Dorchester Minerals, L.p. · NASDAQ:DMLP
Dorchester Minerals, L.p — Shareholder Meeting (May 2018)
35 slides from Dorchester Minerals, L.p's shareholder meeting presentation, May 15, 2018
Slide 1: Annual Meeting May 16, 2018
Dorchester Minerals, LP ANNUAL MEETING May 16, 2018
Slide 2: Forward-Looking Statements
Dorchester Minerals, L.P. DMLP =NASDAQ> Forward-Looking Statements Portions of this document may constitute, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform
Slide 3: Outline
OUTLINE Observations and Trends * Distributions ¢ Minerals NPI Activity ¢ Production and Reserves ¢ Property Discussion
Slide 4: Observations and Trends
Dorchester Minerals, L.P. Observations and Trends Increased Volatility Based on Many Factors * Production Volumes = Pad Operations > Drilling & Completion = Midstream challenges * Cash Flow and Distributions = Wide range of ownership % = Timing > First pays and prior period adjustments = Lease bonus
Slide 5: 2017 Distributions
Dorchester Minerals, L.P. DMLP =NASDAQ> 2017 Distributions Cash Distributions Paid in Calendar 2017 * Reflects Q4 2016 to Q3 2017 activity Composition of 2017 Revenue Net Royalty NPI Other - Revenue Payments Revenue Aaiions $37.7 $37.7MM $3.5 MM $2.9 MM 6 30 25 Total Revenue 20 $44.1MM 15 LP GP Tota
Slide 6: 2017 Distributions: Components and Prices
Dorchester Minerals, L.P. DMLP *NASDAQe 2017 Distributions Components and Prices * Royalty properties contributed 85% to total 2017 LP distributions * Gross Revenue > 67% oil & liquids sales, 26% gas sales, 7% other LP Distribution History ($/unit) Gas Price ($/Mcf) Oil Price ($/bbl) $3.00 $10.00 $1
Slide 7: Minerals NPI
Dorchester Minerals, L.P. DMLP Minerals NPI Activity from August 2013 through March 2018 + Reached surplus in September 2015 for the first time since July 2013 * NPI Payments to DMLP for trailing 12 months through March 2018 total $6.9MM + NPI deficits in 2017 due to new Bakken capital commitments B
Slide 8: Minerals NPI: Trailing Months Activity
Dorchester Minerals, L.P. DMLP Minerals NPI Trailing 12 Months Activity through March 2018 * Trailing 12 months operating margin of 65% Outstanding Capital Commitments By Play Trailing 12 Months Revenue $17.7MM on eer) Trailing 12 Months Expenses (LOE, taxes, etc.) ($6.2 MM) Other Basins ($ 0.2MM) T
Slide 9: 2017 NPI Net Operating Income
Dorchester Minerals, L.P. DMLP =NASDAQ> 2017 NPI Net Operating Income NPI contributions to distributions are not proportionate to production + Oil from Permian and Bakken represent the majority of Net Operating Income + Natural gas from Fayetteville and Hugoton are much smaller contributors due to l
Slide 10: Total Production
Dorchester Minerals, L.P. DMLP NASDAQ? Total Production * Oil trend volatility affected by NPI contributions * Gas decline is due to reduced activity in dry gas basins Daily Gas Rate (Mcfd) Daily Oil Rate (boed) 1,000,000 + + 10,000 Began reporting Plant Products as | |_iquid equivalent —“S | 100,00
Slide 11: Royalty and NPI Production
Dorchester Minerals, L.P. DMLP NASDAQ? Royalty and NPI Production Royalty Production NPI Production * Oillargely driven by robust Midland * Oil was driven by Bakken participation Basin development and recent contributions from Permian + Gas decline is suppressed by associated APO interests gas from
Slide 12: Composition of Production
Dorchester Minerals, L.P. DMLP =NASDAQ> Composition of Production Contribution from Diverse Sources + New plays have replaced declines in legacy assets * Opportunities for production growth in mature basins Daily Gas Rate (Mcfd) Daily Oil Rate (boed) 30,000 3,000 25,000 2,500 20,000 2,000 15,000 1,5
