Dorchester Minerals, L.P. · NASDAQ:DMLP
Dorchester Minerals, L.P — Shareholder Meeting (May 2007)
42 slides from Dorchester Minerals, L.P's shareholder meeting presentation, May 16, 2007
Slide 1: 2007 Annual Meeting
2007 Annual Meeting May 16, 2007 Exhibit 99.1
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: 2006 Highlights – Presentation Outline
2006 Highlights Reserves and Production Activity Highlights – Leasing Activity – Royalty Properties – Net Profits Interests – Fayetteville Shale Looking Ahead Presentation Outline
Slide 4: 2006 Highlights
2006 Highlights
Slide 5: 2006 Highlights
2006 Highlights 2006 2005 Lease Bonus $7.4 MM $1.7 MM 335% Increase Leasing Activity 14,121 ac 4,487 ac 215% Increase Drilling Activity 412 wells 289 wells 43% Increase Cash Distributed $79.9 MM $56.5 MM 41% Increase Net Income $50.2 MM $ 52.8MM 5% Decrease
Slide 6: Quick Look at 2006 Distributions
Royalty Revenue $47.6 MM Total Revenue $86.9 MM Other Revenue $9.1 MM NPI Revenue $30.2 MM Total Expenses $4.6 MM Quick Look at 2006 Distributions LP Distribution $79.9 MM GP Distribution $2.4 MM Cash Distributions Paid in 2006 – Reflects Q4 2005 to Q3 2006 Activity
Slide 7: Volumes, Prices, Distributions
$2.00 $8.00 0.97 1.05 1.14 1.11 1.11 1.05 1.05 1.05 1.02 1.07 1.12 1.01 1.03 1.04 1.03 0.98 0.92 - 0.20 0.40 0.60 0.80 1.00 1.20 1.40 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Mcfepd per 1000 Units Indicated Gas Price per Mcf $10.00 $0.00 $8.00 $6.00 $4.00 $2.00 $9.00 $7.00 $1.00 $5.00 $3.0
Slide 8: Reserves and Production
Reserves and Production
Slide 9: Reserves and Production
Reserves and Production Product Mix Property Allocation Total Proved Reserves of 88.6 Bcfe on 12/31/06 3.14 Mcfe per Unit Outstanding Over 99% of Reserves are Proved Developed Gas 74% Oil 26% NPI 39% 61% Royalty
Slide 10: 2006 Production Replacement Calculation
2006 Production Replacement Calculation Reserves and Production Actual 12/31/05 Reserves Projected 12/31/06 Reserves 2006 Production (11.0 Bcfe) Actual 12/31/06 Reserves Reserve Revisions (9.1 Bcfe) Total Reserves (Bcfe) 88.6 90.5 79.5
Slide 11: 2003-2006 Production Replacement Calculation
2003-2006 Production Replacement Calculation Reserves and Production Actual 01/31/03 Reserves Projected 12/31/06 Reserves 2003-2006 Production (44.8 Bcfe) Actual 12/31/06 Reserves Total Reserves (Bcfe) 97.0 52.2 Reserve Revisions/ Purchases (36.4 Bcfe) 88.6
Slide 12: Projected Volume vs Actual Volume
Projected Volume Actual Volume Reserves and Production DMLP volumetric variance by prod. month Daily Production (MMcfepd) 2005 Q1 Q3 Q2 Q4 Q1 Q3 Q2 Q4 Q1 Q3 Q2 Q4 Q1 Q3 Q2 Q4 2003 2004 2006
Slide 13: Activity Highlights: Leasing Activity
Activity Highlights Leasing Activity
Slide 14: Deal Structuring
Deal Structuring Structure of deal can increase exploratory exposure above conventional lease Reward Risk Participate 100% Look-Back Working Interest Back-In Working Interest Lease 100% (Low Bonus, High Royalty) Lease 100% (High Bonus, Low Royalty) Optional “Heads-up” Working Interest
Slide 15: Hybrid Lease “A”
Hybrid Lease “A” 100% 90% 30% 80% 70% 60% 40% 20% 0% 50% 10% Traditional Lease NRI Royalty Interest 25% Lessee Interest 56.25% Look-Back Interest 18.75% DMLP “Look-Back” Optional participation at casing point Lessee Interest 75% Royalty Interest 25%
Slide 16: Hybrid Lease “B”
