December 2018 Capital One Energy Conference New Orleans, LA
Falcon Minerals Overview NASDAQ: FLMN o Independent, high-quality oil & gas minerals C-Corp began publicly trading in August 2018 o Current enterprise value of 750 million Strong balance sheet at 0.4x leverage o Focused…
Core-of-the-core Eagle Ford minerals position Key highlights Falcon Minerals acreage is in the Eagle Ford core 251,435(1) gross unit acres in the core of the Eagle Ford fairway; 2,500 net royalty acres 3,000 locations with IRRs to…
Advantaged, differentiated high-margin oil-weighted assets with high-FCF conversion and no capex Falcon Minerals E&P operator No direct operating costs or capital expenditures Reduced sensitivity to commodity prices Consistent…
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…
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 driving accretive…
Royalties provide superior economics vs. working interests Illustrative condensate window economics - 65 / Boe Illustrative condensate window economics - 50 / Boe Operating Margin GP&T and Marketing Operating Margin GP&T and Marketing…
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…
Tier 1 operators on Falcon Minerals acreage Best-in-class operators on Falcon Minerals acreage Operator acreage locator Credit % of Net debt / rating Falcon's (1) 2018E (Moody's / 2018E EF Active EF 2018 cash Operator TEV (bn) EBITDA…
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…
Fragmentation of minerals market presents opportunity for consolidation Osprey management and Blackstone have broad industry networks Minerals space is highly fragmented Limited universe of public buyers Public equity provides…
Conservative and disciplined financial philosophy o Strong balance sheet capable of funding accretive acquisitions o Target debt / EBITDA…
Falcon Minerals Forecast o 4Q18E net adjusted production of 6,100-6,500 boe/d o FY19E net production of 7,600 boe/d, including 2 Hooks Ranch pads TIL during the year; FCF of 1.20 per share o Falcon expects 1.05/share of FCF with no…
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
Built to withstand volatility: Falcons high margin structure is favorable compared to energy peers Full-cycle cash margins (Cash margin and per BOE) 45 100% 89% 90% 40 90% 35 80% 41.15 71% 30 64% 70% 25 59% 58% 35.66 Average:…
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