First I would like to wish everyone a Merry Christmas and Happy New Year from all of us at Farmers Royalty Company.
The Board and Management are pleased to report continued growth of revenue for 2011. Gross revenue through the third quarter was $14,665,625 compared to $14,227,934 for the same period of 2010. Although natural gas prices have been low, oil and natural gas liquid prices have remained strong. An increase in volumes of high BTU natural gas and oil has strengthened the growth of the company.
The drilling activity has continued to be aggressive in Western Oklahoma and the Texas Panhandle. These areas not only yield natural gas but also gas liquids and oil. The Granite Wash in Washita, Custer, Beckham, Roger Mills Counties and the Texas Panhandle has continued to show excellent results with high volumes of liquid rich natural gas and good condensate and oil production. The Tonkawa and Cleveland sands Play in Ellis, Dewey, Custer and Roger Mills Counties has very high activity with good results for oil and liquid rich natural gas. Farmers has a large grouping of acres in this multi-zone development. The Cana/Geary Woodford shale Trend in Blaine, Caddo, Canadian, Custer and Dewey Counties has expanded drilling activity with good BTU natural gas and some oil. This Woodford exploration has expanded into Grady and Stephens Counties, where Farmers owns undeveloped minerals. Better information and the technology of horizontal drilling have improved our revenue from royalty and working interest the Company owns. This is encouraging for us with great expectations for new developments in the future.
Last October, the Farmers Royalty team went to Alfalfa and Woods Counties, for first hand observation of drilling activities. The Company has extensive mineral acres in this developing Mississippi formation play. Oil and natural gas is the driver for this shallow horizontal exploration.
Our Shareholders benefit by having a steady dividend from their shares and an increased value of those shares. The average price of the shares has steadily increased since the stock split in 2008, with the last several shares selling for an average of $12,000 per share.
At the November 18, 2011 Board meeting a dividend of $125 per share was declared to be paid. This brings the yearly dividend, for one share of Farmers Royalty Company Stock, to $500. The Company continues to add value to our assets by maximizing royalty interests and participating in drilling and completion of wells.
Again have a wonderful Christmas Season.