Slide 13: 2017 Reserve
Dorchester Minerals, L.P. DMLP 2017 Reserve Total Proved Reserves of 96.8 Bcfe on 12/31/2017 * All reserves are Proved Developed Producing (PDP) + Demonstrated history of positive revisions > new plays, infill drilling, and new technology * Oil and Plant Product volumes exceed 50% of total reserves
Slide 14: 2017 Reserve Composition
Dorchester Minerals, L.P. DMLP =NASDAQ> 2017 Reserve Composition * Permian and Bakken comprise 80% of total oil reserves * Hugoton and Fayetteville comprise 48% of total gas reserves Geographic Breakdown 7% Mid-Continent 6% Permian Barnett 41% 6% South Tx/ \ Gulf Coast \ 5% Hugoton 20% Fayetteville
Slide 15: 2017 Reserve Revisions
Dorchester Minerals, L.P. DMLP =NASDAQ> 2017 Reserve Revisions * Midland Basin was a major driver of upward oil revisions * Extended economic limits and Permian activity supported gas reserves Equivalent Reserves (Bcfe) ly 96.8 Total Natural Gas Reserves (Bcf) ao eds Reserves Year-End 2016 41.2 90 +
Slide 16: Bakken/Three Forks
Dorchester Minerals, L.P. DMLP Bakken/Three Forks * 70,390 gross ac (8,905 net ac) in six core ND counties * Majority of mineral interests are unleased * Year-end 2017 PDP reserves of 1.16 MMboe (RI & WI) ae ‘a Well | Average | Average Count | APO GWI | APO NRI Completed/Producing 683 1.892% | 1.920
Slide 17: Bakken/Three Forks
Dorchester Minerals, L.P. Bakken/Three Forks * 2017 exit rate > 686 boed (73% NPI) * 13 wells producing but not yet in pay * 7 participation elections YTD 2018 DMLP =NASDAQ> * Rig count increased from 51 in May 2017 to 60 in May 2018 Well Count Daily Production (boed) 140 1,400 Non-Consent Elections
Slide 18: Bakken/Three Forks: McKenzie County Example
Dorchester Minerals, L.P. DMLP Bakken/Three Forks McKenzie County Example + 320gross ac (104 net ac) * Average NRI > 3.960% * Participated with unleased interest Continental Resources 1) Uhiman-Pittsburgh Unit (16 wells) 2,683 ac Spacing Unit UhIman 1-7H (1% Prod 2014) > EUR: 1.0 MMboe 3 new wells >
Slide 19: Midland Basin
Dorchester Minerals, L.P. Midland Basin Wolfcamp/Spraberry 1,400 * 248,580 gross ac (15,430 net ac) 1,200 * Unleased at some depths in numeroustracts 1,000 DMLP =NASDAQ> NPI Production (boed) Participation DNon-Consent 800 _cfifPon Note: Production graphs limited tc 20 1,400 10 2011 2012 2013 2014 2
Slide 20: Midland Basin: Glasscock County Example
Dorchester Minerals, L.P. DMLP Midland Basin Glasscock County Example * 10,240 grossac (1,120 net ac) with an average NRI of 1.688% * Horizontal activity on 8 of 16 sections RSP Permian 1) Calverley 9-4 (17 wells) \ 4 A 13 wells producing (all in pay)—4 permits Cumulative 28 month production > 7,921
Slide 21: Glasscock County Example (con't)
Dorchester Minerals, L.P. DMLP Midland Basin Glasscock County Example (con’t) * Calverley Area > RSP Permian and Diamondback Energy * Production profile representative of pad development Daily Production (boed) 140 Calverley Vertical (9 Wells) 120 WCalverley 9-4 Pad 1(2 wells) Riley 8/¢ (2 wells) 40
Slide 22: Midland Basin: Reagan County Example
DMLP =NASDAQ> Dorchester Minerals, L.P. Midland Basin Reagan County Example + 22,331 grossac (3,502 net ac) + “Bolt-Under” acquisition — Increased Northwestern Reagan County acreage position by 63% + Waiting on results of recent Wolfcamp C activity Parsley Energy 1) Bates (12 wells) 12 wells produci
Slide 23: Midland Basin: Northern Upton County Example
Dorchester Minerals, L.P. DMLP Midland Basin Northern Upton County Example * Leased at all depths in 9,372 gross ac (428 net ac) * Unleased at various depths in 12,899 gross ac (500 net ac) * DMOLP has backed-in with full APO interest in 37 horizontal wells + 22additional horizontal wells have been
