OKLAHOMA CITY, Nov. 10, 2015 /PRNewswire/ -- PANHANDLE OIL
AND GAS INC. (NYSE: PHX), "the Company," a non-operating
independent oil and natural gas company with reserves and
production primarily in the Mid-Continent region and the Eagle Ford
Shale, today announced estimated total proved reserve volumes for
the Company's fiscal year ended Sept. 30,
2015. Additional information on the Company can be found at
www.panhandleoilandgas.com.
2015 Reserve Highlights
- Total proved, possible and probable reserves increase 20% to
656.1 Bcfe at Sept. 30, 2015.
- Proved reserves have grown at a compound annual growth rate of
12% during the last five years.
- Downward pricing revisions of proved reserves totaled 44.8
Bcfe.
Proved Reserves
Panhandle's estimated total proved reserves at Sept. 30, 2015, decreased 13% to 180.0 Bcfe from
206.2 Bcfe reported for Sept. 30,
2014, based on SEC mandated pricing. The Sept. 30, 2015, wellhead prices of $2.84 per Mcf of natural gas, $55.27 per barrel of oil and $19.10 per barrel of NGL compare to Sept. 30, 2014, prices of $4.04 per Mcf of natural gas, $96.94 per barrel of oil and $31.45 per barrel of NGL. Panhandle's total
estimated proved reserves are approximately 67% natural gas, 23%
oil and 10% NGL. The Sept. 30, 2015
and 2014, proved reserves were calculated by the independent
petroleum engineering consulting firm DeGolyer and MacNaughton.
At Sept. 30, 2015, approximately
60% of total proved reserves, or 108.1 Bcfe, are categorized as
proved developed as compared to 115.2 Bcfe at Sept. 30, 2014. PUD reserves comprised 40% of
total proved reserves, or 71.9 Bcfe, at Sept. 30, 2015, as compared to 44%, or 90.9 Bcfe,
at Sept. 30, 2014.
During the last five years, Panhandle's total proved reserves
have grown 74% from 103.7 Bcfe to 180.0 Bcfe, a compound annual
growth rate of 12%. This increase in reserves was funded
principally from internally generated cash flow for drilling and
bank debt for the Eagle Ford acquisition. The Company has never
issued shares in a secondary offering.
Management Comments
Michael C. Coffman, Panhandle's
President and CEO, said: "Obviously fiscal 2015 was a very
difficult year in the energy industry. Panhandle's reduced capital
spending level for drilling in the second through fourth quarter
resulted in reduced reserve additions in fiscal 2015.
"With the product prices we have seen since December 2014, we have not been inclined to
commit capital to fund a working interest investment in the
majority of the well proposals we have received. There are a few
plays in our portfolio of mineral acreage that can generate
reasonable returns at current NYMEX futures oil pricing, and we are
participating with a working interest in those wells. Wells drilled
on our mineral acreage in which we do not commit capital to take a
working interest will generate a royalty interest for Panhandle
from any production established.
"We are content to use our excess cash flow to reduce the bank
line of credit facility. Our operating strategies will remain
constant through these difficult times, and Panhandle will be ready
to take advantage of opportunities to acquire accretive assets or
to fund drilling opportunities when product prices and drilling
costs present a reasonable return scenario."
Paul F. Blanchard, Panhandle's
Sr. Vice-President and COO, added: "The Company's total proved
reserves were reduced from 206.1 Bcfe at year-end 2014 to 180.0
Bcfe at year-end 2015. This reduction is attributed to a 44.8 Bcfe
negative pricing revision and unaudited 13.7 Bcfe of 2015
production, somewhat offset by extensions and discoveries of 31.6
Bcfe and a positive performance revision of 0.8 Bcfe.
"Our proved developed reserves decreased from 115.2 Bcfe at
year-end 2014 to 108.1 Bcfe at year-end 2015. The negative revision
to proved developed reserves due to lower product prices was 12.4
Bcfe. Absent the pricing revision, proved developed reserves would
have increased 5.3 Bcfe to 120.5 Bcfe.
"The remaining negative proved pricing revision of 32.4 Bcfe was
primarily the result of two causes. The first was a decrease in
proved reserves as wells reached their projected economic limit
much earlier than projected in the 2014 report. In addition, PUD
locations in the Fayetteville Shale were moved to the probable
undeveloped category, as they were no longer planned to be drilled
within the SEC mandated five-year window due to lower natural gas
prices.
"The material increase in total 3P (proved, probable and
possible) reserves was due to the recognition of additional PUD
reserves based upon improved well performance in the Anadarko Basin Woodford and Springer Shales (CANA and SCOOP).
Additionally, we recognized a significant number of new undeveloped
locations on our existing mineral holdings in the Anadarko Basin Woodford and Springer plays. Substantial drilling in these
reservoirs in 2015 increased the level of certainty of the reserves
associated with these new locations, resulting in their addition to
Panhandle's 3P reserves. These additions, which result in an
increase in 3P reserves of 124.2 Bcfe, are projected to earn some
of the most attractive rates of return in our portfolio at fiscal
year-end 2015 NYMEX futures pricing."
