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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 | |
---|---|---|---|---|---|---|---|---|
0.10 | 3.08% | 3.35 | 3.29 | 3.22 | 3.22 | 108,811 | 22:41:38 |
OKLAHOMA CITY, Aug. 6 /PRNewswire-FirstCall/ -- PANHANDLE OIL AND GAS INC. (NYSE: PHX) today reported financial and operating results for the fiscal third quarter and nine months ended June 30, 2010.
HIGHLIGHTS FOR THE PERIODS ENDED JUNE 30, 2010
FISCAL THIRD QUARTER 2010 RESULTS
For the quarter ending June 30, 2010, the Company recorded a net income of $1,511,300, $.18 per share, as compared to a net loss of $928,512, $.11 per share, for the 2009 third quarter. Total revenues for the 2010 quarter increased 21% over the 2009 quarter to $10,461,870. Cash provided by operating activities totaled $8,656,728, while capital expenditures totaled $3,079,595. Production for the third quarter 2010 was 2,236,236 Mcfe as compared to 2,647,474 Mcfe for the 2009 quarter (a Company record), but was 7% higher than 2010 second quarter production of 2,090,154 Mcfe. The average per Mcfe sales price increased 26% for the 2010 third quarter to $4.32, as compared to $3.42 for the 2009 quarter. The Company recorded approximately $1,100,000 in the 2010 third quarter and payment was received in July 2010 related to the favorable settlement of a lawsuit related to one well in western Oklahoma.
NINE MONTHS 2010 RESULTS
For the nine months ended June 30, 2010, the Company recorded a net income of $8,383,244, $1.00 per share, as compared to a net loss of $2,748,397, $.33 per share, for the 2009 nine months. Total revenues for the 2010 nine months were $39,640,106, a 38% increase over the 2009 nine months. Cash provided by operating activities totaled $20,235,140, which funded capital expenditures of $8,189,105 and enabled the Company to pay off its line of credit balance. Production for the 2010 nine months totaled 6,604,523 Mcfe as compared to 7,522,897 Mcfe for the 2009 nine months. The average per Mcfe sales price increased 33% for the 2010 nine months to $4.99 as compared to $3.74 for the 2009 nine months. The Company further recognized a pre-tax gain (realized and unrealized) on derivative contracts in the 2010 nine months of $5,410,714, compared to a $212,578 gain for the 2009 period.
MANAGEMENT COMMENTS
Michael C. Coffman, President and CEO said, "We are encouraged that our third quarter 2010 production increased 7% over second quarter production levels in spite of reduced capital expenditures as compared to last year's levels. Although our capex was 77% lower through nine months of 2010 as compared to 2009 levels, Panhandle's nine month production is only 12% lower than last year, bearing in mind 2009 was a record production year for the Company. We think this highlights the strength and quality of Panhandle's asset base in several of the premier resource plays in North America. Once we complete our technical evaluation of each project, we have the advantage of being able to selectively participate with a working interest only in those quality drilling projects on our acreage that will add value for our shareholders. Those projects in which we decide not to invest capital following our review of the project's technical merit will still generate a return in the form of a royalty interest when production is established."
Coffman continued: "Panhandle will benefit from the current industry focus on drilling liquids-rich areas and oil properties, because a substantial portion of this drilling is on our perpetually-owned fee mineral acreage located in developing areas such as the Granite Wash and Cana Woodford. Because we already own the mineral rights, we will not be forced to purchase additional leasehold positions at higher market rates in order to participate in these drilling opportunities, and we are not forced to drill to hold acreage.
"Our cash flow from operations has allowed us to completely pay off our debt, fund capex, and build a cash balance despite low natural gas prices and we expect to continue to fund drilling from available cash flow. Panhandle continues to outperform many larger companies in these difficult market conditions. We have the balance sheet strength, a strong asset base, and financial flexibility to efficiently develop our mineral acreage assets, generate our own projects, or pursue appropriate accretive acquisitions should those opportunities present themselves."
OPERATIONS UPDATE
Paul Blanchard, Senior Vice President and COO said, "The volume of drilling proposals in our key areas continued to increase in the third quarter with activity accelerating in the Anadarko Basin Horizontal Granite Wash and the Anadarko Basin 'Cana' Woodford Shale, which are our more oil and natural gas liquids rich plays.
"During the quarter, the Company participated with a 5.8% Net Revenue Interest (NRI) in two wells in the Southeastern Oklahoma Woodford Shale, which produced at the combined rate of 6,600 Mcf per day during their first month of sales. In the Fayetteville Shale, Panhandle participated with a 6.0% NRI in a well which produced 5,500 Mcf per day during its first month of sales. The Company also participated with a 3.1% NRI in a well in the Anadarko 'Cana' Woodford Shale which produced an initial rate of 5,400 Mcfd and we participated with a 1.3% NRI in an Anadarko Basin Horizontal Granite Wash well which yielded initial sales of 11,600 Mcf per day and 600 Bo per day. On July 20, 2010, we had nine working interest wells drilling or completing in our three major shale plays, and there were another 34 working interest wells in which we have approved to participate with a working interest which are not yet drilling."
