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Panhandle Oil And Gas Q1 2015 revenues $30,999,170

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Staff writer ▼ | February 11, 2015
Panhandle Oil And Gas
Panhandle Oil And Gas   The majority of the revenue is from a hedging gain

Panhandle Oil And Gas Inc. reported financial and operating results for the 2015 fiscal first quarter ending Dec. 31, 2014. Total revenues were $30,999,170, compared to $18,396,756 for the 2014 first quarter.

Oil, NGL and natural gas sales increased $1,046,618 or 6% in the 2015 quarter, compared to the 2014 quarter, as a result of a 7% increase in Mcfe production. The average sales price per Mcfe of production during the 2015 first quarter was $5.22, compared to $5.26 for the 2014 first quarter.

The majority of the revenue increase resulted from recording a hedging gain of $11,250,265, prior to provision for income taxes, in the first quarter of 2015 as compared to a loss of $496,901 in the 2014 first quarter.

This gain is principally the result of hedging put in place by the Company shortly after closing on the Eagle Ford acquisition in June 2014. The contracts will allow the Company to effectively sell somewhat over 50% of its expected oil production for approximately $92.00 per barrel, on average, through December 2015.

Oil production increased 40% in the 2015 first quarter to 116,583 barrels, compared to 83,413 barrels in the 2014 first quarter. NGL production increased 96% in the 2015 quarter to 72,804 barrels, and natural gas production decreased 7% for the 2015 first quarter, compared to the 2014 first quarter.

The increased oil production is principally attributable to production from the Eagle Ford Shale properties, and the majority of the increase in NGL production was from several of the NGL rich plays in Oklahoma.

Lease operating expenses increased to $1.28 per Mcfe of production in the 2015 first quarter as compared to $.94 per Mcfe in the 2014 first quarter. This increase is a result of the additional oil production in the Eagle Ford Shale.

Those wells are more cost intensive than the typical historic mix of Panhandle wells, of which the majority are natural gas producers, which typically have significantly lower operating costs. Non-cash impairment charges increased $1,989,006 in the 2015 first quarter as compared to the 2014 first quarter. These charges were on several smaller fields principally in western Oklahoma and the Texas Panhandle and were impacted by significantly reduced oil prices.


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