Panhandle Royalty to buy Wood Oil Co.

Journal Record, The (Oklahoma City), Aug 10, 2001 by David Page

Panhandle Royalty on Thursday said it will purchase Wood Oil Co. of Tulsa.

Wood will be a subsidiary of Oklahoma City-based Panhandle.

Both companies are longtime players in Oklahoma's energy industry.

Panhandle is 75 years old and has non-operating or royalty interests in 2,500 oil and gas wells. Wood Oil is a private, oil, gas and fee mineral company founded in 1919.

This acquisition is anticipated to add more than 50 percent to Panhandle's production and reserve base and 37 percent to its fee mineral ownership base, said H.W. Peace II, president and CEO of Panhandle. Both companies currently own working or royalty interests in several identical wells, including the expanding Potato Hills field area of southeastern Oklahoma's Quachita overtrust belt.

Wood's properties are primarily in Oklahoma and Texas. However, it owns leasehold and minerals in 17 additional states.

Wood's estimated proven reserves are 524,000 barrels of oil and 9.97 billion cubic feet of gas. At Sept. 30, 2000, Panhandle's proven reserves were 660,000 barrels of oil and 14.39 billion cubic feet of natural gas.

The combination of the two companies will provide reduced overhead expenses and economy of scale as compared to our separate operations, Peace said.

There will be only one office in Oklahoma City, he said.

Wood Oil's minerals and production in east Texas, west Texas and Kansas will allow us to be active in areas where we previously were not, or were to only a small extent, he said. We believe the medium- and long-term opportunity for greater growth of Panhandle is considerably enhanced.

In trading Thursday on the Nasdaq Small Cap Market, Panhandle was up 8 cents at $17.15. The 52-week high is $24.99 and the low is $9.50.