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May 2015 Annual General Meeting – Dorchester Minerals Lp

Dorchester Minerals Lp · May 20, 2015 · 52 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 1
    Dorchester Minerals, LP NASDAQ: DMLP Dorchester Minerals, LP Annual Meeting May 20, 2015 1
  2. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 2
    Dorchester Minerals, LP NASDAQ: DMLP Overview of 2014 Results Activity Reserves Production Distributions 3
  3. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 3
    Dorchester Minerals, LP NASDAQ: DMLP Overview of 2014 Results Activity Reserves Production Distributions 4
  4. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 4
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Activity Minimal activity in most dry gas plays Mid-Continent, Fayetteville and Barnett Shale Fever-pitch in Bakken and Midland Basin Confirmation of prospectivity of multiple benches…
  5. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 5
    Dorchester Minerals, LP NASDAQ: DMLP Overview of 2014 Results Activity Reserves Production Distributions 6
  6. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 6
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Reserves Total Proved Reserves of 90.2 Bcfe on 12/31/2014 All reserves are Proved Developed Producing (PDP) Demonstrated history of positive revisions Cumulative revisions since…
  7. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 7
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Reserves Revisions to Reported PDP Reserves Equivalent Reserves (Bcfe) 100 2014 Production 11.6 Bcfe 90.2 Total Reserves 90 2014 Divestitures 2.4 Bcfe 13.2 2014 Revisions 80 70 60…
  8. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 8
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Reserves Composition of Proved Reserves Geographic Breakdown Royalty-NPI Split Equivalent Reserves (Bcfe) Bakken 70 Rockies 10% 53.7 60 Royalty 60% 3% Bcfe NPI 40% Other Permian…
  9. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 9
    Dorchester Minerals, LP NASDAQ: DMLP Overview of 2014 Results Activity Reserves Production Distributions 10
  10. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 10
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Production Natural Gas Production Gas production has decreased due to natural decline in the Hugoton field and reduced Barnett and Fayetteville activity Only 3 new Barnett wells on…
  11. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 11
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Production Oil and Plant Products Production Stable base production from large, mature Permian oil fields Recent increase in oil production from new Bakken and Permian activity Daily…
  12. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 12
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Production Contribution from Diverse Sources New plays have replaced declines in legacy assets Opportunities for production growth in mature basins Daily Equivalent Rate (Mcfed) South…
  13. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 13
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Production Portfolio Has Shifted Over Time 2003-2012 Royalties increased from 48% to 62% due to mineral acquisitions, new drilling on legacy properties, and natural declines in Hugoton…
  14. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 14
    Dorchester Minerals, LP NASDAQ: DMLP Overview of 2014 Results Activity Reserves Production Distributions 15
  15. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 15
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Distributions Cash Distributions Paid in Calendar 2014 Reflects Q4 2013 to Q3 2014 activity Royalty NPI Other Revenue Revenue Revenue 54.0 MM 9.0 MM 4.2 MM Total Revenue 67.2 MM…
  16. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 16
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Distributions Components and Prices Royalty properties contributed 80% to total 2014 LP distributions Gross Revenue 18% gas sales, 80% oil & NGL sales, 2% other revenue NPI contribution…
  17. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 17
    Dorchester Minerals, LP NASDAQ: DMLP Property Discussion Activity Overview Minerals NPI Core Midland Basin Bakken/Three Forks Fayetteville Hugoton 18
  18. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 18
    Dorchester Minerals, LP NASDAQ: DMLP Royalty Overview Leasing and Development Activity Consummated 107 leases in 32 counties/ parishes in five states Lease bonus payments up to 3,750/acre Initial royalty terms up to 25%…
