Dorchester Minerals, L.p. · NASDAQ:DMLP
Dorchester Minerals, L.p — Shareholder Meeting (May 2021)
28 slides from Dorchester Minerals, L.p's shareholder meeting presentation, May 19, 2021
Slide 1: Annual Meeting May 19, 2021
Dorchester Minerals, L.P. DMLP NASDAQ Dorchester Minerals, LP ANNUAL MEETING May 19, 2021 DMLP NASDAQ
Slide 2: Forward-Looking Statements
Dorchester Minerals, L.P. DMLP NASDAQ Forward-Looking Statements Portions of this presentation may constitute, and our officers and representatives from time to time may make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Refo
Slide 3: Outline
OUTLINE • Observations and Trends • Distributions • Production and Reserves • Summary DMLP NASDAQ
Slide 4: Observations and Trends
Dorchester Minerals, L.P. DMLP NASDAQ Observations and Trends Challenging Environment on All Fronts • Prices have recovered but activity still lagging • Industry has focused on capital efficiency and free cash flow through consolidation, resulting in a drop in rig count and production roll-over. We
Slide 5: 2020 Distributions
Dorchester Minerals, L.P. DMLPNASDAQ 2020 Distributions Cash Distributions Paid in Calendar 2020 • Reflects Q4 2019 through Q3 2020 activity • Distribution is formulaic, not discretionary Composition of 2020 Revenues Royalty Net Profits Lease Bonus Revenues Interests & Other Millions $ Payments Reve
Slide 6: 2020 Distributions: Components and Prices
Dorchester Minerals, L.P. DMLP NASDAQ 2020 Distributions Components and Prices • Cumulative LP distributions of $924 MM ($30.73/unit) from inception through Q4 2020 • Royalty properties contributed 66% to total 2020 Revenues • Gross Revenue 80% oil & liquids sales, 10% gas sales, 10% other LP Dist
Slide 7: Total Production
Dorchester Minerals, L.P. DMLPNASDAQ Total Production • Oil production increased by 15% between 2015 and 2020 • Gas production decreased by 34% between 2015 and 2020 • Plant Product production increased by 104% between 2015 and 2020 Daily Oil Rate (boed) Daily Gas Rate (Mcfd) Daily Plant Products Ra
Slide 8: Royalty and NPI Production
Dorchester Minerals, L.P. DMLP NASDAQ Royalty and NPI Production Royalty Production NPI Production • Oil was driven by robust Midland Basin • Oil was driven by Bakken participation development and contributions from Permian APO WI • Gas decline has been suppressed by • Divestment of the Hugoton Fiel
Slide 9: Composition of Production
Dorchester Minerals, L.P. DMLP NASDAQ Composition of Production Contribution from Diverse Sources • Legacy assets provide low-decline production base • Hugoton divestiture and natural declines have reduced contribution from dry gas basins Daily Gas Rate (Mcfd) Daily Oil Rate (boed) 30,000 5,000 25,0
Slide 10: Geographic Split
Dorchester Minerals, L.P. DMLP NASDAQ Geographic Split 2020 Reserves Bakken • Total Proved Reserves of 89.8 Bcfe on 12/31/2020 8% Other • All reserves are Proved Developed Producing (PDP) Mid- Midland 14% Continent 33% • Product mix increasingly liquids weighted 51% oil, 38% 5% natural gas, 11% pl
Slide 11: 2020 Reserve Revisions
Dorchester Minerals, L.P. DMLP NASDAQ 2020 Reserve Revisions • Bakken was single largest contributor to upward oil reserve revisions • Divestitures decreased PDP reserves by 5.7 Bcfe Hugoton was 19% of gas reserves at YE2019 • History of Reserve Revisions Year-end reserves only 4.5% less than in
Slide 12: Mineral Portfolio Overview
Dorchester Minerals, L.P. DMLP NASDAQ Mineral Portfolio Overview • Diversified mineral portfolio spanning 581 Counties in 26 States • Producing and nonproducing mineral, royalty and net profits interest • Wide geographic footprint with exposure to nearly every domestic producing basin • Significant
Slide 13: Our Goal and Our Principles
