OKLAHOMA CITY, Dec. 12, 2017 /PRNewswire/ -- PANHANDLE OIL
AND GAS INC., the "Company," (NYSE: PHX) today reported financial
and operating results for the fiscal year and fourth quarter ended
Sept. 30, 2017, an operations update
and an update on its bank line-of-credit borrowing base.
HIGHLIGHTS FOR THE PERIODS ENDED SEPT.
30, 2017
- Recorded a fourth quarter 2017 net income of $1,039,134, $0.06
per share, compared to a net income of $737,190, $0.05 per
share, for the 2016 fourth quarter.
- Recorded a fiscal year 2017 net income of $3,531,933, $0.21
per share, compared to a net loss of $10,286,884, $0.61
per share, for fiscal 2016.
- Generated cash from operating activities of $20.8 million for the year, as compared to
capital expenditures of $25.8
million.
- Collected lease bonus proceeds of $5.2
million in fiscal 2017.
- Generated 2017 fourth quarter and twelve-month
EBITDA(1) of $7,250,826
and $24,556,609, respectively.
- Year-end 2017 proved reserves increased 36% to 168.6 Bcfe as
compared to year-end 2016 proved reserves.
(1) This is a Non-GAAP measure. Refer to the Non-GAAP
Reconciliation section.
MANAGEMENT COMMENTS
Paul F. Blanchard Jr., President
and CEO, said, "Our strategy, moving forward will have three basic
elements. 1) We will creatively maximize the value of the Company's
existing assets, while minimizing expenses. 2) We will endeavor to
prudently add attractive new assets to the Company's portfolio that
we believe will be additive to long-term shareholder value. 3) We
will continue to maintain a conservative balance sheet.
"Many strategic initiatives have been completed or are underway.
I want to highlight a few significant initiatives that emphasize
how we are maximizing the value of our existing assets.
"The Company invested $25.8
million in drilling activity in 2017, with the vast majority
in the core areas of the STACK, Cana, SCOOP, SE Oklahoma Woodford
and the Eagle Ford Shale. The average finding cost for the wells
from this program, which began production in 2017, is estimated at
an attractive $0.92 per Mcfe. This
activity materially grew the Company's production as these wells
began to produce in the third and fourth quarters of 2017. As a
result of this investing activity, the Company's fourth quarter
2017 production exceeded second quarter 2017 production by
approximately 40%. Our approach of low-risk meaningful return
investment in working interest drilling on our mineral and
leasehold acreage is the foundation of maximizing the value of the
Company's existing assets.
"In 2017, the Company leased 2,473 acres of its mineral
holdings, primarily in the expansion areas of STACK and SCOOP, for
$5.2 million in lease bonuses and an
average royalty of 21%. Our analysis suggests that the lease bonus
plus royalty received from this leasing will exceed the value the
Company would have generated from taking a working interest
participation, thereby maximizing value while minimizing drilling
risk. This illustrates another option available to Panhandle to
maximize shareholder value in competitive leasing areas through our
perpetual mineral ownership.
"Another effort to optimize our asset value and profitability is
the Company's marginal well divestiture program. In 2017, the
Company began the process of selling marginal working interest
wells. We intend to continue this program in 2018, with the goal of
materially reducing the Company's LOE per Mcfe while having a much
smaller impact on cash flow and production. The vast majority of
the wells sold through this program on our mineral holdings will be
sold well-bore only, where we retain all our perpetual mineral
rights outside those well-bores.
"On the acquisition front, we continue to screen for and
evaluate attractive acquisition opportunities, with a heavy
emphasis toward mineral interests. We are finding the market to be
active and competitive. With our 4,500 plus gross undeveloped
drilling locations identified on existing mineral and leasehold
acreage, we have the ability to be patient in this process, but
will continue to actively search for opportunities that meet our
strategic criteria and pursue only those we believe will be
accretive to long-term shareholder value.
"In October 2017, the Company
renegotiated and extended its credit facility with very favorable
terms and a new maturity date of Nov.
20, 2022.The borrowing base was maintained at $80 million and on Nov.
30, 2017, our debt was $49.9
million.
