( X ) | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the period ended | December 31, 2012 |
( ) | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from | to |
Commission File Number | 001-31759 |
PANHANDLE OIL AND GAS INC. | ||
(Exact name of registrant as specified in its charter) | ||
OKLAHOMA | 73-1055775 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
Grand Centre Suite 300, 5400 N Grand Blvd., Oklahoma City, Oklahoma 73112 | ||
(Address of principal executive offices) |
Registrant's telephone number including area code | (405) 948-1560 |
X Yes No |
X Yes No |
Large accelerated filer ____ | Accelerated filer X | Non-accelerated filer ____ | Smaller reporting company ____ |
Yes X No |
Part I | Financial Information | |||
Item 1 Condensed Financial Statements | Page | |||
Condensed Balance Sheets – December 31, 2012 and September 30, 2012 | 1 | |||
Condensed Statements of Operations – Three months ended December 31, 2012 and 2011 | 2 | |||
Statements of Stockholders’ Equity – Three months ended December 31, 2012 and 2011 | 3 | |||
Condensed Statements of Cash Flows – Three months ended December 31, 2012 and 2011 | 4 | |||
Notes to Condensed Financial Statements | 5 | |||
Item 2 Management's discussion and analysis of financial condition and results of operations | 11 | |||
Item 3 Quantitative and qualitative disclosures about market risk | 15 | |||
Item 4 Controls and procedures | 16 | |||
Part II | Other Information | 16 | ||
Item 6 Exhibits | 16 | |||
Signatures | 17 |
December 31, 2012
|
September 30, 2012
|
|||||||
Assets
|
(unaudited)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 986,363 | $ | 1,984,099 | ||||
Oil, NGL and natural gas sales receivables
|
8,234,220 | 8,349,865 | ||||||
Deferred income taxes
|
95,900 | 121,900 | ||||||
Refundable income taxes
|
5,980 | 325,715 | ||||||
Refundable production taxes
|
548,576 | 585,454 | ||||||
Derivative contracts
|
764,643 | - | ||||||
Other
|
155,978 | 255,812 | ||||||
Total current assets
|
10,791,660 | 11,622,845 | ||||||
Properties and equipment, at cost, based on successful efforts accounting:
|
||||||||
Producing oil and natural gas properties
|
281,200,946 | 275,997,569 | ||||||
Non-producing oil and natural gas properties
|
9,962,008 | 10,150,561 | ||||||
Furniture and fixtures
|
703,457 | 668,004 | ||||||
291,866,411 | 286,816,134 | |||||||
Less accumulated depreciation, depletion and amortization
|
(170,783,831 | ) | (165,199,079 | ) | ||||
Net properties and equipment
|
121,082,580 | 121,617,055 | ||||||
Investments
|
1,238,638 | 1,034,870 | ||||||
Refundable production taxes
|
736,004 | 911,960 | ||||||
Total assets
|
$ | 133,848,882 | $ | 135,186,730 | ||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 4,057,404 | $ | 6,447,692 | ||||
Derivative contracts
|
- | 172,271 | ||||||
Accrued liabilities and other
|
1,014,007 | 1,007,779 | ||||||
Total current liabilities
|
5,071,411 | 7,627,742 | ||||||
Long-term debt
|
14,454,757 | 14,874,985 | ||||||
Deferred income taxes
|
27,020,907 | 26,708,907 | ||||||
Asset retirement obligations
|
2,195,383 | 2,122,950 | ||||||
Stockholders' equity:
|
||||||||
Class A voting common stock, $.0166 par value; 24,000,000 shares authorized, 8,431,502 issued at December 31, 2012, and September 30, 2012
|
140,524 | 140,524 | ||||||
Capital in excess of par value
|
2,195,559 | 2,020,229 | ||||||
Deferred directors' compensation
|
2,493,184 | 2,676,160 | ||||||
Retained earnings
|
85,805,264 | 84,821,395 | ||||||
90,634,531 | 89,658,308 | |||||||
Less treasury stock, at cost; 173,147 shares at December 31, 2012, and 181,310 shares at September 30, 2012
|
(5,528,107 | ) | (5,806,162 | ) | ||||
Total stockholders' equity
|
85,106,424 | 83,852,146 | ||||||
Total liabilities and stockholders' equity
|
$ | 133,848,882 | $ | 135,186,730 |
Three Months Ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Revenues:
|