Dorchester Minerals, L.P. DMLP NASDAQ Our Goal and Our Principles We Want to: • Assemble and actively manage a portfolio of properties that will enable unitholders to benefit from multiple commodity price and development cycles We will be: • Conscientious about G&A • Aligned • UBTI-Free We are: • No
Slide 14: Appendix
APPENDIX DMLP NASDAQ
Slide 15: Bakken/Three Forks
Dorchester Minerals, L.P. DMLP NASDAQ Bakken/Three Forks • 83,600 gross ac (10,400 net ac) in six core ND • 1,195 gross producing wells at year-end 2020 counties majority unleased minerals • 2020 5 Participation, 20 Non-Consent • Rig count 15 in May 2020 to 15 in May 2021 • YTD 2021 2 Partic
Slide 16: Permian Basin
Dorchester Minerals, L.P. DMLP NASDAQ Permian Basin 16
Slide 17: Permian Basin
Dorchester Minerals, L.P. DMLP NASDAQ Permian Basin • Permian net revenue has shifted dramatically from Legacy Permian properties on Central Basin Platform to Midland and Delaware Basins • Legacy Permian counties contributed 25% of Permian net revenue in 2020 2010 Net Royalty Revenue ($MM) 2020 Net
Slide 18: Midland Basin
Dorchester Minerals, L.P. DMLP NASDAQ Midland Basin • 251,000 gross ac (15,400 net ac) in core • Largest sources are Midland and Upton Co. • Unleased at some depths in numerous tracts • Growth in NPI production is a result of after- • Operator Exposure Pioneer, ConocoPhillips payout interest in No
Slide 19: Delaware Basin
Dorchester Minerals, L.P. DMLP NASDAQ Delaware Basin • DMLP Position • Silvertip Prospect Area • 13,500 gross ac (900 net ac) located in Loving, • Active development in 2020/2021 Reeves and Ward Co., TX and Lea Co., NM • Potential for increased well density • 640 gross ac of ORRI’s • 14 of 21 DSU’s
Slide 20: 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 4.0 % Mgmt GP $2.0 MM Mgmt LP is 2.7X 10.9 %
Slide 21: Minerals NPI
Dorchester Minerals, L.P. DMLPNASDAQ Minerals NPI Trailing 12 Months Activity through March 2021 • Trailing 12 months operating margin of 41% versus prior year trailing 12 months operating margin of 67% was highly impacted by 2020 operator curtailments • NPI was in deficit status from June 2020 thro
Slide 22: 2020 Reserves
Dorchester Minerals, L.P. DMLP NASDAQ 2020 Reserves History of Positive Reserve Revisions • Cumulative Reserve Revisions have exceeded 100% of Current Reserves • Production and divestitures have exceeded initial reserves by 133.4 Bcfe Equivalent Reserves (Bcfe) 120 100 94.0 Initial Reserves 89.8 Tot
Slide 23: Royalty Liquids Production
Dorchester Minerals, L.P. DMLP NASDAQ Royalty Liquids Production • Incremental contribution from 333 wells in 2020 with an average NRI of 0.551442% • All Wells 23% Decline • Pre-2020 Wells 38% Decline • Pre-2019 Wells 29% Decline Daily Liquids Rate (boed) 10,000 Total Royalty Liquids Productio
Slide 24: New Well Activity
Dorchester Minerals, L.P. DMLP NASDAQ New Well Activity 250 200 150 100 50 0 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Royalty NPI Royalty Wells 98 195 84 107 28 116 NPI Wells 16 43 23 9 15 13 Net Wells .64 2.52 .97 .76 .49 .73 Note: Well count based on first revenue receipts in indicated peri
Slide 25: 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 NRI 100% 100% WI 50% 100% NRI to DMOLP 0% 0% 100% 200% 300% North Dakota % Costs Recovered by Operator • Unleased mineral owner
Slide 26: Royalty Cash Receipts
Dorchester Minerals, L.P. DMLP NASDAQ 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 r
Slide 27: Net Royalty Acres?
Dorchester Minerals, L.P. DMLP NASDAQ Net Royalty Acres? Complex mineral ownership is not well represented by Net Royalty Acres • Royalty rates and lease status vary by depth • Royalty rates vary by contract • Single section example from Upton Co. Floating NPRI Mineral Interest Spraberry burdening 1
Slide 28: Annual Meeting May 19, 2021
Dorchester Minerals, L.P. DMLP NASDAQ Dorchester Minerals, LP ANNUAL MEETING May 19, 2021 DMLP NASDAQ