April 7, 2005


via facsimile and U.S. mail
Mr. Michael C. Coffman
Chief Financial Officer
Grand Centre, Suite 305
5400 North Grand Blvd.
Oklahoma City, OK 73112

	Re:	Panhandle Royalty Company
		Form 10-K for the year ended September 30, 2004
		Form 10-Q for the period ending December 31, 2004
		File No.1-9210

Dear Mr. Coffman:

      We have reviewed the above filings and have the following
comments. Our review has been limited to your financial statements
and the related disclosures in Management`s Discussion and
Analysis.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.












Form 10-K for the year ended September 30, 2004


Financial Statements

      Note 1- Summary of Significant Accounting Policies, page 28

1. We note your disclosure under the heading `Depreciation,
Depletion, Amortization, and Impairment` that you amortize your
non-
producing oil and gas properties, which include non-producing
minerals, over a 33 year period using the straight-line method. It
is
unclear how your accounting complies with the criteria in SFAS 19.
Please tell us how you determined to depreciate non-producing
properties over 33 years using the straight-line method.  In your
response, specifically cite the literature you believe applies to
this accounting.  Additionally, please provide the gross amounts
of
non-producing minerals subject to this accounting, the amounts of
related accumulated depreciation you recorded in fiscal years 2004
and 2003, and the depreciation expense you recorded in each of the
past 3 fiscal years.

Item 9.A.- Controls and Procedures

2. We note your statement that there have been no "significant
changes" in your "internal controls" and no factors that could
"significantly affect" these controls subsequent to the date of
their
evaluation.  Note, however, that Item 308(c) of Regulation S-K
requires that disclosure of any change in the registrant`s
"internal
control over financial reporting" identified in connection with
the
evaluation required by paragraph (d) of Exchange Act Rules 13a-15
or
15d-15 that occurred during the fourth fiscal quarter that has
"materially affected, or is reasonably likely to materially
affect,
the registrant`s internal control over financial reporting."  See
also paragraph 4(d) of Regulation S-K, Item 601(B)(31).  As such,
we
believe you should revise your disclosure in future filings, as
appropriate.

Closing Comments

      As appropriate, please amend your filing(s) and respond to
these comments within 10 business days or tell us when you will
provide us with a response.  You may wish to provide us with
marked
copies of amendment(s) to expedite our review.  Please furnish a
cover letter with your amendment(s) that keys your responses to
our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment(s) and responses to our comments.




      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing(s) reviewed by the staff
to
be certain that they have provided all information investors
require
for an informed decision.  Since the company and its management
are
in possession of all facts relating to the company`s disclosure,
they
are responsible for the accuracy and adequacy of the disclosures
they
have made.  In connection with responding to our comments, please
provide, in writing, a statement from the company acknowledging
that:

the company is responsible for the adequacy and accuracy of the
disclosure in the filing(s);

staff comments or changes to disclosure in response to staff
comments
do not foreclose the Commission from taking any action with
respect
to the filing; and

	the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing(s) or
in
response to our comments on your filing(s).

      You may contact Tracie Towner at (202) 824-5673 or Shannon
Buskirk at                 (202) 942-1826 if you have questions
regarding comments on the financial statements and related
matters.
Please contact me at (202) 942-1870 with any other questions.

							Sincerely,



							H. Roger Schwall
							Assistant Director


Panhandle Royalty Company
April 7, 2005
page 3




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405

         DIVISION OF
CORPORATION FINANCE