Dorchester Minerals, L.p. · NASDAQ:DMLP
Dorchester Minerals, L.p — Investor Presentation (May 2009)
52 slides from Dorchester Minerals, L.p's investor presentation, May 12, 2009
Slide 1: Dorchester Minerals, LP Annual Presentation
Exhibit 99.1 Dorchester Minerals, LP NASDAQ: DMLP Dorchester Minerals, LP Annual Presentation May 13, 2009 1
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 Presentation Outline • Overview of 2008 – Distributions and Financial Results – Production and Reserves – Peer Group Analysis – Royalty Cash Receipts • Property Highlights – Portfolio Overview – Royalty Properties – Net Profits Interests – Fayetteville Shale • De
Slide 4: Overview of 2008 Results
Dorchester Minerals, LP NASDAQ: DMLP Overview of 2008 Results 4
Slide 5: 2008 Distributions
Dorchester Minerals, LP NASDAQ: DMLP 2008 Distributions • Cash Distributions Paid in Calendar 2008 – Reflects Q4 2007 to Q3 2008 activity Royalty NPI Other Revenue Revenue Revenue $58.3 MM $27.4 MM $1.2 MM Total Revenue $86.9 MM LP GP Total Distribution Distribution Expenses $79.2 MM $2.5 MM $5.2 MM
Slide 6: 2008 Financial Results
Dorchester Minerals, LP NASDAQ: DMLP 2008 Financial Results • Revenue – Price – Distributions – Record revenues and distributions in 2008 – Royalty properties contributed 69% to total operating revenues – NPI and lease bonuses have become a smaller portion of revenues Operating Revenue ($MM) Gas Pri
Slide 7: 2008 Production Overview
Dorchester Minerals, LP NASDAQ: DMLP 2008 Production Overview • Total 2008 Production of 10.23 Bcfe – 82% of total production was natural gas, 18% oil and condensate – Benefits of a diverse portfolio – High quality properties Low decline rate – Cumulative production since inception has exceeded proj
Slide 8: 2008 Reserves Overview
Dorchester Minerals, LP NASDAQ: DMLP 2008 Reserves Overview • Total Proved Reserves of 82.4 Bcfe on 12/31/08 – 100% of reserves are proved developed Oil NPI – Demonstrated history of positive revisions 26% 35% Royalty Gas – Revisions and acquisitions account for 61% of current reserves 65% 74% – Dri
Slide 9: Peer Group Comparison
Dorchester Minerals, LP NASDAQ: DMLP Peer Group Comparison • Reserves and Production Performance – DMLP is a cross between a royalty trust with 100% net profits interests (SJT) and one with 100% royalties (SBR), plus the upside of a large non-producing mineral portfolio with potential for future dri
Slide 10: Peer Group Comparison
Dorchester Minerals, LP NASDAQ: DMLP Peer Group Comparison • Market Performance – Pure royalties lack operating leverage inherent in net profits interests Less volatility • Underperforming in high price environment (2007 to mid-2008) • Overperforming in low price environment due to lower fixed cost
Slide 11: Royalty Cash Receipts
Dorchester Minerals, LP NASDAQ: DMLP Royalty Cash Receipts • Long delay between production and cash distribution – Cash receipts extend over multiple months due to adjustments, releases, etc. – Prices can change dramatically between production and payment of distribution – Example of a typical cash
Slide 12: Royalty Cash Receipts
Dorchester Minerals, LP NASDAQ: DMLP Royalty Cash Receipts • Long delay between production and cash distribution – Peak cash receipt month was July 2008 – Peak distribution was paid in November 2008 – Actual cash receipts, distributions and gas price: Cash Receipts/Distribution ($MM) HSC Gas Price (
Slide 13: Property Highlights: Royalty Properties
Dorchester Minerals, LP NASDAQ: DMLP Property Highlights Royalty Properties 13
Slide 14: Property Highlights