"In conclusion, the Company has the flexibility to creatively
manage its existing assets in a manner we believe will optimize
long-term shareholder value We will endeavor to prudently add
attractive new assets to the Company's portfolio where we believe
they will be additive to long-term per share value. We will
continue our strategy to maintain a conservative balance sheet
throughout all commodity cycles."
FISCAL FOURTH QUARTER 2017 RESULTS
For the 2017 fourth quarter, the Company recorded net income of
$1,039,134, or $0.06 per share. This compared to net income of
$737,190, or $0.05 per share, for the 2016 fourth quarter. Net
cash provided by operating activities was $6,436,955 for the 2017 fourth quarter, versus
$2,085,857 for the 2016 fourth
quarter. Capital expenditures for the 2017 fiscal quarter totaled
$7,796,176.
Total revenues for the 2017 fourth quarter were $12,896,932, an increase of 27% from $10,157,985 for the 2016 quarter. Oil, NGL and
natural gas sales increased $3,293,913, or 37%, in the 2017 quarter, as
compared to the 2016 quarter. This revenue increase was a result of
increased oil, NGL and natural gas volumes of 19%, 46% and 20%,
respectively, and increased oil, NGL and natural gas prices of 12%,
58% and 6%, respectively. Average sales price per Mcfe of
production during the 2017 fourth quarter was $3.70, a 12% increase from $3.31 in the 2016 fourth quarter. Oil production
increased in the 2017 quarter to 93,027 barrels, versus 78,398
barrels in the 2016 quarter, while gas production increased 20% to
2,330,838 Mcf, and NGL production increased 46% to 65,034 barrels.
Additionally, losses on derivative contracts were $0.4 million in the 2017 quarter compared to a
gain of $0.8 million in the 2016
quarter.
FISCAL YEAR 2017 RESULTS
For fiscal 2017, the Company recorded a net income of
$3,531,933, or $0.21 per share. This compared to a net loss of
$10,286,884, or $0.61 per share, for fiscal 2016. Net cash
provided by operating activities decreased 8% to $20.8 million for 2017, versus 2016. Capital
expenditures in fiscal 2017 totaled $25.8
million as compared to $4.0
million in fiscal 2016.
Total revenues for 2017 were $46,335,049, an increase of 19% from $39,060,783 for 2016. This revenue increase was a
result of increased oil, NGL and natural gas prices of 26%, 58% and
41%, respectively, increased NGL volumes of 2% and was somewhat
offset by decreased oil and natural gas production volumes of 15%
and 1%, respectively. Overall results were a 3% decrease in Mcfe
production volumes and a 32% increase in the average sales price
per Mcfe to $3.60, as compared to
$2.73 in 2016. Revenue from lease
bonuses in 2017 was $5.1 million,
compared to $7.7 million in 2016.
Gains on derivative contracts totaled $1.2
million in 2017 as compared to losses of $0.1 million in 2016.
Oil, NGL and natural gas sales increased $8,524,559, or 27%, for 2017, as compared to
2016. The increase was due to increased oil, NGL and natural gas
prices coupled with higher NGL production volumes and somewhat
offset by lower oil and natural gas production volumes. Oil
production decreased 15%, primarily the result of the production
decline in the Eagle Ford Shale. To a lesser extent, declining
production from various fields in western Oklahoma, the Texas
Panhandle and Bakken Shale
also contributed to the decrease. These decreases were partially
offset by new production added in the Eagle Ford Shale on six wells
in the second half of 2017. NGL production increased 2%, largely
the result of new production coming online in the Anadarko Woodford
and Eagle Ford Shale. This more than offset the natural decline in
the Anadarko Woodford Shale in western and central Oklahoma and the Anadarko Basin Granite Wash in western
Oklahoma and the Texas Panhandle. Natural gas production
decreased 1%, principally due to declining production in the
Fayetteville Shale. To a much lesser extent, declining production
from the Anadarko Woodford Shale in western and central
Oklahoma, the Anadarko Basin Granite Wash and the
southeastern Oklahoma Woodford Shale also contributed to the
decrease. These declines were mostly offset as a result of new well
production in southeastern Oklahoma Woodford Shale and Anadarko
Woodford Shale.
