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Share Name | Share Symbol | Market | Type |
---|---|---|---|
PHX Minerals Inc | NYSE:PHX | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.02 | 0.62% | 3.27 | 3.29 | 3.22 | 3.22 | 108,451 | 21:00:01 |
OKLAHOMA CITY, Dec. 8, 2010 /PRNewswire-FirstCall/ -- PANHANDLE OIL AND GAS INC., the "Company", (NYSE: PHX) today reported financial and operating results for the fiscal fourth quarter and twelve months ended September 30, 2010.
HIGHLIGHTS FOR THE THREE AND TWELVE MONTH PERIODS ENDED SEPTEMBER 30, 2010
Fiscal Fourth Quarter 2010 Results
The Company recorded net income of $3,036,446, or $.36 per share, as compared to net income of $343,376, or $.04 per share, for the 2009 fourth quarter. Capital expenditures for drilling and equipping wells decreased 24% to $3,119,401, as compared to the corresponding 2009 quarter, reflecting an overall industry reduction in drilling activity in dry gas plays. Net cash provided by operating activities for the 2010 quarter rose 12.8% to $7,567,057 as compared to $6,708,784 for the 2009 quarter. Total revenues for the 2010 quarter rose 44.5% to $12,298,310 as compared to $8,510,139 for the 2009 quarter. For the 2010 quarter, the average realized sales price was $4.80 per Mcfe as compared to $3.95 per Mcfe for the 2009 period.
For the fourth fiscal quarter ended September 30, 2010, production increased to 2,312,093 Mcfe as compared to 2,236,236 Mcfe for the 2010 third quarter and 2,090,154 Mcfe for the 2010 second quarter. Quarterly production was 2% lower compared to the 2009 fourth quarter.
Fiscal Year 2010 Results
The Company recorded a net income of $11,419,690, or $1.36 per share, as compared to net loss for fiscal 2009 of $2,405,021, or $.29 per share. Net cash provided by operating activities for 2010 was $27,806,475 as compared to $37,710,606 for 2009. Total revenues for 2010 rose 39.3% to $51,938,416 as compared to $37,272,614 for 2009. Capital expenditures for drilling and equipping wells totaled $11,308,506 in 2010, as compared to $39,915,051 for 2009. For fiscal 2010, the average realized sales price was $4.94 per Mcfe as compared to $3.79 per Mcfe for 2009.
For the fiscal year ended September 30, 2010, the Company reported a production decrease of 10% to 8.9 Bcfe as compared to 9.9 Bcfe for fiscal 2009. The production decrease reflects lower drilling activity across Panhandle's acreage positions because of lower natural gas prices and the associated 72% reduction in capital expenditures in fiscal 2010 versus 2009.
In a press release dated November 8, 2010, Panhandle announced a 74% increase in proved reserves for fiscal 2010. Total proved reserves increased to 103.7 Bcfe at September 30, 2010. Since 2005 the Company's total proved reserves have grown 232% from 31.3 Bcfe to 103.7 Bcfe, at a compound annual growth rate of 27.2%. This growth is principally the result of reserves added from development of two Oklahoma Woodford Shale plays and the Arkansas Fayetteville Shale.
At September 30, 2010, Panhandle had 12 producing working interest wells and 4 producing royalty interest wells in the Cana play with an additional 9 wells in process. The Company owns 3,545 net mineral acres in the core area of this play yielding a 2.8% average net revenue interest in 1,063 gross proven, probable and possible undeveloped drilling locations based on 80 acre well spacing. The Company anticipates drilling activity will increase in this play as development of this natural gas liquids-rich play expands during 2011.
At September 30, 2010, Panhandle had 99 producing working interest wells and 281 producing royalty interest wells in the Fayetteville Shale with an additional 24 wells in process. The Company owns 7,308 net mineral acres in the core area of this play yielding a 2.2% average net revenue interest in 1,735 gross proven, probable and possible undeveloped drilling locations based on 80 acre well spacing. Because of the very low finding costs associated with Fayetteville Shale development, the Company expects drilling activity to continue in this play in 2011 despite the low natural gas pricing environment.