Hybrid Lease “B” 100% 90% 30% 80% 70% 60% 40% 20% 0% 50% 10% Lessee Interest 75% Traditional Lease NRI DMLP “Back-In” Lessee Interest 70% Lessee Interest 56.25% ORRI 5% Royalty Interest 25% Royalty Interest 25% APO Back- in Interest 18.75% Royalty Interest 25%
Slide 17: Activity Highlights: Royalty Properties
Activity Highlights Royalty Properties
Slide 18: Royalty Property Highlights
Royalty Property Highlights Leasing Activity – Consummated 76 leases/elections on 14,121 net acres – Identified 377 new wells on royalty properties – 75 active lease offers Maximizing Value of Mineral Assets – Lease bonus payments up to $675/acre – Initial royalty terms up to 30% – 14 Hybrid leases
Slide 19: Activity Highlights
Activity Highlights Williston Basin Horizontal Bakken Arkansas Fayetteville Shale Hugoton Area Chase Group South Texas Vicksburg/Queen City Alabama Smackover
Slide 20: T-Patch Field (Starr, TX)
Jan-03 Jul-03 Feb-04 Aug-04 Mar-05 Sep-05 Apr-06 Nov-06 May-07 Dec-07 1,000 10,000 Royalty Property Highlights T-Patch Field (Starr, TX) – High initial production rates, high decline rates – First development well tested in April 2007 at 8 MMcfepd – Additional development tracts with higher NRI’s Ne
Slide 21: Jeffress Field (Hidalgo, TX)
Jan-03 Jul-03 Feb-04 Aug-04 Mar-05 Sep-05 Apr-06 Nov-06 May-07 Dec-07 1,000 10,000 100,000 Royalty Property Highlights Jeffress Field (Hidalgo, TX) – Negotiated back-in working interest (Hybrid “B”) – 3 wells producing, recent well tested 2 MMcfpd – 417 acres leased within a 2,000 acre AMI Well Coun
Slide 22: East Jeffress Field (Hidalgo, TX)
Jan-03 Jul-03 Feb-04 Aug-04 Mar-05 Sep-05 Apr-06 Nov-06 May-07 Dec-07 1,000 10,000 100,000 Royalty Property Highlights East Jeffress Field (Hidalgo, TX) – Legacy royalty asset with 6.25% NRI – Long-life production, no PUD reserves assigned to property – Recent step-out completion tested over 13 MMcf
Slide 23: Activity Highlights
Activity Highlights Williston Basin Horizontal Bakken Arkansas Fayetteville Shale Hugoton Area Chase Group Alabama Smackover South Texas Vicksburg/Queen City
Slide 24: Little Cedar Creek Field (Conecuh, AL)
Jan-03 Jul-03 Feb-04 Aug-04 Mar-05 Sep-05 Apr-06 Nov-06 May-07 Dec-07 Royalty Property Highlights Little Cedar Creek Field (Conecuh, AL) – 22 wells producing, 4 wells permitted/drilling – EUR increasing, 2.6 MMboe in 2005 to 8.7 MMboe in 2007 – Initiating gas re-injection and waterflood operations O
Slide 25: Activity Highlights: Net Profits Interests
Activity Highlights Net Profits Interests
Slide 26: Net Profits Interest Highlights
Net Profits Interest Highlights Increased Exposure to Upside Potential – Participated in 41 wells in Arkansas, Mississippi, Montana, New Mexico, North Dakota, Oklahoma, and Texas 35 wells completed in 2006 6 wells in various stages of drilling or completion at year-end – Optional working interest pa
Slide 27: 2003-2006 NPI Production Analysis
Jan-03 Jul-03 Feb-04 Aug-04 Mar-05 Sep-05 Apr-06 Nov-06 May-07 Dec-07 1,000 10,000 Net Profits Interest Highlights “2003-2006 NPI” Production Analysis – 91 producing wells/units, 7 in drilling or completion stage – Multiple wells are not yet in pay status – Approximately 1 Bcfe produced from incepti
Slide 28: 2003-2006 NPI Cash Flow Analysis to Q1 2007
Net Profits Interest Highlights “2003-2006 NPI” Cash Flow Analysis to Q1 2007 – Cumulative Revenue $5.6 MM – Cumulative Operating Income $4.6 MM – Cumulative Investment $4.8 MM – Cumulative Surplus (Deficit) ($0.2 MM) 2003 2004 2005 2006 2007 March 2007 NOI $190,000 ($1,200,000) ($1,000,000) ($800,0