Total costs and expenses for 2017 decreased $14,944,551, or 26%, from 2016. Lease operating
expenses declined $0.9 million,
principally the result of significant new low-cost production
coming on, decreased operating costs in several fields and the
company selling some high operating cost wells in 2017. Provision
for impairment decreased $11.3
million in 2017 as a result of severely depressed oil, NGL
and natural gas prices during 2016. The Company also recorded a
$0.1 million loss on asset sales in
2017, as compared to a $2.6 million
gain in 2016.
BANK LINE-OF-CREDIT UPDATE
On Oct. 25, 2017, Panhandle's
credit facility was renegotiated and our bank line-of-credit
borrowing base was reaffirmed and remained unchanged at
$80 million. The new maturity date is
Nov. 30, 2022. The outstanding
balance at Nov. 30, 2017, is
$49.9 million with availability under
the line of $30.1 million. Based on
currently expected product prices, the Company anticipates funding
normal operations and its drilling capital expenditures program in
2018 from internally generated cash flow and, if needed, the
availability under its line-of-credit.
OPERATIONS UPDATE
The 2017 drilling capital expenditures of $25.8 million were primarily invested in the
cores of three low-risk resource plays: southeastern Oklahoma
Woodford, STACK/Cana Woodford and
the Eagle Ford. The first material production response from this
program was seen in the third quarter, when production grew 26%
from the prior quarter. Production in the fourth quarter grew
another 11% above the third quarter to 36.0 Mmcfe per day. This is
the highest quarterly production for the Company since the third
quarter of 2015.
Panhandle participated in eight significant wells operated by BP
in the southeastern Oklahoma Woodford in 2017. Four of the wells
began producing late in the second quarter, and the remaining four
began producing in the third quarter. These eight wells, which have
an average 20% working interest and 27.4% net revenue interest,
produced 6,340 Mcf per day net to Panhandle in September.
The Company participated in six significant STACK/Cana Woodford wells operated by Cimarex, with a
17.5% working interest and 16.25% net revenue interest. The six
wells began producing in late July and produced 8,258 Mcfe per day
net to Panhandle in September.
The Company also participated in 10 wells in the Eagle Ford
Shale in south Texas. Two wells
started producing in April, four wells began producing in August
and the four remaining wells began producing in mid-November.
September production from the first six wells totaled 421 Boe per
day net to Panhandle. The four wells that began producing in
mid-November are currently producing 181 Boe per day net to
Panhandle.
In the Permian basin, QEP sold leasehold rights, including its
rights on our contiguous 43.6-square-mile mineral holdings in
Andrews and Winkler Counties, Texas. The new operator has begun drilling a
Barnett Shale horizontal test on our mineral position and has also
indicated intent to test the Wolfcamp. Panhandle elected not to
participate with a working interest and to maintain a royalty
interest in the Barnett Shale test.
Also in the Permian Basin, Element Petroleum has drilled seven
San Andres wells on our contiguous 34.5-square-mile mineral acreage
block in Cochran County Texas.
Panhandle elected not to participate with a working interest and to
maintain a royalty interest in the seven wells. Three of the wells
are currently producing, and the remaining four wells are being
completed and prepared for production. Production from each of the
three producing wells progressively improved as compared to the
prior wells, with the most recent well producing an average of 255
Boe per day in the last 30 days.
Twelve rigs are currently drilling on our mineral holdings in
STACK/Cana/SCOOP and southeastern Oklahoma Woodford. Panhandle has
a working interest in one well and a royalty interest in the
remaining eleven.
FINANCIAL
HIGHLIGHTS
Statements of
Operations
|
|
|
|
Three Months Ended
Sept. 30,
|
|
|
Year Ended Sept.
