September 2018 Barclays CEO Energy-Power Conference September 5, 2018
Important notice and disclaimer FORWARD-LOOKING STATEMENTS Certain statements contained in this Presentation, which reflect the current views of Osprey and Royal with respect to future events and financial performance, and any other…
Independent, high-quality oil & gas minerals C-Corp O Osprey Energy Acquisition Corp. 275 million equity raised in July/August 2017 Mineral and royalty business formed in 2011 Core-of-the-core Eagle Ford in DeWitt, Karnes, SPAC…
Core-of-the-core Eagle Ford position Key highlights Falcon Minerals acreage is in the Eagle Ford core 251,435(1) gross unit acres in the core of the prolific condensate-rich / volatile oil Eagle Ford fairway, with 3,000 locations…
The Eagle Ford shale is the most geographically advantaged large-scale oil play in the U.S. Key takeaways Royals historical NYMEX WTI and realized oil pricing Oil Price (/bbl) Well-established and extensive midstream infrastructure…
Falcon Minerals investment thesis Falcon Minerals intends to acquire core-of-the-core minerals assets in leading plays with sustainable free cash flow and visible growth Future acquisitions will be geared towards accretively driving…
Falcon Minerals business strategy A Benefit from organic development of our acreage B Pursue accretive acquisitions Growth within free C cash flow Focus on total stockholder returns D Maintain a conservative capital…
Advantaged, differentiated high-margin oil-weighted assets with high-FCF conversion and no capex Falcon Minerals E&P operator No direct operating No direct operatingcosts orcapital costs or capital expenditures expenditures…
Leading cost structure with high cash margins relative to leading E&P operators 2Q18 Full-cycle cash margins (Cash margin and per BOE) 45 100% 89% 40 90% 35 80% 41.15 71% 30 64% 70% 25 59% 58% 35.66 Average: 52% 60% 20 53% 30.57…
Tier 1 operators on Falcon Minerals acreage Best-in-class operators on Falcon Minerals acreage Operator acreage locator % of Net debt / Credit rating Falcon's 2018E (Moody's / 2018E EF Active EF 2018 cash Operator TEV (bn) (1)…
Top tier assets paired with top tier operators IP30 progression by operator (Boe/d) 2009-2011 2012-2014 2015-2017 Hooks Ranch April 2018 Avg. 1,680 1,673 1,420 1,286 1,327 1,223 1,209 1,101 1,071 1,005 823 729 597…
Active development Numerous avenues of visible growth 100% conversion of permits to PDP Well life cycle (permit to first production days) Undeveloped Permit Well Well Well 189 line-of-sight wells location filed spud completed…
BP acquisition of BHPs Eagle Ford assets Multiple catalysts for accelerating production On July 27, 2018, BP announced the acquisition of BHPs US onshore assets for 10.5 billion Significant third-party validation of world-class…
Example of active development on Falcon Minerals acreage Key takeaways Hooks Ranch unit summary & locator map Falcon Minerals has 22.5% royalty interest 100% HBP and operated by ConocoPhillips 6-well pad brought online 60 day IP on…
Attractive entry point into the minerals segment Projected free cash flow yield 11.2% 10.1% 9.7% Peer Average 8.3% 2019E 9.1% 6.6% 4.9% (1) (2) FRU FLMN BSM KRP VNOM PSK 10.4% 9.4% Peer Average 7.7% 8.9% 8.2%…
Focused on shareholder returns Driving shareholder value through a combination of: Attractive returns profile Exposure to top-tier acreage and active operators Commitment to return capital to shareholders Disciplined…
Fragmentation of minerals market presents opportunity for consolidation 5.3+ billion of privately funded minerals companies Commitment Falcon management and Company (mm) Owner type Blackstone have broad industry Company A 2,000…
Ability to leverage Falcons management expertise to make accretive minerals acquisitions Falcon management team has the expertise and proven track record to deliver immense value to shareholders through future minerals acquisitions…
Blackstone is a world-class financial partner Blackstone Energy Platform Selected Eagle Ford Investments Blackstone is one of the largest independent managers of private Blackstone and GeoSouthern formed a joint capital in the world…
Conservative and disciplined financial philosophy o Strong balance sheet capable of funding accretive acquisitions o Target debt / EBITDA…
Financial projections pricing environment as of the announcement of the acquisition NYMEX Strip pricing 6/1/2018 Financial assumptions Projected cash flow summary (1) ( in millions unless otherwise specified) 2017A 2018E 2019E…
Falcon Minerals summary High margin cash flows with strong free cash flow generation Assets in the core-of-the-core Eagle Ford shale Extensive, repeatable drilling inventory of highly economic locations High-quality…
Appendix
Royalties provide superior economics vs. working interests Royalty, mineral and override interest overview Illustrative condensate window economics (/Boe) Royalty interests are perpetual rights to a fixed percentage of Operating margin…
Illustrative fully diluted FLMN share count and ownership Illustrative share price Share counts in millions 10.00 11.00 12.00 13.00 14.00 15.00 16.00 17.00 18.00 Osprey - Public IPO shares(1) 27.5 27.5 27.5 27.5 27.5 27.5 27.5 27.5…
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