Slide 29: Activity Highlights
Activity Highlights Williston Basin Horizontal Bakken Arkansas Fayetteville Shale Hugoton Area Chase Group Alabama Smackover South Texas Vicksburg/Queen City
Slide 30: Hugoton Area - Operated Properties
Jan-03 Jul-03 Feb-04 Aug-04 Mar-05 Sep-05 Apr-06 Nov-06 May-07 Dec-07 1,000 10,000 100,000 Hugoton Area - Operated Properties – 2006 production within 2% of projection (7.8% decline) – Continuing successful stimulation program – Initiated well deepening and 2007 drilling program Net Profits Interest
Slide 31: Activity Highlights
Activity Highlights Williston Basin Horizontal Bakken Arkansas Fayetteville Shale Hugoton Area Chase Group Alabama Smackover South Texas Vicksburg/Queen City
Slide 32: Horizontal Bakken (Montana and North Dakota)
Jan-03 Jul-03 Feb-04 Aug-04 Mar-05 Sep-05 Apr-06 Nov-06 May-07 Dec-07 1,000 10,000 Horizontal Bakken (Montana and North Dakota) – 14 producing wells including two tri-laterals – Average reserves of 210,000 boe up to 430,000 boe – Open acreage adjacent to Parshall field in Mountrail, ND Net Profits I
Slide 33: Activity Highlights: Fayetteville Shale
Activity Highlights Fayetteville Shale
Slide 34: Activity Highlights
Activity Highlights Williston Basin Horizontal Bakken Arkansas Fayetteville Shale Hugoton Area Chase Group Alabama Smackover South Texas Vicksburg/Queen City
Slide 35: Fayetteville Shale Highlights
Fayetteville Shale Highlights Eastern Arkoma Basin – Northern Arkansas – Ownership Summary 23,336 gross/11,464 net acres in trend 196 sections in 8 counties – Lease Transaction 9,800 net acres in 179 sections in 8 counties Bonus of $625 per acre with 25% royalty Optional working interest participati
Slide 36: Fayetteville Shale Highlights
Fayetteville Shale Highlights Eastern Arkoma Basin – Northern Arkansas – Current Activity 9 wells completed as producers 5 wells in various stages of drilling or completion 11 wells permitted and/or proposed by operator $1.7 million in net expenditures and commitments – Operators SEECO (SWN), Chesap
Slide 37: Fayetteville Shale Highlights
Fayetteville Shale Highlights Six County Core Area – Conway, Cleburne, Faulkner, Pope, Van Buren, White – Approximately 70 sections in “Productive Fairway” – Fayetteville undeveloped in 96% of DMLP’s sections HBP/Unleased Acreage Leased Acreage Productive Fairway 203 Producing Wells 77 Active Permit
Slide 38: Fayetteville Shale Highlights
0 50 100 150 200 250 300 1,000 10,000 Fayetteville Shale Highlights Normalized Zero-time Plot to Q1 2007 – Initial rates ranging up to 3.2 MMcfd – Expected ultimate recoveries up to 1.8 Bcf – Significantly outperforming 1.4 Bcf type curve 1.4 Bcf Type Curve Gas Rate (Mcfpd) Actual Average Days on Pr
Slide 39: Fayetteville Shale Highlights
Jun-06 Jul-06 Jul-06 Aug- Sep- Oct-06 Nov- Dec- Jan-07 Feb- Mar-07 Fayetteville Shale Highlights Net Production to Q1 2007 (8 wells producing) – Working interest production rate of 410 Mcfd – Royalty interest production rate of 100 Mcfd – WI up to 6.25%, NRI up to 10.1% (WI + RI) Q4 2006 Q1 2007 Q3
Slide 40: Looking Ahead
Looking Ahead
Slide 41: Developing Plays
Developing Plays New York T-BR/Devonian Arkansas Deep Shales Delaware Basin Pennsylvanian East Texas Deep Bossier North Dakota Horizontal Bakken South Texas Vicksburg/Queen City
Slide 42: 2007 Annual Meeting
2007 Annual Meeting May 16, 2007