30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, NGL and natural
gas sales
|
|
$
|
12,147,894
|
|
|
$
|
8,853,981
|
|
|
$
|
39,935,912
|
|
|
$
|
31,411,353
|
|
Lease bonuses and
rentals
|
|
|
1,157,545
|
|
|
|
547,633
|
|
|
|
5,149,297
|
|
|
|
7,735,785
|
|
Gains (losses) on
derivative contracts
|
|
|
(408,507)
|
|
|
|
756,371
|
|
|
|
1,249,840
|
|
|
|
(86,355)
|
|
|
|
|
12,896,932
|
|
|
|
10,157,985
|
|
|
|
46,335,049
|
|
|
|
39,060,783
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
|
|
3,136,979
|
|
|
|
3,316,004
|
|
|
|
12,682,969
|
|
|
|
13,590,089
|
|
Production
taxes
|
|
|
418,614
|
|
|
|
323,918
|
|
|
|
1,548,399
|
|
|
|
1,071,632
|
|
Depreciation,
depletion and amortization
|
|
|
4,743,280
|
|
|
|
5,524,548
|
|
|
|
18,397,548
|
|
|
|
24,487,565
|
|
Provision for
impairment
|
|
|
652,202
|
|
|
|
152,207
|
|
|
|
662,990
|
|
|
|
12,001,271
|
|
Loss (gain) on asset
sales and other
|
|
|
7,385
|
|
|
|
(2,388,545)
|
|
|
|
105,830
|
|
|
|
(2,576,237)
|
|
Interest
expense
|
|
|
390,210
|
|
|
|
310,592
|
|
|
|
1,275,138
|
|
|
|
1,344,619
|
|
General and
administrative
|
|
|
2,083,128
|
|
|
|
2,006,071
|
|
|
|
7,441,242
|
|
|
|
7,139,728
|
|
|
|
|
11,431,798
|
|
|
|
9,244,795
|
|
|
|
42,114,116
|
|
|
|
57,058,667
|
|
Income (loss) before
provision (benefit) for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,465,134
|
|
|
|
913,190
|
|
|
|
4,220,933
|
|
|
|
(17,997,884)
|
|
Provision (benefit)
for income taxes
|
|
|
426,000
|
|
|
|
176,000
|
|
|
|
689,000
|
|
|
|
(7,711,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
1,039,134
|
|
|
$
|
737,190
|
|
|
$
|
3,531,933
|
|
|
$
|
(10,286,884)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
0.06
|
|
|
$
|
0.05
|
|
|
$
|
0.21
|
|
|
$
|
(0.61)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares
|
|
|
16,668,814
|
|
|
|
16,402,172
|
|
|
|
16,646,582
|
|
|
|
16,577,799
|
|
Unissued, vested
directors' shares
|
|
|
259,301
|
|
|
|
269,461
|
|
|
|
253,603
|
|
|
|
263,057
|
|
|
|
|
16,928,115
|
|
|
|
16,671,633
|
|
|
|
16,900,185
|
|
|
|
16,840,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared per share of common stock and paid in
period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
Balance
Sheets
|
|
|
|
Sept. 30,
2017
|
|
|
Sept. 30,
2016
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
557,791
|
|
|
$
|
471,213
|
|
Oil, NGL and natural
gas sales receivables,
|
|
|
|
|
|
|
|
|
net of allowance for
uncollectable accounts
|
|
|
7,585,485
|
|
|
|
5,287,229
|
|
Refundable income
taxes
|
|
|
489,945
|
|
|
|
83,874
|
|
Derivative contracts,
net
|
|
|
544,924
|
|
|
|
-
|
|
Assets held for
sale
|
|
|
557,750
|
|
|
|
-
|
|
Other
|
|
|
253,480
|
|
|
|
419,037
|
|
Total current
assets
|
|
|
9,989,375
|
|
|
|
6,261,353
|
|
|
|
|
|
|
|
|
|
|
Properties and
equipment at cost, based on successful efforts
accounting:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Producing oil and
natural gas properties
|
|
|
434,571,516
|
|
|
|
434,469,093
|
|
Non-producing oil and
natural gas properties
|
|
|
7,428,927
|
|
|
|
7,574,649
|
|
Other
|
|
|
1,067,894
|
|
|
|
1,069,658
|
|
|
|
|
443,068,337
|
|
|
|
443,113,400
|
|
Less accumulated
depreciation, depletion and amortization
|
|
|
|
|
|
|
|
|
|
|
(246,483,979)
|
|
|
|
(251,707,749)
|
|
Net properties and
