Dorchester Minerals, L.p. · NASDAQ:DMLP
Dorchester Minerals, L.p — Shareholder Meeting (May 2006)
41 slides from Dorchester Minerals, L.p's shareholder meeting presentation, May 3, 2006
Slide 1: 2006 Annual Meeting
2006 Annual Meeting May 3, 2006 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: Presentation Outline
2005 Highlights Reserves and Production Peer Group Comparison Activity Highlights – Leasing Activity – Royalty Properties – Net Profits Interests – Fayetteville Shale Looking Ahead Presentation Outline
Slide 4: 2005 Highlights
2005 Highlights
Slide 5: 2005 Highlights
2005 Highlights Net Income $52.8 MM $30.1 MM Lease Bonus $1.7 MM $1.6 MM Leasing Activity 78 leases 42 leases Drilling Activity 289 wells 196 wells Cash Distributed $56.5 MM $46.5 MM 2005 2004
Slide 6: Quick Look at 2005 Distributions
Royalty Revenue $36.8 MM Total Revenue $62.9 MM Other Revenue $1.1 MM NPI Revenue $25.0 MM Total Expenses $4.8 MM Quick Look at 2005 Distributions LP Distribution $56.5 MM GP Distribution $1.6 MM Distributions Paid in 2005 – Reflects Q4 2004 to Q3 2005 Activity
Slide 7: Volumes, Prices and Distributions
$0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90$1.20 $1.00 0.00 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.40 0.97 1.05 1.14 1.11 1.11 1.05 1.05 1.05 1.02 1.07 1.12 1.01 - 0.20 0.40 0.60 0.80 1.00 1.20 1.40 Mcfepd per 1000 Units Volumes – Prices – Distributions Gas Price per Mcf 2005 2003 2004 Q1 Q3
Slide 8: Reserves and Production
Reserves and Production
Slide 9: Total Proved Reserves
Total Proved Reserves 90.5 Bcfe Reserves per Unit 3.20 Mcf Proved Developed 99.7% Production Replacement 77% SEC PV $344 million Reserve Life Index (R/P) 8.2 Reserves and Production
Slide 10: Production Replacement Calculation
Production Replacement Calculation Reserves and Production Actual 12/31/04 Reserves Projected 12/31/05 Reserves 2005 Production Actual 12/31/05 Reserves Reserve Revisions Total Reserves (Bcfe) 90.5 93.1 81.7
Slide 11: Reserves and Production: Product Mix and Property Allocation
Reserves and Production Product Mix Property Allocation Proved Reserves on December 31, 2005 Gas 73% Oil 27% NPI 42% 58% Royalty
Slide 12: DMLP volumetric variance by production month
Reserves and Production DMLP volumetric variance by prod. month Daily Production (MMcfepd) 2003 2004 2005 2006 Projected Volume Actual Volume
Slide 13: Peer Group Comparison
Peer Group Comparison
Slide 14: Value of $100 from Q1 2005 through Q1 2006
Q4 05 Value of $100 from Q1 2005 through Q1 2006 Q1 05 Q2 05 Q3 05 Q1 06 Peer Group Comparison Total Return (Distributions Reinvested) $80 $100 $120 $140 $160 $180 DMLP SJT NASDAQ SBR
Slide 15: Value of $100 from Q3 2005 through Q1 2006
Q4 05 Value of $100 from Q3 2005 through Q1 2006 Q3 05 Q1 06 Peer Group Comparison Total Return (Distributions Reinvested) Q2 06 $90 $100 $110 $120 $130 $140 DMLP SJT NASDAQ SBR
Slide 16: Activity Highlights: Leasing Activity
Activity Highlights Leasing Activity
Slide 17: 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)
Slide 18: 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 19: 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 20: Significant Hybrid Leases
Significant Hybrid Leases Hybrid Lease “A” – 19 transactions – Haley Field Area (Loving and Winkler, TX) – Granite Wash (Hemphill and Wheeler, TX) Hybrid Lease “B” – 4 transactions – Jeffress Field (Hidalgo, TX)
Slide 21: Activity Highlights: Royalty Properties
Activity Highlights Royalty Properties
Slide 22: Royalty Property Highlights
Royalty Property Highlights Leasing Activity – Consummated 78 leases and pooling elections – Identified 289 new wells on royalty properties – 80 active lease offers Maximizing Value of Mineral Assets – Lease bonus payments up to $800/acre – Initial royalty terms ranged from 25% to 30% – Hybrid lease
Slide 23: Royalty Property Highlights
Royalty Property Highlights Mid-Continent South Texas Alabama
Slide 24: Royalty Property Highlights: T-Patch Field
