2008 IPAA OGIS San Francisco, CA - October 6 2008

IPAA OGIS Florida-February 17-18, 2009

1

2008 IPAA OGIS San Francisco, CA - October 6 2008

NYSE: PHX

IPAA OGIS San Francisco, IPAA OGIS San Francisco, CA September 29-October CA September 29-October

1, 20091, 2009

IPAA OGIS San Francisco, IPAA OGIS San Francisco, CA September 29-October CA September 29-October

1, 20091, 2009

NYSE: PHX

IPAA OGIS San Francisco, CA – September 29 – October 1, 2009IPAA OGIS San Francisco, CA – September 29 – October 1, 2009

22

Forward-Looking Statements and Risk Factors – This report 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 acquisitions and 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 2008 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 strong independent oil and gas companies and majors; 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 and the amount and timing of development expenditures; uncertainties in evaluating oil and gas reserves; 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; and drilling and operating risks.

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.


3

Who isPanhandle Oil and

Gas?NYSE: PHX


44Panhandle Oil and Gas Inc.

Non-operating independent oil and gas company with current drilling projects in the Woodford Shales, Fayetteville Shale and Western Oklahoma

Market Capitalization - $185 million

52-week range - $13.15 - $34.00

8.3 million shares outstanding

Insider ownership – 13.8%

Unique and Evolving company


55UNIQUE: Operational Strategy

Use ownership of 254,600 mineral acres as base, “legacy assets”

Use mineral acreage ownership to participate with a working interest in the drilling of a significant number of wells Working interest in 1,350 wells Royalty interest in 3,300 wells

As a non-operator, Panhandle participates in drilling with operating companies, principally large independents.

Majority of drilling is on perpetually owned fee mineral acreage, drilling on owned fee mineral acres maximizes rate of return, royalty on our acres is paid to Panhandle

Approximately 75% of oil and gas sales revenue is from working interests in wells


66Financial Highlights

Fiscal Year Ended September 30,

Revenue & Earnings 2008

2007

Revenue $69,119,121 $39,128,911

Net income $21,555,769 $6,343,464

Earnings per share $2.54 $.75

Net cash provided by operating activities $39,924,719 $28,106,500

Capital expenditures $38,747,749 $27,785,431

Mcfe produced (33% increase) 7,722,450 5,791,407

Average Mcfe sales price $8.94 $6.47


77Financial Highlights

Nine Months EndedJune 30,

Revenue & Earnings 2009 2008

Revenue $28,973,677 $44,904,231

Net income (loss) $(2,748,397) $12,780,473

Earnings per share $(.33) $1.50

Net cash provided by operating activities $30,617,545 $25,474,992

Capital expenditures(third quarter 2009 $5.2 million)

$35,509,890 $27,757,275

Mcfe produced (36% increase) 7,522,897 5,538,866

Average Mcfe sales price $3.74 $8.79


88Financial Highlights: Condensed Balance Sheet

June 30, 2009

Current assets $9,755,029

Property and equipment 206,748,234

Less accumulated DD&A (106,949,000)

Net property and equipment 99,799,234

Other 1,196,268

Total assets $110,750,531

Current liabilities $7,944,345

Long-term debt 13,332,504

Deferred income taxes 22,818,750

Asset retirement obligation 1,672,978

Long-term derivative contracts 894,240

Shareholders equity 64,087,714

Total liabilities and equity $110,750,531


99PHX: 2009 Operating Strategies

Maintain operational and financial flexibility

Prudently manage capital expenditures and credit facility drawdowns

Continue and expand participation in unconventional plays

Continue to exploit legacy assets, leveraging mineral average ownership into producing properties

Maintain ability and commitment to prudently maximize current and future drilling and development opportunities

Potentially divest of a limited number of properties in non-core areas or groups of marginal properties