equipment
|
|
|
196,584,358
|
|
|
|
191,405,651
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
170,486
|
|
|
|
157,322
|
|
Total
assets
|
|
$
|
206,744,219
|
|
|
$
|
197,824,326
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,847,230
|
|
|
$
|
2,351,623
|
|
Derivative contracts,
net
|
|
|
-
|
|
|
|
403,612
|
|
Accrued liabilities
and other
|
|
|
1,690,789
|
|
|
|
1,718,558
|
|
Total current
liabilities
|
|
|
3,538,019
|
|
|
|
4,473,793
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
52,222,000
|
|
|
|
44,500,000
|
|
Deferred income
taxes
|
|
|
31,051,007
|
|
|
|
30,676,007
|
|
Asset retirement
obligations
|
|
|
3,196,889
|
|
|
|
2,958,048
|
|
Derivative contracts,
net
|
|
|
28,765
|
|
|
|
24,659
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Class A voting common
stock, $0.0166 par value; 24,000,000 shares authorized; 16,863,004
issued at Sept. 30, 2017 and 2016
|
|
|
|
|
|
|
|
|
|
|
280,938
|
|
|
|
280,938
|
|
Capital in excess of
par value
|
|
|
2,726,444
|
|
|
|
3,191,056
|
|
Deferred directors'
compensation
|
|
|
3,459,909
|
|
|
|
3,403,213
|
|
Retained
earnings
|
|
|
113,330,216
|
|
|
|
112,482,284
|
|
|
|
|
119,797,507
|
|
|
|
119,357,491
|
|
Treasury stock, at
cost; 184,988 shares at Sept. 30, 2017, and 262,708 shares at Sept.
30, 2016
|
|
|
|
|
|
|
|
|
|
|
(3,089,968)
|
|
|
|
(4,165,672)
|
|
Total stockholders'
equity
|
|
|
116,707,539
|
|
|
|
115,191,819
|
|
Total liabilities and
stockholders' equity
|
|
$
|
206,744,219
|
|
|
$
|
197,824,326
|
|
Condensed Statements
of Cash Flows
|
|
|
|
Year ended Sept.
30,
|
|
|
|
2017
|
|
|
2016
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
3,531,933
|
|
|
$
|
(10,286,884)
|
|
Adjustments to
reconcile net income (loss) to net
|
|
|
|
|
|
|
|
|
cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
18,397,548
|
|
|
|
24,487,565
|
|
Impairment
|
|
|
662,990
|
|
|
|
12,001,271
|
|
Provision for deferred
income taxes
|
|
|
375,000
|
|
|
|
(9,960,000)
|
|
Gain from leasing of
fee mineral acreage
|
|
|
(5,147,957)
|
|
|
|
(7,732,023)
|
|
Proceeds from leasing
fee mineral acreage
|
|
|
5,194,290
|
|
|
|
8,049,434
|
|
Net (gain) loss on
sales of assets
|
|
|
94,889
|
|
|
|
(2,688,408)
|
|
Common stock
contributed to ESOP
|
|
|
312,380
|
|
|
|
200,158
|
|
Common stock
(unissued) to Directors'
|
|
|
|
|
|
|
|
|
Deferred Compensation
Plan
|
|
|
358,658
|
|
|
|
329,465
|
|
Restricted stock
awards
|
|
|
597,940
|
|
|
|
781,479
|
|
Other
|
|
|
(5,783)
|
|
|
|
81,606
|
|
Cash provided (used)
by changes in assets
|
|
|
|
|
|
|
|
|
and
liabilities:
|
|
|
|
|
|
|
|
|
Oil, NGL and natural
gas sales receivables
|
|
|
(2,298,256)
|
|
|
|
2,589,146
|
|
Fair value of
derivative contracts
|
|
|
(944,430)
|
|
|
|
4,639,035
|
|
Refundable income
taxes
|
|
|
(406,071)
|
|
|
|
262,023
|
|
Other current
assets
|
|
|
165,557
|
|
|
|
308,980
|
|
Accounts
payable
|
|
|
(103,389)
|
|
|
|
(811,749)
|
|
Accrued
liabilities
|
|
|
(27,107)
|
|
|
|
388,053
|
|
Total
adjustments
|
|
|
17,226,259
|
|
|
|
32,926,035
|
|
Net cash provided by
operating activities
|
|
|
20,758,192
|
|
|
|
22,639,151
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Capital expenditures,
including dry hole costs
|
|
|
(25,807,897)
|
|
|
|
(3,986,235)
|
|
Investments in
partnerships
|
|
|
(23,563)
|
|
|
|
50,126