(unaudited) | |||||||
Oil, NGL and natural gas sales
|
$ | 12,758,954 | $ | 11,744,277 | ||||
Lease bonuses and rentals
|
374,392 | 1,755,191 | ||||||
Gains (losses) on derivative contracts
|
892,693 | (222,079 | ) | |||||
Income from partnerships
|
154,396 | 126,944 | ||||||
14,180,435 | 13,404,333 | |||||||
Costs and expenses:
|
||||||||
Lease operating expenses
|
3,296,562 | 2,264,912 | ||||||
Production taxes
|
303,553 | 438,499 | ||||||
Exploration costs
|
19,767 | 313,370 | ||||||
Depreciation, depletion and amortization
|
5,639,020 | 4,142,413 | ||||||
Provision for impairment
|
154,965 | 363,547 | ||||||
Loss (gain) on asset sales, interest and other
|
43,186 | (77,041 | ) | |||||
General and administrative
|
1,898,084 | 1,697,523 | ||||||
11,355,137 | 9,143,223 | |||||||
Income before provision for income taxes
|
2,825,298 | 4,261,110 | ||||||
Provision for income taxes
|
677,000 | 849,000 | ||||||
Net income
|
$ | 2,148,298 | $ | 3,412,110 | ||||
Basic and diluted earnings per common share (Note 3)
|
$ | 0.26 | $ | 0.41 | ||||
Basic and diluted weighted average shares outstanding:
|
||||||||
Common shares
|
8,250,109 | 8,256,171 | ||||||
Unissued, directors' deferred compensation shares
|
122,285 | 130,654 | ||||||
8,372,394 | 8,386,825 | |||||||
Dividends declared per share of common stock and paid in period
|
$ | 0.07 | $ | 0.07 | ||||
Dividends declared per share of common stock and to be paid in quarter ended March 31
|
$ | 0.07 | $ | 0.07 |
Class A voting
|
Capital in
|
Deferred
|
||||||||||||||||||||||||||||||
Common Stock
|
Excess of
|
Directors'
|
Retained
|
Treasury
|
Treasury
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Par Value
|
Compensation
|
Earnings
|
Shares
|
Stock
|
Total
|
|||||||||||||||||||||||||
Balances at September 30, 2012
|
8,431,502 | $ | 140,524 | $ | 2,020,229 | $ | 2,676,160 | $ | 84,821,395 | (181,310 | ) | $ | (5,806,162 | ) | $ | 83,852,146 | ||||||||||||||||
Purchase of treasury stock
|
- | - | - | - | - | (4,198 | ) | (116,632 | ) | (116,632 | ) | |||||||||||||||||||||
Restricted stock awards
|
- | - | 257,877 | - | - | - | - | 257,877 | ||||||||||||||||||||||||
Net income
|
- | - | - | - | 2,148,298 | - | - | 2,148,298 | ||||||||||||||||||||||||
Dividends ($.14 per share)
|
- | - | - | - | (1,164,429 | ) | - | - | (1,164,429 | ) | ||||||||||||||||||||||
Distribution of deferred directors' compensation
|
- | - | (82,547 | ) | (297,140 | ) | - | 12,361 | 394,687 | 15,000 | ||||||||||||||||||||||
Increase in deferred directors' compensation charged to expense
|
- | - | - | 114,164 | - | - | - | 114,164 | ||||||||||||||||||||||||
Balances at December 31, 2012
(unaudited)
|
8,431,502 | $ | 140,524 | $ | 2,195,559 | $ | 2,493,184 | $ | 85,805,264 | (173,147 | ) | $ | (5,528,107 | ) | $ | 85,106,424 |
Class A voting
|
Capital in
|
Deferred
|
||||||||||||||||||||||||||||||
Common Stock
|
Excess of
|
Directors'
|
Retained
|
Treasury
|
Treasury
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Par Value
|
Compensation
|
Earnings
|
Shares
|
Stock
|
Total
|
|||||||||||||||||||||||||
Balances at September 30, 2011
|
8,431,502 | $ | 140,524 | $ | 1,924,507 | $ | 2,665,583 | $ | 79,771,563 | (175,331 | ) | $ | (5,699,860 | ) | $ | 78,802,317 | ||||||||||||||||
Restricted stock awards
|
- | - | 57,729 | - | - | - | - | 57,729 | ||||||||||||||||||||||||
Net income
|
- | - | - | - | 3,412,110 | - | - | 3,412,110 | ||||||||||||||||||||||||
Dividends ($.14 per share)
|
- | - | - | - | (1,161,075 | ) | - | - | (1,161,075 | ) | ||||||||||||||||||||||
Increase in deferred directors' compensation charged to expense
|
- | - | - | 119,876 | - | - | - | 119,876 | ||||||||||||||||||||||||
Balances at December 31, 2011
(unaudited)
|
8,431,502 | $ | 140,524 | $ | 1,982,236 | $ | 2,785,459 | $ | 82,022,598 | (175,331 | ) | $ | (5,699,860 | ) | $ | 81,230,957 |
Three months ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Operating Activities