  19. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 19
    Dorchester Minerals, LP NASDAQ: DMLP Net Profits Interests Overview NPI Provides Exposure to Working Interest Potential Without Generating UBTI Currently five NPI groups Capitalize on strong negotiating position to capture…
  20. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 20
    Dorchester Minerals, LP NASDAQ: DMLP Net Profits Interests Production Relative contribution of NPIs has shifted over time Hugoton accounted for 96% of NPI production at inception 44% in Q4 2014 Minerals NPI volumes prior to Q3…
  21. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 21
    Dorchester Minerals, LP NASDAQ: DMLP Minerals NPI Production by Product Gas production has declined since 2012, but oil production has increased by 300% over the same period Daily Oil Rate (boepd) Daily Gas Rate (Mcfd) Daily…
  22. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 22
    Dorchester Minerals, LP NASDAQ: DMLP Minerals NPI Components of Production New Areas: MT Bakken (2006), Fayetteville (2007), ND Bakken (2009), Permian (2010) Additional working interest opportunities in Bakken and Permian Daily…
  23. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 23
    Dorchester Minerals, LP NASDAQ: DMLP Minerals NPI Activity from August 2013 through March 2015 Cash on Hand 07/31/2013 5.0 MM Outstanding Capital Commitments Cumulative Revenue 33.7 MM Cumulative Expense (LOE, taxes, etc) (…
  24. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 24
    Dorchester Minerals, LP NASDAQ: DMLP Minerals NPI Activity from August 2013 through March 2015 Deficit has improved since September 2014 Revenue from recent wells and declining capital commitments As of Balance ( Millions)…
  25. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 25
    Dorchester Minerals, LP NASDAQ: DMLP 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%…
  26. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 26
    Dorchester Minerals, LP NASDAQ: DMLP Non-Consent/Non-Participation Texas Unleased mineral owner backs in for full working interest after operator recovers 100% of costs Selected Texas N/C Paid Out Average Average Counties Well…
  27. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 27
    Dorchester Minerals, LP NASDAQ: DMLP Minerals NPI Production by Interest Type First Bakken Non-consent payout in 2009, Texas payouts ongoing since 2006 Production decline rates are lower when payout occurs Daily Equivalent Rate…
  28. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 28
    Dorchester Minerals, LP NASDAQ: DMLP Core Midland Basin Emerging Horizontal Wolfcamp Play Varying undivided interests in 200,000 gross acres Unleased below the Spraberry in numerous tracts Core Midland Basin Production…
  29. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 29
    Dorchester Minerals, LP NASDAQ: DMLP Core Midland Basin Effect of well elections on production profile Single Operator in Upton Co, Texas NPI participation in 36 wells Operator declined DMLPs elections to participate after 2013…
  30. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 30
    Dorchester Minerals, LP NASDAQ: DMLP Core Midland Basin Example: Selected Upton/Midland County Holdings Varying undivided interests 4.2% interest in 42,800 gross acres Unleased below the Spraberry in numerous tracts Over 70…
  31. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 31
    Dorchester Minerals, LP NASDAQ: DMLP Bakken/Three Forks Williston Basin Northwestern North Dakota DMLP owns 70,390 gross acres/8,905 net acres Producing 1,100 boepd at year-end 2014 82% from Working Interests Production…
  32. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 32
    Dorchester Minerals, LP NASDAQ: DMLP Bakken/Three Forks Williston Basin Northwestern North Dakota DMLP owns 70,390 gross acres/8,905 net acres Well Average Average Count BPO NRI APO NRI Completed as Producers 509 0.848%…
  33. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 33
    Dorchester Minerals, LP NASDAQ: DMLP Bakken/Three Forks Non-Consent Elections A Look Back 302 Non-Consent Wells 41 Back-in WI Wells 16% Incremental 84% NRI Royalty 4% Royalty After Payout Revenue 17.8 MM 4.5 MM 14.3 MM…
  34. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 34
    Dorchester Minerals, LP NASDAQ: DMLP Bakken/Three Forks Non-Consent Elections A Look Back Payout depends on actual CAPEX spent, production, oil prices, etc. Numerous wells likely to payout in the future cannot predict how many…
