Dorchester Minerals, L.p. · NASDAQ:DMLP
Dorchester Minerals, L.p — Shareholder Meeting (May 2008)
41 slides from Dorchester Minerals, L.p's shareholder meeting presentation, May 13, 2008
Slide 1: Dorchester Minerals, LP 2008 Annual Presentation
Dorchester Minerals, LP NASDAQ: DMLP Exhibit 99.1 Dorchester Minerals, LP 2008 Annual Presentation May 13, 2008
Slide 2: Forward-Looking Statements
Dorchester Minerals, LP NASDAQ: DMLP • 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 materiali
Slide 3: Presentation Outline
Dorchester Minerals, LP NASDAQ: DMLP Overview of 2007 Results Activity Highlights Royalty Properties Net Profits Interests Fayetteville Shale Developing Play Highlights Horizontal Bakken Appalachia Appendix and Additional Materials Presentation Outline
Slide 4: Overview of 2007 Results
Dorchester Minerals, LP NASDAQ: DMLP Overview of 2007 Results
Slide 5: 2007 Distributions
Dorchester Minerals, LP NASDAQ: DMLP Royalty Revenue $39.3 MM Total Revenue $62.4 MM Other Revenue $1.7 MM NPI Revenue $21.4 MM Total Expenses $5.0 MM 2007 Distributions LP Distribution $55.7 MM GP Distribution $1.7 MM Cash Distributions Paid in Calendar 2007 Reflects Q4 2006 to Q3 2007 activity
Slide 6: 2007 Financial Results
Dorchester Minerals, LP NASDAQ: DMLP $0 $20 $40 $60 $80 $100 2003 2004 2005 2006 2007 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 Royalties NPI Lease Bonus Gas Price ($/Mcf) 2007 Financial Results $49.2 $56.8 $79.8 $74.9 $65.4 Operating Revenue ($MM) Gas Price ($/Mcf) Distributions ($/unit) Revenue – Price
Slide 7: 2007 Production Results
Dorchester Minerals, LP NASDAQ: DMLP 2007 Production Results Daily Production (MMcfepd) 2003 2004 2005 2006 2007 2008 Forecasted Production Actual Production 3.0% Annualized Decline 11.4% Decline Since Inception 8.6% 3-year Decline Rate 6.7% 1-year Decline Rate Actual vs. Forecast (Excludes Minerals
Slide 8: 2007 Reserves Overview
Dorchester Minerals, LP NASDAQ: DMLP Actual 12/31/2006 Projected 12/31/2007 Actual 12/31/2007 2007 Reserves Overview 2007 Production (10.2 Bcfe) Reserve Revisions (4.3 Bcfe) Total Reserves (Bcfe) 82.7 88.6 78.4 Total Proved Reserves of 82.7 Bcfe on 12/31/07 2.93 Mcfe per unit outstanding 100% of res
Slide 9: 2007 Reserves Overview: Historical Reserve Revisions
Dorchester Minerals, LP NASDAQ: DMLP Actual 01/31/2003 Projected 12/31/2007 Actual 12/31/2007 Total Reserves (Bcfe) 2007 Reserves Overview 2003-2007 Production (55.0 Bcfe) Reserve Revisions (36.2 Bcfe) 82.7 97.0 42.0 Historical Reserve Revisions Since Inception Demonstrated history of positive revis
Slide 10: Activity Highlights: Royalty Properties
Dorchester Minerals, LP NASDAQ: DMLP Activity Highlights Royalty Properties
Slide 11: Royalty Property Highlights: Acreage Distribution
Dorchester Minerals, LP NASDAQ: DMLP Royalty Property Highlights Acreage Distribution 344,862 net acres (3,121,523 gross acres) Wide geographic spread – 573 counties in 25 states Includes most major producing basins Approximately 70% of acreage is undeveloped
Slide 12: Royalty Property Highlights: Leasing and Development Activity
Dorchester Minerals, LP NASDAQ: DMLP Royalty Property Highlights Leasing and Development Activity Consummated 107 leases/elections on 2,758 net acres Lease bonus payments up to $500/acre Initial royalty terms up to 40% 94 active lease offers Identified 346 new wells on royalty properties Fayettevill
Slide 13: Royalty Property Highlights: East Jeffress Field
Dorchester Minerals, LP NASDAQ: DMLP Legacy royalty asset with 6.25% NRI Long-life production, no PUD reserves assigned to property Recent step-out completion tested over 9.8 MMcfpd Five new wells since year-end 2007 Royalty Property Highlights Gas Rate (Mcfepd) Well Count East Jeffress Field (Coate
Slide 14: Activity Highlights: Net Profits Interests
Dorchester Minerals, LP NASDAQ: DMLP Activity Highlights Net Profits Interests
Slide 15: Net Profits Interest Highlights
Dorchester Minerals, LP NASDAQ: DMLP Net Profits Interest Highlights NPI Provides LP Exposure to Working Interest Potential Without Generating UBTI Participated in 34 wells in Arkansas, Montana, North Dakota, Oklahoma, and Texas 24 wells completed in 2007 4 wells abandoned in 2007 6 wells in various
Slide 16: Net Profits Interest Highlights: Capital Expenditures
Dorchester Minerals, LP NASDAQ: DMLP 29% 2% 69% Minerals NPI Hugoton NPI Other NPI Net Profits Interest Highlights $0.0 $1.0 $2.0 $3.0 $4.0 2003 2004 2005 2006 2007 Historical NPI CAPEX ($MM) 2007 NPI CAPEX Capital Expenditures Through year-end 2007 $10.0 MM in total NPI investments 88% of CAPEX use
Slide 17: Minerals NPI Production Analysis
