Dorchester Minerals, L.p. · NASDAQ:DMLP
Dorchester Minerals, L.p — IPAA Private Capital Conference 2004
28 slides from Dorchester Minerals, L.p's conference presentation, Apr 16, 2004
Slide 1: IPAA Private Capital Conference
IPAA Private Capital Conference Monday, April 19, 2004
Slide 2: Forward-Looking Statements
Forward-Looking Statements Dorchester Minerals, L.P. This presentation may contain “forward-looking statements” as defined by federal law. Any statement in this presentation that is not a historical fact may be deemed to be a forward-looking statement. Such statements are subject to certain risks, u
Slide 3: Company Profile
Company Profile Dallas-based, publicly traded Delaware limited partnership that owns producing and non-producing natural gas and crude oil mineral, royalty, overriding royalty, net profits and leasehold interests in 25 states.
Slide 4: Company Profile
Company Profile NASD: DMLP Market capitalization: $480 million* No debt 80% gas December 31, 2003 reserves: –92.7 Bcfe -> 99% proved developed * Based on closing market price on March 31, 2004 of $17.90 per unit
Slide 5: Company Formation
Company Formation Commenced operations on January 31, 2003, upon the combination of: • Dorchester Hugoton, Ltd., • Republic Royalty Company, L.P. • Spinnaker Royalty Company L.P.
Slide 6: Dorchester Hugoton, Ltd. (NASD: DHULZ)
Dorchester Hugoton, Ltd. (NASD: DHULZ) LP units distributed to Dorchester Gas Corporation shareholders in 1982 Oklahoma and Kansas Hugoton Field assets owned by Dorchester Gas since mid 1950s > 90% working interest in 135 sections; average net revenue interest > 85% 1.8 million units originally valu
Slide 7: Republic Royalty Company, L.P.
Republic Royalty Company, L.P. • Partnership formed in 1993 to acquire assets from SASI Minerals Company and others • Funded with sale of net profits interests to five pension fund investors management, and properties contributed by management •Properties consist of producing and non- producing mine
Slide 8: Republic Royalty Company, L.P.
Republic Royalty Company, L.P. $67.9 million cumulative actual and deemed capital contributions $99.0 million cumulative distributions at January 31, 2003 $311.9 million cumulative distributions and common LP unit value* as of March 31, 2004 * Based on closing market price on March 31, 2004 of $17.9
Slide 9: Spinnaker Royalty Company, L.P.
Spinnaker Royalty Company, L.P. • Partnership formed in 1996 Funded with equity contributions from 15 taxable and tax-exempt investors $23.6million initial capital contributions March 1996-acquired producing and non-producing mineral, royalty, overriding royalty, leasehold and net profits interests
Slide 10: Spinnaker Royalty Company, L.P.
Spinnaker Royalty Company, L.P. $32.5 million cumulative actual and deemed capital contributions $58.8 million cumulative distributions at January 31, 2003 $162.8 million cumulative distributions and common LP unit value* as of March 31, 2004 * Based on closing market price on March 31, 2004 of $17.
Slide 11: Merger Drivers
Merger Drivers • Larger, more diversified asset base • Improved capital efficiencies • Opportunity for future growth from undeveloped properties and from acquisitions.
