is engaged in the acquisition, ownership, management and development of its fee minerals. It actively participates in the exploration, drilling, production and acquisition of hydrocarbons on internally and externally generated prospects. Its stock is traded on the American Stock Exchange (AMEX) under the symbol PHX. The Company's office is located in Oklahoma City while its mineral holdings and production are situated in Oklahoma, New Mexico, Texas, and nineteen(19) other states. is engaged in the acquisition, ownership, management and development of its fee minerals. It actively participates in the exploration, drilling, production and acquisition of hydrocarbons on internally and externally generated prospects. Its stock is traded on the American Stock Exchange (AMEX) under the symbol PHX. The Company's office is located in Oklahoma City while its mineral holdings and production are situated in Oklahoma, New Mexico, Texas, and nineteen(19) other states. Panhandle Royalty Company (AMEX-PHX)

Panhandle’s Principal Properties consisted of perpetual ownership of 259,390 Net Mineral Acres within 1,709,054 Gross Acres. The Company also held Leases on 20,227 Net Acres of Minerals in Arkansas, Louisiana, Oklahoma, Kansas, Texas and New Mexico. Panhandle held Royalty and/or Working Interests in 4,898 total Oil or Gas Wells, including 98 Successfully Completed but Not Yet Producing Wells. There were 60 Wells in the process of being Drilled or Completed.

Net Fee Minerals Owned Net Fee Minerals Owned

259,390 Acres of Mineral Interest Owned Fee As of 9/30/ ,050 Arkansas - 10, ,327 Colorado - 8, ,901 Florida - 6, ,068 Illinois - 1, ,122 Kansas - 3, ,008 Montana - 1, ,319 Nebraska - 1, ,179 North Dakota - 11, ,456 New Mexico - 57, ,146 Oklahoma - 113, ,825 South Dakota - 1, ,085 Texas - 43,085 (10) Other States (10) - 906

FISCAL Yearly % FISCAL Yearly % 2003 Change 2003 Change REVENUE$22,456, REVENUE$22,456, % NETINCOME$ 5,961,622 1,638 NET INCOME$ 5,961,622 1,638 % INCOME/SHARE $ ,565 INCOME/SHARE $ ,565 % OPERATINGCASHFLOW$13,198, OPERATING CASH FLOW$13,198, % CAPITALEXP $ 9,195, CAPITAL EXP. (E&P) $ 9,195, % DIVIDENDS $ 582,797 1 % ASSETS $49,402, ASSETS $49,402, % SHAREHOLDERSEQUITY $22,527, SHAREHOLDERS EQUITY $22,527, % TOTALDEBT $14,666,665 (19) TOTAL DEBT $14,666,665 (19) % STOCKPRICE $ STOCK PRICE $ % FiscalYearEnd9/30/03 (Fiscal Year End 9/30/03) PRICE EARNING RATIO (PE) 8/1 P ANHANDLE R OYALTY C OMPANY Financial D ATA S HEET S UMMARY

Dollars Paid In Dividends Dollars Paid In Dividends One Time Extra Dividend

FISCAL Yearly % FISCAL Yearly % 2003 Change 2003 ChangePRODUCTION OIL (BBLS ) 112,746(15) OIL (BBLS ) 112,746(15) % GAS (MCF ) 3,926,124 1 GAS (MCF ) 3,926,124 1 % BOE 767,102 (2) BOE 767,102 (2) % MCFE 4,602,600 (2) MCFE 4,602,600 (2) % PROVED RESERVES OIL (BBLS ) 835,978 (25) OIL (BBLS ) 835,978 (25) % GAS (MCF) 28,269,873 1 GAS (MCF) 28,269,873 1 % BOE 5,547,624 (4) BOE 5,547,624 (4) % MCFE 33,285,741 (4) MCFE 33,285,741 (4) % Undiscounted Value (M$) 115,741, Undiscounted Value (M$) 115,741, % 10% Discounted (M$) 75,497, % Discounted (M$) 75,497, % RESERVE PRICE $/BBL (1) $/BBL (1) % $/MCF $/MCF % P ANHANDLE R OYALTY C OMPANY S UMMARY O PERATING D ATA S HEET

Average per Year Increase is 19% since 1991

ANNUAL PRODUCTION ANNUAL PRODUCTION Average 17 % Increase Per Year Over 1991 Base Year

Total Proved Reserves Total Proved Reserves

Estimated Future Net Cash Flows From Proved Oil & Gas Reserves

FISCAL Yearly % FISCAL Yearly % 2003 Change 2003 Change WORKING INTEREST WELLS Pending & Scheduled Pending & Scheduled % Drilling12 9 Drilling12 9 % Testing24 9 Testing24 9 % Producing (11 Oil, 102 Gas)113 Producing (11 Oil, 102 Gas)113 8 % P&A 20 P&A 20 (23) % TOTALS TOTALS % ROYALTY INTEREST WELLS Pending & Scheduled 60 3 Pending & Scheduled 60 3 % Drilling 3 (57) Drilling 3 (57) % Testing 21 0 Testing 21 0 % Producing (14 Oil, 100 Gas) Producing (14 Oil, 100 Gas) % P&A P&A % TOTALS TOTALS % Combined Total Wells Combined Total Wells % Gross Producing Wells 4, Gross Producing Wells 4, % Average Net Interest 2003 W.I. Completions = 4.88 % W.I., 4.49 % NRI Average Net Interest 2003 R.I. Completions = 0.91 % R.I. P ANHANDLE R OYALTY C OMPANY S UMMARY O PERATING D ATA S HEET

Total Gross Producing Wells Total Gross Producing Wells

P ANHANDLE R OYALTY C OMPANY F INANCIAL D ATA S HEET – First Quarter 2004

Significant Activity 2003

PANHANDLE ROYALTY COMPANY ….... End …….