Investor Presentation June 2012 Recognizing and Responsibly Delivering the Greatest Value From Every Acre and Growing Through Disciplined Investments
The Forestar Difference Strategically located in key growth regions and active oil and gas basins Focused strategy to deliver the greatest value from real estate and natural resources Experienced management team with proven ability to…
Our Strategy The Dimensional Land Model TM Forestar is a real estate and natural resources company with a strategy focused on maximizing the value of its assets by: Recognizing and responsibly delivering the greatest value from…
Delivering The Greatest Value From Every Acre 146,000 acres of low-basis land 130,000 real estate acres generating fiber growth and sales 89 projects residential and mixed-used communities in 7 states and 11 markets 4 significant…
Forestar Minerals - Oil and Gas Building Momentum By Driving Leasing and Exploration to Increase Production and Reserves 66
Delivering The Greatest Value From Every Acre Minerals Pipeline Terms Activity Financials Greatest Value (Acres) 1 Production Reserves 20% 27% Royalty and 534 Wells 2 32,000 Working Interest Cash Flow = 134mm3 REALIZATION 3 5…
Increased Oil Production Driving Higher Royalties Growth in Drilling Activity Forestars Share of Well Count Quarterly Oil & Gas Production YE 2009 Q1 2012 Q1 2011 Q1 2012 540 534 69,200 515 Well Count 490 32,000 472 467…
Accelerating Value Realization of Minerals Through Proven Reserve Growth Proven Reserves (Before Income Taxes) PV10* Future Net Cash Flows * ( in millions) ( in millions) 90.0 81 150 134 60.0 100 34 57 30.0 74% Oil 50 0.0…
Target Formations 20112012 Well Completions East Texas and Wells Drilled East Texas & Louisiana* Gulf Coast Basins Last 12 months Target Frio / Hackberry 1 Yegua / Cockfield 2 Wilcox 12 Austin Chalk 3 Rodessa James Lime…
Targeting 160,000 Acres For Oil and Gas Prospects Rodessa Pettet 24,000 acres 2,000 acres Target Specific Zones and Oil / NGLs / Natural Gas Oil / NGLs / Natural Gas Formations For Prospect Generation Bossier-Haynesville Shale…
Austin Chalk Drilling Activity Increasing LOUISIANA Brookeland Rapides Trend Vernon TEXAS Byerley A32 Unit 21 Newton Masters Creek Trend Byerley A32 Unit 22 Available For Lease Leased Keaghey A2 1 HBP Blackstone A90 1…
Austin Chalk Drilling Activity Increasing ( in millions) Estimated Ultimate Recoveries FOR Natural Net Gas Dry Completion Royalty Condensate Liquids Gas Total Well Date Interest MB MB MMCF MMBOE Forestar Blackstone A90 Unit 1 Nov09…
Enhancing Minerals Value Creation and Realization Value % of Well Q1 2012 Components Economics Capital Wells Operating 50 75% Moderate Value Creation & Realization Working 10 50% Low 10 Interest Royalties 20 25% None…
Minerals - Oil and Gas Acquisition of Credo Petroleum Corporation Doubles Production and Reserves, Provides Meaningful Ownership in Strategic Oil and Gas Basins, Further Enhances Transparency and Disclosure, and Creates Solid Platform…
Credo Acquisition Overview Acquisition of CREDO Petroleum (NASDAQ:CRED) for 14.50 per share Total equity value 146 million all cash Consistent with Strategy and Triple in FOR initiatives Accelerate value realization Optimize…
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…
Attractive Leasehold Interests In Prolific Basins 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 Denver…
Bakken Provides Significant Value Creation Potential 6,000 net mineral acres in core of Bakken & Three Forks Leasehold Mineral Interests Locations Bakken / Three Forks Acres Locator Map PARSHALL FIELD FORT BERTHOLD…
Acquisition Provides Meaningful Scale and Solid Platform For Future Growth and Additional Investment Combined Mineral Interests Market Net Acres* Texas 256,000 Georgia 156,000 Louisiana 144,000 Kansas 43,000 Nebraska 41,000 Alabama…
