Panhandle Oil and Gas Inc (PHX, Financial) filed Quarterly Report for the period ended 2009-06-30.
Panhandle Royalty Company is engaged in the ownership acquisition and management of mineral properties and the exploration for and development of oil and gas properties principally involving wells located on the Company\'s mineral interests. Panhandle and its wholly owned subsidiary Wood Oil Company mineral properties and other oil and gas interests are located primarily in Oklahoma New Mexico Texas and twenty other states. Panhandle Oil and Gas Inc has a market cap of $211.9 million; its shares were traded at around $25.53 with a P/E ratio of 16.06 and P/S ratio of 3.07. The dividend yield of Panhandle Oil and Gas Inc stocks is 1.1%. Panhandle Oil and Gas Inc had an annual average earning growth of 18.5% over the past 5 years.
DD&A increased $2,173,620 or 47% in the 2009 quarter. DD&A per mcfe in the 2009 quarter was $2.59 as compared to $2.36 in the 2008 quarter. A 34% increase in mcfe produced in the 2009 quarter, vs. the 2008 quarter, accounts for approximately $1.6 million of the overall DD&A increase. The remaining increase of approximately $600,000 is attributable to lower oil and natural gas reserve volumes per well, resulting from lower oil and natural gas prices, and higher costs for horizontally drilled wells primarily in the Woodford and Fayetteville Shale areas. These same wells also account for the majority of the 2009 quarters increase in natural gas production.
The Companys fair value of derivative contracts was ($923,629) as of June 30, 2009 and $646,193 as of September 30, 2008. The Company had a net gain of $212,578 in the nine months ended June 30, 2009 compared to a loss of $4,391,316 for the nine months ended June 30, 2008. The Company received cash payments of $1,782,400 for the 2009 period and made payments of $777,900 for the 2008 period.
DD&A increased $7,506,059 or 56% in the 2009 period as compared to the 2008 period. DD&A was $2.78 per mcfe in the 2009 period as compared to $2.41 per mcfe in the 2008 period. A 36% increase in total mcfe produced in the 2009 period, vs. the 2008 period, accounts for approximately $4.8 million of the overall DD&A increase. The remaining increase of approximately $2.7 million is attributable to the increase in DD&A per mcfe which is related to lower oil and natural gas reserve volumes per well resulting from lower oil and natural gas prices, and higher costs for horizontally drilled wells primarily in the Woodford and Fayetteville Shale areas. These same wells also account for the majority of the 2009 periods increase in natural gas production.
The provision for impairment increased $1,738,461 in the 2009 period as compared to the 2008 period. Driven by depressed oil and natural gas prices, impairment has been recorded on 19 fields during the 2009 period in the amount of $2,124,133. Two of the fields accounted for $1,729,034 of the impairment, one field in Wheeler County, Texas consisting of one deep well (drilled in 2006 and had mechanical issues during completion which dramatically increased costs) was impaired $1,070,129 and one mature field in Beckham County, Oklahoma principally consisting of wells drilled in 2006 and prior was impaired $658,905. The Company did not incur any impairment in the three primary areas of operation (Woodford Shale area, Fayetteville Shale area and the Dill City project). During the 2008 period, seven fields were impaired a total of $385,672.
The Companys revenue can be significantly impacted by changes in market prices for oil and natural gas. Based on the Companys fiscal 2008 production, a $.10 per mcf change in the price received for natural gas production would result in a corresponding $693,000 annual change in revenue. A $1.00 per barrel change in the price received for oil production would result in a corresponding $132,000 annual change in revenue. Cash flows could be impacted, to a lesser extent, by changes in the market interest rates related to the revolving credit facility which, as of June 30, 2009, bore interest at an annual variable interest rate equal to the national prime rate plus from .50% to 1.25%, or 30 day LIBOR plus from 2.00% to 2.75%, with an established interest rate floor of 4.50%. At June 30, 2009, the Company had $13,332,504 outstanding under this facility. Based on total debt outstanding at June 30, 2009 a .5% change in interest rates would result in a $67,000 annual change in pre-tax operating cash flow.