OPERATING HIGHLIGHTS | ||||||||
Third Quarter | Third Quarter | Nine Months | Nine Months | |||||
Ended | Ended | Ended | Ended | |||||
June 30, 2010 | June 30, 2009 | June 30, 2010 | June 30, 2009 | |||||
Mcfe Sold | 2,236,236 | 2,647,474 | 6,604,523 | 7,522,897 | ||||
Average Sales Price per MCFE | $4.32 | $3.42 | $4.99 | $3.74 | ||||
Barrels Sold | 26,873 | 34,145 | 76,325 | 99,149 | ||||
Average Sales Price per Barrel | $73.65 | $53.89 | $73.16 | $48.81 | ||||
Mcf Sold | 2,074,998 | 2,442,604 | 6,146,573 | 6,928,003 | ||||
Average Sales Price per MCF | $3.70 | $2.96 | $4.46 | $3.36 | ||||
Quarterly Production Levels | |||||||
Quarter ended | Barrels Sold | Mcf Sold | Mcfe Sold | ||||
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 | ||||
6/30/09 | 34,145 | 2,442,604 | 2,647,474 | ||||
Derivative contracts in place as of June 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 (unaudited) | ||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||
2010 | 2009 | 2010 | 2009 | |||||||
Revenues: | ||||||||||
Oil and natural gas sales | $ 9,659,803 | $ 9,058,169 | $ 32,981,230 | $ 28,114,989 | ||||||
Lease bonuses and rentals | 934,532 | 28,777 | 1,057,468 | 182,019 | ||||||
Gains (losses) on derivative contracts | (218,935) | (470,974) | 5,410,714 | 212,578 | ||||||
Income of partnerships | 86,470 | 49,244 | 190,694 | 252,889 | ||||||
10,461,870 | 8,665,216 | 39,640,106 | 28,762,475 | |||||||
Costs and expenses: | ||||||||||
Lease operating expenses | 1,681,982 | 2,095,933 | 6,166,102 | 5,772,401 | ||||||
Production taxes | 236,793 | 369,802 | 1,041,738 | 1,117,040 | ||||||
Exploration costs | 538,262 | 112,537 | 1,415,025 | 314,845 | ||||||
Depreciation, depletion and amortization | 5,221,723 | 6,844,813 | 15,998,498 | 20,882,405 | ||||||
Provision for impairment | - | 115,892 | 12,370 | 2,124,133 | ||||||
Loss (gain) on asset sales, interest and other | (989,152) | (46,564) | (987,333) | (143,022) | ||||||
General and administrative | 1,507,962 | 1,174,315 | 4,353,462 | 3,721,070 | ||||||
8,197,570 | 10,666,728 | 27,999,862 | 33,788,872 | |||||||
Income (loss) before provision (benefit) for income taxes | 2,264,300 | (2,001,512) | 11,640,244 | (5,026,397) | ||||||
Provision (benefit) for income taxes | 753,000 | (1,073,000) | 3,257,000 | (2,278,000) | ||||||
Net income (loss) | $ 1,511,300 | $ (928,512) | $ 8,383,244 | $ (2,748,397) | ||||||
Basic and diluted earnings (loss) per common share | $ 0.18 | $ (0.11) | $ 1.00 | $ (0.33) | ||||||
Basic and diluted weighted average shares outstanding: | ||||||||||
Common shares | 8,311,636 | 8,300,128 | 8,311,636 | 8,300,128 | ||||||
Unissued, vested directors' shares | 112,160 | 97,867 | 110,640 | 96,325 | ||||||
8,423,796 | 8,397,995 | 8,422,276 | 8,396,453 | |||||||
Dividends declared per share of | ||||||||||
common stock and paid in period | $ 0.07 | $ 0.07 | $ 0.21 | $ 0.21 | ||||||
Consolidated Balance Sheets (Information at June 30, 2010 is unaudited) | ||||||
June 30, 2010 | September 30, 2009 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ 2,169,634 | $ 639,908 | ||||
Oil and natural gas sales receivables, net of allowance | ||||||
for uncollectible accounts | 8,205,594 | 7,747,557 | ||||
Derivative contracts | 1,548,598 | - | ||||
Deferred income taxes | - | 1,934,900 | ||||
Refundable production taxes | 881,349 | 616,668 | ||||
Other | 1,221,884 | 68,817 | ||||
Total current assets | 14,027,059 | 11,007,850 | ||||
Properties and equipment, at cost, based on | ||||||
successful efforts accounting: | ||||||
Producing oil and natural gas properties | 204,638,307 | 198,076,244 | ||||
Non-producing oil and natural gas properties | 10,184,554 | 10,332,537 | ||||
Furniture and fixtures | 600,363 | 578,460 | ||||
215,423,224 | 208,987,241 | |||||
Less accumulated depreciation, depletion and amortization | 129,344,929 | 112,900,027 | ||||
Net properties and equipment | 86,078,295 | 96,087,214 | ||||
Investments | 581,126 | 682,391 | ||||
Derivative contracts | 239,781 | - | ||||
Refundable production taxes | 494,620 | 772,177 | ||||