Dorchester Minerals, LP NASDAQ: DMLP Property Highlights • Mineral Portfolio Overview – 348,521 net acres (3,119,341 gross acres) – 573 counties in 25 states – Approximately 70% of acreage is undeveloped – Wide geographic spread including most major producing basins – Assets range from mature legacy
Slide 15: Royalty Properties
Dorchester Minerals, LP NASDAQ: DMLP Royalty Properties • Leasing and Development Activity – Consummated 63 leases/elections on 1,211 net acres in 25 counties/parishes in four states – Lease bonus payments up to $850/acre – Initial royalty terms up to 40% – 46 active lease offers as of April 2009 –
Slide 16: Royalty Properties
Dorchester Minerals, LP NASDAQ: DMLP Royalty Properties • Bob West Field – Starr County, Texas – Legacy royalty asset with net revenue interests ranging up to 10.2% – Long-life production, no PUD reserves assigned to property – Recompletion of existing wellbores combined with new development drillin
Slide 17: Property Highlights: Net Profits Interests
Dorchester Minerals, LP NASDAQ: DMLP Property Highlights Net Profits Interests 17
Slide 18: Net Profits Interests
Dorchester Minerals, LP NASDAQ: DMLP Net Profits Interests • NPI Provides LP Exposure to Working Interest Potential Without Generating UBTI – Participated in 63 wells in Arkansas, Montana, North Dakota, Oklahoma, and Texas • 42 wells completed in 2008 • 21 wells in various stages of drilling or comp
Slide 19: Net Profits Interests
Dorchester Minerals, LP NASDAQ: DMLP Net Profits Interests • Capital Expenditures Through Year-end 2008 – $15.8 million in cumulative investments in all net profits interest properties – 2008 investments increased by 52% over 2007 and 327% over 2003 – Majority of CAPEX was used to drill new wells in
Slide 20: Net Profits Interests
Dorchester Minerals, LP NASDAQ: DMLP Net Profits Interests • Minerals NPI Performance – Production and reserves growing steadily since inception – 165 wells/units producing at year-end 2008 (152 currently in pay status) – 1.8 Bcfe in production receipts through April 2009 – Total proved reserves of
Slide 21: Net Profits Interests
Dorchester Minerals, LP NASDAQ: DMLP Net Profits Interests • Minerals NPI Cash Flow Through March 2009 Cumulative Revenue $15.0 MM Cumulative Expense (LOE, taxes, etc) ($2.3 MM) Cumulative Operating Income $12.7 MM Cumulative Investment ($13.5 MM) Surplus balance must be positive before the Cumulati
Slide 22: Net Profits Interests
Dorchester Minerals, LP NASDAQ: DMLP Net Profits Interests • Hugoton Area – Operated Properties – 2008 production within 3% of projection – Year-over-year decline of only 5.4% – World-class asset but limited upside potential Gas Rate (Mcfepd) Well Count 100,000 300 250 200 10,000 150 100 50 1,000 0
Slide 23: Property Highlights: Fayetteville Shale
Dorchester Minerals, LP NASDAQ: DMLP Property Highlights Fayetteville Shale 23
Slide 24: Fayetteville Shale
Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale • 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% roya
Slide 25: Fayetteville Shale
Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale • Six County Core Area – Current development activity on DMLP acreage • 92 wells completed as producers • 27 wells in various stages of drilling or completion • 36 wells permitted and/or proposed by operator – Drilling or permitting activity ha
Slide 26: Fayetteville Shale
Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale • Permitting, Drilling and Payment History – Development activity remains at high levels, driven by SWN and CHK – Well spuds have been outpaced by well permits, a leading indicator – Substantial time-lag between spud and first payment 275 days
Slide 27: Fayetteville Shale
Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale • Capital Expenditures • 2008 Reserves – Total Fayetteville investments of – Year-end reserves of 2.9 Bcf (81 wells) $6.7 MM through year-end 2008 • 1.5 Bcf (WI) – Additional $1.1 MM to date in 2009 • 1.4 Bcf (RI) – Average $3.1 MM per well in
Slide 28: Fayetteville Shale
Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale • Production Results • Well Performance – 77 wells producing at year-end 2008 – Improved stimulation and longer laterals • 1.2 MMcfd (WI) have increased average initial rate • 1.1 MMcfd (RI) • 2006 1.9 MMcfd (Max 2.9 MMcfd) – 89% Year-over-year
Slide 29: Developing Play Highlights
Dorchester Minerals, LP NASDAQ: DMLP Developing Play Highlights 29
Slide 30: Developing Play Highlights
Dorchester Minerals, LP NASDAQ: DMLP Developing Play Highlights • Horizontal Bakken (North Dakota) – Northwestern North Dakota – Diversified acreage position • 70,390 gross acres, 7,602 net acres – Operators: Continental, EOG, Hess, Marathon – Elected non-consent option in 70 wells to date th • 1/8
Slide 31: Developing Play Highlights
Dorchester Minerals, LP NASDAQ: DMLP Developing Play Highlights • Horizontal Bakken (North Dakota) – DMOLP owns 188 net acres in Parshall field in Mountrail County • Risan 1-34H – Paid out, EUR: 514,000 boe • Pederson 1-33H – Drilled (confidential status) • Austin 20-29H – Drilled (confidential stat
Slide 32: Developing Play Highlights
Dorchester Minerals, LP NASDAQ: DMLP Developing Play Highlights • Devonian Shale (Appalachia) – New York and Pennsylvania – Concentrated acreage position • 32,588 gross acres • 23,093 net acres • 70% in Allegany and Steuben Counties, NY – Challenging political environment in New York – Potential tar
Slide 33: Annual Presentation
Dorchester Minerals, LP NASDAQ: DMLP Dorchester Minerals, LP Annual Presentation May 13, 2009 33
Slide 34: Appendix
Dorchester Minerals, LP NASDAQ: DMLP Appendix 34
Slide 35: 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? – 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 cre
Slide 36: 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 Participation right royalty and optional assigned to DMOLP participation right DMOLP pays 100% of costs Royalty and receives 100% of (100% of cash flow) revenue plus interest
Slide 37: Distribution Determinations
Dorchester Minerals, LP NASDAQ: DMLP Appendix • Distribution Determinations – Period from October 2007 through September 2008 ($ thousands) Limited General Partners Partner 4% of Net Cash Receipts from Royalty Properties $ -------- $2,171 96% of Net Cash Receipts from Royalty Properties $52,107 $ --
Slide 38: Alignment of GP and LP interests
Dorchester Minerals, LP NASDAQ: DMLP Appendix • 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 3.00 % Mgmt LP is 3.3 Mgmt GP $2.4 MM 9.56 % Mgmt LP $7
Slide 39: Operating Leverage – Royalty Interest vs. NPI
Dorchester Minerals, LP NASDAQ: DMLP Appendix • Operating Leverage – Royalty Interest vs. NPI Royalty Interest Net Profits Interest Production Volume 1,000 Mcf 1,000 Mcf Gas Price $6.00/Mcf $6.00/Mcf Revenue $6,000 $6,000 Fixed Production Costs ($0) ($1,000) Operating Income $6,000 $5,000 Net Intere
Slide 40: Fayetteville Shale Well List
Dorchester Minerals, LP NASDAQ: DMLP Appendix • Fayetteville Shale Well List DMOLP DMOLP DMLP Current Test Rate Well Name County WI NRI RI Status (Mcfd) Beals 8-7 #1-13H White 0.000% 0.000% 0.781% Producing 428 Beverly Crofford #1-14H Conway 1.322% 0.996% 1.563% Spud Beverly Crofford #2-14H Conway 1
Slide 41: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix • Fayetteville Shale Well List (continued) DMOLP DMOLP DMLP Current Test Rate Well Name County WI NRI RI Status (Mcfd) Collister 12-13 #1-32H Van Buren 1.254% 0.941% 1.561% Producing 946 Collister 12-13 #2-32H Van Buren 1.273% 0.955% 1.561% Spud Colliste