|
(unaudited) | |||||||
Net income
|
$ | 2,148,298 | $ | 3,412,110 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation, depletion and amortization
|
5,639,020 | 4,142,413 | ||||||
Impairment
|
154,965 | 363,547 | ||||||
Provision for deferred income taxes
|
338,000 | 231,000 | ||||||
Exploration costs
|
19,767 | 313,370 | ||||||
Gain from leasing of fee mineral acreage
|
(373,440 | ) | (1,754,982 | ) | ||||
Net (gain) loss on sale of assets
|
- | (116,879 | ) | |||||
Income from partnerships
|
(154,396 | ) | (126,944 | ) | ||||
Distributions received from partnerships
|
194,147 | 150,404 | ||||||
Directors' deferred compensation expense
|
114,164 | 119,876 | ||||||
Restricted stock awards
|
257,877 | 57,729 | ||||||
Cash provided by changes in assets and liabilities:
|
||||||||
Oil and natural gas sales receivables
|
115,645 | 338,124 | ||||||
Fair value of derivative contracts
|
(936,914 | ) | 536,014 | |||||
Refundable production taxes
|
212,834 | 65,919 | ||||||
Other current assets
|
47,528 | (40,662 | ) | |||||
Accounts payable
|
(361,777 | ) | (95,148 | ) | ||||
Income taxes receivable
|
319,735 | 354,246 | ||||||
Other non-current assets
|
- | 308 | ||||||
Income taxes payable
|
- | 264,786 | ||||||
Accrued liabilities
|
(577,210 | ) | (469,579 | ) | ||||
Total adjustments
|
5,009,945 | 4,333,542 | ||||||
Net cash provided by operating activities
|
7,158,243 | 7,745,652 | ||||||
Investing Activities
|
||||||||
Capital expenditures, including dry hole costs
|
(6,864,399 | ) | (6,344,006 | ) | ||||
Acquisition of working interest properties
|
- | (17,399,052 | ) | |||||
Acquisition of minerals and overrides
|
(330,000 | ) | (1,384,897 | ) | ||||
Proceeds from leasing of fee mineral acreage
|
384,790 | 1,802,892 | ||||||
Investments in partnerships
|
(243,519 | ) | (63,242 | ) | ||||
Proceeds from sales of assets
|
- | 128,925 | ||||||
Excess tax benefit on stock-based compensation
|
15,000 | - | ||||||
Net cash used in investing activities
|
(7,038,128 | ) | (23,259,380 | ) | ||||
Financing Activities
|
||||||||
Borrowings under debt agreement
|
4,171,662 | 25,726,136 | ||||||
Payments of loan principal
|
(4,591,890 | ) | (11,203,765 | ) | ||||
Purchase of treasury stock
|
(116,632 | ) | - | |||||
Payments of dividends
|
(580,991 | ) | (579,756 | ) | ||||
Net cash provided by (used in) financing activities
|
(1,117,851 | ) | 13,942,615 | |||||
Increase (decrease) in cash and cash equivalents
|
(997,736 | ) | (1,571,113 | ) | ||||
Cash and cash equivalents at beginning of period
|
1,984,099 | 3,506,999 | ||||||
Cash and cash equivalents at end of period
|
$ | 986,363 | $ | 1,935,886 | ||||
Supplemental Schedule of Noncash Investing and Financing Activities
|
||||||||
Dividends declared and unpaid
|
$ | 583,438 | $ | 581,319 | ||||
Additions to asset retirement obligations
|
$ | 42,156 | $ | 16,246 | ||||
Gross additions to properties and equipment
|
$ | 5,218,194 | $ | 23,483,505 | ||||
Net (increase) decrease in accounts payable for properties and equipment additions
|
1,976,205 | 1,644,450 | ||||||
Capital expenditures and acquisitions, including dry hole costs
|
$ | 7,194,399 | $ | 25,127,955 |
Three Months Ended
|
||||||||
December 31,
|
||||||||
2012
|
2011
|
|||||||
Performance based, restricted stock
|
$ | 99,939 | $ | 21,387 | ||||
Non-performance based, restricted stock
|
157,938 | 36,342 | ||||||
Total compensation expense
|
$ | 257,877 | $ | 57,729 |
As of December 31, 2012
|
||||||||
Unrecognized
Compensation Cost
|
Weighted Average
Period (in years)
|
|||||||
Performance based, restricted stock
|
$ | 528,192 | 1.91 | |||||
Non-performance based, restricted stock
|
408,252 | 1.99 | ||||||
Total
|
$ | 936,444 |
Production volume
|
Indexed
|
||
Contract period
|
covered per month
|
pipeline
|
Fixed price
|
Natural gas costless collars
|
|||
November 2012 - January 2013
|
150,000 Mmbtu
