Corporate Presentation May 2020 Cautionary Statement Regarding - PowerPoint PPT Presentation

Corporate Presentation May 2020

Cautionary Statement Regarding Forward-Looking Statements Cautionary Statement Regarding Forward-Looking Statements This presentation includes “forward - looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Sect ion 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included in this presentation that address activities, events or developme nts that Panhandle Oil and Gas Inc. (“Panhandle” or the “Company”) expects, believes or anticipates will or may occur in the future are forward looking statements. The words “antici pat es”, “plans”, “estimates”, “believes”, “expects”, “intends”, “will”, “should”, “may” and similar expressions may be used to identify forward -looking statements. Forward-looking statements may include, but are not limited to, statements relating to: our future financial and operating results; our ability to execute our business strategies; estimations and the respective values of oil, NGL and natural gas reserves; the level of production on our properties and the future expenses associated therewith; projections and volatility of future realized oil and natural gas prices; planned capital expenditures associated with our mineral, leasehold and non-operated working interests; statements concerning anticipated cash flow and liquidity; and our strategy and other plans and objectives for future operations. Although the Company believes the expectations reflected in these and other forward-looking statements are reasonable, the Company can give no assurance such statements will prove to be correct. Such forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the Company’s management. Information concerning these risks and other factors can be found in the Company’s fili ngs with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10- Q, available on the Company's website or the SEC’s we bsite at www.sec.gov. Readers are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this presentation are made as of the date hereof, and the Company does not undertake any obligation to update the forward-looking statements as a result of new information, future events or otherwise. Use of Non-GAAP Financial Information This presentation includes certain non-GAAP financial measures. Adjusted EBITDA is a supplemental non-GAAP measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Panhandle defines “Adjusted EBITDA” as net income (loss) plus interest expense, provision for impairment, depreciation, depletion and amortization of properties and equipment, including amortization of other assets, provision (benefit) for income taxes and unrealized (gains) losses on derivative contracts. Panhandle references Adjusted EBITDA in this presentation because it recognizes that certain investors consider Adjusted EBITDA a useful means of measuring our ability to meet our debt service obligations and evaluating our financial performance. Adjusted EBITDA has limitations and should not be considered in isolation or as a substitute for net income, operating income, cash flow from operations or other consolidated income or cash flow data prepared in accordance with GAAP. Because not all companies use identical calculations, the Company’s calculation of adjusted EBITDA may not be comparable to a similarly title d measure of other companies. Oil and Gas Reserves The SEC generally permits oil and gas companies, in filings made with the SEC, to disclose proved reserves, which are reserve estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, and certain probable and possible reserves that meet the SEC’s definitions for such terms. The Company discloses only estimated proved reserves in its filings wit h the SEC. The Company’s estimated proved reserves as of September 30, 2019, referenced in this presentation were prepared by DeGolyer and MacNaughton, an independent engineering firm, and comply with definitions promulgated by the SEC. Additional information on the Company’s estimated proved reserves is contained in the Company’s filin gs with the SEC. 1

Company Snapshot Key Statistics 12% 24% Net Mineral Acres (000's) 12% N et Mineral Acres 258,436 Average Royalty Rate on Leased Acreage ~18.75% 258 71% 52% 75 5% 2Q20 N et Production (Mmcfe/d) 27.6 10% Operational 2Q20 Adjusted EBITDA ($mm) 1 $3.1 10% Gross wells on Production 6,793 4% Gross Additional Undrilled Locations 3,555 Gross Rigs Running 2 9 2Q20 Production (MMcfe/d) 18% 25% Gross WIPs 2 118 33% Gross Active Permits 2 78 1% 7% 27.6 27.6 11% Listing NYSE 8% 64% Equity Value($mm) 3 $68 17% et Debt($mm) 4 N $28 16% Enterprise Value ($mm) $97 Financial 2016 2019 Quarterly Dividend $0.01 Production Split 8 Annualized Dividend Yield 0.96% 26% 67% 33% Estimated Current DCF Yield 5 16.0% 6 ($mm) SEC PDP PV 10 $59 Royalty Interest Working Interest 6 ($mm) SEC 1P PV 10 $63 7 ($mm) 2P PV 10 $115 74% Note: 1 Normalized for gain on asset sale 2 As of 3/31/20 3 Equity value as of 5/8/20 (share price $4.17); Assumes 16.4mm shares outstanding 4 Net debt as of May 11, 2020 2 5 Discretionary Cash Flow yield calculated by subtracting interest expense from EBITDA and dividing by market cap 6 PV-10 estimates as of 3/31/2020 using SEC price deck; $53.10 per bbl of oil, $15.31 per bbl of NGL, $1.90 per mcf of gas 7 NYMEX Strip pricing as of 4/17/2020 8 Royalty and working interest based on production; Working interest is in Eagle Ford, SCOOP / STACK, Arkoma STACK, and Fayetteville

Why Invest in PHX? ❖ ❖ Deal evaluation Peer leading G&A 2 1 underpinned on among mineral in-house players with technical minimal Management & expertise, incremental G&A Scalable Technical team engineering and required for a infrastructure for that understands geology scale-up acquisitions the "rocks" ❖ ❖ ~50% of the PHX Team with a team has a successful history technical of sourcing and background closing accretive transactions ❖ ❖ Improved capital Abundant supply 4 3 return profile of private through minerals assets Track record of Energy down- increased DCF looking for returned via monetization capital return and cycle provides a dividends ❖ generating excess great opportunity IPO valuations ❖ Low PDP decline are hurting discretionary cash to pivot and scale- combined with sponsors looking flow up good line of sight for an exit to development leads to healthy DCF yield 3

Corporate History PHX 1.0 – Beginning as a Co-op PHX 2.0 – Continued December 1926 Founded as Panhandle Cooperative Royalty Company in 2007 Oklahoma Name changed to Panhandle Oil and Gas, Inc 1926- 1969 Formed for the purpose of conducting a mining business; including buying and selling lands, oil and 1969 - 2019 2008 gas leases and royalties Listed on NYSE, ticker symbol PHX 1928 Paid first dividend of $1.00 per share 2014 1969 Acquisition in the Eagle Ford Authorized participation in first working interest well 2018 PHX 2.0 – Conversion to C-Corp Acquisitions in the Bakken and STACK and SCOOP (Minerals Only) 1979 Panhandle Cooperative Royalty Company was merged into Panhandle Royalty Company and its shares were PHX 3.0 – Pure Minerals Strategy registered with the SEC and traded over-the-counter 2019 1969 - 2019 1979 Publicly stated strategy of focusing exclusively on mineral Company began to retain a substantial part of its cash and royalty assets 2019 - Present flow to acquire additional mineral acreage and to − Non-consent on AFE; FY-to-date non-consent on 6+ participate with a working interest in the drilling of working interest proposals wells on its mineral acreage September 2019 Announces the appointment of Chad L. Stephens as Chief 1988 Executive Officer New Mexico Osage Cooperative Royalty merged into December 2019 Panhandle Announces the closing on the acquisition of 700 net mineral acres in the core of the STACK play in Oklahoma for $9.3 million 4