Dorchester Minerals, L.p. · NASDAQ:DMLP
Dorchester Minerals, L.p — Shareholder Meeting (May 2005)
33 slides from Dorchester Minerals, L.p's shareholder meeting presentation, May 4, 2005
Slide 1: Dorchester Minerals, LP 2005 Annual Meeting
Dorchester Minerals, LP 2005 Annual Meeting Annual Meeting of the Limited Partners May 4, 2005
Slide 2: Forward-Looking Statements
Forward-Looking Statements Portions of this document may constitute “forward-looking statements” as defined by federal law. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions pr
Slide 3: Presentation Outline
Presentation Outline 2004 Highlights – Financial – Operational 2004 Reserves Peer Group Comparison 2004 Activity Highlights – Royalty Properties – Net Profits Interests (NPI) Looking Ahead to 2005
Slide 4: Dorchester Minerals 2004
Dorchester Minerals 2004 Highlights
Slide 5: 2004 Financial Highlights
2004 Financial Highlights Increase in Net Income – 2004: $30.08 million – 2003: ($26.83 million) Increase in Lease Bonus and Other Income – 2004: $1.61 million – 2003: $0.29 million Increase in Limited Partner Distributions – 2004: $47.95 million – 2003: $39.97 million 2004 Highlights
Slide 6: Quick Look at 2004
Quick Look at 2004 Distributions Distributions Paid in 2004 – Reflects Q4 2003 to Q3 2004 Activity Royalty Revenue $26.3 MM NPI Revenue $23.3 MM Other Revenue $2.0 MM Total Revenue $51.6 MM LP Distribution $46.5 MM GP Distribution $1.2 MM Total Expenses $3.9 MM 2004 Highlights
Slide 7: 2004 Operational Highlights
2004 Operational Highlights Acquired High-Quality Assets in Exchange for 1.2 million Limited Partner Units 196 New Wells Completed on Royalty Properties 25 New Wells Drilled on NPI Properties Reserves Increased to 93.1 Bcfe Integrated Garland and Dallas Offices Successful Certification of Internal C
Slide 8: Volumes – Prices – Distributions: Volumes
Volumes – Prices – Distributions Mcfepd per 1000 Units $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2003 2004 2005 0.974 1.052 1.145 1.107 1.108 1.052 1.055 1.048 1.025
Slide 9: Volumes – Prices – Distributions: Gas Price
Volumes – Prices – Distributions Average Gas Price per Mcf $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2003 2004 2005 0.974 1.052 1.145 1.107 1.108 1.052 1.055 1.048 1.025
Slide 10: Volumes – Prices – Distributions: Quarterly Distribution
Volumes – Prices – Distributions Quarterly Distribution per Unit $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2003 2004 2005 0.974 1.052 1.145 1.107 1.108 1.052 1.055 1.048 1.025 0.458 0.423 0.391 0.415 0.415 0.476 0.426 0.481
Slide 11: Dorchester Minerals 2004 Reserves
Dorchester Minerals 2004 Reserves
Slide 12: 2004 Reserves
2004 Reserves Total Proved Reserves 93.1 Bcfe Reserves per Unit 3.30 Mcf Proved Developed 99.4% Reserve Replacement 100.4% SEC PV10 $256 million Reserve Life Index (R/P) 8.8
Slide 13: 2004 Reserves: Product Mix and Allocation
2004 Reserves Oil 25% Gas 75% Product Mix Royalty 57% NPI 43% Property Allocation
Slide 14: Dorchester Minerals Peer Group Comparison
Dorchester Minerals Peer Group Comparison
Slide 15: Distributions: Peer Group Comparison
Distributions Distributed $46.5 million ($1.70 per Unit) 8.8% Annual Yield on Common Units 2004 Yield based on 01/02/04 price (DMLP: $19.31 ) 15% 12% 9% 6% 3% 0% PBT SJT SBR HGT Peer Average DMLP CRT MTR Peer Group Comparison 11.6% 10.8% 9.7% 9.3% 9.3% 8.8% 8.7% 8.5%
Slide 16: Unit Price: Peer Group Comparison
Unit Price Price Appreciation of 24% ($4.61 per Unit) Market Capitalization Increased to $676 MM Normalized 2004 Returns 40% 30% 20% 10% 0% -10% -20% Q1 Q2 Q3 Q4 Peer Group Comparison DMLP Peer Average NASDAQ Composite
Slide 17: Reserve Replacement: Peer Group Comparison
Reserve Replacement 2004 Reserve Replacement (Proved Developed) 115% 110% 105% 100% 95% 90% 85% 80% SJT PBT SBR DMLP CRT Peer Average HGT MTR Peer Group Comparison 107.9% 106.4% 102.6% 100.4% 100.0% 99.8% 91.8% 83.3%
Slide 18: Dorchester Minerals
Dorchester Minerals 2004 Activity Highlights
