PHX LISTED NYSE ®. Forward-Looking Statements and Risk Factors – This presentation includes...

PHXLISTEDNYSE®

Forward-Looking Statements and Risk Factors – This presentation 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 or mineral acreage acquisitions, 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, we 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 2012 Form 10-K filed with the Securities and Exchange Commission. These “Risk Factors” include the volatility of oil and gas prices; Panhandle’s ability to compete effectively against larger independent oil and gas companies; 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; the amount and timing of development expenditures; unsuccessful exploration and development drilling; declines in the values of our oil and gas properties resulting in write-downs; the negative impact lower oil and gas prices could have on our ability to borrow; current economic conditions worldwide; future legislative or regulating changes; shortages of oilfield equipment, services and qualified personnel; and drilling and operating risks. As Panhandle does not operate any of the properties in which it has an interest, we have very limited ability to exercise any influence over operations of these properties, associated costs or the timing of drilling on its properties.

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.

Annual Shareholders Meeting, March 7, 2013 2

Year Ended September 30,

2012 2011

Revenue $48,532,317 $44,976,651Net income $7,370,996 $8,493,912Earnings per share $.88 $1.01

Net cash provided by operating activities (not including lease bonus received of $7.3 mm) $25,371,196 $29,283,929

Capital expenditures - Drilling - Acquisitions

$25,147,30620,144,121

$22,739,9084,805,440

Mcfe produced 10,583,440 8,922,503Average Mcfe sales price $3.86 $4.87Long-term debt $14,874,985 $0

Annual Shareholders Meeting, March 7, 20133

Condensed Balance Sheet September 30, 2012Current assets $11,622,845 Property and equipment 286,816,134 Less accumulated DD&A (165,199,079)Net property and equipment 121,617,055 Other 1,946,830 Total assets $135,186,730Current liabilities $7,627,742Long-term debt 14,874,985Deferred income taxes 26,708,907 Asset retirement obligation 2,122,950

Shareholders equity: Stock and paid in capital 2,160,753 Retained earnings 84,821,395 Deferred directors’ compensation

2,676,160

Treasury stock (5,806,162)Total liabilities and equity $135,186,730


Three Months Ended December 31,

2012 2011

Revenue $14,180,435 $13,404,333

Net income $2,148,298 $3,412,110

Earnings per share $.26 $.41Net cash provided by operating activities $7,158,243 $7,745,652

Capital expenditures - Drilling $6,864,399 $6,344,006 - Acquisitions $330,000 $18,783,949

Long-term debt $14,454,757 $14,522,371

Mcfe sold 3,008,365 2,559,524

Average Mcfe sales price $4.24 $4.59


0

5

10

15

20

25

30

35

40

Ten-Year Share Price Growth Ten-Year Share Price Growth


Development of western Oklahoma/Texas Panhandle oil and natural gas liquids rich horizontal Granite Wash, Hogshooter, Cleveland, Marmaton and Tonkawa

Focused development of our high quality asset base in three ofthe nation’s premier resource plays

Arkansas Fayetteville Shale Anadarko Basin ‘Cana’ Woodford Shale Southeastern Oklahoma Woodford Shale

Southern Oklahoma Woodford Shale Oil Play ~ 3,700 net mineral acres available for participation


0

10,000

20,000

30,000

40,000

50,000

60,000

12.3

1.2

010

3.3

1.2011

6.3

0.2011

9.3

0.2011

12.3

1.2

011

3.3

1.2012

6.3

0.2012

9.3

0.2012

12.3

1.2

012

OIL NGL


* The Company began accounting for NGL production as a separate product from gas in FY 2012


0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000GAS Equivalent Oil + NGLMCFE

Exceptional Reserve Growth

• Proved reserves at year-end 2012 Fiscal year-end 2012 proved reserves increased to 124.7 Bcfe An 11.7% increase over 2011

• Record 3P (proved, probable and possible) reserves at year-end 2012 Fiscal year-end 2012 3P reserves increased to 442.1 Bcfe A 7.4% increase over 2011

• Year-end 2012 inventory of undeveloped locations 4,180 undeveloped locations

• Proved, probable and possible reserve appraisal performed by DeGolyer and MacNaughton


Proved Reserve GrowthProved Reserve GrowthProved Reserve GrowthProved Reserve Growth

27.7 28.735.5 41.3

50.362.5 67.1

73.8

44.6

50.9

6.4

3.6

41.2

9.2

5.6

12.8

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2005 2006 2007 2008 2009 2010 2011 2012

Pro

ved

Res

erv

es (

Bcf

e)

Proved Developed Reserves Proved Undeveloped Reserves


86.1 87.4 87.1125.1

156.5

75.0

147.9

200.1

174.8

160.9

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

2008 2009 2010 2011 2012

Pro

ved

/Pos

sib

le R

eser

ves,

(B

cfe)