Slide 24: Delaware Basin
Dorchester Minerals, L.P. DMLP =NASDAQ> Delaware Basin Wolfcamp / Bone Springs * 13,538 grossac (911 net ac) located in Loving, Reeves and Ward counties, Texas and Lea County, New Mexico * 640 gross ac of ORRI’s * Majority of tracts are leased at 1/4 royalty + Prospective in multiple zones within th
Slide 25: Delaware Basin: Loving County Example
Dorchester Minerals, L.P. Delaware Basin Loving County Example * 9,948 gross ac (398 net ac) + 21 new wells permitted YTD 2018 Anadarko Petroleum 1) Silvertip (33 wells) Average NRI> 0.570% 15 wells producing (13 in pay) 17 wells drilling/WOC 1 well permitted not spud Cumulative 15 month production
Slide 26: Delaware Basin: Winkler County Example
Dorchester Minerals, L.P. DMLP Delaware Basin Winkler County Example Wolfcamp / Bone Springs Varying undivided mineral interests in 6,400 gross acres in Block 27 90% leased/HBP with average NRI of 8.940% Recent activity has extended the prospective limits of the Basin to the east Ongoing leasehold a
Slide 27: Appendix
APPENDIX
Slide 28: 2017 Reserves: History of Positive Reserve Revisions
Dorchester Minerals, L.P. DMLP 2017 Reserves History of Positive Reserve Revisions * Cumulative Reserve Revisions have exceeded 100% of Current Reserves Equivalent Reserves (Bcfe) 120 106.5 ___ Initial Reserves 96.8 Total Reserves 100 - Acquisitions 2003-2017 40 Production (177.0 Befe) 3 |] Total Re
Slide 29: Minerals NPI: Production by Product
Dorchester Minerals, L.P. DMLP NASDAQ? Minerals NPI Production by Product * Added 91 new wells in 2017 located in North Dakota, Oklahoma, and Texas * Gas production has declined since 2012, but oil production has increased by over 250% * Bakken Participations & Permian Payouts activity led to oil in
Slide 30: Non-Consent/Non-Participation
Dorchester Minerals, L.P. DMLP *NASDAQe Non-Consent/Non-Participation Texas * Unleased mineral owner backs in for full working interest after operator recovers 100% of costs NRI 100% + 100% WI 50% | 100% NRI to DMOLP 0% + 0% 100% 200% 300% North Dakota % Costs Recovered by Operator + Unleased minera
Slide 31: Non-Consent/Non-Participation
Dorchester Minerals, L.P. DMLP =NASDAQ> Non-Consent/Non-Participation Texas * Unleased mineral owner backs in for full working interest after operator recovers 100% of costs Selected Texas Total N/C Paid Out Average Average Counties Well Count | WellCount | BPONRI | APONRI Howard 17 4 0.000% 2.235%
Slide 32: Fayetteville Shale
Dorchester Minerals, L.P. DMLP Fayetteville Shale Eastern Arkoma Basin + 23,336 grossac (11,464 net ac) in 196 sections + 476 wells producing at year-end + 2017 exit rate > 2.4 MMcfd (44% WI) + No new wells on DMLP acreage in 2017 New Wells on Production Daily Production (Mcfd) 120 8,000 ‘0 Working
Slide 33: Hugoton Operated Properties
Dorchester Minerals, L.P. Daily Gas Rate (Mcfd) DMLP *NASDAQe Hugoton Operated Properties Hugoton Field — Oklahoma Panhandle * Divested Kansas operations in Sept 2014 — average net sales of 2.8 MMcfd * Ongoing well optimization and cost-saving initiatives, but limited upside potential Daily Oil Rate
Slide 34: Management Ownership
Dorchester Minerals, L.P. DMLP NASDAQ? Management Ownership Alignment of GP and LP interests * GP has no incentive distribution rights — fixed sharing ratio * Management’s LP interest exceeds its GP interest * Not incentivized to make dilutive transactions * DSD Royalty Acquisition increased Managem
Slide 35: Annual Meeting
Dorchester Minerals, LP ANNUAL MEETING May 16, 2018