|
NYMEX Henry Hub
|
$3.00 floor/$3.70 ceiling
|
November 2012 - January 2013
|
150,000 Mmbtu
|
NYMEX Henry Hub
|
$3.00 floor/$3.70 ceiling
|
November 2012 - January 2013
|
50,000 Mmbtu
|
NYMEX Henry Hub
|
$3.00 floor/$3.65 ceiling
|
February 2013 - December 2013
|
80,000 Mmbtu
|
NYMEX Henry Hub
|
$3.75 floor/$4.25 ceiling
|
February 2013 - December 2013
|
50,000 Mmbtu
|
NYMEX Henry Hub
|
$3.75 floor/$4.30 ceiling
|
February 2013 - December 2013
|
100,000 Mmbtu
|
NYMEX Henry Hub
|
$3.75 floor/$4.05 ceiling
|
Production volume
|
Indexed (1)
|
||
Contract period
|
covered per month
|
pipeline
|
Fixed price
|
Natural gas basis protection swaps
|
|||
January - December 2012
|
50,000 Mmbtu
|
CEGT
|
NYMEX -$.29
|
January - December 2012
|
40,000 Mmbtu
|
CEGT
|
NYMEX -$.30
|
January - December 2012
|
50,000 Mmbtu
|
PEPL
|
NYMEX -$.29
|
January - December 2012
|
50,000 Mmbtu
|
PEPL
|
NYMEX -$.30
|
Natural gas costless collars
|
|||
March - October 2012
|
50,000 Mmbtu
|
NYMEX Henry Hub
|
$2.50 floor/$3.25 ceiling
|
April - October 2012
|
120,000 Mmbtu
|
NYMEX Henry Hub
|
$2.50 floor/$3.10 ceiling
|
April - October 2012
|
60,000 Mmbtu
|
NYMEX Henry Hub
|
$2.50 floor/$3.20 ceiling
|
April - October 2012
|
50,000 Mmbtu
|
NYMEX Henry Hub
|
$2.50 floor/$3.20 ceiling
|
April - October 2012
|
50,000 Mmbtu
|
NYMEX Henry Hub
|
$2.50 floor/$3.45 ceiling
|
April - October 2012
|
50,000 Mmbtu
|
NYMEX Henry Hub
|
$2.50 floor/$3.30 ceiling
|
August - October 2012
|
50,000 Mmbtu
|
NYMEX Henry Hub
|
$2.50 floor/$3.30 ceiling
|
November 2012 - January 2013
|
150,000 Mmbtu
|
NYMEX Henry Hub
|
$3.00 floor/$3.70 ceiling
|
November 2012 - January 2013
|
150,000 Mmbtu
|
NYMEX Henry Hub
|
$3.00 floor/$3.70 ceiling
|
November 2012 - January 2013
|
50,000 Mmbtu
|
NYMEX Henry Hub
|
$3.00 floor/$3.65 ceiling
|
Oil costless collars
|
|||
January - December 2012
|
2,000 Bbls
|
NYMEX WTI
|
$90 floor/$105 ceiling
|
February - December 2012
|
3,000 Bbls
|
NYMEX WTI
|
$90 floor/$110 ceiling
|
May - December 2012
|
2,000 Bbls
|
NYMEX WTI
|
$90 floor/$114 ceiling
|
(1) CEGT - Centerpoint Energy Gas Transmission's East pipeline in Oklahoma
|
|||
PEPL - Panhandle Eastern Pipeline Company's Texas/Oklahoma mainline
|
Gains (losses) on natural gas
|
Three months ended
|
|||||||
derivative contracts
|
12/31/2012
|
12/31/2011
|
||||||
Realized
|
$ | (44,221 | ) | $ | 313,935 | |||
Increase (decrease) in fair value
|
936,914 | (536,014 | ) | |||||
Total
|
$ | 892,693 | $ | (222,079 | ) |
Balance Sheet
|
12/31/2012
|
9/30/2012
|
||||||||
Location
|
Fair Value
|
Fair Value
|
||||||||
Asset Derivatives:
|
||||||||||
Derivatives not designated as Hedging Instruments:
|
||||||||||
Commodity contracts
|
Short-term derivative contracts
|
$ | 764,643 | $ | - | |||||
Commodity contracts
|
Long-term derivative contracts
|
- | - | |||||||
Total Asset Derivatives (a)
|
$ | 764,643 | $ | - | ||||||
Liability Derivatives:
|
||||||||||
Derivatives not designated as Hedging Instruments:
|
||||||||||
Commodity contracts
|
Short-term derivative contracts
|
$ | - | $ | 172,271 | |||||
Commodity contracts
|
Long-term derivative contracts
|
- | - | |||||||
Total Liability Derivatives (a)
|
$ | - | $ | 172,271 |
Quoted Prices in Active Markets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
Total Fair Value
|
|||||||||||||
Financial Assets (Liabilities):
|
||||||||||||||||
Derivative Contracts - Collars
|
$ | - | $ | - | $ | 764,643 | $ | 764,643 |
Instrument Type
|
Unobservable Input
|
Range
|
Weighted Average
|
Fair Value
December 31, 2012
|
||||||||||||
Oil Collars
|
Oil price volatility curve
|
0% | - | 0% | 0 | % | $ | 14,980 | ||||||||
Natural Gas Collars
|
Natural gas price volatility curve
|
0% | - | 29.39% | 20.14 | % | $ | 749,663 |
Derivatives
|
||||
Balance of Level 3 as of October 1, 2012
|
$ | (96,937 | ) | |
Total gains or (losses) - realized and unrealized:
|
||||
Included in earnings
|