Slide 12: Transaction Hurdles
Transaction Hurdles 1) Maintain non-UBTI (unrelated business taxable income) status of current and future income. SOLUTION: • Transfer working interest properties to separate entity subject to net profits interests • Prohibition against debt 2) Equalize general partner capitalization and ownership S
Slide 13: Transaction Hurdles
Transaction Hurdles 3) Ensure highest level of transparency and integrity. SOLUTION: Š GP and LP interests are aligned Š 5% limitation on G&A reimbursement Š Fixed 4% general partner interest Š Business Opportunities Agreement and lock-ups 4) Registration Process Š Three-way public-private oil and g
Slide 14: Company Structure
Company Structure Dorchester Minerals Management GP LLC GP Dorchester Minerals Management LP 100% Direct & Indirect Dorchester Minerals Operating, L.P. General Partner 100% Dorchester Minerals, L.P. Working Interest Properties 97% NPI Royalty Properties Net Profits Interests
Slide 15: Ownership and Reserves
Ownership and Reserves Total LP Interest Proved Reserves @ January 31, 2003 Dorchester Hugoton, Ltd. 39.7% 44.0% Republic Royalty Company, L.P. 40.5% 37.5% Spinnaker Royalty Company, L.P. 19.8% 18.5%
Slide 16: Properties
Properties Š Net profits interests Š Royalty properties Š 2003 Production (Bcfe): Q2 Q3 Q4 NPI 1.267 1.453 1.427 Royalty 1.321 1.395 1.354 Totals 2.588 2.848 2.781
Slide 17: Net Profits Interests
Net Profits Interests Š Former Dorchester Hugoton properties Š Former Republic and Spinnaker properties
Slide 18: Net Profits Interests
Net Profits Interests • Former Dorchester Hugoton properties: • 147 wells located in Texas County, Oklahoma and Stevens County, Kansas • Working interest > 90%; average net revenue interest > 85% • Oklahoma—640-acre spacing Kansas 320-acre spacing • Long-lived mature assets
Slide 19: Net Profits Interests
Net Profits Interests Former Republic and Spinnaker Properties Š Unleased mineral interests o Direct participation o Back-in working interests o Carried working interests o Look-backs Š High net operating margin Š 35 wells drilled in 2003 o 26 completions o 3 dry holes o 6 drilling / completing
Slide 20: Royalty Properties
Royalty Properties Š Producing properties Non-producing properties
Slide 21: High quality, long-lived properties
Š High quality, long-lived properties Š 59 fields > 100 Mmbls EUR Š Six fields > 1 Tcf EUR Š Multiple acquisitions by predecessors: o Newmont Oil Company o Felmont Oil Company o Essex Royalty o Case-Pomeroy o Triton Oil & Gas o Mayfair Minerals o Buffalo Royalty o Montoya Oil Corporation o Alder Oil
Slide 22: Producing Royalty Properties
Producing Royalty Properties Major South Texas / Gulf Coast 18% All Others 38% Oklahoma 11% Major West Texas 33% West Texas – Major fields Š Wasson Š Seminole Š Means Š North Robertson South Texas / Gulf Coast – Major fields Š Jeffress / McAllen Ranch Š Port Hudson Š Bob West Oklahoma Š Anadarko Bas
Slide 23: Non-producing Properties
Non-producing Properties Š Approximately 75% of all net acres Š > 150 leases and pooling elections in last five years Š > 1000 new wells added since 1997
Slide 24: Non-producing Properties
Non-producing Properties Š Value-added approach Š Every tract is a prospect Š Every lease offer is a well proposal Š Maximize asset value
Slide 25: Growth Opportunities
Growth Opportunities • Exploitation of NPI properties • Hugoton Field assets • Participation in development of unleased minerals via NPI conveyances • Enhancement of royalty properties • Encourage exploration and development • Participation via net profits interests
Slide 26: Growth Opportunities
Growth Opportunities • Acquisitions of properties in exchange for units • Accretive to distributions and reserves per unit • Leverage information franchise • Minimal incremental costs
Slide 27: What is Dorchester Minerals, L.P.?
What is Dorchester Minerals, L.P.? Royalty Trust Producing Properties DMLP Exploration Potential E&P Company Structure MLP
Slide 28: Contact Information
Contact Information 3738 Oak Lawn Avenue Suite 300 Dallas, TX 75219 Phone (214) 559-0300 Fax (214) 559-0933 William Casey McManemin, Chief Executive Officer James E. Raley, Chief Operating Officer H.C. (“Pete”) Allen, Jr., Chief Financial Officer
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