Oklahoma City-based Panhandle Oil and Gas Inc. (NYSE:PHX), a growing non-operating independent oil and natural gas company with reserves and production primarily in the Arkansas Fayetteville shale, the Southeastern Oklahoma Woodford shale, the Anadarko Basin (Cana) Woodford shale and several Western Oklahoma liquid-rich plays, including the Granite Wash, has announced estimated total proved reserve volumes for the company's fiscal year ended Sept. 30, 2012. Additional information on the Company can be found at www.panhandleoilandgas.com.

Total Proved Reserves Increase 12%

Panhandle's estimated total proved reserves at Sept. 30, 2012, increased 12% to 124.7 Bcfe from 111.7 Bcfe reported for Sept. 30, 2011, based on SEC mandated pricing. The Sept. 30, 2012, wellhead prices of $2.51 per thousand cubic feet (Mcf) of natural gas, $89.41 per barrel of oil and $35.70 per barrel of natural gas liquids (NGL) compare to Sept. 30, 2011, prices of $3.81 per Mcf of natural gas, $90.28 per barrel of oil and $38.91 per barrel of NGL in the 2011 report. Panhandle's increased drilling activity over the last 24 months in several plays in Western Oklahoma and the Texas Panhandle which produce significant oil and NGL, have resulted in meaningful increases in oil and NGL production and the discovery of new reserves for the company. The increased NGL production necessitated inclusion, for the first time, of the NGL volumes in the reserve calculations for fiscal year end 2011. Panhandle's total estimated proved reserves are approximately 91% natural gas, 5% oil and 4% NGL. The Sept. 30, 2012 and 2011, proved reserves were calculated by the independent petroleum engineering consulting firm DeGolyer and MacNaughton.

At Sept. 30, 2012, approximately 59% of total proved reserves, or 73.8 billion cubic feet equivalent (Bcfe), are categorized as proved developed reserves as compared to 67.1 Bcfe at Sept. 30, 2011. Forty-one percent, or 50.1 Bcfe of total proved reserves, are categorized as proved undeveloped (PUD) at Sept. 30, 2012, as compared to 44.6 Bcfe of total PUD reserves at Sept. 30, 2011. As a result of several years of drilling activity in the company's shale plays, Panhandle's PUD reserves reflect a substantial number of drilling locations resulting from the continuing delineation of these plays. In addition, the continuing increased lateral length and other advances in well completion technology have increased reserves per well in these plays, especially in the core of the plays where most of the current drilling is taking place.

Since operating strategy changes in fiscal 2006, Panhandle's total proved reserves have grown 264% from 34.3 Bcfe to 124.7 Bcfe, at a compound annual growth rate of 24%. This year's growth in proved reserves benefited from the acquisitions made in the Arkansas Fayetteville shale and another year of active drilling on the company's mineral and leasehold acreage. However, significant downward revisions in natural gas reserves, resulting from the lower SEC mandated natural gas price utilized in the Sept. 30, 2012, reserve report, offset some of these gains in reserve volumes.