Dorchester Minerals, LP NASDAQ: DMLP 1,000 10,000 2003 2004 2005 2006 2007 2008 Gas Rate (Mcfepd) Well Count Net Profits Interest Highlights Minerals NPI Production Analysis 125 wells/units producing at year-end 2007 108 wells are currently in pay status 1.2 Bcfe in production receipts through Q1 20
Slide 18: Minerals NPI Cash Flow Analysis
Dorchester Minerals, LP NASDAQ: DMLP Net Profits Interest Highlights ($1.2) ($1.0) ($0.8) ($0.6) ($0.4) ($0.2) $0.0 $0.2 $0.4 2003 2004 2005 2006 2007 2008 Net Operating Income Investment Surplus (Deficit) ($ Millions) Minerals NPI Cash Flow Analysis Through Q1 2008 Cumulative Revenue $9.3 MM Cumula
Slide 19: Net Profits Interest Highlights: Hugoton Area
Dorchester Minerals, LP NASDAQ: DMLP Net Profits Interest Highlights Hugoton Area – Operated Properties 2007 production within 3% of projection (8.2% decline) Drilled two new wells in 2007, additional well currently waiting on pipeline Initiated Herrington re-completion study Gas Rate (Mcfepd) Well
Slide 20: Activity Highlights: Fayetteville Shale
Dorchester Minerals, LP NASDAQ: DMLP Activity Highlights Fayetteville Shale
Slide 21: Fayetteville Shale Highlights: Ownership Summary
Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale Highlights Eastern Arkoma Basin – Northern Arkansas Ownership summary 23,336 gross/11,464 net acres in trend 196 sections in 8 counties 2006 lease transaction 9,800 net acres in 179 sections in 8 counties Bonus of $625 per acre with 25% royalty
Slide 22: Fayetteville Shale Highlights: Current Activity and Single Well Economics
Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale Highlights Eastern Arkoma Basin – Northern Arkansas Current activity on Dorchester acreage 43 wells completed as producers 18 wells in various stages of drilling or completion 25 wells permitted and/or proposed by operator $4.0 million in net e
Slide 23: Fayetteville Shale Highlights: Six County Core Area
Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale Highlights Current Activity in Conway, Cleburne, Faulkner, Pope, Van Buren, White Approximately 80 sections in “Productive Fairway” Permitting or drilling activity in 21% of DMLP’s sections Six County Core Area
Slide 24: Fayetteville Shale Highlights: Normalized Production
Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale Highlights 1,000 10,000 DMLP Average 1.4 Bcf Type Curve 2.0 Bcf Type Curve Well Count Full Months on Production NOTE: DMLP average reflects data from first full month of production Normalized Production Graph Average proved developed EUR of 1.6
Slide 25: Fayetteville Shale Highlights: Net Production Graph
Dorchester Minerals, LP NASDAQ: DMLP 1,000 1,200 1,400 2006 2007 2008 32 wells flowing to sales as of February 2008 Working interest 734 Mcfd (Subject to Minerals NPI) Royalty interest 572 Mcfd Working Interests up to 6.42%, NRI up to 10.1% (WI + RI) Gas Rate (Mcfepd) Well Count Fayetteville Shale H
Slide 26: Fayetteville Shale Highlights: Permitting, Drilling and Payment History
Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale Highlights 2005 2006 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 New Permits New Wells Spud 1st Payment Received Development activity increasing steadily Substantial time lag between spud and first payment 240 days Permitting, Drilling and Payment History Fi
Slide 27: Developing Play Highlights
Dorchester Minerals, LP NASDAQ: DMLP Developing Play Highlights
Slide 28: Developing Play Highlights: Horizontal Bakken
Dorchester Minerals, LP NASDAQ: DMLP Developing Play Highlights Horizontal Bakken (North Dakota) Six County Core Area Operators: Continental, EOG, Hess, Marathon Diversified acreage position 70,390 gross acres 7,602 net acres Participated in 2 wells Elected non-consent option in 27 wells th royalty
Slide 29: Developing Play Highlights: Devonian Shale (Appalachia)
Dorchester Minerals, LP NASDAQ: DMLP Developing Play Highlights Devonian Shale (Appalachia) New York and Pennsylvania Potential targets Upper Devonian oil (shallow) Marcellus/Devonian shale gas (middle) Trenton-Black River gas (deep) Operators: Chesapeake, East Resources, EOG, Fortuna Energy Concent
Slide 30: 2008 Annual Meeting
Dorchester Minerals, LP 2008 Annual Meeting May 13, 2008
Slide 31: Appendix
Dorchester Minerals, LP NASDAQ: DMLP Appendix
Slide 32: Appendix: Minerals NPI and Participation Rights
Dorchester Minerals, LP NASDAQ: DMLP Appendix Upon its formation, Dorchester Minerals, LP (DMLP, the public partnership and owner of the mineral interests) provided for future development opportunities on its undeveloped mineral interests by the creation of the Minerals Net Profits Interest (Mineral
Slide 33: What is the Minerals NPI and How Does it Work?
