Forestar Group Inc · NYSE:FOR
Forestar — Merger or Acquisition (June 2012)
14 slides from Forestar's merger presentation, Jun 4, 2012
Slide 1: Acquisition of CREDO Petroleum
Acquisition of CREDO Petroleum June 4, 2012 Recognizing and Responsibly Delivering the Greatest Value From Every Acre and Growing Through Disciplined Investments
Slide 2: Notice to Investors
Notice to Investors This presentation contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are typically identified by words or phrases such as “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,”
Slide 3: Credo Acquisition Overview
Credo Acquisition Overview Acquisition of CREDO Petroleum (NASDAQ:CRED) for $14.50 per share Total equity value $146 million - all cash Acquisition price = 34% premium* Consistent with Strategy and Triple in FOR initiatives 3 * Based on Credo closing price of $10.86 per share on June 1, 2012 Acquisi
Slide 4: Benefits
Acquisition Benefits Doubles production and reserves, enhances disclosure Creates meaningful scale, ownership and operations in strategic basins Maintains solid financial position, enhanced by recurring cash flows Provides a strong operating platform for growth and investment Exceeds return requirem
Slide 5: Attractive Leasehold Interests In Prolific Basins
Attractive Leasehold Interests In Prolific Basins 5 CREDO Leasehold Interests – Q1 2012 Market Net Acres Basins Formations North Dakota 6,000 Williston Bakken & Three Forks Kansas 43,000 Central Uplift Lansing – Kansas City Nebraska 41,000 Denver – Julesburg Central Uplift Lansing – Kansas City Okla
Slide 6: Bakken Provides Significant Value Creation Potential
Bakken Provides Significant Value Creation Potential 6,000 net mineral acres in core of Bakken & Three Forks Bakken Well Assumptions Avg. Well production (EUR) >500 Mboe Average working interest 8.0% Units 50 Wells Completed* 16 Wells Drilling* 9 Wells Planned by YE 2012* 9 Total Potential Wells up
Slide 7: Provides Meaningful Scale and Solid Platform For Future Growth and Additional Investment
Acquisition Provides Meaningful Scale and Solid Platform For Future Growth and Additional Investment 3 7 Future growth in production and reserves driven by oil and liquid rich opportunities Combined Mineral Interests Market Net Acres* Texas 256,000 Georgia 156,000 Louisiana 144,000 Kansas 43,000 Neb
Slide 8: Compelling Combination Value Drivers
Compelling Combination Value Drivers Combination creates strong platform for growth and investment, stronger recurring cash flows, financial flexibility and provides opportunities to improve transparency and disclosures Value Drivers Metrics Increased Scale > $140 million PV-10 Value* > $250 million
Slide 9: Compelling Combination Value Drivers
Compelling Combination Value Drivers Combination creates significant scale through production and reserve growth, meaningful ownership and operations in prolific basins and is focused on oil and NGL’s Value Drivers 2011 Metrics* CRED FOR Combined Doubles Production and Reserves Meaningful Ownership
Slide 10: Accelerating Realization of Oil & Gas Through Increased Production and Reserve Growth
Accelerating Realization of Oil & Gas Through Increased Production and Reserve Growth (BOE) 10 Acquisition Accelerates Value Realization of Forestar Minerals 28% Oil 36% Oil Future Net Cash Flows From Reserves * ($ in millions) *Note: Based on Credo Form 10-K for period ending 10/31/11 and Forestar
Slide 11: Analysis
Acquisition Analysis 3 Credo Acquisition Price Per Share $14.50 Premium to Pre-announcement Credo Price ($10.86 - 6/1/12) 34% Equity Purchase $146 + Closing Costs* 7 Total Purchase Price $153 Financing** Committed Loan $75 Revolver Availability & Cash 78 $153 11 ($ in millions) Following the acquisi
Slide 12: Credo Acquisition Generates Scale, Creates Platform for Growth and Investment
Credo Acquisition Generates Scale, Creates Platform for Growth and Investment and Accelerates Value Realization Proforma Combined Portfolio of Assets Oil & Gas ($ in millions) Net Minerals Acres* 719,000 Proforma Q1 2012 Investment - $200 million Reserves (MMBOE) 7.1 PV-10 Reserves $143 Future Net C
Slide 13: Compelling Combination Value Drivers
Compelling Combination Value Drivers Combination creates scale by increasing production and reserves, providing solid platform for growth, maintaining solid balance sheet, and creating additional shareholder value 19 Creates meaningful scale, with ownership and operations in strategic basins Increas
Slide 14: Acquisition of Credo Petroleum
Acquisition of Credo Petroleum June 4, 2012 Recognizing and Responsibly Delivering the Greatest Value From Every Acre and Growing Through Disciplined Investments 14