||||
Realized
|
23,579 | |||
Unrealized
|
838,001 | |||
Included in other comprehensive income (loss)
|
||||
Purchases, issuances and settlements
|
||||
Transfers in and out of Level 3
|
||||
Balance of Level 3 as of December 31, 2012
|
$ | 764,643 |
Quarter Ended December 31,
|
||||||||||||||||
2012
|
2011
|
|||||||||||||||
Fair Value
|
Impairment
|
Fair Value
|
Impairment
|
|||||||||||||
Producing Properties
|
$ | 332,220 | $ | 154,965 | $ | 419,122 | $ | 363,547 | (a) |
Net cash provided (used) by:
|
||||||||||||
2012
|
2011
|
Change
|
||||||||||
Operating activities
|
$ | 7,158,243 | $ | 7,745,652 | $ | (587,409 | ) | |||||
Investing activities
|
$ | (7,038,128 | ) | $ | (23,259,380 | ) | $ | 16,221,252 | ||||
Financing activities
|
$ | (1,117,851 | ) | $ | 13,942,615 | $ | (15,060,466 | ) | ||||
Increase (decrease) in cash and cash equivalents
|
$ | (997,736 | ) | $ | (1,571,113 | ) | $ | 573,377 |
|
·
|
Horizontal Granite Wash in western Oklahoma and the Texas Panhandle
|
|
·
|
Horizontal Cleveland in western Oklahoma and the Texas Panhandle
|
|
·
|
Horizontal Marmaton in western Oklahoma
|
|
·
|
Horizontal Tonkawa in western Oklahoma
|
|
·
|
Vertical Mississippian in northern Oklahoma
|
|
·
|
Vertical Spraberry in West Texas
|
|
·
|
Vertical Yeso in southeastern New Mexico
|
|
·
|
Horizontal Anadarko Basin Woodford Shale in western Oklahoma
|
|
·
|
Horizontal Ardmore Basin Woodford Shale in southern Oklahoma
|
Oil Bbls
|
Average
|
Mcf
|
Average
|
NGL Bbls
|
Average
|
Mcfe
|
Average
|
|||||||||||||||||||||||||
Sold
|
Price
|
Sold
|
Price
|
Sold
|
Price
|
Sold
|
Price
|
|||||||||||||||||||||||||
Three months ended
|
||||||||||||||||||||||||||||||||
12/31/2012
|
46,656 | $ | 83.86 | 2,544,385 | $ | 3.11 | 30,674 | $ | 30.31 | 3,008,365 | $ | 4.24 | ||||||||||||||||||||
12/31/2011
|
38,040 | $ | 89.39 | 2,243,312 | $ | 3.46 | 14,662 | $ | 40.05 | 2,559,524 | $ | 4.59 |
Quarter ended
|
Oil Bbls Sold
|
Mcf Sold
|
NGL Bbls Sold
|
Mcfe Sold
|
||||||||||||
12/31/2012
|
46,656 | 2,544,385 | 30,674 | 3,008,365 | ||||||||||||
9/30/2012
|
45,552 | 2,251,540 | 32,538 | 2,720,080 | ||||||||||||
6/30/2012
|
38,937 | 2,273,649 | 23,680 | 2,649,351 | ||||||||||||
3/31/2012
|
30,614 | 2,303,797 | 27,834 | 2,654,485 | ||||||||||||
12/31/2011
|
38,040 | 2,243,312 | 14,662 | 2,559,524 |
Period
|
Total Number
of Shares
Purchased
|
Average Price
Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
|
||||||||||||
12/1 - 12/31/12
|
4,198 | $ | 27.78 | 4,198 | $ | 1,082,000 | ||||||||||
Total
|
4,198 | $ | 27.78 | 4,198 |
PANHANDLE OIL AND GAS INC. | |||
February 7, 2013 | /s/ Michael C. Coffman | ||
Date | Michael C. Coffman, President and | ||
Chief Executive Officer | |||
February 7, 2013 | /s/ Lonnie J. Lowry | ||
Date | Lonnie J. Lowry, Vice President | ||
and Chief Financial Officer | |||
February 7, 2013 | /s/ Robb P. Winfield | ||
Date | Robb P. Winfield, Controller | ||
and Chief Accounting Officer |
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Panhandle Oil and Gas Inc. (the Company);
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f), for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Panhandle Oil and Gas Inc. (the Company);
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f), for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
|
Note 12 - Fair Value Measurements (Detail) - Summary of impairments associated with certain assets measured at fair value on a nonrecurring basis within Level 3 (USD $)
|
3 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|||||
Producing Properties | $ 332,220 | [1] | $ 419,122 | [1] | ||
Producing Properties | $ 154,965 | [1] | $ 363,547 | [1] | ||
|
Note 11 - Derivatives (Detail) (USD $)
|
Dec. 31, 2012
|
Sep. 30, 2012
|
---|---|---|
Derivative Assets (Liabilities), at Fair Value, Net (in Dollars) | $ 764,643 | $ (172,271) |
