OKLAHOMA CITY, Dec. 11, 2013 /PRNewswire/ -- PANHANDLE OIL AND GAS INC., the "Company," (NYSE:PHX) today reported financial and operating results for the fiscal fourth quarter and twelve months ended Sept. 30, 2013.
HIGHLIGHTS FOR THE YEAR ENDED SEPT. 30, 2013
- Recorded 12-month net income of $13,960,049, $1.67 per share, compared to a net income of $7,370,996, $0.88 per share, for fiscal 2012.
- Increased fiscal 2013 production by 22% over fiscal 2012 to 13.0 billion cubic feet equivalent (Bcfe), the largest in Company history.
- Increased fiscal year 2013 oil production 53% over 2012 volumes.
- Generated cash from operating activities of $37.4 million for the year, well in excess of drilling capital expenditures of $26.8 million.
- Increased oil, NGL and natural gas sales revenues 48% in fiscal 2013, as compared to fiscal 2012.
- Maintained strong balance sheet with debt to equity of 8.6%.
Fiscal Year 2013 Results
For fiscal 2013, the Company recorded net income of $13,960,049, or $1.67 per share. This compared to net income of $7,370,996, or $0.88 per share, for fiscal 2012. Net cash provided by operating activities increased 47% to $37,402,109 for fiscal 2013 versus 2012. Capital expenditures for drilling and equipping wells in fiscal 2013 totaled $26,765,785, providing in excess of $10 million of free cash flow. Debt was reduced by $6.6 million during the year.
Total revenues for 2013 were $62,889,120, increasing 30% from $48,532,317 for 2012. Fiscal 2012 revenues included lease bonuses and rentals of $7,152,991, as compared to $938,846 in 2013. The Company was able to complete two significant leases on 5,174 net mineral acres during 2012, receiving $6.5 million in bonus payments, as compared to minor leasing activity in 2013. Oil, NGL and gas sales revenues increased $19,787,444, or 48%, to $60,605,878 in 2013, as compared to 2012. This increase was a result of a 22% increase in Mcfe production and a 21% increase in the average per Mcfe sales price. The average sales price per Mcfe of production during 2013 was $4.68 compared to $3.86 in 2012.
Oil production increased 53% in 2013 to 234,084 barrels from 153,143 barrels in 2012, and gas production increased 1,814,031 Mcf, or 20%, compared to 2012. Gas production volume increases are principally attributable to the development of the Company's Fayetteville Shale properties and gas production from wells drilled in the oil and NGL rich plays. Drilling expenditures over the prior 24 months targeting oil and NGL rich plays, principally in Western Oklahoma and the Texas Panhandle, are responsible for the increased oil volumes. In addition, 111,897 barrels of NGL were sold in fiscal 2013, which was a 13% increase versus 2012.
Fiscal Fourth Quarter 2013 Results
For the 2013 fourth quarter, the Company recorded net income of $5,719,096, or $0.68 per share. This compared to net income of $182,621, or $0.02 per share, for the 2012 fourth quarter. Net cash provided by operating activities increased 201% to $13,208,895 for the 2013 fourth quarter, versus the 2012 fourth quarter. For the quarter, cash flow from operations substantially exceeded costs to drill and equip wells of $6,189,426.
Total revenues for the 2013 fourth quarter were $18,396,254, increasing 67% from $11,041,382 for the 2012 quarter. Oil, NGL and gas sales revenue increased $6,849,393, or 62% in the 2013 quarter, as compared to the 2012 quarter. This increase was principally a result of a 28% increase in Mcfe production and a 19% increase in the sales price of natural gas. The average sales price per Mcfe of production during the 2013 fourth quarter was $5.15, a 27% increase from $4.07 for the 2012 fourth quarter. Oil production increased 74% in the 2013 quarter to 79,387 barrels, versus 45,552 barrels in the 2012 quarter, and gas production increased 568,539 Mcf to 2,820,079 Mcf, a 25% increase from the 2012 quarter.
Management Comments
Michael C. Coffman, President and CEO, said, "Fiscal 2013 provided both exceptional financial and operating results for the Company. A 53% increase in oil production coupled with a 26% increase in our average natural gas sales price and a 20% increase in natural gas sales volumes increased oil and gas sales revenues 48% to $60.6 million. Net income for 2013 increased 89% to $13.96 million over 2012 net income.