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Panhandle Royalty Company is engaged in the ownership acquisition and management of mineral properties and the exploration for and development of oil and gas properties principally involving wells located on the Company\'s mineral interests. Panhandle and its wholly owned subsidiary Wood Oil Company mineral properties and other oil and gas interests are located primarily in Oklahoma New Mexico Texas and twenty other states. Panhandle Oil and Gas Inc has a market cap of $211.9 million; its shares were traded at around $25.53 with a P/E ratio of 16.06 and P/S ratio of 3.07. The dividend yield of Panhandle Oil and Gas Inc stocks is 1.1%. Panhandle Oil and Gas Inc had an annual average earning growth of 18.5% over the past 5 years.
Highlight of Business Operations:
Fair value of derivative contracts as of June 30, 2009 was ($923,629) and $207,745 as of March 31, 2009. The Company had a net loss of $470,974 in the three months ended June 30, 2009 compared to a loss of $2,286,789 for the three months ended June 30, 2008. The Company received cash payments under the contracts of $660,400 during the 2009 quarter and made cash payments of $878,900 during the fiscal 2008 quarter.DD&A increased $2,173,620 or 47% in the 2009 quarter. DD&A per mcfe in the 2009 quarter was $2.59 as compared to $2.36 in the 2008 quarter. A 34% increase in mcfe produced in the 2009 quarter, vs. the 2008 quarter, accounts for approximately $1.6 million of the overall DD&A increase. The remaining increase of approximately $600,000 is attributable to lower oil and natural gas reserve volumes per well, resulting from lower oil and natural gas prices, and higher costs for horizontally drilled wells primarily in the Woodford and Fayetteville Shale areas. These same wells also account for the majority of the 2009 quarters increase in natural gas production.
The Companys fair value of derivative contracts was ($923,629) as of June 30, 2009 and $646,193 as of September 30, 2008. The Company had a net gain of $212,578 in the nine months ended June 30, 2009 compared to a loss of $4,391,316 for the nine months ended June 30, 2008. The Company received cash payments of $1,782,400 for the 2009 period and made payments of $777,900 for the 2008 period.
DD&A increased $7,506,059 or 56% in the 2009 period as compared to the 2008 period. DD&A was $2.78 per mcfe in the 2009 period as compared to $2.41 per mcfe in the 2008 period. A 36% increase in total mcfe produced in the 2009 period, vs. the 2008 period, accounts for approximately $4.8 million of the overall DD&A increase. The remaining increase of approximately $2.7 million is attributable to the increase in DD&A per mcfe which is related to lower oil and natural gas reserve volumes per well resulting from lower oil and natural gas prices, and higher costs for horizontally drilled wells primarily in the Woodford and Fayetteville Shale areas. These same wells also account for the majority of the 2009 periods increase in natural gas production.
The provision for impairment increased $1,738,461 in the 2009 period as compared to the 2008 period. Driven by depressed oil and natural gas prices, impairment has been recorded on 19 fields during the 2009 period in the amount of $2,124,133. Two of the fields accounted for $1,729,034 of the impairment, one field in Wheeler County, Texas consisting of one deep well (drilled in 2006 and had mechanical issues during completion which dramatically increased costs) was impaired $1,070,129 and one mature field in Beckham County, Oklahoma principally consisting of wells drilled in 2006 and prior was impaired $658,905. The Company did not incur any impairment in the three primary areas of operation (Woodford Shale area, Fayetteville Shale area and the Dill City project). During the 2008 period, seven fields were impaired a total of $385,672.
The Companys revenue can be significantly impacted by changes in market prices for oil and natural gas. Based on the Companys fiscal 2008 production, a $.10 per mcf change in the price received for natural gas production would result in a corresponding $693,000 annual change in revenue. A $1.00 per barrel change in the price received for oil production would result in a corresponding $132,000 annual change in revenue. Cash flows could be impacted, to a lesser extent, by changes in the market interest rates related to the revolving credit facility which, as of June 30, 2009, bore interest at an annual variable interest rate equal to the national prime rate plus from .50% to 1.25%, or 30 day LIBOR plus from 2.00% to 2.75%, with an established interest rate floor of 4.50%. At June 30, 2009, the Company had $13,332,504 outstanding under this facility. Based on total debt outstanding at June 30, 2009 a .5% change in interest rates would result in a $67,000 annual change in pre-tax operating cash flow.
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