Panhandle Oil and Gas Inc. Announces Western Oklahoma Lease Agreement

PANHANDLE OIL AND GAS INC. PHX today reported that is has leased partial rights to 2,846 of its net mineral acres located in Roger Mills County, Okla., to a large independent exploration and production company for $4,981,000. Panhandle also retained a 3/16th non-cost bearing royalty interest in all production from wells drilled on these leased rights. The rights leased were from the surface to 100 feet below the base of the Virgilian (the base of the Virgilian is equivalent to the base of the Tonkawa). Panhandle retained the rights to the deeper pays including the Hogshooter, Cleveland, Marmaton and Granite Wash. The primary term of the lease is three (3) years with the right to extend for one additional year. The lessee also has the right of first refusal to the deep rights on this mineral acreage, should Panhandle elect to market any of these rights during the primary term of the lease. The transaction does not include any existing Panhandle production or currently booked reserves. Panhandle retains its perpetual mineral ownership.