Panhandle Royalty Company ( AMEX-PHX )

2. 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 StockExchange (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)

3. As of September 30, 2003 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.

5. Net Fee Minerals Owned

6. Arkansas - 10,050 Colorado - 8,327 Florida - 6,901 Illinois - 1,068 Kansas - 3,122 Montana - 1,008 Nebraska - 1,319 North Dakota - 11,179 New Mexico - 57,456 Oklahoma - 113,146 South Dakota - 1,825 Texas - 43,085 Other States(10)- 906 259,390 Acres ofMineral InterestOwned Fee As of 9/30/2003

7. PANHANDLE ROYALTY COMPANYFinancialDATA SHEET SUMMARY FISCALYearly % 2003Change REVENUE$22,456,03865% NETINCOME$ 5,961,622 1,638% INCOME/SHARE$ 2.83 1,565% OPERATINGCASHFLOW$13,198,368 76% CAPITALEXP. (E&P)$ 9,195,916 32% DIVIDENDS$ 582,797 1% ASSETS$49,402,534 10% SHAREHOLDERSEQUITY$22,527,685 33% TOTALDEBT$14,666,665 (19)% STOCKPRICE$ 22.69 56% (FiscalYearEnd9/30/03) PRICE EARNING RATIO(PE)8/1

9. Dollars Paid In Dividends One Time Extra Dividend

12. PANHANDLE ROYALTY COMPANYSUMMARY OPERATING DATA SHEET FISCALYearly % 2003Change PRODUCTION OIL(BBLS)112,746 (15)% GAS(MCF)3,926,124 1% BOE767,102 (2)% MCFE4,602,600 (2)% PROVED RESERVES OIL(BBLS)835,978 (25)% GAS(MCF)28,269,873 1% BOE5,547,624 (4)% MCFE33,285,741 (4)% Undiscounted Value(M$)115,741,342 22% 10% Discounted(M$)75,497,304 23% RESERVE PRICE $/BBL 27.39 (1)% $/MCF4.43 42%

14. Average per Year Increase is 19% since 1991

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

16. Total Proved Reserves

17. Estimated Future Net Cash Flows From Proved Oil & Gas Reserves

18. PANHANDLE ROYALTY COMPANYSUMMARY OPERATING DATA SHEET FISCALYearly % 2003Change WORKING INTEREST WELLS Pending & Scheduled17425% Drilling129% Testing249% Producing(11 Oil, 102 Gas)1138% P&A20(23)% TOTALS29311% ROYALTY INTEREST WELLS Pending & Scheduled603% Drilling3(57)% Testing210% Producing(14 Oil, 100 Gas)11430% P&A1233% TOTALS21015% Combined Total Wells50313% Gross Producing Wells4,89828% 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.

20. Total Gross Producing Wells

21. PANHANDLE ROYALTY COMPANYFINANCIAL DATA SHEET – FirstQuarter2004 FISCALYearly% 2004Change REVENUE…………………….........................................…$ 4,973,46211% NET INCOME…………………………………………….……$ 990,23352% INCOME/SHARE …………………………………….$ .4752% CASH FROM OPERATING ACTIVITIES………………….............................….…….$ 3,791,53861% CAPITAL EXPENDITURES…….… $ 1,992,211(11) % BARRELSAVERAGEMCFAVERAGESOLD PRICESOLDPRICE 2004 QTR30,086 $ 30.30 934,032 $ 4.16 2003 QTR27,609$ 27.76 951,535 $ 3.82

22. Significant Activity 2003

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