$3.00 floor / $3.70 ceiling [Member] | Natural Gas Costless Collars [Member] | 150,000 Mmbtu [Member] | November 2012 - January 2013 [Member] | Contract 1 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.00 | |
$3.00 floor / $3.70 ceiling [Member] | Natural Gas Costless Collars [Member] | 150,000 Mmbtu [Member] | November 2012 - January 2013 [Member] | Contract 1 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.70 | |
$3.00 floor / $3.70 ceiling [Member] | Natural Gas Costless Collars [Member] | 150,000 Mmbtu [Member] | November 2012 - January 2013 [Member] | Contract 1 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 150,000 | |
$3.00 floor / $3.70 ceiling [Member] | Natural Gas Costless Collars [Member] | 150,000 Mmbtu [Member] | November 2012 - January 2013 [Member] | Contract 2 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.00 | |
$3.00 floor / $3.70 ceiling [Member] | Natural Gas Costless Collars [Member] | 150,000 Mmbtu [Member] | November 2012 - January 2013 [Member] | Contract 2 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.70 | |
$3.00 floor / $3.70 ceiling [Member] | Natural Gas Costless Collars [Member] | 150,000 Mmbtu [Member] | November 2012 - January 2013 [Member] | Contract 2 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 150,000 | |
$3.00 floor / $3.65 ceiling [Member] | Natural Gas Costless Collars [Member] | 50,000 Mmbtu [Member] | November 2012 - January 2013 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.00 | |
$3.00 floor / $3.65 ceiling [Member] | Natural Gas Costless Collars [Member] | 50,000 Mmbtu [Member] | November 2012 - January 2013 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.65 | |
$3.00 floor / $3.65 ceiling [Member] | Natural Gas Costless Collars [Member] | 50,000 Mmbtu [Member] | November 2012 - January 2013 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 50,000 | |
$3.75 floor / $4.25 ceiling [Member] | Natural Gas Costless Collars [Member] | February 2013 - December 2013 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.75 | |
$3.75 floor / $4.25 ceiling [Member] | Natural Gas Costless Collars [Member] | February 2013 - December 2013 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 4.25 | |
$3.75 floor / $4.25 ceiling [Member] | Natural Gas Costless Collars [Member] | February 2013 - December 2013 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 80,000 | |
$3.75 floor / $4.30 ceiling [Member] | Natural Gas Costless Collars [Member] | February 2013 - December 2013 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.75 | |
$3.75 floor / $4.30 ceiling [Member] | Natural Gas Costless Collars [Member] | February 2013 - December 2013 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 4.30 | |
$3.75 floor / $4.30 ceiling [Member] | Natural Gas Costless Collars [Member] | February 2013 - December 2013 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 50,000 | |
$3.75 floor / $4.05 ceiling [Member] | Natural Gas Costless Collars [Member] | February 2013 - December 2013 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.75 | |
$3.75 floor / $4.05 ceiling [Member] | Natural Gas Costless Collars [Member] | February 2013 - December 2013 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 4.05 | |
$3.75 floor / $4.05 ceiling [Member] | Natural Gas Costless Collars [Member] | February 2013 - December 2013 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 100,000 | |
NYMEX -$.29 [Member] | Natural Gas Basis Protection Swaps [Member] | January - December 2012 [Member] | CEGT [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 50,000 | |
NYMEX -$.29 [Member] | Natural Gas Basis Protection Swaps [Member] | January - December 2012 [Member] | PEPL [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 50,000 | |
NYMEX -$.30 [Member] | Natural Gas Basis Protection Swaps [Member] | January - December 2012 [Member] | CEGT [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 40,000 | |
