Dorchester Minerals, L.p. · NASDAQ:DMLP
Dorchester Minerals, L.p — Shareholder Meeting (May 2017)
33 slides from Dorchester Minerals, L.p's shareholder meeting presentation, May 16, 2017
Slide 1: Annual Meeting
Dorchester Minerals, LP ANNUAL MEETING May 16, 2017
Slide 2: Forward-Looking Statements
Dorchester Minerals, L.P. DMLP =NASDAQ> Forward-Looking Statements Portions of this document may constitute, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform
Slide 3: Outline
OUTLINE Observations and Trends * Distributions ¢ Minerals NPI Status ¢ Production and Reserves ¢ Property Discussion
Slide 4: Observations and Trends
Dorchester Minerals, L.P. DMLP =NASDAQ> Observations and Trends Production Volatility Based on Many Factors * Price volatility * Rig count > Rig efficiency * Pad drilling, longer laterals and enhanced completions Midland Basin Activity in the Spotlight * Significant contribution to 2016 results * In
Slide 5: 2016 Distributions
Dorchester Minerals, L.P. DMLP =NASDAQ> 2016 Distributions Cash Distributions Paid in Calendar 2016 * Reflects Q4 2015 to Q3 2016 activity Composition of 2016 Revenue Royalty NPI Other -_ Revenue Revenue Revenue Auilions $25.8MM $5.5MM $2.7MM $25.8 25 20 Total Revenue 15 $34.0 MM 10 Lp GP Total 5 Di
Slide 6: 2016 Distributions: Components and Prices
Dorchester Minerals, L.P. DMLP NASDAQ? 2016 Distributions Components and Prices * Royalty properties contributed 76% to total 2016 LP distributions * Gross Revenue > 71% oil & liquids sales, 21% gas sales, 8% other LP Distribution History ($/unit) Gas Price ($/Mcf) Oil Price ($/bbl) $3.00 $10.00 $10
Slide 7: Minerals NPI
Dorchester Minerals, L.P. Minerals NPI Activity from August 2013 through March 2017 * Reached surplus in September 2015 for the first time since July 2013 + NPI Payments for trailing 12 months through March 2017 total $4.9MM * NPlin deficit Feb 2017 & Mar 2017 due to new capital commitments Balance
Slide 8: Minerals NPI: Inception-To-Date Activity
Dorchester Minerals, L.P. DMLP NASDAQ? Minerals NPI Inception-To-Date Activity through March 2017 Cumulative Revenue $126.0 MM Outstanding Capital Commitments Cumulative Expense (LOE, taxes, etc.) ($31.9MM) Cumulative Operating Income $94.1MM By Play Cumulative CAPEX Spent ($74.5 MM) Bakken ($ 7.2MM
Slide 9: Total Production
Dorchester Minerals, L.P. DMLP NASDAQ? Total Production * Oil trend volatility affected by NPI contributions * Gas decline is due to reduced activity in dry gas basins Daily Gas Rate (Mcfd) Daily Oil Rate (boed) 1,000,000 + 10,000 Began reporting Plant Products as 100,000 + 1,000 10,000 | 100 1,000
Slide 10: Royalty and NPI Production
Dorchester Minerals, L.P. DMLP NASDAQ? Royalty and NPI Production Royalty Production NPI Production * Oillargely driven by robust Midland * Oil was driven by Bakken participation Basin development but slowed significantly in 2015 & 2016 * Gas decline is due to reduced activity in * Gas production is
Slide 11: Composition of Production
Dorchester Minerals, L.P. DMLP =NASDAQ> Composition of Production Contribution from Diverse Sources + New plays have replaced declines in legacy assets * Opportunities for production growth in mature basins Daily Gas Rate (mcfd) Daily Oil Rate (boed) 30,000 3,000 25,000 | 2,500 20,000 2,000 15,000 1
Slide 12: 2016 Reserve
Dorchester Minerals, L.P. DMLP 2016 Reserve Total Proved Reserves of 83.7 Bcfe on 12/31/2016 * All reserves are Proved Developed Producing (PDP) + Demonstrated history of positive revisions > new plays, infill drilling, and new technology * Oil and Plant Product volumes exceed 50% of total reserves
Slide 13: 2016 Reserve Composition
Dorchester Minerals, L.P. DMLP =NASDAQ> 2016 Reserve Composition * Permian and Bakken comprise 46% of total reserves * Royalty reserves increased from 62% at YE 2015 to 68% at YE 2016 Geographic Breakdown Bakken Rockies 9% Barnett Permian 4% 37% Mid-Continent 7% Hugoton South Tx/ “| 20% Gulf Coast 6
Slide 14: 2016 Reserve Revisions
Dorchester Minerals, L.P. DMLP NASDAQ? 2016 Reserve Revisions * Midland Basin was a major driver of upward oil revisions * Natural declines and economic limits suppressed gas reserves * Cumulative revisions since inception account for 168% of 2016 reserves Equivalent Reserves (Bcfe) Gas Reserves (Bc
Slide 15: Bakken/Three Forks
Dorchester Minerals, L.P. DMLP Bakken/Three Forks * 70,390 gross ac (8,905 net ac) in six core ND counties * Majority of mineral interests are unleased * Year-end 2016 PDP reserves of 1.18 MBOE (RI & WI) aie ‘i Well | Average | Average Count | APO GWI | APO NRI Completed/Producing 628 2.034% | 2.062
Slide 16: Bakken/Three Forks
Dorchester Minerals, L.P. DMLP Bakken/Three Forks * 2016 exit rate > 660 boed (75% NPI) * 16 wells producing but not yet in pay * 20 participation elections YTD 2017 * Rig count increased from 27 in May 2016 to 50 in May 2017 Well Count Daily Production (boed) 140 1,400 50 Non-Consent Elections _— R
