared to 2010 volumes.

Natural gas prices received by the Company declined through May 2012 to below $2.00 per Mmbtu, but rebounded to approximately $2.40 per Mmbtu during September 2012. NYMEX natural gas futures prices (the Company receives on average approximately 93% of NYMEX price for its natural gas sales) indicate price improvement to the mid $3.00 per Mmbtu level as an average for fiscal 2013. As of September 30, 2012, the Company had costless collar contracts covering 7,000 barrels per month of oil production through December 2012, 430,000 Mmbtu per month of natural gas production through October 2012, 350,000 Mmbtu per month of natural gas production from November 2012 through January 2013, and basis protection swap contracts covering 190,000 Mmbtu per month of natural gas production through December 2012. With continued oil and natural gas price volatility, management continues to evaluate opportunities for product price protection by hedging a portion of the Companys future oil and natural gas production.

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10qk
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