At September 30, 2010, Panhandle had 137 producing working interest wells and 48 producing royalty interest wells in the Southeast Oklahoma Woodford Shale play with an additional 26 wells in process. The Company owns 6,310 net mineral acres in the core area of this play yielding a 3.6% average net revenue interest in 1,214 gross proven, probable and possible undeveloped drilling locations based on 80 acre well spacing. The Company does not anticipate an acceleration of drilling activity in this play during 2011.
Management Comment
Michael C. Coffman, President and CEO said, "Fiscal 2010 was another challenging year both from an economic and operational standpoint. Despite the dual challenges of the economic downturn and continuing downward pressure on natural gas prices, Panhandle delivered the second highest annual revenue and net income in the Company's history. The strength of our assets is reflected in the 74% increase in our proved reserves, and we end this fiscal year with zero debt. These results prove that our commitment to increased drilling on our mineral acreage continues to maximize value for our shareholders."
Paul F. Blanchard, Panhandle's Senior Vice-President and COO added, "We have been pleased with the industry's continuing development of oil and natural gas liquids-rich plays in Western Oklahoma, where Panhandle owns a significant amount of its 254,000 net fee mineral acres. These plays allow us to capitalize on current market prices and superior rates of return in these plays, versus the dry gas plays such as the Southeast Oklahoma Woodford. The development of oil and natural gas liquids-rich plays again highlights the advantage Panhandle offers investors through perpetual mineral acreage ownership. We have been able to shift investment dollars rapidly to more oil and natural gas liquids-rich drilling opportunities without having to expend any capital for additional leasehold acreage."
Blanchard continued: "We expect to deploy substantially more drilling capital in fiscal 2011, particularly in several of the oil and natural gas liquids-rich plays in Western Oklahoma, including horizontal drilling in the Granite Wash, Cleveland, Tonkawa and Marmaton plays, as well as the Anadarko Basin (Cana) Woodford. Given our strong cash flows and untapped line of credit, we are financially positioned to accelerate our participation in drilling activity in these areas next year."
OPERATING HIGHLIGHTS | ||||||||
Fourth Quarter | Fourth Quarter | Fiscal Year | Fiscal Year | |||||
Ended | Ended | Ended | Ended | |||||
September 30, 2010 | September 30, 2009 | September 30, 2010 | September 30, 2009 | |||||
MCFE Sold | 2,312,093 | 2,356,051 | 8,916,616 | 9,878,948 | ||||
Average Sales Price per MCFE | $4.80 | $3.95 | $4.94 | $3.79 | ||||
Barrels of Oil Sold | 26,054 | 29,011 | 102,379 | 128,160 | ||||
Average Sales Price per Barrel | $71.85 | $61.97 | $72.83 | $51.79 | ||||
MCF of Natural Gas Sold | 2,155,769 | 2,181,985 | 8,302,342 | 9,109,988 | ||||
Average Sales Price per MCF | $4.27 | $3.44 | $4.41 | $3.38 | ||||
Quarterly Production Levels | |||||||
Quarter ended | Barrels Sold | MCF Sold | MCFE | ||||
9/30/10 | 26,054 | 2,155,769 | 2,312,093 | ||||
6/30/10 | 26,873 | 2,074,998 | 2,236,236 | ||||
3/31/10 | 21,998 | 1,958,166 | 2,090,154 | ||||
12/31/09 | 27,454 | 2,113,409 | 2,278,133 | ||||
9/30/09 | 29,011 | 2,181,985 | 2,356,051 | ||||