NYMEX -$.30 [Member] | Natural Gas Basis Protection Swaps [Member] | January - December 2012 [Member] | PEPL [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 50,000 | |
$2.50 floor / $3.25 ceiling [Member] | Natural Gas Costless Collars [Member] | March - October 2012 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 2.50 | |
$2.50 floor / $3.25 ceiling [Member] | Natural Gas Costless Collars [Member] | March - October 2012 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.25 | |
$2.50 floor / $3.25 ceiling [Member] | Natural Gas Costless Collars [Member] | March - October 2012 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 50,000 | |
$2.50 floor/ $3.10 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 2.50 | |
$2.50 floor/ $3.10 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.10 | |
$2.50 floor/ $3.10 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 120,000 | |
$2.50 floor / $3.20 ceiling [Member] | Natural Gas Costless Collars [Member] | 60,000 Mmbtu [Member] | April - October 2012 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 2.50 | |
$2.50 floor / $3.20 ceiling [Member] | Natural Gas Costless Collars [Member] | 60,000 Mmbtu [Member] | April - October 2012 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.20 | |
$2.50 floor / $3.20 ceiling [Member] | Natural Gas Costless Collars [Member] | 60,000 Mmbtu [Member] | April - October 2012 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 60,000 | |
$2.50 floor / $3.20 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 2.50 | |
$2.50 floor / $3.20 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.20 | |
$2.50 floor / $3.20 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 50,000 | |
$2.50 floor / $3.45 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 2.50 | |
$2.50 floor / $3.45 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.45 | |
$2.50 floor / $3.45 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 50,000 | |
$2.50 floor / $3.30 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 2.50 | |
$2.50 floor / $3.30 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.30 | |
$2.50 floor / $3.30 ceiling [Member] | Natural Gas Costless Collars [Member] | April - October 2012 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 50,000 | |
$2.50 floor / $3.30 ceiling [Member] | Natural Gas Costless Collars [Member] | August - October 2012 [Member] | Minimum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 2.50 | |
$2.50 floor / $3.30 ceiling [Member] | Natural Gas Costless Collars [Member] | August - October 2012 [Member] | Maximum [Member] | NYMEX Henry Hub [Member]
|
||
Derivative, Swap Type, Fixed Price | 3.30 | |
$2.50 floor / $3.30 ceiling [Member] | Natural Gas Costless Collars [Member] | August - October 2012 [Member] | NYMEX Henry Hub [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 50,000 | |
$90 floor / $105 ceiling [Member] | Oil costless collars [Member] | January - December 2012 [Member] | Minimum [Member] | NYMEX WTI [Member]
|
||
Derivative, Swap Type, Fixed Price | 90 | |
$90 floor / $105 ceiling [Member] | Oil costless collars [Member] | January - December 2012 [Member] | Maximum [Member] | NYMEX WTI [Member]
|
||
Derivative, Swap Type, Fixed Price | 105 | |
$90 floor / $105 ceiling [Member] | Oil costless collars [Member] | January - December 2012 [Member] | NYMEX WTI [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 2,000 | |
$90 floor / $110 ceiling [Member] | Oil costless collars [Member] | February - December 2012 [Member] | Minimum [Member] | NYMEX WTI [Member]
|
||
Derivative, Swap Type, Fixed Price | 90 | |
$90 floor / $110 ceiling [Member] | Oil costless collars [Member] | February - December 2012 [Member] | Maximum [Member] | NYMEX WTI [Member]
|
||
Derivative, Swap Type, Fixed Price | 110 | |