"These results were achieved from the reinvestment of cash flow in high-quality drilling projects. In fact, not only did we fully fund drilling costs from cash flow, we reduced outstanding debt during the year by $6.6 million, ending the year with debt of $8.3 million.
"Panhandle continues to be in the enviable position of having very low debt coupled with strong cash flows. This allows us to deploy the capital necessary to take full advantage of all drilling opportunities on our acreage which we anticipate will generate acceptable rates of return. Our drilling investments over the last two years have yielded exceptional production and reserve growth for Panhandle. We expect to be able to continue making these investments in fiscal 2014 and beyond. Management is continually evaluating the execution of our business strategies to be sure we maximize the return on and the value of Panhandle's assets, which in turn will increase our value per share."
OPERATING HIGHLIGHTS | |||||||
Fourth Quarter Ended | Fourth Quarter Ended | Year Ended | Year Ended | ||||
Sept. 30, 2013 | Sept. 30, 2012 | Sept. 30, 2013 | Sept. 30, 2012 | ||||
MCFE Sold | 3,478,639 | 2,720,080 | 12,962,215 | 10,583,440 | |||
Average Sales Price per MCFE | $5.15 | $4.07 | $4.68 | $3.86 | |||
Barrels of Oil Sold | 79,387 | 45,552 | 234,084 | 153,143 | |||
Average Sales Price per Barrel | $100.98 | $87.24 | $91.56 | $90.13 | |||
MCF of Natural Gas Sold | 2,820,079 | 2,251,540 | 10,886,329 | 9,072,298 | |||
Average Sales Price per MCF | $3.20 | $2.68 | $3.31 | $2.62 | |||
Barrels of NGL Sold | 30,373 | 32,538 | 111,897 | 98,714 | |||
Average Sales Price per Barrel | $28.89 | $32.52 | $27.67 | $33.23 | |||
Quarterly Production Levels | ||||||||
Quarter ended | Oil Bbls Sold | MCF Sold | NGL Bbls Sold | MCFE Sold | ||||
9/30/13 | 79,387 | 2,820,079 | 30,373 | 3,478,639 | ||||
6/30/13 | 55,474 | 2,742,996 | 25,660 | 3,229,800 | ||||
3/31/13 | 52,567 | 2,778,869 | 25,190 | 3,245,411 | ||||
12/31/12 | 46,656 | 2,544,385 | 30,674 | 3,008,365 | ||||
9/30/12 | 45,552 | 2,251,540 | 32,538 | 2,720,080 | ||||
6/30/12 | 38,937 | 2,273,649 | 23,680 | 2,649,351 | ||||
3/31/12 | 30,614 | 2,303,797 | 27,834 | 2,654,485 | ||||
12/31/11 | 38,040 | 2,243,312 | 14,662 | 2,559,524 | ||||
FINANCIAL HIGHLIGHTS | ||||||||||||
Statements of Operations | ||||||||||||
Three Months Ended Sept. 30, | Year Ended Sept. 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Revenues: | ||||||||||||
Oil, NGL and natural gas sales | $ | 17,918,943 | $ | 11,069,550 | $ | 60,605,878 | $ | 40,818,434 | ||||
Lease bonuses and rentals | 399,367 | 216,835 | 938,846 | 7,152,991 | ||||||||
Gains (losses) on derivative contracts | (185,142) | (376,175) | 611,024 | 73,822 | ||||||||
Income from partnerships | 263,086 | 131,172 | 733,372 | 487,070 | ||||||||
18,396,254 | 11,041,382 | 62,889,120 | 48,532,317 | |||||||||
Costs and expenses: | ||||||||||||
Lease operating expenses | 2,820,790 | 2,571,028 | 11,861,403 | 9,141,970 | ||||||||
Production taxes | 657,499 | 377,544 | 1,834,840 | 1,449,537 | ||||||||
Exploration costs | (51,032) | 595,519 | 9,795 | 979,718 | ||||||||
Depreciation, depletion and amortization | 4,855,581 | 5,380,502 | 21,945,768 | 19,061,239 | ||||||||
Provision for impairment | 304,829 | 39,784 | 530,670 | 826,508 | ||||||||
Loss (gain) on asset sales, interest and other | (646,480) | (6,353) | (785,401) | 39,493 | ||||||||
General and administrative | 1,674,971 | 1,586,737 | 6,801,996 | 6,388,856 | ||||||||