Derivative contracts in place as of September 30, 2010 (prices below reflect the Company's net price from the listed Oklahoma pipelines) | ||||
Production volume | Indexed (1) | |||
Contract period | covered per month | Pipeline | Fixed price | |
Fixed price swaps | ||||
January - December, 2010 | 100,000 Mmbtu | CEGT | $5.015 | |
January - December, 2010 | 50,000 Mmbtu | CEGT | $5.050 | |
January - December, 2010 | 100,000 Mmbtu | PEPL | $5.570 | |
January - December, 2010 | 50,000 Mmbtu | PEPL | $5.560 | |
Basis protection swaps | ||||
January - December, 2011 | 50,000 Mmbtu | CEGT | NYMEX -$.27 | |
January - December, 2011 | 50,000 Mmbtu | CEGT | NYMEX -$.27 | |
January - December, 2011 | 50,000 Mmbtu | PEPL | NYMEX -$.26 | |
January - December, 2011 | 50,000 Mmbtu | PEPL | NYMEX -$.27 | |
January - December, 2012 | 50,000 Mmbtu | CEGT | NYMEX -$.29 | |
January - December, 2012 | 40,000 Mmbtu | CEGT | NYMEX -$.30 | |
January - December, 2012 | 50,000 Mmbtu | PEPL | NYMEX -$.29 | |
January - December, 2012 | 50,000 Mmbtu | PEPL | NYMEX -$.30 | |
(1) CEGT - CenterPoint Energy Gas Transmission's East pipeline in Oklahoma | ||||
PEPL - Panhandle Eastern Pipeline Company's Texas/Oklahoma mainline | ||||
FINANCIAL HIGHLIGHTS Consolidated Statements of Operations | |||||||||
Three Months Ended September 30, | Twelve Months Ended September 30, | ||||||||
2010 | 2009 | 2010 | 2009 | ||||||
Revenues: | |||||||||
Oil and natural gas sales | $ 11,087,717 | $ 9,306,699 | $ 44,068,947 | $ 37,421,688 | |||||
Lease bonuses and rentals | 63,206 | 6,887 | 1,120,674 | 188,906 | |||||
Gains (losses) on derivative contracts | 932,947 | (874,406) | 6,343,661 | (661,828) | |||||
Income of partnerships | 214,440 | 70,959 | 405,134 | 323,848 | |||||
12,298,310 | 8,510,139 | 51,938,416 | 37,272,614 | ||||||
Costs and expenses: | |||||||||
Lease operating expenses and production taxes | 2,432,024 | 2,007,794 | 9,639,864 | 8,897,235 | |||||
Exploration costs | 168,748 | 396,737 | 1,583,773 | 711,582 | |||||
Depreciation, depletion and amortization | 3,223,625 | 7,286,528 | 19,222,123 | 28,168,933 | |||||
Provision for impairment | 593,245 | 340,387 | 605,615 | 2,464,520 | |||||
Loss (gain) on sale of assets, interest and other | (40,815) | (2,534,385) | (1,028,148) | (2,677,407) | |||||
General and administrative | 1,241,037 | 1,144,974 | 5,594,499 | 4,866,044 | |||||
Bad debt expense (recovery) | - | (185,272) | - | (185,272) | |||||
7,617,864 | 8,456,763 | 35,617,726 | 42,245,635 | ||||||
Income (loss) before provision (benefit) for income taxes | 4,680,446 | 53,376 | 16,320,690 | (4,973,021) | |||||
Provision (benefit) for income taxes | 1,644,000 | (290,000) | 4,901,000 | (2,568,000) | |||||
Net income (loss) | $ 3,036,446 | $ 343,376 | $ 11,419,690 | $ (2,405,021) | |||||
Earnings (loss) per common share | $ 0.36 | $ 0.04 | $ 1.36 | $ (0.29) | |||||
Weighted average shares outstanding: | |||||||||
Common shares | 8,308,701 | 8,300,253 | 8,310,896 | 8,300,160 | |||||
Unissued, vested directors' shares | 113,962 | 99,242 | 111,491 | 97,177 | |||||
8,422,663 | 8,399,495 | 8,422,387 | 8,397,337 | ||||||
Dividends declared per share of | |||||||||
common stock and paid in period | $ 0.07 | $ 0.07 | $ 0.28 | $ 0.28 | |||||
Consolidated Balance Sheets | |||||
September 30, 2010 | September 30, 2009 | ||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ 5,597,258 | $ 639,908 | |||
Oil and natural gas sales receivables (net) | 9,063,002 | 7,747,557 | |||