Probable Possible


Year-End 2012 Reserves and First Quarter 2013 Production and Revenue by ProductYear-End 2012 Reserves and First Quarter 2013 Production and Revenue by ProductYear-End 2012 Reserves and First Quarter 2013 Production and Revenue by ProductYear-End 2012 Reserves and First Quarter 2013 Production and Revenue by Product


62%85%91%

7%

6%4%

31%

9%5%

0

20

40

60

80

100

Gas NGL Oil

9% 15%

38%

First Quarter 2013Revenue

First Quarter 2013 Production

Year-End 2012 SEC

PDP Reserves

Acquisition Strategy

●Focus on acquiring both HBP leasehold and un-leased and leased mineral acreage properties in economically depressed dry gas resource plays as well as appropriately priced oil/liquids rich properties

●Majority of purchases to date have been in the Fayetteville Shale

●Potential to expand into other dry gas plays and oil/liquids rich plays

●The goal is to add extremely low risk and long lived proved, probable and possible reserves which will generate exceptionally attractive long term returns

●This is accomplished by acquiring dry gas reserves below industry replacement costin the cores of the nation’s lowest cost gas resource plays or acquiring appropriately priced oil/liquids rich properties


Leasing Strategy (Leasing of PHX mineral holdings to active operators)

●

●Example: Northern Oklahoma Mississippian Play leased for ~$1.7MM bonus with 3 years primary term, while retaining 3/16ths royalty (proportionately reduced) in each well drilled on PHX minerals

Mississippian reserves are extremely variable and difficult to predict PHX minerals were not generally located near viable Mississippian vertical show wells or

economic Mississippian horizontal wells Water transportation and disposal expenses make most wells uneconomic for non-operating owners

as they do not share ownership with the operators in the profit center disposal systemsand are captive to very high disposal fees

Produced water is saturated with salt and therefore difficult and expensive to lift from the producing wells leading to higher operating expenses and potential for environmental liability

Leasing eliminates the risk of investing capital in uneconomic projects due to low reserves, mechanical failures, low product price or high operating expense

●Will consider leasing in other plays where leasing valuations are compelling


Lease Company minerals in situations where it is clear that the value generated by the lease bonus and royalty will exceed the potential value of participation with a working interest in wells drilled on mineral acreage

Diverse mineral ownership across the playInterest (WI or RI) in 17% of all producing wells in the play PHX wells primarily operated by Newfield, Devon, BP and PetroQuestCurrent production 5.3 Mmcfe per dayReserves

Year-End 2012 Proved – 37.6 Bcfe (30.1% of total) Probable – 90.4 Bcfe (57.8% of total) Possible – 72.4 Bcfe (45.0% of total)

Mineral ownership generates superior returns



Blue outline is Current

Development Area

Current Development Area

6,518 net PHX acres

163 PHX producing working interest wells w/6.1% average NRI

60 PHX producing royalty interest wells

4.4% average NRI in 897 undeveloped WI locations

359 additional undeveloped RI locations

Diverse mineral and leasehold ownership across the play

Interest (WI or RI) in 22% of all producing wells in the play

PHX wells primarily operated by Southwestern Energy

Current production 14.1 Mmcfe per day

Reserves Year-End 2012 Proved – 48.2 Bcfe (38.6% of total) Probable – 29.8 Bcfe (19.1% of total) Possible – 46.0 Bcfe (28.6% of total)

Mineral ownership generates superior returns


Diverse mineral ownership across initial playand expansion areas

Interest (WI or RI) in 12% of all producing wells in the play

PHX wells primarily operated by Devon and Cimarex

Current production 2.1 Mmcfe per day

Reserves Year-End 2012 Proved – 9.4 Bcfe (7.5% of total) Probable – 34.6 Bcfe (22.1% of total) Possible – 34.5 Bcfe (21.4% of total)

● Mineral ownership generates superior returns



Reserve Assessment Area

3,545 net PHX acres

57 PHX producing working interest wells w/3.0% average NRI

7 PHX producing royalty interest wells

3.8% average NRI in 437 undeveloped WI locations

330 additional RI locations

Red outline is

Core Development

AreaYellow outline is Potential Play

Extent

Blue outline is 3P Reserve

Assessment Area


The currently active oil and liquids plays within the outlined area include the Granite Wash, Hogshooter, Cleveland and Marmaton

~ 17,100 net mineral acres available for PHX participation

~ 320 net leasehold acres available for PHX participation

~ 8,400 net mineral acres leased in the past with PHX retained royalty

2,743 acres leased from surface to base of Virgilian (Tonkawa Equivalent)


2012 Wells

2013 Wells

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