Total assets | $ 101,420,881 | $ 108,549,632 | ||||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ 4,305,954 | $ 4,810,687 | ||||
Derivative contracts | - | 1,726,901 | ||||
Accrued liabilities | 1,706,808 | 1,033,570 | ||||
Total current liabilities | 6,012,762 | 7,571,158 | ||||
Long-term debt | - | 10,384,722 | ||||
Deferred income taxes | 22,689,650 | 24,064,650 | ||||
Asset retirement obligations | 1,639,175 | 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 | 140,524 | 140,524 | ||||
Capital in excess of par value | 1,922,053 | 1,922,053 | ||||
Deferred directors' compensation | 2,181,650 | 1,862,499 | ||||
Retained earnings | 71,145,347 | 64,507,547 | ||||
75,389,574 | 68,432,623 | |||||
Less treasury stock, at cost; 119,866 shares at | ||||||
June 30, 2010 and at September 30, 2009 | (4,310,280) | (4,310,280) | ||||
Total stockholders' equity | 71,079,294 | 64,122,343 | ||||
Total liabilities and stockholders' equity | $ 101,420,881 | $ 108,549,632 | ||||
Condensed Consolidated Statements of Cash Flows | ||||||
Nine months ended June 30, | ||||||
2010 | 2009 | |||||
Operating Activities | ||||||
Net income (loss) | $ 8,383,244 | $ (2,748,397) | ||||
Adjustments to reconcile net income (loss) to net cash | ||||||
provided by operating activities: | ||||||
Unrealized (gains) losses on natural gas derivative contracts | (4,301,814) | 1,569,822 | ||||
Depreciation, depletion, amortization and impairment | 16,010,868 | 23,006,628 | ||||
Provision for deferred income taxes | 613,000 | (3,125,000) | ||||
Exploration costs | 1,039,905 | 314,845 | ||||
Net (gain) loss on sale of assets and other | (1,139,072) | (181,760) | ||||
Income from partnerships | (190,694) | (252,889) | ||||
Distributions received from partnerships | 270,817 | 308,182 | ||||
Directors' deferred compensation expense | 319,151 | 230,237 | ||||
Other | 64,555 | - | ||||
Cash provided by changes in assets and liabilities: | ||||||
Oil and natural gas sales receivables | (458,037) | 9,634,657 | ||||
Refundable income taxes | - | 2,162,305 | ||||
Refundable production taxes | 12,876 | (474,810) | ||||
Other current assets | (1,153,067) | (138,232) | ||||
Accounts payable | 143,270 | 106,136 | ||||
Income taxes payable | 360,966 | 165,919 | ||||
Accrued liabilities | 259,172 | 39,902 | ||||
Total adjustments | 11,851,896 | 33,365,942 | ||||
Net cash provided by operating activities | 20,235,140 | 30,617,545 | ||||
Investing Activities | ||||||
Capital expenditures, including dry hole costs | (8,189,105) | (35,509,890) | ||||
Proceeds from leasing of fee mineral acreage | 1,256,102 | 202,007 | ||||
Investments in partnerships | (43,413) | - | ||||
Proceeds from sales of assets | 401,168 | 2,514,343 | ||||
Net cash used in investing activities | (6,575,248) | (32,793,540) | ||||
Financing Activities | ||||||
Borrowings under debt agreement | 10,799,814 | 43,705,195 | ||||
Payments of loan principal | (21,184,536) | (40,076,791) | ||||
Payments of dividends | (1,745,444) | (1,743,027) | ||||
Net cash provided by (used in) financing activities | (12,130,166) | 1,885,377 | ||||
Increase (decrease) in cash and cash equivalents | 1,529,726 | (290,618) | ||||
Cash and cash equivalents at beginning of period | 639,908 | 895,708 | ||||
Cash and cash equivalents at end of period | $ 2,169,634 | $ 605,090 | ||||
Supplemental Schedule of Noncash Investing and Financing Activities | ||||||
Additions to asset retirement obligations | $ 18,950 | $ 168,567 | ||||
Gross additions to properties and equipment | $ 7,541,102 | $ 24,069,809 | ||||
Net (increase) decrease in accounts payable for properties | ||||||
and equipment additions | 648,003 | 11,440,081 | ||||
Capital expenditures, including dry hole costs | $ 8,189,105 | $ 35,509,890 | ||||
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 2009 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; decreases 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 g. 6 PR Newswire
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