9,616,158 | 10,544,761 | 42,199,071 | 37,887,321 | |||||||||
Income before provision for income taxes | ||||||||||||
8,780,096 | 496,621 | 20,690,049 | 10,644,996 | |||||||||
Provision for income taxes | 3,061,000 | 314,000 | 6,730,000 | 3,274,000 | ||||||||
Net income | $ | 5,719,096 | $ | 182,621 | $ | 13,960,049 | $ | 7,370,996 | ||||
Basic and diluted earnings per common share: | ||||||||||||
Net income | $ | 0.68 | $ | 0.02 | $ | 1.67 | $ | 0.88 | ||||
Weighted average shares outstanding: | ||||||||||||
Common shares | 8,220,466 | 8,239,648 | 8,240,792 | 8,246,335 | ||||||||
Unissued, vested directors' shares | 120,076 | 119,086 | 116,112 | 114,596 | ||||||||
8,340,542 | 8,358,734 | 8,356,904 | 8,360,931 | |||||||||
Dividends declared per share of common stock and paid in period | ||||||||||||
$ | 0.07 | $ | 0.07 | $ | 0.28 | $ | 0.28 | |||||
Balance Sheets | ||||||
Sept. 30, 2013 | Sept. 30, 2012 | |||||
Assets | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 2,867,171 | $ | 1,984,099 | ||
Oil, NGL and natural gas sales receivables | 13,720,761 | 8,349,865 | ||||
Refundable income taxes | - | 325,715 | ||||
Refundable production taxes | 662,051 | 585,454 | ||||
Deferred income taxes | - | 121,900 | ||||
Derivative contracts | 425,198 | - | ||||
Other | 129,998 | 255,812 | ||||
Total current assets | 17,805,179 | 11,622,845 | ||||
Properties and equipment at cost, based on successful efforts accounting: | ||||||
Producing oil and natural gas properties | 304,889,145 | 275,997,569 | ||||
Non-producing oil and natural gas properties | 8,932,905 | 10,150,561 | ||||
Furniture and fixtures | 737,368 | 668,004 | ||||
314,559,418 | 286,816,134 | |||||
Less accumulated depreciation, depletion and amortization | ||||||
(186,641,291) | (165,199,079) | |||||
Net properties and equipment | 127,918,127 | 121,617,055 | ||||
Investments | 1,574,642 | 1,034,870 | ||||
Refundable production taxes | 540,482 | 911,960 | ||||
Total assets | $ | 147,838,430 | $ | 135,186,730 | ||
Liabilities and Stockholders' Equity | ||||||
Current Liabilities: | ||||||
Accounts payable | $ | 8,409,634 | $ | 6,447,692 | ||
Derivative contracts | - | 172,271 | ||||
Deferred income taxes | 127,100 | - | ||||
Income taxes payable | 751,992 | - | ||||
Accrued liabilities and other | 1,011,865 | 1,007,779 | ||||
Total current liabilities | 10,300,591 | 7,627,742 | ||||
Long-term debt | 8,262,256 | 14,874,985 | ||||
Deferred income taxes | 31,226,907 | 26,708,907 | ||||
Asset retirement obligations | 2,393,190 | 2,122,950 | ||||
Stockholders' equity: | ||||||
Class A voting common stock, $.0166 par value; 24,000,000 shares | ||||||
140,524 | 140,524 | |||||
Capital in excess of par value | 2,587,838 | 2,020,229 | ||||
Deferred directors' compensation | 2,756,526 | 2,676,160 | ||||
Retained earnings | 96,454,449 | 84,821,395 | ||||
101,939,337 | 89,658,308 | |||||
Treasury stock, at cost; 200,248 shares at Sept. 30, 2013, | ||||||
(6,283,851) | (5,806,162) | |||||
Total stockholders' equity | 95,655,486 | 83,852,146 | ||||
Total liabilities and stockholders' equity | $ | 147,838,430 | $ | 135,186,730 | ||
Condensed Statements of Cash Flows | ||||||
Year ended Sept. 30, | ||||||
2013 | 2012 | |||||
Operating Activities | ||||||
Net income (loss) | $ | 13,960,049 | $ | 7,370,996 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
Depreciation, depletion and amortization | 21,945,768 | 19,061,239 | ||||