1010PHX: 2009 Operating Strategies - continued

$50 million credit facility with Oklahoma banks, maturity October, 2011

Outstanding balance on credit facility at September 17, 2009, $10.4 million

$35 million borrowing base, as of May 2009

Natural Gas Swaps (all swaps tied to specific Oklahoma pipeline price)

Continually evaluating hedge position

Period Volume/MonthAverage Pipeline

Price

2009 300,000 mmbtu $3.775

2010 300,000 mmbtu $5.30

Trailing 12-Mo. Operating and G&A Expense1111

PH

X

$1.47

$/M

cfe

Peer Average: $2.29

Note: Trailing twelve month for periods ending 6/30/09.Source: EnerCom Incorporated. Peer set includes: BRY, CHK, CLR, CRK, DVN, FST, GDP, GMXR, HK, NFX, PETD, PLLL, PQ, PVA, PXP, RRC, SWN, XTO.


123-Year Finding and Development Cost

Source: EnerCom Incorporated. Peer set includes: BRY, CHK, CLR, CRK, DVN, FST, GDP, GMXR, HK, NFX, PETD, PLLL, PQ, PVA, PXP, RRC, SWN, XTO.


Peer Average: $3.49

PH

X

$2.50

$/M

cfe

Debt to Market Capitalization 1313

Note: As of 8/28/09.Source: EnerCom Incorporated. Peer set includes: BRY, CHK, CLR, CRK, DVN, FST, GDP, GMXR, HK, NFX, PETD, PLLL, PQ, PVA, PXP, RRC, SWN, XTO.


6%

Peer Average: 83%

PH

X

Asset Intensity 1414

Note: As of 6/30/09.Source: EnerCom Incorporated. Peer set includes: BRY, CHK, CLR, CRK, DVN, FST, GDP, GMXR, HK, NFX, PETD, PLLL, PQ, PVA, PXP, RRC, SWN, XTO.


Peer Average: 77%

54%P

HX

PHX: Asset Pyramid


15

Perpetually owned 198,000 open acres, 56,000 producing or leased acres

Reserves on fee mineral acres, Fayetteville and Woodford Shales (superior economics due to royalty retention)

Over 4,000 total wells, 88% natural gas

Low ratio of PUD to total proved reserves


Operations Overview 16


1717Overview/Fiscal Year 2008 Operating Highlights

Total U.S. mineral ownership of ~ 255,000 acres Significant ownership in the Western Oklahoma Anadarko Basin,

Arkansas Fayetteville and the Southeastern Oklahoma Woodford

2008 proved reserves increased 29% to 54.1 Bcfe Reserve replacement 257% Growth through the drillbit 2008 finding cost - $2.64/Mcfe 89% natural gas 76% proved developed producing

2008 annual production increased 33% to 21.2 Mmcfe per day Q3 2009 production increased to 29.1 Mmcfe per day

Superior investment economics Large inventory of undrilled locations in premier established and

developing resource plays Participation with minerals as a working interest owner


1818PHX: Mid-Year Proved Reserve Update

Proved Reserves March 31,

2009September

30,2008

SEC Pricing (1)

Proved reserve volumes 53.1 Bcfe 54.1 Bcfe

Estimated future net cash flows, 10% discounted present value (before income taxes, millions of dollars)

$61.9 $119.9

Normalized Pricing (2)

Proved reserve volumes 62.4 Bcfe 54.8 Bcfe

Estimated future net cash flows,10% discounted present value (before income taxes, millions of dollars)

$156.3 $133.5

1. SEC Pricing September 30, 2008 - $4.52/Mcf & $97.74/Bbl, flat SEC Pricing March 31, 2009 - $2.45/Mcf & $46.93/Bbl, flat

2. Normalized Pricing - $6.00/Mcf & 45.00/Bbl, flat

Panhandle Oil and Gas Mineral Holdings


LeaseholdLeasehold

19

0

20

40

60

80

100

120

OK NM TX ND AR

Net

Acre

s (

Th

ou

san

ds)