Definition of Press Release Terms:
Mcf: thousand cubic feet of natural gas
Bcfe: billion cubic feet of natural gas equivalent
Mcfe: thousand cubic feet of natural gas equivalent (Crude oil and
NGL are converted to a thousand cubic feet of natural gas
equivalent by using the ratio of one barrel to six Mcf of natural
gas.)
Mboe: thousand barrels of oil equivalent (Natural gas is converted
to a thousand barrels of oil equivalent by using the ratio of six
Mcf of natural gas to one barrel.)
NGL: natural gas liquids
Boepd: barrels of oil equivalent per day
Proved Reserves – SEC Flat Pricing
|
|
|
|
|
|
|
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Proved Reserves SEC
Pricing
|
|
|
|
Sept. 30,
2015
|
|
Sept. 30,
2014
|
|
|
Proved Developed
Reserves:
|
|
|
|
|
|
Barrels of
NGL
|
1,466,834
|
|
1,564,859
|
|
|
Barrels of
Oil
|
2,725,077
|
|
2,890,678
|
|
|
Mcf of Gas
|
82,899,159
|
|
88,512,767
|
|
|
Mcfe
|
108,050,625
|
|
115,245,989
|
|
|
Proved Undeveloped
Reserves:
|
|
|
|
|
|
Barrels of
NGL
|
1,453,766
|
|
1,475,322
|
|
|
Barrels of
Oil
|
4,313,353
|
|
4,678,901
|
|
|
Mcf of Gas
|
37,314,885
|
|
53,979,593
|
|
|
Mcfe
|
71,917,599
|
|
90,904,931
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|
|
Total Proved
Reserves:
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|
|
|
|
|
Barrels of
NGL
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2,920,600
|
|
3,040,181
|
|
|
Barrels of
Oil
|
7,038,430
|
|
7,569,579
|
|
|
Mcf of Gas
|
120,214,044
|
|
142,492,360
|
|
|
Mcfe
|
179,968,224
|
|
206,150,920
|
|
|
|
|
|
|
|
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10% Discounted
Estimated Future
|
|
|
|
|
|
Net Cash Flows
(before income taxes):
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|
|
|
|
|
Proved
Developed
|
$126,295,752
|
|
$234,799,797
|
|
|
Proved
Undeveloped
|
17,948,482
|
|
135,228,020
|
|
|
Total
|
$144,244,234
|
|
$370,027,817
|
|
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SEC
Pricing
|
|
|
|
|
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Oil/Barrel
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$55.27
|
|
$96.94
|
|
|
Gas/Mcf
|
$2.84
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|
$4.04
|
|
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NGL/Barrel
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$19.10
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|
$31.45
|
|
TABLE 1
Proved Reserves – NYMEX Futures Pricing
(1)
|
10% Discounted
Estimated Future
|
|
Proved
Reserves
|
|
|
Net Cash Flows
(before income taxes)
|
|
Sept. 30,
2015
|
|
|
Proved
Developed
|
|
$123,465,294
|
|
|
Proved
Undeveloped
|
|
20,797,565
|
|
|
Total
|
|
$144,262,859
|
|
|
|
|
|
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(1)
|
Nymex
Futures Pricing as of Sept. 30, 2015, basis adjusted to Company
wellhead price
|
TABLE 2
Probable and Possible Reserves
DeGolyer
and MacNaughton prepared estimates of the Company's probable and
possible undeveloped reserves utilizing NYMEX futures pricing,
basis adjusted to Company wellhead price.
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Estimated Net
Probable and Possible Reserves
|
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NYMEX Futures Pricing
(1)
|
|
|
|
Sept. 30,
2015
|
|
|
Probable
Reserves:
|
|
|
|
Barrels of
NGL
|
3,211,018
|
|
|
Barrels of
Oil
|
1,093,010
|
|
|
Mcf of Gas
|
249,427,553
|
|
|
Mcfe (1)
|
275,251,721
|
|
|
10% Discounted
Estimated Future
|
|
|
|
Net Cash Flows
(before income taxes)
|
$75,376,283
|
|
|
|
|
|
|
Possible
Reserves:
|
|
|
|
Barrels of
NGL
|
1,660,800
|
|
|
Barrels of
Oil
|
1,086,794
|
|
|
Mcf of Gas
|
184,442,173
|
|
|
Mcfe (1)
|
200,927,737
|
|
|
10% Discounted
Estimated Future
|
|
|
|
Net Cash Flows
(before income taxes)
|
$55,444,087
|
|
(1)
|
Nymex Futures
Pricing as of Sept. 30, 2015, basis adjusted to Company wellhead
price
|
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, the Company 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 2014 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; 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;
uncertainties in evaluating oil and gas reserves; 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; and
Panhandle cannot 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, 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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/panhandle-oil-and-gas-inc-announces-sept-30-2015-reserves-and-operations-update-300176121.html
SOURCE PANHANDLE OIL AND GAS INC.