Company Profile

Panhandle Royalty Company acquires and manages mineral interests and explores and develops oil and gas properties. The Company's mineral properties and other oil and gas interests are located primarily in Oklahoma, Texas and New Mexico, as well as in 12 other states. The principal products of the Company are crude oil and natural gas.

Panhandle has increasingly had a strategy of taking non-operating working and/or royalty interests in outside third-party wells. The company has acquired the assets, the minerals, or the entire company in several acquisitions beginning in the 1980s. In October 2001, Panhandle closed upon its largest acquisition Ð Wood Oil Company. WoodÕs assets include a non-operating working interest or royalty interest in approximately 2,000 producing wells with net proven reserves of 13.1 billion cubic feet equivalents.

The acquisition is part of Panhandle's strategy of being more aggressive in searching out new reserves to utilize most of the cash flow available for increasing growth.

In 2001, for the second consecutive year, Panhandle set new records in revenue, net income and total reserves as measured in billions of cubic feet of equivalent gas. Revenues were $12.8 million for the fiscal year ending September of 2001, an increase of 37.9% over 2000. Net income was $4.26 million, or $2.05 per diluted share. This was a results of both increased gas prices and increased oil production. Oil production increased due to several new wells completed in west Texas and central Oklahoma, more than replacing the decline from the older Dagger Draw Field in New Mexico.

The company was named the number one public company in Oklahoma in the October 30th "Daily Oklahoman," based upon its percentage growth in several areas compared to a list of 50 large and small public companies in all types of businesses headquartered in the state.