CORPORATE STRATEGY Manage Mineral Ownership as a Portfolio to Maximize Value and Generate Optimal Free Cash Flow Maintain Strong Financial Position Reward Shareholders 4 CORPORATE PRESENTATION JANUARY 2019
CORPORATE STRATEGY 2018 RESULTS Manage Mineral Ownership as a Portfolio to Maximize Value and Generate Optimal Cash Flow o Selectively participate with working interest on existing holdings in the highest quality, low risk projects…
CORPORATE STRATEGY 2018 RESULTS Maintain Strong Financial Position o Allocate capital for highest shareholder returns 2018 11.6 million core resource play drilling 11.3 million core resource play acquisitions 2.7 million regular…
CORPORATE STRATEGY 2018 RESULTS Reward Shareholders o Continue to pay regular dividends Paid regular dividend for over 50 consecutive years Current rate 0.16 per year 2.7 million of regular annual dividends o Repurchase shares…
MINERAL AND LEASEHOLD POSITION BAKKEN/THREE FORKS SCOOP/STACK PERMIAN FAYETTEVILLE BASIN ARKOMA WOODFORD - PHX MINERALS - PHX LEASEHOLD - PHX OWNERSHIP COUNTIES EAGLE FORD 8 CORPORATE PRESENTATION JANUARY…
SCOOP / STACK POSITION 9,566 net mineral acres Current Net Production (1) 130 bbl of oil, 320 bbl of NGL and 5,270 mcf of gas per day 9 rigs operating on PHX acreage and 83 rigs within 2.5 miles of PHX acreage 226 permits filed on…
EAGLE FORD POSITION 1,831 net acres (leasehold) Non-op working interest position in the oil window of the Eagle Ford play 100% HBP TEXAS Average WI of 14.4% and NRI of 10.7% Current Net Production (1) 337 bbl of oil, 58 bbl of NGL…
ARKOMA WOODFORD POSITION 10,998 net mineral acres Current Net Production (1) 54 bbl of NGL and 7,559 mcf of gas per day 1 rig operating on PHX acreage and 8 rigs operating within 2.5 miles of PHX acreage 23 permits filed on PHX…
BAKKEN/THREE FORKS POSITION 2,811 net mineral acres Current Net Production (1) 199 bbl of oil, 18 bbl of NGL and 243 mcf of gas per day In July 2018, acquired 2,729 net mineral acres in the core of the play All 20 DUCs included in…
PERMIAN POSITION 32,975 net mineral acres NEW MEXICO TEXAS Current Net Production (1) 181 bbl of oil, 43 bbl of NGL and 231 mcf of gas per day Recently sold 206 net mineral acres in Lea and Eddy Counties, New Mexico for 9.3 million…
FAYETTEVILLE POSITION 10,013 net mineral acres Current Net Production (1) 5,912 mcf of gas per day No rigs currently operating ARKANSAS Recent leasehold transactions involving Flywheel and Merit could generate renewed interest in…
Mcfe The industry standard conversion is each barrel of oil and natural gas liquid (NGL) is converted to an Mcf equivalent (Mcfe) at the ratio of one barrel equals six Mcfe 15 CORPORATE PRESENTATION JANUARY 2019
Net Mineral Acreage 2018 Year-End Producing Mineral acres in which Panhandle owns a royalty or working interest in a producing well Leased Minerals acres owned by Panhandle that are leased to third parties but not producing Open…
SEC PROVED RESERVES 2018 Year-End By Reserve Category PUD 63.9 Bcfe 36.8% PDNP 1.6 Bcfe 0.9% PDP Proved Developed Producing Reserves PDNP Proved Developed Non-Producing Reserves PUD Proved Undeveloped Reserves…
Proved, Probable & Possible Reserves 2018 Year-End Total Proved, Probable and Possible reserves represent less than 27% of total acreage 18 CORPORATE PRESENTATION JANUARY 2019
The perpetual nature of mineral ownership allows PHX to benefit from innovation without incurring Horizontal 2015 additional costs Completion Anadarko Basin Section 33-13N-9W Canadian Co., Oklahoma Vertical 1994 Completions…
COMPANY OPERATIONS PHX owns interest in 6,079 gross producing wells 4,315 wells with royalty interest only 1,764 wells with working interest Majority also have royalty interest from our mineral ownership Production (Fiscal Year…
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Mcfe The industry standard conversion is each barrel of oil and natural gas liquid (NGL) is converted to an Mcf equivalent (Mcfe) at the ratio of one barrel equals six Mcfe 24 CORPORATE PRESENTATION JANUARY 2019
Hedge Position as of 01/14/19 Calendar Swap Collar Average Collar Average Product Volume Mcf/Bbl Year Price Floor Price Ceiling Price 2019 Natural Gas 3,600,000 3.06 2020 Natural Gas 300,000 2.98 2019 Crude Oil 78,000 58.46…
Fiscal Year Ended Sept. 30, Financial Highlights 2018 2017 Oil, NGL and natural gas sales 48,385,335 39,935,912 Lease bonus 1,580,997 5,149,297 Total revenue 45,034,264 46,335,049 Lease operating expenses 13,460,278 12,682,969…
Condensed Balance Sheet September 30, 2018 September 30, 2017 Current assets 8,246,176 9,989,375 Net property and equipment 198,284,401 196,584,358 Other 219,109 170,486 Total assets 206,749,686 206,744,219 Current liabilities 5,737,126…
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PHX INVESTMENT HIGHLIGHTS Foundation of perpetual mineral ownership PHX generates revenue whether we participate with a Working Interest, or take a Lease Bonus plus a Royalty Interest Mineral rights provide a perpetual option to…
PHX VALUE PROPOSITION 13,521 net undeveloped mineral acres currently leased Will generate additional royalty revenue when production ensues 184,839 net mineral acres currently open (unleased) Can be leased with cash bonus to PHX +…
Appendix 31 CORPORATE PRESENTATION JANUARY 2019
BACKGROUND DEFINITIONS Mineral Ownership The right to extract all minerals below the surface at any depth Working Interest Responsible for capital investments and operating expenses Receives revenue from natural gas, oil and NGL…
UNIQUE ASSETS 258,556 acres of perpetual mineral rights ownership 60,196 acres producing (23%); 13,521 acres leased (5%); 184,839 acres open (72%) Significant ownership in several top shale/resource plays Majority of mineral…
UNIQUE FLEXIBILITY The owner of mineral rights can: Extract the minerals Lease the right to extract minerals to a third party Sell the mineral rights 34 CORPORATE PRESENTATION JANUARY 2019
UNIQUE FLEXIBILITY Extracting the Minerals Right to participate with working interest on unleased mineral acreage Our choice whether to participate in return-driven, low-risk drilling PHX working interest is proportionate to mineral…
EXAMPLE OF HOW OWNERSHIP IS DETERMINED IN A DRILLING UNIT Working Interest Participation 640 acres - 100% Panhandle Working Interest - 100% Panhandle Revenue Interest - 100% 640 Acre Drilling Unit Lease out Mineral Acreage…
PANHANDLE CAPITAL ALLOCATION & ASSET OPTIMIZATION Tools to achieve highest long-term return to shareholders Participate with a working interest Lease our mineral acreage Sell mineral rights Acquire additional mineral rights…
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