Impairment | 530,670 | 826,508 | ||||
Provision for deferred income taxes | 4,767,000 | 1,802,000 | ||||
Exploration costs | 9,795 | 979,718 | ||||
Gain from leasing of fee mineral acreage | (936,701) | (7,146,299) | ||||
Net (gain) loss on sales of assets | (208,750) | (122,504) | ||||
Income from partnerships | (733,372) | (487,070) | ||||
Distributions received from partnerships | 917,718 | 601,300 | ||||
Common stock contributed to ESOP | 308,450 | 326,942 | ||||
Common stock (unissued) to Directors' | ||||||
Deferred Compensation Plan | 377,520 | 417,347 | ||||
Restricted stock awards | 683,968 | 330,923 | ||||
Cash provided (used) by changes in assets and liabilities: | ||||||
Oil, NGL and natural gas sales receivables | (5,370,896) | 461,539 | ||||
Fair value of derivative contracts | (597,469) | 388,211 | ||||
Refundable income taxes | 325,715 | 28,531 | ||||
Refundable production taxes | 294,881 | 85,926 | ||||
Other current assets | 73,508 | (108,098) | ||||
Accounts payable | 298,191 | 585,912 | ||||
Other non-current assets | - | 308 | ||||
Income taxes payable | 751,992 | - | ||||
Accrued liabilities | 4,072 | (32,233) | ||||
Total adjustments | 23,442,060 | 18,000,200 | ||||
Net cash provided by operating activities | 37,402,109 | 25,371,196 | ||||
Investing Activities | ||||||
Capital expenditures, including dry hole costs | (26,765,785) | (25,147,306) | ||||
Acquisition of working interest properties | - | (17,399,052) | ||||
Acquisition of minerals and overrides | (783,750) | (2,745,069) | ||||
Proceeds from leasing of fee mineral acreage | 1,023,368 | 7,265,808 | ||||
Investments in partnerships | (724,118) | (481,904) | ||||
Proceeds from sales of assets | 870,610 | 134,821 | ||||
Excess tax benefit on stock-based compensation | 15,000 | 83,742 | ||||
Net cash used in investing activities | (26,364,675) | (38,288,960) | ||||
Financing Activities | ||||||
Borrowings under debt agreement | 11,569,652 | 43,475,443 | ||||
Payments of loan principal | (18,182,381) | (28,600,458) | ||||
Purchases of treasury stock | (1,214,638) | (1,158,957) | ||||
Payments of dividends | (2,326,995) | (2,321,164) | ||||
Net cash provided by (used in) financing activities | (10,154,362) | 11,394,864 | ||||
Increase (decrease) in cash and cash equivalents | 883,072 | (1,522,900) | ||||
Cash and cash equivalents at beginning of year | 1,984,099 | 3,506,999 | ||||
Cash and cash equivalents at end of year | $ | 2,867,171 | $ | 1,984,099 | ||
Condensed Statements of Cash Flows (continued) | ||||||
Year ended Sept. 30, | ||||||
2013 | 2012 | |||||
Supplemental Disclosures of Cash Flow Information | ||||||
Interest paid (net of capitalized interest) | $ | 157,558 | $ | 127,970 | ||
Income taxes paid, net of refunds received | $ | 870,295 | $ | 1,356,706 | ||
Supplemental schedule of noncash investing and financing activities: | ||||||
Additions and revisions, net, to asset retirement obligations | $ | 161,065 | $ | 279,075 | ||
Gross additions to properties and equipment | $ | 29,261,285 | $ | 46,201,308 | ||
Net (increase) decrease in accounts payable for properties and equipment additions | ||||||
(1,711,750) | (909,881) | |||||
Capital expenditures, including dry hole costs | $ | 27,549,535 | $ | 45,291,427 | ||
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 2013 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; 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. 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.