  35. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 35
    Dorchester Minerals, LP NASDAQ: DMLP Bakken/Three Forks Example: 22-155N-94W, Mountrail Co. (149 net acres) Peak Avg. BPO APO Well Name (Operator) Election Rate NRI NRI (boepd) EN-Jeffrey 155-94-2215H-1 (Hess) Participate…
  36. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 36
    Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale Eastern Arkoma Basin Northern Arkansas DMLP owns 23,336 gross/11,464 net acres in 196 sections 457 wells producing 3.9 MMcfd at year-end 2014 46% from Working Interests…
  37. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 37
    Dorchester Minerals, LP NASDAQ: DMLP Fayetteville Shale Eastern Arkoma Basin Northern Arkansas Fewer wells are being drilled and average interest is smaller Initial rates have improved 64% since 2012 Only 4 wells spud on DMLP…
  38. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 38
    Dorchester Minerals, LP NASDAQ: DMLP Hugoton Operated Properties Hugoton Field Oklahoma Panhandle Divested Kansas operations in Sept 2014 average net sales of 2.8 MMcfd 2014 production within 1.0% of projection Year-over-year…
  39. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 39
    Dorchester Minerals, LP NASDAQ: DMLP Dorchester Minerals, LP Annual Meeting May 20, 2015 40
  40. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 40
    Dorchester Minerals, LP NASDAQ: DMLP Appendix 41
  41. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 41
    Dorchester Minerals, LP NASDAQ: DMLP Portfolio Overview Geographically Diverse 574 counties in 25 states 377,000 net mineral acres (2,307,000 gross acres) Varying NPRIs, ORRIs and leasehold interests in an additional 860,000…
  42. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 42
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Reserves History of Positive Reserve Revisions Cumulative Reserve Revisions have exceeded 100% of Current Reserves Equivalent Reserves (Bcfe) 120 106.5 Initial Reserves Total 100 12.5…
  43. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 43
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Production Plant Products Contribution Plant Products (PP) includes all production revenue other than that from oil and gas Volumes may be reported in barrels, cubic feet, gallons,…
  44. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 44
    Dorchester Minerals, LP NASDAQ: DMLP 2014 Production Plant Products Example Permian Royalty Calculated PP Volumes are highly dependent on operators marketing elections May be reported by operator as a BTU adjustment to…
  45. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 45
    Dorchester Minerals, LP NASDAQ: DMLP Minerals NPI What is the Minerals NPI and How Does it Work Upon its formation, Dorchester Minerals, LP (DMLP, the public partnership and owner of the mineral interests) provided for future…
  46. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 46
    Dorchester Minerals, LP NASDAQ: DMLP Minerals NPI What is the Minerals NPI and How Does it Work DMLP Lease to third party for Participation right royalty and optional assigned to DMOLP participation right DMOLP pays 100%…
  47. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 47
    Dorchester Minerals, LP NASDAQ: DMLP Distributions Distribution Determinations Period from October 2013 through September 2014 ( thousands) Limited General Partners Partner 4% of Net Cash Receipts from Royalty Properties…
  48. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 48
    Dorchester Minerals, LP NASDAQ: DMLP Management Ownership Alignment of GP and LP interests GP has no incentive distribution rights fixed sharing ratio Managements LP interest exceeds its GP interest Not incentivized to make…
  49. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 49
    Dorchester Minerals, LP NASDAQ: DMLP Effects of Operating Leverage Royalty Interest vs. NPI Royalty Interest Net Profits Interest Production Volume 1,000 Mcf 1,000 Mcf Gas Price 4.00/Mcf 4.00/Mcf Revenue 4,000 4,000 Fixed…
  50. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 50
    Dorchester Minerals, LP NASDAQ: DMLP 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…
  51. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 51
    Dorchester Minerals, LP NASDAQ: DMLP 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…
  52. May 2015 Annual General Meeting – Dorchester Minerals Lp – slide 52
    Dorchester Minerals, LP NASDAQ: DMLP Dorchester Minerals, LP Annual Meeting May 20, 2015 53

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