|
|
Proceeds from sales
of assets
|
|
|
723,700
|
|
|
|
4,501,726
|
|
Net cash used in
investing activities
|
|
|
(25,107,760)
|
|
|
|
565,617
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Borrowings under debt
agreement
|
|
|
27,809,185
|
|
|
|
12,339,101
|
|
Payments of loan
principal
|
|
|
(20,087,185)
|
|
|
|
(32,839,101)
|
|
Purchases of treasury
stock
|
|
|
(601,853)
|
|
|
|
(117,165)
|
|
Payments of
dividends
|
|
|
(2,684,001)
|
|
|
|
(2,677,305)
|
|
Excess tax benefit on
stock-based compensation
|
|
|
-
|
|
|
|
(43,000)
|
|
Net cash provided by
(used in) financing activities
|
|
|
4,436,146
|
|
|
|
(23,337,470)
|
|
Increase (decrease)
in cash and cash equivalents
|
|
|
86,578
|
|
|
|
(132,702)
|
|
Cash and cash
equivalents at beginning of year
|
|
|
471,213
|
|
|
|
603,915
|
|
Cash and cash
equivalents at end of year
|
|
$
|
557,791
|
|
|
$
|
471,213
|
|
|
Supplemental
Disclosures of Cash Flow
|
|
|
|
|
|
|
|
|
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid (net of
capitalized interest)
|
|
$
|
1,212,878
|
|
|
$
|
1,365,474
|
|
Income taxes paid,
net of refunds received
|
|
$
|
720,072
|
|
|
$
|
2,029,977
|
|
|
|
|
|
|
|
|
|
|
Supplemental
schedule of noncash
|
|
|
|
|
|
|
|
|
investing and
financing activities:
|
|
|
|
|
|
|
|
|
Additions and
revisions, net, to asset
|
|
|
|
|
|
|
|
|
retirement
obligations
|
|
$
|
624,893
|
|
|
$
|
14,095
|
|
|
|
|
|
|
|
|
|
|
Gross additions to
properties and equipment
|
|
$
|
25,406,894
|
|
|
$
|
5,118,733
|
|
Net (increase)
decrease in accounts payable for properties and equipment
additions
|
|
|
|
|
|
|
|
|
|
|
401,003
|
|
|
|
(1,132,498)
|
|
Capital expenditures,
including dry hole costs
|
|
$
|
25,807,897
|
|
|
$
|
3,986,235
|
|
OPERATING
HIGHLIGHTS
|
|
|
Fourth Quarter
Ended
|
|
|
Fourth Quarter
Ended
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
Sept. 30,
2017
|
|
|
Sept. 30,
2016
|
|
|
Sept. 30,
2017
|
|
|
Sept. 30,
2016
|
|
MCFE Sold
|
|
3,279,204
|
|
|
|
2,678,725
|
|
|
|
11,101,739
|
|
|
|
11,496,249
|
|
Average Sales Price
per MCFE
|
$
|
3.70
|
|
|
$
|
3.31
|
|
|
$
|
3.60
|
|
|
$
|
2.73
|
|
Barrels of Oil
Sold
|
|
93,027
|
|
|
|
78,398
|
|
|
|
310,677
|
|
|
|
364,252
|
|
Average Sales Price
per Barrel
|
$
|
46.75
|
|
|
$
|
41.62
|
|
|
$
|
46.27
|
|
|
$
|
36.70
|
|
MCF of Natural Gas
Sold
|
|
2,330,838
|
|
|
|
1,940,749
|
|
|
|
8,194,529
|
|
|
|
8,284,377
|
|
Average Sales Price
per MCF
|
$
|
2.71
|
|
|
$
|
2.55
|
|
|
$
|
2.70
|
|
|
$
|
1.92
|
|
Barrels of NGL
Sold
|
|
65,034
|
|
|
|
44,598
|
|
|
|
173,858
|
|
|
|
171,060
|
|
Average Sales Price
per Barrel
|
$
|
22.85
|
|
|
$
|
14.43
|
|
|
$
|
19.87
|
|
|
$
|
12.60
|
|
Quarterly Production
Levels
|
|
Quarter
ended
|
|
Oil Bbls
Sold
|
|
|
MCF Sold
|
|
|
NGL Bbls
Sold
|
|
|
MCFE Sold
|
|
9/30/17
|
|
|
93,027
|
|
|
|
2,330,838
|
|
|
|
65,034
|
|
|
|
3,279,204
|
|
6/30/17
|
|
|
75,467
|
|
|
|
2,265,091
|
|
|
|
39,337
|
|
|
|
2,953,915
|
|
3/31/17
|
|
|
66,547
|
|
|
|
1,748,909
|
|
|
|
33,836
|
|
|
|
2,351,207
|
|
12/31/16
|
|
|
75,636
|
|
|
|
1,849,692
|
|
|
|
35,651
|
|
|
|
2,517,414
|
|
9/30/16
|
|
|
78,398
|
|
|
|
1,940,749
|
|
|
|
44,598
|
|
|
|
2,678,725
|
|
6/30/16
|
|
|
88,732
|
|
|
|
2,112,567
|
|
|
|
40,477
|
|
|
|
2,887,821
|
|
3/31/16
|
|
|
90,760
|
|
|
|
2,014,139
|
|
|
|
37,934
|
|
|
|
