Production Pumped Up 37% for Panhandle

Panhandle Oil and Gas is excited these days about production from the Woodford Shale. Production for the first quarter of 2008 increased 37% to 1,831,206 mcfe as compared to 1,334,357 mcfe for the 2007 quarter.

Production from the Woodford shale properties, net to Panhandle's interest, is approximately 92 mmcf per month. Additional wells are being completed and put on production monthly. Net production from the Fayetteville shale properties is growing at a slower pace due to the smaller number of wells in which Panhandle has an interest and the smaller ownership interest in those wells. Net production from the Fayetteville shale properties is approximately 10 mmcf per month. Production from the Dill City project will continue to increase as several wells have recently begun production. Net production from this area, prior to the newest wells going on line, was approximately 46 mmcf and 2,400 barrels per month. As Panhandle does not operate any of these wells it is somewhat difficult for us to obtain the most up-to-date production information on all wells in these areas and to be able to predict when or how many new wells will be drilled or begin production.

"We continue to see significant new drilling activity and well proposals on the Company's mineral acreage in the unconventional natural gas plays. Through January 2008, we have agreed to participate with a working interest in the drilling of 71 wells in the Woodford shale in southeast Oklahoma and 29 wells in the Fayetteville shale in Arkansas. At the end of January, 2008, Panhandle had an interest in 36 working interest wells and 9 royalty interest wells which were producing in the Woodford shale, and 10 working interest wells and 27 royalty interest wells which were producing in the Fayetteville shale. The remainder of the referenced working interest wells were pending, drilling or testing. Drilling in both shale plays is expected to remain active for several years. In addition, drilling in the Dill City project in western Oklahoma continues to be active. In the project at the end of January 2008, Panhandle had an interest in 10 new Atoka producing wells, 2 wells drilling and there were 11 wells scheduled. Again, this project will remain active through fiscal 2008 and beyond."