Dorchester Minerals, L.p. · NASDAQ:DMLP
Dorchester Minerals, L.p — Shareholder Meeting (May 2022)
29 slides from Dorchester Minerals, L.p's shareholder meeting presentation, May 18, 2022
Slide 1: Dorchester Minerals, L.P. Annual Meeting May 18, 2022
Dorchester Minerals, L.P. DMLP NASDAQ Dorchester Minerals, L.P. ANNUAL MEETING May 18, 2022 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 • Property Highlights • Summary DMLP NASDAQ
Slide 4: Observations and Trends
Dorchester Minerals, L.P. DMLP NASDAQ Observations and Trends Industry Conditions • High commodity prices have not translated into a surge in drilling activity • Industry continues to focus on capital efficiency and free cash flow volume growth is not the priority • Operators’ response to the reco
Slide 5: 2021 Distributions
Dorchester Minerals, L.P. DMLP NASDAQ 2021 Distributions Components and Prices • 11.4% annualized cash distribution yield(1) with Q1 2022 distribution of $0.753926/unit paid May 12, 2022 • Cumulative LP distributions of $1 billion ($33.66/unit) from inception through Q1 2022 • Royalty properties con
Slide 6: Minerals NPI
Dorchester Minerals, L.P. DMLP NASDAQ Minerals NPI Trailing 12 Months Activity through March 2022 • Trailing 12 months operating margin of 63% versus prior year trailing 12 months operating margin of 41% was highly impacted by 2020 shut-ins and curtailments • NPI has been in surplus since August 202
Slide 7: Total Production
Dorchester Minerals, L.P. DMLPNASDAQ Total Production • Oil production increased by 38% between 2016 and 2021 • Gas production decreased by 26% between 2016 and 2021 • Plant Product production increased by 127% between 2016 and 2021 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 volumes sustained by robust Midland • Oil historically driven by Bakken Basin development participation, but few proposals in 2021 • Gas decline has been suppressed by • Divestment of Hugoton Fie
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 • Largest contributors to both oil and gas production are the Midland Basin and Bakken • Hugoton Field divestiture and natural declines have reduced c
Slide 10: 2021 Reserves
Dorchester Minerals, L.P. DMLP NASDAQ 2021 Reserves Geographic Split Bakken • Total Proved Reserves of 15.5 MMBoe on 12/31/2021 10% Other Midland • All reserves are Proved Developed Producing (PDP) 14% 30% Mid- • Product mix weighted to liquids 48% oil, 11% plant Continent products, 41% natural ga
Slide 11: 2021 Reserve Revisions
Dorchester Minerals, L.P. DMLP NASDAQ 2021 Reserve Revisions • Improved 2021 commodity prices extended economic limits in legacy properties • History of Reserve Revisions Year-end reserves within 1% of initial 2003 reserves Equivalent Reserves (MMBoe) Natural Gas Reserves (Bcf) 18 Year-End 2020 33
Slide 12: Mineral Portfolio Overview
Dorchester Minerals, L.P. DMLP NASDAQ Mineral Portfolio Overview • Diversified mineral portfolio spanning 590 Counties in 28 States • Producing and nonproducing mineral, royalty and net profits interest • Wide geographic footprint with exposure to nearly every domestic producing basin • Significant
Slide 13: Acquisition Activity
Dorchester Minerals, L.P. DMLP NASDAQ Acquisition Activity • Three geographically diverse mineral and royalty acquisitions in last 12 months • Approximately 14,500 net royalty acres located in 44 counties in 10 states • Total of 2,875,000 units issued to contributors • Attractive near-term accretion
Slide 14: Bakken/Three Forks
Dorchester Minerals, L.P. DMLP NASDAQ Bakken/Three Forks • 83,600 gross ac (10,400 net ac) in six core ND • 1,651 gross producing wells at year-end 2021 counties majority unleased minerals • 2021 7 Participation, 10 Non-Consent • Rig count 15 in April 2021 to 34 in April 2022 • YTD 2022 6 Pa
Slide 15: Permian Basin
Dorchester Minerals, L.P. DMLP NASDAQ Permian Basin Delaware Basin CBP Midland Basin 15
Slide 16: Midland Basin
Dorchester Minerals, L.P. DMLP NASDAQ Midland Basin • 257,000 gross ac (17,000 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 17: 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, • Added 17 new wells in 2021 Reeves and Ward Co., TX and Lea Co., NM • 12 of 21 DSU’s contain only 1 well • 640 gross ac of ORRI’s • 4 active permits on ac
Slide 18: 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 • UBTI-Free • Unlevered • Aligned
Slide 19: Appendix
APPENDIX DMLP NASDAQ
Slide 20: 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’ contribution to Permian net revenue decreased from 71% in 2011 to 23% in 2021 2011 Net
Slide 21: 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 $2.2 MM Mgmt LP is 2.5X 9.8 %
Slide 22: 2021 Reserves
Dorchester Minerals, L.P. DMLP NASDAQ 2021 Reserves History of Positive Reserve Revisions • Cumulative Reserve Revisions have exceeded 100% of Current Reserves • Production and divestitures have exceeded initial reserves by 24.4 MMBoe Equivalent Reserves (MMBoe) 20.0 15.7 Initial Reserves 15.5 Total
Slide 23: Royalty Liquids Production
Dorchester Minerals, L.P. DMLP NASDAQ Royalty Liquids Production • Pre-2021 Wells 25% Decline • Pre-2020 Wells 15% Decline • Pre-2019 Wells 11% Decline Daily Liquids Rate (boed) 10,000 Pre-2020 Wells (Producing as of 12/31/2019) Total Royalty Pre-2019 Wells Pre-2021 Wells Liquids Production (P
Slide 24: New Well Activity
Dorchester Minerals, L.P. DMLP NASDAQ New Well Activity 400 350 300 250 200 150 100 50 0 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 NPI Royalty Royalty Acquired Royalty Wells 84 107 28 116 84 272 253 336 NPI Wells 23 9 15 13 4 18 10 32 Net Wells 0.97 0.76 0.49 0.73 0.52 0.83 2.1
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: Investment Highlights
Dorchester Minerals, L.P. DMLP NASDAQ Investment Highlights Assets Structure Management • Long-life Resource Base • Formulaic Distribution • Sustainable Cost Structure • Exposure to Multiple Basins • Unlevered and Unhedged • Non-Dilutive Equity Compensation • Asset Base Includes • Depletion Deductio
Slide 29: Dorchester Minerals, L.P. Annual Meeting May 18, 2022
Dorchester Minerals, L.P. DMLP NASDAQ Dorchester Minerals, L.P. ANNUAL MEETING May 18, 2022 DMLP NASDAQ