2,786,303
|
|
12/31/15
|
|
|
106,362
|
|
|
|
2,216,922
|
|
|
|
48,051
|
|
|
|
3,143,400
|
|
Derivative contracts
in place as of Dec. 1, 2017
|
|
|
|
Production
volume
|
|
Indexed
|
|
|
Contract
period
|
|
covered per
month
|
|
pipeline
|
|
Fixed
price
|
Natural gas costless
collars
|
|
|
|
|
|
|
January - December
2017
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$2.80 floor / $3.47
ceiling
|
January - December
2017
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.00 floor / $3.35
ceiling
|
April - December
2017
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$2.80 floor / $3.35
ceiling
|
April - December
2017
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$2.75 floor / $3.35
ceiling
|
April - December
2017
|
|
30,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.00 floor / $3.65
ceiling
|
May - December
2017
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.00 floor / $3.60
ceiling
|
May - December
2017
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.20 floor / $3.65
ceiling
|
January - March
2018
|
|
100,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.50 floor / $3.95
ceiling
|
January - March
2018
|
|
150,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.40 floor / $3.95
ceiling
|
January - December
2018
|
|
40,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$2.75 floor / $3.35
ceiling
|
January - December
2018
|
|
40,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$2.75 floor / $3.30
ceiling
|
April - December
2018
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$2.80 floor / $3.15
ceiling
|
|
|
|
|
|
|
|
Natural gas fixed
price swaps
|
|
|
|
|
|
|
January - December
2017
|
|
25,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.100
|
April - December
2017
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.070
|
April - December
2017
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.210
|
April - December
2017
|
|
30,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.300
|
July - December
2017
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.510
|
August - December
2017
|
|
100,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.095
|
January - March
2018
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.700
|
January - March
2018
|
|
75,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.575
|
January - March
2018
|
|
100,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.520
|
January - December
2018
|
|
50,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$3.080
|
April - December
2018
|
|
40,000
Mmbtu
|
|
NYMEX Henry
Hub
|
|
$2.910
|
|
|
|
|
|
|
|
Oil costless
collars
|
|
|
|
|
|
|
January - December
2017
|
|
3,000 Bbls
|
|
NYMEX WTI
|
|
$50.00 floor / $55.00
ceiling
|
January - December
2017
|
|
3,000 Bbls
|
|
NYMEX WTI
|
|
$52.00 floor / $58.00
ceiling
|
January - December
2017
|
|
3,000 Bbls
|
|
NYMEX WTI
|
|
$53.00 floor / $57.75
ceiling
|
April - December
2017
|
|
2,000 Bbls
|
|
NYMEX WTI
|
|
$50.00 floor / $57.50
ceiling
|
July - December
2017
|
|
5,000 Bbls
|
|
NYMEX WTI
|
|
$45.00 floor / $56.25
ceiling
|
January - June
2018
|
|
2,000 Bbls
|
|
NYMEX WTI
|
|
$47.50 floor / $52.75
ceiling
|
January - December
2018
|
|
2,000 Bbls
|
|
NYMEX WTI
|
|
$47.50 floor / $52.50
ceiling
|
January - December
2018
|
|
2,000 Bbls
|
|