Slide 42: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix • Fayetteville Shale Well List (continued) DMOLP DMOLP DMLP Current Test Rate Well Name County WI NRI RI Status (Mcfd) Green Bay Packaging 10-16 #3-22H26 Van Buren 3.366% 3.366% 0.000% Producing 2,358 Green Bay Packaging 9-15 #1-19H Conway 0.000% 0.000%
Slide 43: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix • Fayetteville Shale Well List (continued) DMOLP DMOLP DMLP Current Test Rate Well Name County WI NRI RI Status (Mcfd) Hemphill 9-14 #1-30H Conway 0.000% 0.000% 0.391% Producing 839 Hillis #1-27 Van Buren 6.250% 6.250% 0.000% S/I 880 Hillis #2-27H Van Bu
Slide 44: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix • Fayetteville Shale Well List (continued) DMOLP DMOLP DMLP Current Test Rate Well Name County WI NRI RI Status (Mcfd) Jerome Carr 9-15 #4-31H Conway 3.796% 2.847% 2.188% Producing 3,911 John Wells 9-15 #1-2H Conway 0.000% 0.000% 0.659% Producing 1,357 J
Slide 45: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix • Fayetteville Shale Well List (continued) DMOLP DMOLP DMLP Current Test Rate Well Name County WI NRI RI Status (Mcfd) Koone-Hillis 10-16 #1-34H27 Van Buren 2.534% 2.534% 0.000% Producing 1,477 Lagasse Investments Inc. 8-12 #1-8H Faulkner 5.000% 3.750% 7
Slide 46: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix • Fayetteville Shale Well List (continued) DMOLP DMOLP DMLP Current Test Rate Well Name County WI NRI RI Status (Mcfd) Mulliniks 9-12 #4-35H36 Cleburne 2.849% 2.136% 1.335% Producing Mulliniks 9-12 #5-35H36 Cleburne 3.661% 2.746% 1.716% Producing Mullini
Slide 47: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix • Fayetteville Shale Well List (continued) DMOLP DMOLP DMLP Current Test Rate Well Name County WI NRI RI Status (Mcfd) Roy Brockman 9-15 #1-24H Conway 0.000% 0.000% 0.381% Producing 3,001 Russell #1-33H Van Buren 6.250% 6.250% 0.000% Producing 1,145 Russ
Slide 48: Fayetteville Shale Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix • Fayetteville Shale Well List (continued) DMOLP DMOLP DMLP Current Test Rate Well Name County WI NRI RI Status (Mcfd) Webb 9-6 #1-35H White 4.385% 3.288% 2.344% Spud 48
Slide 49: North Dakota Horizontal Bakken Well List
Dorchester Minerals, LP NASDAQ: DMLP Appendix • North Dakota Horizontal Bakken Well List BPO APO Current Test Rate Well Name County NRI NRI Status (Bopd) Almer 11-X-6 Williams 0.028% 0.223% Permitted Arvid 1-34H Divide 0.279% 1.741% Producing 339 Austin 20-29H Mountrail 2.322% 18.575% Spudded Austin
Slide 50: North Dakota Horizontal Bakken Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix • North Dakota Horizontal Bakken Well List (continued) BPO APO Current Test Rate Well Name County NRI NRI Status (Bopd) Erie 44-19H Mountrail 0.108% 0.861% Producing 361 Gaugler 31-15H Dunn 0.057% 0.457% Spudded Gehrer 21-14H Dunn 0.726% 5.805% Spudded G
Slide 51: North Dakota Horizontal Bakken Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix • North Dakota Horizontal Bakken Well List (continued) BPO APO Current Test Rate Well Name County NRI NRI Status (Bopd) Mack 1-2H McKenzie 0.383% 3.060% Spudded Marlene 1-10 Williams 0.046% 0.273% Producing 387 Mary Ann 1-15H McKenzie 0.103% 0.823% Produ
Slide 52: North Dakota Horizontal Bakken Well List (continued)
Dorchester Minerals, LP NASDAQ: DMLP Appendix • North Dakota Horizontal Bakken Well List (continued) BPO APO Current Test Rate Well Name County NRI NRI Status (Bopd) Scott 24-31H Dunn 1.053% 8.427% Producing 327 Shonna 1-15H Divide 0.145% 1.161% Producing 445 Sig 21X-6 Burke 0.003% 0.024% Spudded Sk
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