$90 floor / $110 ceiling [Member] | Oil costless collars [Member] | February - December 2012 [Member] | NYMEX WTI [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 3,000 | |
$90 floor / $114 ceiling [Member] | Oil costless collars [Member] | May - December 2012 [Member] | Minimum [Member] | NYMEX WTI [Member]
|
||
Derivative, Swap Type, Fixed Price | 90 | |
$90 floor / $114 ceiling [Member] | Oil costless collars [Member] | May - December 2012 [Member] | Maximum [Member] | NYMEX WTI [Member]
|
||
Derivative, Swap Type, Fixed Price | 114 | |
$90 floor / $114 ceiling [Member] | Oil costless collars [Member] | May - December 2012 [Member] | NYMEX WTI [Member]
|
||
Derivative Contract Volume (in British Thermal Units and Barrels of Oil Equivalent) | 2,000 |
Note 4 - Long-term Debt (Detail) (USD $)
|
3 Months Ended |
---|---|
Dec. 31, 2012
|
|
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars) | $ 80,000,000 |
Discounting Rate of Company Reserves | 8.00% |
Secured Borrowing Base Credit Facility (in Dollars) | 35,000,000 |
Collateral Securities Repledged, Delivered, or Used (in Dollars) | $ 39,367,672 |
Line of Credit Facility, Interest Rate at Period End | 2.31% |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% |
National Prime [Member] | Minimum [Member]
|
|
Debt Instrument, Basis Spread on Variable Rate | 0.50% |
National Prime [Member] | Maximum [Member]
|
|
Debt Instrument, Basis Spread on Variable Rate | 1.25% |
LIBOR [Member] | Minimum [Member]
|
|
Debt Instrument, Basis Spread on Variable Rate | 2.00% |
LIBOR [Member] | Maximum [Member]
|
|
Debt Instrument, Basis Spread on Variable Rate | 2.75% |
Note 12 - Fair Value Measurements (Detail) - Unobservable Inputs for Level 3 Fair Value Measurements (USD $)
|
3 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
Sep. 30, 2012
|
Dec. 31, 2012
Oil Collars [Member]
Minimum [Member]
|
Dec. 31, 2012
Oil Collars [Member]
Maximum [Member]
|
Dec. 31, 2012
Oil Collars [Member]
|
Dec. 31, 2012
Natural Gas Collars [Member]
Minimum [Member]
|
Dec. 31, 2012
Natural Gas Collars [Member]
Maximum [Member]
|
Dec. 31, 2012
Natural Gas Collars [Member]
|
|||||
Price volatility curve, percentage | 0.00% | 0.00% | 0.00% | 29.39% | ||||||||
Price volatility curve, percentage | 0.00% | 0.00% | 0.00% | 29.39% | ||||||||
Weighted average of price volatility curve, percentage | 0.00% | 20.14% | ||||||||||
Fair Value (in Dollars) | $ 764,643 | [1] | [1] | $ 14,980 | $ 749,663 | |||||||
|
Note 2 - Income Taxes
|
3 Months Ended |
---|---|
Dec. 31, 2012
|
|
Income Tax Disclosure [Text Block] |
NOTE
2: Income Taxes
The
Company’s provision for income taxes differs from the
statutory rate primarily due to estimated federal and state
benefits generated from estimated excess federal and Oklahoma
percentage depletion, which are permanent tax
benefits.
Both excess
federal percentage depletion, which is limited to certain
production volumes and by certain income levels, and excess
Oklahoma percentage depletion, which has no limitation on
production volume, reduce estimated taxable income or add to
estimated taxable loss projected for any year. The federal
and Oklahoma excess percentage depletion estimates will be
updated throughout the year until finalized with the detail
well-by-well calculations at fiscal year-end. Federal and
Oklahoma excess percentage depletion benefits, when a
provision for income taxes is recorded, decrease the
effective tax rate, while the effect is to increase the
effective tax rate when a benefit for income taxes is
recorded. The benefits of federal and Oklahoma excess
percentage depletion are not directly related to the amount
of pre-tax income recorded in a period. Accordingly, in
periods where a recorded pre-tax income or loss is relatively
small, the proportional effect of these items on the
effective tax rate may be significant. The effective tax rate
for the quarter ended December 31, 2012, was 24% as compared
to 20% for the quarter ended December 31, 2011.
|