Dorchester Minerals, LP NASDAQ: DMLP Appendix What is the Minerals NPI and How Does it Work? DMLP Lease to third party for royalty and optional participation right Participation right assigned to DMOLP NPI payment (96.97% of cash flow) Distributable Cash DMOLP pays 100% of costs and receives 100% of
Slide 34: Operating Leverage – Royalty Interest vs. NPI
Dorchester Minerals, LP NASDAQ: DMLP Appendix Net Profits Interest Royalty Interest 1,000 Mcf $6.00/Mcf $6,000 ($0) $6,000 25% Royalty $1,500 1,000 Mcf $7.80/Mcf $7,800 ($0) $7,800 25% Royalty $1,950 1,000 Mcf $6.00/Mcf $6,000 ($1,000) $5,000 25% NPI $1,250 1,000 Mcf $7.80/Mcf $7,800 ($1,000) $6,800
Slide 35: Fayetteville Shale Well List
Dorchester Minerals, LP NASDAQ: DMLP Appendix Fayetteville Shale Well List Completed 0.059% 0.000% 0.000% Conway Green Bay Packaging 9-15 #2-19H Completed 0.059% 0.000% 0.000% Conway Green Bay Packaging 9-15 #1-19H 2,358 Completed 0.000% 3.166% 3.491% Van Buren Green Bay Packaging 10-16 #3-22H26 Per
Slide 36: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix Fayetteville Shale Well List (continued) Spudded 2.189% 2.847% 3.796% Conway Jerome Carr 9-15 #3-31H 3,242 Producing 2.188% 2.847% 3.796% Conway Jerome Carr #2-31H 1,622 Producing 2.188% 2.847% 3.796% Conway Jerome Carr #1-31H 1,840 Producing 0.098% 0.00
Slide 37: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix Fayetteville Shale Well List (continued) Producing 5.840% 3.750% 5.000% Van Buren Love 10-12 #2-17H Producing 5.840% 3.750% 5.000% Van Buren Love 10-12 #1-17H Completed 0.684% 0.000% 0.000% Van Buren Lewis 11-13 #3-30H 1,754 Completed 0.684% 0.000% 0.000
Slide 38: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix Fayetteville Shale Well List (continued) Permitted 0.381% 0.000% 0.000% Conway Roy Brockman 9-15 #2-24H 3,001 Producing 0.381% 0.000% 0.000% Conway Roy Brockman 9-15 #1-24H Permitted 1.953% 2.109% 2.813% Van Buren Rothwell 9-12 #2-15H Permitted 1.953% 2.
Slide 39: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix Fayetteville Shale Well List (continued) Producing 1.563% 0.938% 1.250% Pope Tackett #1-33H Permitted 0.684% 0.000% 0.000% Van Buren Smith 11-13 #1-30H 4,648 Completed 1.504% 0.000% 0.000% Conway Salinas, Reyes 9-15 #2-20H 5,429 Completed 1.504% 0.000% 0
Slide 40: North Dakota Horizontal Bakken Well List
Dorchester Minerals, LP NASDAQ: DMLP Appendix North Dakota Horizontal Bakken Well List Spudded 13.931% 1.741% McKenzie Schmitz Federal 44-34H Producing 6.966% 0.871% Mountrail Risan 1-34H Permitted 0.457% 0.057% Dunn Reiss Ranch 24-10H Permitted 2.322% 0.290% Mountrail Pederson 1-33H Permitted 0.091
Slide 41: North Dakota Horizontal Bakken Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix North Dakota Horizontal Bakken Well List (continued) Spudded 4.644% 0.580% Williams Z I Seamon 8-9 H Permitted 4.644% 0.580% Williams Z I Seamon 8-7 H Producing 0.413% 0.052% Mountrail Torgeson 15B-2-2H Permitted 0.668% 0.084% McKenzie Thompson 44X-20 Pr