Slide 19: Developing Plays
Developing Plays Montana Horizontal Bakken Mid-Continent Granite Wash Delaware Basin Pennsylvanian South Texas Wilcox Trend North Texas Barnett Shale Alabama Smackover Arkansas Fayetteville Shale New York Trenton/BR 2004 Activity Highlights
Slide 20: Royalty Property Highlights
Royalty Property Highlights Leasing Activity – Consummated 41 leases and pooling elections – Identified 196 new wells on royalty properties – 109 active lease offers Maximizing Value of Mineral Assets – Lease bonus payments up to $500/acre – Initial royalty terms averaged 24% – Hybrid Leases—“Back-I
Slide 21: Royalty Property Highlights: Unnamed Field (South TX)
Royalty Property Highlights Unnamed Field (South TX) Unamed Operator 5 Wells Drilled Avg. Test Rate: 10 MMcfd, 270 bopd DMLP: 5.1% NRI 2004 Reserves: 3.8 Bcfe (1 well) 2004 Activity Highlights
Slide 22: Royalty Property Highlights: Canute North
Royalty Property Highlights Canute North (Custer, OK) Cimarex Energy Test Rate: 4.9 MMcfd, 21 bopd DMLP: 5.4% NRI Additional Well Being Completed 2004 Reserves: 4.1 Bcfe (1 well) 2004 Activity Highlights
Slide 23: Royalty Property Highlights: Little Cedar Creek
Royalty Property Highlights Little Cedar Creek (Conecuh, AL) Midroc Operating Company Unitized for Secondary Recovery DMLP: 1.3% NRI Operator’s Reserves: 11.1 MMboe DMLP 2004 Reserves: 2.0 MMboe 2004 Activity Highlights
Slide 24: Royalty Property Highlights: Brookeland
Royalty Property Highlights Brookeland (Tyler, TX) Anadarko Petroleum Test Rate: 11.8 MMcfd, 2,752 bopd DMLP: 1.09% NRI Additional Well Being Completed No Reserves Assigned in 2004 2004 Activity Highlights
Slide 25: Net Profits Interest Highlights
Net Profits Interest Highlights Hugoton Operated Properties – Average gas rate of 14,660 Mcfd – Continuing well stimulation program Other Activity – Participated with working interest in 25 wells – Oklahoma, Texas, Montana and Arkansas Maximize Value of Mineral Assets – Access to well information –
Slide 26: Net Profits Interest Highlights: Des Moines
Net Profits Interest Highlights Des Moines (Washita, OK) Cimarex Energy 13,200 ft Test Rates up to 6.5 MMcfd DMLP: 7.03% WI (8.78% NRI) Estimated Reserves: 2.2 Bcfe/well 2004 Activity Highlights
Slide 27: Net Profits Interest Highlights: Horizontal Bakken
Net Profits Interest Highlights Horizontal Bakken (Richland, MT) Various Operators Two Multi-Lateral Wells Completed Test Rates up to 789 bopd 1 Well Drilling and 1 Proposed DMLP: up to 6.3% WI/NRI Estimated Reserves: 300 Mboe (1 well) 2004 Activity Highlights
Slide 28: Net Profits Interest Highlights: Cherokee
Net Profits Interest Highlights Cherokee (Roger Mills, OK) Chesapeake & JMA Energy 15,100 ft Test Rates up to 6.7 MMcfd DMLP: 0.2-1.6% WI/NRI Estimated Reserves: 1.7 Bcf/well 2004 Activity Highlights
Slide 29: Net Profits Interest Highlights: Fayetteville Shale
Net Profits Interest Highlights Fayetteville Shale (Northern AR) Southwestern Energy 1 Well Waiting on completion DMLP: 6.3% WI/NRI SWN Estimates 58-65 Bcf/section Substantial Unleased Acreage 2004 Activity Highlights
Slide 30: Hybrid Lease A (9 Leases During 2004)
Hybrid Lease A (9 Leases During 2004) NRI Traditional Lease 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Lessee Interest 75% Royalty Interest 25% DMLP “Look-Back” Lessee Interest 56.25% Look-Back Interest 18.75% Royalty Interest 25% Optional participation at casing point 2004 Activity Highlights
Slide 31: Hybrid Lease B (4 Leases During 2004)
Hybrid Lease B (4 Leases During 2004) NRI Traditional Lease Lessee Interest 75% Royalty Interest 25% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% DMLP “Back-In” Lessee Interest 75% ORRI 5% Royalty Interest 20% Lessee Interest 60% Back-In Interest 20% (APO) Royalty Interest 20% 2004 Activity Highlight
Slide 32: Looking Ahead to 2005
Dorchester Minerals Looking Ahead to 2005
Slide 33: Dorchester Minerals, LP 2005 Annual Meeting
Dorchester Minerals, LP 2005 Annual Meeting Annual Meeting of the Limited Partners May 4, 2005