Deferred income taxes | - | 1,934,900 | |||
Refundable production taxes | 804,120 | 616,668 | |||
Derivative contracts | 1,481,527 | - | |||
Other | 412,778 | 68,817 | |||
Total current assets | 17,358,685 | 11,007,850 | |||
Properties and equipment, at cost, based on | |||||
successful efforts accounting: | |||||
Producing oil and natural gas properties | 207,928,578 | 198,076,244 | |||
Non-producing oil and natural gas properties | 9,616,330 | 10,332,537 | |||
Furniture and fixtures | 656,889 | 578,460 | |||
218,201,797 | 208,987,241 | ||||
Less accumulated depreciation, depletion and amortization | 131,983,249 | 112,900,027 | |||
Net properties and equipment | 86,218,548 | 96,087,214 | |||
Investments | 754,208 | 682,391 | |||
Derivative contracts | 138,799 | - | |||
Refundable production taxes | 654,599 | 772,177 | |||
Total assets | $ 105,124,839 | $ 108,549,632 | |||
Liabilities and Stockholders' Equity | |||||
Current liabilities: | |||||
Accounts payable | $ 5,062,806 | $ 4,810,687 | |||
Derivative contracts | - | 1,726,901 | |||
Deferred income taxes | 354,100 | 53,100 | |||
Accrued income taxes and other liabilities | 1,842,918 | 980,470 | |||
Total current liabilities | 7,259,824 | 7,571,158 | |||
Long-term debt | - | 10,384,722 | |||
Deferred income taxes | 22,552,650 | 24,064,650 | |||
Asset retirement obligations | 1,730,369 | 1,620,225 | |||
Derivative contracts | - | 786,534 | |||
Stockholders' equity: | |||||
Class A voting common stock, $.0166 par value; | |||||
24,000,000 shares authorized, 8,431,502 issued at September 30, 2010 and 2009 | 140,524 | 140,524 | |||
Capital in excess of par value | 1,816,365 | 1,922,053 | |||
Deferred directors' compensation | 2,222,127 | 1,862,499 | |||
Retained earnings | 73,599,733 | 64,507,547 | |||
77,778,749 | 68,432,623 | ||||
Less treasury stock, at cost; 120,560 shares at September | |||||
30, 2010 and 119,866 shares at September 30, 2009 | (4,196,753) | (4,310,280) | |||
Total stockholders' equity | 73,581,996 | 64,122,343 | |||
Total liabilities and stockholders' equity | $ 105,124,839 | $ 108,549,632 | |||
Condensed Consolidated Statements of Cash Flows | |||||||||||
Year ended September 30, | |||||||||||
2010 | 2009 | 2008 | |||||||||
Operating Activities | |||||||||||
Net income (loss) | $ 11,419,690 | $ (2,405,021) | $ 21,555,769 | ||||||||
Adjustments to reconcile net income (loss) to net | |||||||||||
cash provided by operating activities: | |||||||||||
Depreciation, depletion, amortization, | |||||||||||
and impairment | 19,827,738 | 30,633,453 | 20,311,040 | ||||||||
Provision for deferred income taxes | 777,000 | (3,814,000) | 9,116,000 | ||||||||
Exploration costs | 1,208,653 | 711,582 | 455,943 | ||||||||
Net (gain) loss on sales of assets | (1,189,605) | (2,654,759) | 20,632 | ||||||||
Income from partnerships | (405,134) | (323,848) | (631,891) | ||||||||
Distributions received from partnerships | 523,317 | 432,805 | 724,765 | ||||||||
Other | 64,555 | 4,708 | - | ||||||||
Common stock contributed to ESOP | 287,194 | 245,811 | 218,733 | ||||||||
Common stock (unissued) to Directors' | |||||||||||
Deferred Compensation Plan | 359,628 | 256,688 | 247,033 | ||||||||
Restricted stock awards | 12,028 | - | - | ||||||||
Bad debt expense (recovery) | - | (185,272) | 591,258 | ||||||||
Cash provided (used) by changes in assets | |||||||||||
and liabilities: | |||||||||||
Oil and natural gas sales receivables | (1,315,445) | 9,620,843 | (9,671,136) | ||||||||