NYMEX WTI
|
|
$48.00 floor / $53.25
ceiling
|
January - December
2018
|
|
2,000 Bbls
|
|
NYMEX WTI
|
|
$50.00 floor / $55.75
ceiling
|
July - December
2018
|
|
3,000 Bbls
|
|
NYMEX WTI
|
|
$50.00 floor / $58.00
ceiling
|
|
|
|
|
|
|
|
Oil fixed price
swaps
|
|
|
|
|
|
|
January - December
2017
|
|
3,000 Bbls
|
|
NYMEX WTI
|
|
$53.89
|
April - December
2017
|
|
2,000 Bbls
|
|
NYMEX WTI
|
|
$54.20
|
January - March
2018
|
|
4,000 Bbls
|
|
NYMEX WTI
|
|
$54.00
|
January - June
2018
|
|
4,000 Bbls
|
|
NYMEX WTI
|
|
$51.25
|
January - December
2018
|
|
3,000 Bbls
|
|
NYMEX WTI
|
|
$50.72
|
January - December
2018
|
|
2,000 Bbls
|
|
NYMEX WTI
|
|
$52.02
|
April - December
2018
|
|
4,000 Bbls
|
|
NYMEX WTI
|
|
$54.14
|
|
|
|
|
|
|
|
Non-GAAP Reconciliation
This news release includes certain "non-GAAP financial measures"
under the rules of the Securities and Exchange Commission,
including Regulation G. These non-GAAP measures are calculated
using GAAP amounts in our financial statements.
EBITDA Reconciliation
EBITDA is defined as net income (loss) plus interest expense,
provision for impairment, depreciation, depletion and amortization
of properties and equipment (which includes amortization of other
assets), and provision (benefit) for income taxes. We recognize
that certain investors consider EBITDA a useful means of measuring
our ability to meet our debt service obligations and evaluating our
financial performance. EBITDA has limitations and should not be
considered in isolation or as a substitute for net income,
operating income, cash flow from operations or other consolidated
income or cash flow data prepared in accordance with GAAP. Because
not all companies use identical calculations, this presentation of
EBITDA may not be comparable to a similarly titled measure of other
companies. The following table provides a reconciliation of net
income (loss) to EBITDA for the periods indicated.
|
Fourth Quarter
Ended
|
|
|
Fiscal Year
Ended
|
|
|
Sept. 30,
2017
|
|
|
Sept. 30,
2017
|
|
Net Income
(Loss)
|
$
|
1,039,134
|
|
|
$
|
3,531,933
|
|
Plus:
|
|
|
|
|
|
|
|
Income Tax Expense (Benefit)
|
|
426,000
|
|
|
|
689,000
|
|
Interest Expense
|
|
390,210
|
|
|
|
1,275,138
|
|
DD&A
|
|
4,743,280
|
|
|
|
18,397,548
|
|
Impairment
|
|
652,202
|
|
|
|
662,990
|
|
EBITDA
|
$
|
7,250,826
|
|
|
$
|
24,556,609
|
|
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 2017 Form 10-K filed with the
Securities and Exchange Commission. These "Risk Factors" include
Panhandle's 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; unsuccessful exploration
and development drilling; decreases in the values of Panhandle's
oil and gas properties resulting in write-downs; the negative
impact lower oil and gas prices could have on the Company's ability
to borrow; drilling and operating risks; uncertainty regarding
potential changes to the rules and regulations which affect the oil
and gas industry; and Panhandle's inability to control activities
on its 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. 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.
View original
content:http://www.prnewswire.com/news-releases/panhandle-oil-and-gas-inc-reports-fourth-quarter-and-fiscal-2017-results-and-operations-update-300570325.html
SOURCE PANHANDLE OIL AND GAS INC.