Royalty Property Highlights T-Patch Field (Starr, TX) – 8 wells completed as of 12/31/05 – Production rates ranged up to 21 MMcfpd – Two wells completed in Q1 2006 (10.2% NRI) Guerra Min. Trust #1: 6.7 MMcfpd, 70 bopd Guerra Min. Trust #2: 11.7 MMcfpd, 250 bopd – Additional development tracts with h
Slide 25: T-Patch Field Production Rates
1,000 10,000 100,000 1,000 10,000 Royalty Property Highlights T-Patch Field (Starr, TX) – High initial production rates – High decline rates Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Gas Rate (Mcfpd) Oil Rate (bopd)
Slide 26: Royalty Property Highlights: Jeffress Field
Royalty Property Highlights Jeffress Field (Hidalgo, TX) – Negotiated back-in working interest (Hybrid “B”) BPO: 7.5% NRI APO: 10.9% NRI – Indication of a significant discovery Initial flow rate of 3.3 MMcfpd, 96 bopd Flowing pressure of 5190 psi with 5,990 psi shut-in – 417 acres leased within a 2,
Slide 27: Anadarko Basin - Granite Wash
1,000 10,000 Royalty Property Highlights Anadarko Basin - Granite Wash – 595 sections in 7 counties, Oklahoma and Texas – Perryman lease demonstrates continuous activity Gas Rate (Mcfpd) Well Count 1985 2005 1990 1995 2000
Slide 28: Little Cedar Creek Field
1,000 10,000 Royalty Property Highlights Little Cedar Creek Field (Conecuh, AL) – 19 wells producing and 4 wells permitted/drilling – Unitized for secondary recovery Oil Rate (bopd) Well Count 1996 2006 1998 2000 2002 2004
Slide 29: Activity Highlights: Net Profits Interests
Activity Highlights Net Profits Interests
Slide 30: Net Profits Interest Highlights
Net Profits Interest Highlights Increased Exposure to Upside Potential – Participated in 49 wells in Arkansas, Montana, New Mexico, Oklahoma, and Texas – Optional working interest participation in numerous leases Maximize Value of Mineral Assets – Unburdened working interests (WI = NRI) – Informatio
Slide 31: Net Profits Interest Highlights
Net Profits Interest Highlights Montana Horizontal Bakken Arkansas Fayetteville Shale Mid-Continent Granite Wash Hugoton Area Chase Group
Slide 32: Horizontal Bakken (Richland, MT)
1,000 Horizontal Bakken (Richland, MT) – Participated in 9 wells (5 wells producing) – Technology-driven play, multi-lateral completions Net Profits Interest Highlights Oil Rate (bopd) Well Count Q1 05 Q2 05 Q3 05 Q4 05 Q4 04 Q1 06
Slide 33: Horizontal Bakken (Richland, MT)
Net Profits Interest Highlights Horizontal Bakken (Richland, MT) – Wells typically drilled on 1280 acre units
Slide 34: Hugoton Area - Operated Properties
Hugoton Area - Operated Properties – 2005 production within 1% of projection – Continuing successful stimulation program Net Profits Interest Highlights 2004 2005 2006 Gas Rate (Mcfpd) 8,000 10,000 12,000 14,000 16,000 Projected Volume Actual Volume
Slide 35: Activity Highlights: Fayetteville Shale
Activity Highlights Fayetteville Shale
Slide 36: Fayetteville Shale Highlights
Fayetteville Shale Highlights Eastern Arkoma Basin – Northern Arkansas – 9,800 net acres in 180 sections in 8 counties Van Buren Pope Cleburne White Conway Faulkner HBP Acreage Leased Acreage Producing Wells Permitted Wells
Slide 37: Fayetteville Shale Highlights
Fayetteville Shale Highlights Eastern Arkoma Basin – Northern Arkansas – Monitored trend development Horizontal wells have tested up to 3.7 MMcfd – Elected to participate in two horizontal wells D&C costs - $1.4 million (6.25% WI) – Circulated request for proposals in January 2006 Competitive biddin
Slide 38: Fayetteville Shale Highlights: Focus Area
Fayetteville Shale Highlights Focus Area – Conway, Van Buren, Faulkner Cove Creek Gravel Hill Griffin Mountian Scotland HBP Acreage Leased Acreage Producing Wells Permitted Wells
Slide 39: Looking Ahead
Looking Ahead
Slide 40: Developing Plays
Developing Plays New York Trenton/BR Arkansas Deep Shales North Texas Barnett Shale Delaware Basin Pennsylvanian East Texas Deep Bossier North Dakota Horizontal Bakken
Slide 41: 2006 Annual Meeting
2006 Annual Meeting May 3, 2006