Panhandle Natural Gas Production Up

PANHANDLE OIL AND GAS INC. reported total proved reserves at September 30, 2007,
calculated by the Company's petroleum engineering consulting firm, totaled
41.9 bcfe an increase of 22% over year end September 30, 2006 proved reserves
of 34.3 bcfe. Of the 41.9 bcfe of total proved reserves only 15% or 6.4 bcfe
are proved undeveloped reserves.
Production for fiscal 2007 increased 19% to 5,791,407 mcfe as compared to
4,881,976 mcfe for fiscal 2006; however, the Company's average sales price per
mcfe declined $.91 to $6.47 in fiscal 2007. Further, production for the
fourth quarter of 2007 increased 25% to 1,719,986 mcfe as compared to
1,376,926 mcfe for the fourth quarter of 2006. The average sales price in the
2007 quarter decreased $.20 per mcfe to $6.24 as compared to the 2006 quarter.
Fiscal year ended September 30, 2007 net income was $6,343,464, or $.75
per share, as compared to net income for fiscal year 2006 of $10,574,219, or
$1.25 per share. Total revenues for fiscal 2007 were $39,128,911 as compared
to $37,485,680 for fiscal 2006. Cash flow from operations increased 20% for
fiscal 2007 to $28,106,500 as compared to $23,470,145 for fiscal 2006.
Additions to properties and equipment for drilling and equipping wells and
purchasing leasehold totaled $28,112,522 in fiscal 2007 as compared to
$22,624,040 for 2006.