In electric mixer (w/dough hook), mix dry ingredients including peanut butter on low speed then add egg and 1 cup water until it forms a slightly sticky ball.
Dump the dough onto a well floured board and knead into a ball. Roll the dough out 1/2 inch thick.
OPTIONAL: Roll out dough into a sheet pan then cut to squares to the desired size with a pizza cutter. You can use a cookie cutter but that's a lot more work and the dog really won't care about the shape of the treat. Great gift idea, however.
OPTIONAL: Brush with egg wash and sprinkle with oat meaL.
Bake in 325 degree oven for one hour, until completely hard.