Significant Mineral Acreage Holdings

Economic Impact of Participation with Mineral Interest


20

42% Higher19%

Lower$1.78

$1.45

24%

34%

0

5

10

15

20

25

30

35

40

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

Typical W.I. Owner PHX Typical W.I. Owner PHX

Finding Cost, $/Mcfe Rate of Return, % (BTAX)Assumptions:• PHX ownership - 1% W.I., 1% NRI

• Typical ownership - 1% W.I., 0.8125% NRI

• Reserves - 2.0 Bcf/well

• Gross well cost - $2,900,000

•Wellhead gas price - 7/31/09 NYMEX Strip, adjusted for basis ($6.19/Mcf wellhead average over life of well)

Arkansas Fayetteville


2121PHX: Quarterly Production Profile

0

5

10

15

20

25

30

35

Mm

cfe

per

day

CAGR 28.4%

2222PHX: Areas of Focus



2323Western Oklahoma: Anadarko Basin

Anadarko Basin

Anadarko Basin (Cana) horizontal Woodford

Anadarko Basin (Colony) horizontal Granite Wash

Anadarko Basin (SE Leedey) horizontal Cleveland


2424Anadarko Basin: Woodford Shale

Anadarko Basin

~ 40 horizontal wells on production in the play (as of May, 2009)

10,000’ – 13,000’ depth

~ 3,300 Mcfd typical initial month production rate

PHX generates superior returns Drilling on our minerals, we keep royalty

4.3% average NRI in 42 sections (1,365 net acres)

7 working interest wells approved (as of 9/14/09) 6 producers and 1 scheduled

2 royalty interest wells producing

~ 330 undeveloped locations (based on 8 wells per section)


2525Anadarko Basin: Woodford Shale


2626Arkansas: Fayetteville Shale

Fayetteville Shale

Fayetteville Shale

Daily net production ~ 4.5 Mmcf per day


2% average N.R.I. in 284 sections (8,000 net acres)

94 working interest wells approved (as of 9/14/09) 71 producers, 2 drilling, 4 testing, 17 scheduled W. I. <1% to 8%, average 4.4% in these wells N.R.I. <1% to 8%, average 5.3% in these wells


~ 2,200 probable/possible locations


2727Arkansas: Fayetteville Shale


2828Arkansas: Fayetteville Shale Reserves

Net Reserves (Bcf) to PHX

Proved 3.5

Probable 19.0 * Possible39.0 * ~ 2,200 locations

* DeGolyer and MacNaughton, as of 9/30/08 based on 8 wells per section

Operators: Southwestern Energy, Chesapeake, Petrohawk


2929SE Oklahoma: Woodford Shale

Woodford Shale Daily net production ~ 8.4 Mmcf per day


10,000 acres in active counties (Coal, Hughes, Pittsburgh & Atoka)

3.9% average N.R.I. in 185 sections (6,200 net acres)

132 working interest wells approved (as of 9/14/09) 116 producers, 2 drilling, 9 testing, 5 scheduled W.I. <1% to 42%, average 6.8% in these wells N.R.I. <1% to 38%, average 6.9% in these wells


~ 1,200 probable/possible locations


3030SE Oklahoma: Woodford Shale


3131SE Oklahoma: Woodford Shale Reserves

* DeGolyer and MacNaughton, as of 9/30/08

based on 8 wells per section

Operators:

Newfield, Continental, Devon, BP, XTO

Net Reserves (Bcf) to PHX

Proved 15Probable 67.0 * Possible36.0 * ~ 1,200 locations


3232The Panhandle Oil and Gas Advantage

Strong financial metrics < 10% debt to market capitalization

Broadly diversified perpetual mineral holdings Total US mineral ownership of ~ 255,000 acres

Large drilling inventory in multiple resource plays Over 3,000 locations identified

Substantial advantage in capital efficiency due to mineral ownership Participate with mineral interest as a working interest

owner or; Retain a significant royalty ownership in properties with

no additional capital investment

2008 IPAA OGIS San Francisco, CA - October 6 2008

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