SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
DATE OF REPORT: (Date of Earliest Event Reported) DECEMBER 11, 2003
PANHANDLE ROYALTY COMPANY
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(Exact name of registrant as specified in its charter)
OKLAHOMA 0-9116 73-1055775
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(State of Incorporation) (Commission File) (I.R.S. Employer
Number Identification No.)
GRAND CENTRE SUITE 210, 5400 NORTH GRAND BLVD., OKLAHOMA CITY, OK 73112
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(Address of principal executive offices)
Registrant's telephone number including area code: (405) 948-1560
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Panhandle Royalty Company
FORM 8-K
December 11, 2003
ITEM 5 OTHER EVENTS
This Form 8-K contains the Company's press release discussing the
fiscal year-end September 30, 2003 financial results, which was
released on December 11, 2003.
OKLAHOMA CITY, OK- PANHANDLE ROYALTY COMPANY (AMEX-PHX) today reported
significant financial growth for fiscal 2003, ending September 30, 2003. Company
financial records were set in several areas. Annual revenue of $22,456,038 was
an increase of 65% over fiscal 2002's previous record. Net income after
provision for $2,217,000 of income taxes was $5,961,622, a 40% increase over
fiscal 2001's previous record and a 1,638% increase over fiscal 2002. Net after
tax diluted per share earnings were $2.83, a 1,669% increase over 2002.
Costs and expenses for the fiscal year were $14,323,916, an increase of 6% over
fiscal 2002. Cash flow from operations grew 76% to $13,198,368, another record
high. Additional records were set in total assets of $49,402,534, up 10%, and
shareholder equity of $22,527,685, up 33%. Proven gas reserves (including CO(2))
were up 1% to 29,463,373 mcf, a record, while oil reserves were down 25% to
835,978 barrels. Gas production (including CO(2)) increased 1% to 3,926,124
mcf, while oil production decreased 15% to 112,746 barrels. Average price
received was $4.79/mcf for gas and $29.30/barrel for oil. These were increases
of 85% and 30% respectively over fiscal 2002 pricing.
H W PEACE II, COMPANY PRESIDENT AND CEO STATED:
"Fiscal 2003 was a year of growth and completing the consolidation of Wood Oil
Company (purchased in fiscal 2002) into Panhandle. The results of that
consolidation coupled with excellent gas and oil price and increased gas
production combined to provide the Company and its shareholders the best
financial year in our 77 year history. We were able to pay down long-term debt
and make interest payments totaling $5, 500,000, while participating in 169
wells with a working interest. Of these working interest wells, 113 were
producers and 20 were dry holes. Average working interest was approximately 5%
per well but ranged from 1% to 15%. Most of these wells were in Oklahoma on
Company owned minerals. Additionally, there were 150 wells where Panhandle had
only a royalty interest either drilling, testing or completed during the year
with 114 being producers and 12 being dry holes and 24 drilling or testing at
year end. The average net revenue interest in these royalty interest wells is
0.9% per well. Combined
Panhandle Royalty Company
FORM 8-K
December 11, 2003
working and royalty interest success rate of 88% greatly exceeds the industry
average. Natural gas production provided 83% of Company revenue."
"The major portion of Panhandles revenue is derived from wells
producing on Company owned minerals in Oklahoma where the industry enjoys a
favorable ethic for environmentally safe drilling, completion and rapid market
sales. Higher gas prices have again opened up large areas of western and
southern Oklahoma for deeper exploration and development at depth ranges from
15,000' to 25,000'. These same higher prices are also causing operators to
commence drilling in structurally and stratigraphically complex geologic areas
of southeastern Oklahoma's Ouachita Mountains. Prices have further escalated
drilling of vertical and horizontal wells in eastern Oklahoma's Arkoma Basin
Hartshorne Formation for coal bed methane. Panhandle has extensive mineral
ownership in all these areas. We have also been able to acquire leasehold of 40
to 60 acres per section, particularly in western Oklahoma's new Cherokee
Carbonate Wash Trend, offsetting fiscal 2003 well completions. Assuming gas
price remains in the $4/mcf or higher range for the next three to five years, we
will continue to position ourselves for more drilling and with success
concomitant growth."
YEAR ENDED SEPTEMBER 30,
2003 2002
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Revenues $ 22,456,038 $ 13,591,397
Costs and Expenses $ 14,323,916 $ 13,541,338
Net Income $ 5,961,622 $ 343,059
Cash provided by
Operating Activities $ 13,198,368 $ 7,481,195
Average Shares Outstanding - Diluted 2,103,713 2,089,972
Diluted Earnings per Share $ 2.83 $ 0.16
Dividends paid per Share $ 0.28 $ 0.28
Barrels Sold 112,746 132,514
Average Sales Price per Barrel $ 29.30 $ 22.48
MCF Sold 3,926,124 3,897,084
Average Sales Price per MCF $ 4.79 $ 2.59
Panhandle Royalty Company (AMEX-PHX) is a publicly held diversified mineral
holding company engaged in the acquisition, ownership, management and
development of its fee minerals. It actively participates in the exploration,
drilling, production and acquisition of hydrocarbons on internally and
externally generated prospects. Its stock is traded on the American Stock
Exchange under the symbol PHX. The Company's office is located in Oklahoma City
while its mineral holdings and production are situated in Oklahoma, New Mexico,
Texas and 19 other states.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PANHANDLE ROYALTY COMPANY
/s/ Michael C. Coffman
DATE: December 11, 2003 Michael C. Coffman, Vice President
Chief Financial Officer,
Secretary & Treasurer