Fair value of derivative contracts | (4,133,761) | 3,159,628 | (539,277) | ||||||||
Refundable income taxes | - | 2,162,305 | (2,162,305) | ||||||||
Refundable production taxes | (69,874) | (921,769) | (467,076) | ||||||||
Other current assets | (343,961) | 74,455 | (25,927) | ||||||||
Accounts payable | (24,896) | 287,883 | 59,921 | ||||||||
Income taxes payable | 583,625 | 338,511 | (211,155) | ||||||||
Accrued liabilities | 225,723 | 86,603 | 471,569 | ||||||||
Total adjustments | 16,386,785 | 40,115,627 | 18,508,127 | ||||||||
Net cash provided by operating activities | 27,806,475 | 37,710,606 | 40,063,896 | ||||||||
Investing Activities | |||||||||||
Capital expenditures, including dry hole costs | (11,308,506) | (39,915,051) | (38,747,749) | ||||||||
Proceeds from leasing of fee mineral acreage | 1,316,377 | 209,930 | 200,356 | ||||||||
Investments in partnerships | (254,555) | (59,742) | (139,177) | ||||||||
Proceeds from sales of assets | 401,168 | 3,441,871 | 840,398 | ||||||||
Net cash used in investing activities | (9,845,516) | (36,322,992) | (37,846,172) | ||||||||
Condensed Consolidated Statements of Cash Flows (continued) | |||||||||
Year ended September 30, | |||||||||
2010 | 2009 | 2008 | |||||||
Financing Activities | |||||||||
Borrowings under debt agreement | $ 10,799,814 | $ 49,027,225 | $ 47,281,411 | ||||||
Payments of loan principal | (21,184,536) | (48,346,603) | (42,238,782) | ||||||
Purchases of treasury stock | (291,383) | - | (4,998,842) | ||||||
Payments of dividends | (2,327,504) | (2,324,036) | (2,355,163) | ||||||
Net cash used in financing activities | (13,003,609) | (1,643,414) | (2,311,376) | ||||||
Increase (decrease) in cash and cash equivalents | 4,957,350 | (255,800) | (93,652) | ||||||
Cash and cash equivalents at beginning of year | 639,908 | 895,708 | 989,360 | ||||||
Cash and cash equivalents at end of year | $ 5,597,258 | $ 639,908 | $ 895,708 | ||||||
Supplemental Disclosures of Cash Flow | |||||||||
Information | |||||||||
Interest paid (net of capitalized interest) | $ 60,912 | $ - | $ 23,212 | ||||||
Income taxes paid, net of refunds received | $ 3,530,718 | $ (1,261,808) | $ 4,145,122 | ||||||
Supplemental schedule of noncash | |||||||||
investing and financing activities: | |||||||||
Additions and revisions, net, to asset | |||||||||
retirement obligations | $ 110,144 | $ 95,076 | $ 151,998 | ||||||
Gross additions to properties and equipment | $ 11,585,521 | $ 28,540,290 | $ 52,812,138 | ||||||
Net (increase) decrease in accounts payable for | |||||||||
properties and equipment additions | (277,015) | 11,374,761 | (14,064,389) | ||||||
Capital expenditures, including dry hole costs | $ 11,308,506 | $ 39,915,051 | $ 38,747,749 | ||||||
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 2010 Form 10-K filed with the Securities and Exchange Commission. These "Risk Factors" include: the worldwide economic recession's continuing negative effects on the natural gas business; our 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; uncertainties in evaluating oil and gas reserves; 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; drilling and operating risks; and we cannot control activities on our 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, 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.
SOURCE Panhandle Oil and Gas Inc.
Copyright 2010 PR Newswire
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