Compelling Combination Value Drivers Value Drivers 2011 Metrics* CRED FOR Combined ( in millions) Production (BOE) 301,000 422,200 723,200 Increased Scale / Reserves (MMBOE) 4.1 3.0 7.1 Doubles Production % Oil 48% 35% 42% and…
Proved Developed Reserves Represent Only One Component of Reserve Value and Opportunity Reserve reporting beyond proved developed requires the ability and intent to drill Forestar YE 2011 Forestar Reserves YE 2011 Reserve (MMBOE)…
Credo Acquisition Will Generate Scale, Create Platform for Growth and Investment, and Accelerate Value Realization Q1 2012 Proforma Combined Portfolio of Assets Acquisition Benefits Oil & Gas ( in millions) Net Minerals Acres* 719,000…
Real Estate - Community Development Building Momentum by Increasing Residential Lot Sales And Developing Exceptional Master Plan Communities 27 Page 27
Delivering The Greatest Value From Every Acre Real Estate Greatest Value Pipeline 1 Activity Uses Financials 2 (Acres) Development 2,000 1,348 acres 2,815 lots 50K per lot 63 projects 498 commercial acres 90K per acre (avg sales…
Low Basis Assets Located in Stronger Markets Texas Markets Represent 75% of our Investment in Real Estate Salt Lake City 1 0.4 Oakland 1 8.8 Kansas City 1 2.9 Los Angeles 2 14.4 Atlanta 33 84.9 Denver 5 31.3 Tampa 3…
Increased Residential Lot Sales Reflect Stable Demand and Reduced Finished Lot Inventories in Texas Annual Lot Sales & Avg. Lot Margin Forestar Residential Lot Inventory* 2006 Peak Sales = 3,600 lots 50,000 1,117 1,060 40,000…
Real Estate Pipeline Well Positioned For Recovery Developed In Entitlement and Under Total Real Estate Undeveloped Process Entitled Development Acres Undeveloped Land Owned 95,360 102,261 Ventures 6,901 Residential Owned 24,867…
Triple in FOR Strategic Initiatives Building Momentum By Increasing Oil Production, Proven Reserves and Residential Lot Sales 32
Our Focus: Triple in FOR Historical Avg. Initiatives (20082011) Target Focus on Accelerating Value Realization Triple Residential Lot Sales 850 lots 2,500 lots Triple Oil & Gas Production (Mcfe) 2.3 Bcfe 6.7 Bcfe Triple Total Segment…
Increasing Our Financial Flexibility Light Farms Venture Sold 800 Acres for 56 Million Pro forma April 2012: Light Farms Sale 1st Quarter Light Farms ( in millions) 2012 Sale FOR / RPG Land Company sold 800 acres from proposed…
Accelerating Value Realization Building momentum by increasing oil production and proven reserves Growing lot sales and increasing market share Harvesting value from stabilized commercial assets Capitalizing on growth…
Appendix Recognizing and Responsibly Delivering the Greatest Value From Every Acre and Growing Through Disciplined Investments 36
Mineral Resources Segment KPIs 1st 1st Quarter Quarter Full Year Full Year 2012 2011 2011 2010 Leasing Activity Net Acres Leased 800 4,900 8,100 16,900 Avg. Bonus / Acre 360 340 279 457 Royalties* Oil Produced (Barrels) 69,200…
Real Estate Segment KPIs 1st 1st Quarter Quarter Full Year Full Year 2012 2011 2011 2010 Residential Lot Sales * Lots Sold 285 214 1,117 804 Average Price / Lot 53,000 48,200 47,400 49,500 Gross Profit / Lot 20,800 18,500 17,500…
Fiber Resources Segment KPIs 1st 1st Quarter Quarter Full Year Full Year 2012 2011 2011 2010 Fiber Sales Pulpwood Tons Sold 24,400 65,600 266,200 392,900 Average Pulpwood Price / Ton 10.18 9.18 8.69 9.93 Sawtimber Tons Sold 4,400…
YE 2011 Proven Reserves ( in millions) 2011 2010 % Change Proved Developed Reserves 1 Oil Reserves MBBL 1,053.7 608.7 73% Gas Reserves BCF 11.4 10.5 9% Future Net Revenues* 132.7 77.5 71% PV10 3* 81.0 45.3 79% Proved Developed…
Reconciliation of Non-GAAP Financial Measures (Unaudited) In our full year and fourth quarter 2011 earnings release and conference call presentation materials furnished to the Securities and Exchange Commission on Form 8K on February…
Anna Torma Forestar Group Inc. SVP Corporate Affairs 6300 Bee Cave Road Building Two, Suite 500 Austin, TX 78746 512-433-5312 annatormaforestargroup.com 42
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