Slide 17: Bakken/Three Forks: McKenzie County Example
Dorchester Minerals, L.P. DMLP Bakken/Three Forks McKenzie County Example Continental Resources - UhIman-Pittsburgh Unit ~ i | U4 * Dorchester owns 320 gross ac (104 net ac) }—| * 2,633 ac Spacing Unit 4 * Average NRI > 3.96% . a + UhIman 1-7H (1% Prod 2014) > EUR: 860 MBO & 1.2 BCF * Potential Deve
Slide 18: Midland Basin
Dorchester Minerals, L.P. DMLP Midland Basin NPI Production (boed) Wolfcamp/Spraberry 600 Participation + 229,000 gross ac (11,500 net ac) 500 ‘ @Non-Consent * Unleased at some depths in numeroustracts 499 MLegacy Guasscock ca) 2009 2010 2011 2012 2013 2014 2015 2016 | eb e, Royalty Production (boed
Slide 19: Midland Basin: Glasscock County Example
Dorchester Minerals, L.P. DMLP Midland Basin Glasscock County Example * 10,240 grossac (1,120 net ac) with average NRI of 1.688% * Horizontal activity on 6 of 16 sections =NASDAQ> RSP Permian Calverley 9-4 (13 wells) ‘ » * 8 wells producing — all wells in pay ~ + Awells drilling/WOC + Lwell permitte
Slide 20: Midland Basin: Reagan County Example
Dorchester Minerals, L.P. Midland Basin Reagan County Example + 19,760 grossac (2,191 net ac) * Approximately 90% of net ac HBP at 1/8th royalty, 10% unleased Bast 34-39#4412H (offset) | © 1P24: 2,420 boed Note: Production & test rates from RRC, Drillinginfo, & Public Company Filings.
Slide 21: Delaware Basin
Dorchester Minerals, L.P. Delaware Basin DMLP =NASDAQ> Wolfcamp / Bone Springs * 11,618 grossac (856 net ac) located in Loving, Reeves and Ward counties, Texas and Lea County, New Mexico + 3,200 gross ac of NPRI’s & 640 gross ac of ORRI’s * Majority of tracts are leased at 1/4 royalty + Prospective
Slide 22: Delaware Basin: Lea and Loving Counties Example
Dorchester Minerals, L.P. DMLP =NASDAQ> Delaware Basin Lea and Loving counties Example EOG Resources Thor 21, Rattlesnake 21 Fed Com & Ophelia 27 (16 wells) —— * Dorchester owns 960 gross ac (36 net ac) 4 * Average NRI > 0.547% Ter ET Tua : * Developme! | + 42 wells producing — 14 wells in pay TE ~C
Slide 23: Delaware Basin: Winkler County Example
Dorchester Minerals, L.P. Delaware Basin Winkler County Example oie, Dele neinettal partic guaiagauneral Maerests cian atene teedisnes Other Ri aaa ORMGL, Productice ie Sect ros lace AC Dell magic a Pedic Company riliege, ae Wolfcamp / Bone Springs Recent activity has extended the prospective limits
Slide 24: Appendix
APPENDIX
Slide 25: 2016 Reserves: History of Positive Revisions
Dorchester Minerals, L.P. DMLP 2016 Reserves History of Positive Reserve Revisions * Cumulative Reserve Revisions have exceeded 100% of Current Reserves Equivalent Reserves (Bcfe) 120 106.5 _ Initial Reserves 83.7 Total Reserves 100 - Acquisitions 80 60 2003-2016 Production 40 (163.7 Bcfe) ep 9 |] T
Slide 26: Minerals NPI: Production by Product
Dorchester Minerals, L.P. DMLP NASDAQ? Minerals NPI Production by Product * Added 56 new wells in 2016 located in Arkansas, North Dakota, Oklahoma, and Texas * Gas production has declined since 2012, but Oil production has increased by over 150% * Decreased Bakken activity led to Oil decline in 2016
Slide 27: Non-Consent/Non-Participation
Dorchester Minerals, L.P. DMLP *NASDAQe 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 minera
Slide 28: 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 North Dakota recovers 150% of costs Selected Texas Total N/C Paid Out Average Average Counties Well Count | Well Count | BPONR
Slide 29: Fayetteville Shale
Dorchester Minerals, L.P. DMLP NASDAQ? Fayetteville Shale Eastern Arkoma Basin * 23,336 grossac (11,464 net ac) in 196 sections + 462 wells producing at year-end + 2016 exit rate > 2.8 MMcfd (44% WI) + Rig Count dropped to zero in 2016 New Wells on Production Daily Production (Mcfd) 120 8,000 100 |
Slide 30: Hugoton Operated Properties
Dorchester Minerals, L.P. DMLP *NASDAQe Hugoton Operated Properties Hugoton Field — Oklahoma Panhandle * Divested Kansas operations in Sept 2014 average net sales of 2.8 MMcfd + Ongoing well optimization and cost-saving initiatives, but limited upside potential Daily Gas Rate (Mcfd) Daily Oil Rate (
Slide 31: 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 2016 Cash 3.3% 5 = Mgmt GP mm $0.9 MM Memt
Slide 32: Peer Group Comparison
Dorchester Minerals, L.P. DMLP =NASDAQ> Peer Group Comparison Market Performance * Pure royalties lack operating leverage inherent in net profits interests > Less volatility * Outperformance in low price environment due to lower fixed cost structure 5-Year Normalized Returns (distributions reinveste
Slide 33: Annual Meeting
Dorchester Minerals, LP ANNUAL MEETING May 16, 2017