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Credit Suisse Energy Summit – Falcon Minerals

Falcon Minerals · Feb 12, 2019 · 18 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. Credit Suisse Energy Summit – Falcon Minerals – slide 1
    I N V E S T O R Presentation F E B R U A R Y 1 2 , 2 0 1 9 C R E D I T S U I S S E E N E R G Y S U M M I T V A I L , C O
  2. Credit Suisse Energy Summit – Falcon Minerals – slide 2
    Introduction to Falcon Minerals ? Independent, high-quality royalty company which began publicly trading in August 2018 ? Falcon’s primary assets are located in the core of the Eagle Ford Shale, the highestreturning oil basin in the…
  3. Credit Suisse Energy Summit – Falcon Minerals – slide 3
    Falcon’s Business Model Offers Strong Returns Falcon benefits from high cash flow margins from its premier royalty and mineral interests Falcon’s primary assets are in the core of Eagle Ford shale, the highest returning oil and gas…
  4. Credit Suisse Energy Summit – Falcon Minerals – slide 4
    Falcon’s Core Business Principles High-Growth, Long-Term Shareholder Value Substantial free cash flow, nearly all returned to shareholders High cash operating margins through commodity cycles Strong, low-levered balance sheet with…
  5. Credit Suisse Energy Summit – Falcon Minerals – slide 5
    A Model of Consistent Free Cash Flow 6 Falcon offers a unique yet highly effective business model: Providing consistent, high-margin returns to shareholders Falcon’s Core Royalty Assets No Capex Required Low Operating Costs…
  6. Credit Suisse Energy Summit – Falcon Minerals – slide 6
    Significant Upside in Falcon’s Valuation vs. Other Yield Vehicles Source: Company filings and FactSet as of February 8, 2019. Note: MLPs include 10 largest components of AMZ index including: ET, EPD, MMP, MPLX, PAA, WES, BPL, ANDX, EQM…
  7. Credit Suisse Energy Summit – Falcon Minerals – slide 7
    Benefits of Falcon Minerals vs. Traditional Energy We can remove this slide if the prior slide with sector comparisons is sufficient Falcon Minerals Oilfield Services Midstream E&P Operated E&P Non-Operated No Operating Costs or…
  8. Credit Suisse Energy Summit – Falcon Minerals – slide 8
    Royalties Provide Superior Economics Operating Margin GP&T and Marketing Production and Ad Valorem Taxes Additional Costs (2) Illustrative Condensate Window Economics Illustrative Condensate Window Economics Realized Price: $65.00 /…
  9. Credit Suisse Energy Summit – Falcon Minerals – slide 9
    Eagle Ford: Falcon’s Premier Asset Base • Key highlights Bakken Eagle Ford Permian ~($10.00) / bbl Differential ~($6.00) / bbl Differential ~+$7.00 / bbl Differential Best differentials of any U.S. oil play ? Core of the…
  10. Credit Suisse Energy Summit – Falcon Minerals – slide 10
    Top Operators Develop Falcon’s Position Eagle Ford Operator Positions on Falcon Acreage Falcon’s producers are: • Well-capitalized with long-term development horizons • Focused on maximizing returns in high-IRR regions • Advancing…
  11. Credit Suisse Energy Summit – Falcon Minerals – slide 11
    Producer Activity Supports Future Growth Falcon’s primary producers indicate future development expansion on their Eagle Ford positions • Sees return to Eagle Ford production growth in 2H19; expecting ~ 20% YoY production increase •…
  12. Credit Suisse Energy Summit – Falcon Minerals – slide 12
    Falcon’s flexible capital structure enables strong use of free cash flow Low-levered balance sheet: Debt-to-EBITDA 0.3x High cash operating margins (3Q18: 88%) No capex requirement to maintain and grow production ? > 90% payout…
  13. Credit Suisse Energy Summit – Falcon Minerals – slide 13
    Financial Overview & Guidance 14 (1) Assumes $7.34 share price as of February 8, 2019. (2) The forecasted 1H19 net production range does not include any contribution from additional Hooks Ranch wells connected in the future. (3)…
  14. Credit Suisse Energy Summit – Falcon Minerals – slide 14
    Falcon Minerals Summary Extensive, repeatable drilling inventory of highly economic locations High-quality operators with active development programs and visible production growth High margin cash flows with strong free cash flow…
  15. Credit Suisse Energy Summit – Falcon Minerals – slide 15
    APPENDIX
  16. Credit Suisse Energy Summit – Falcon Minerals – slide 16
    Premier Assets Paired With Top-Tier Operators 1,005 1,223 597 729 823 1,101 1,071 1,209 1,286 1,673 1,327 1,420 Conocophillips Devon EOG Pioneer Rscs DVN/BP 20% COP 49% EOG 21%…
  17. Credit Suisse Energy Summit – Falcon Minerals – slide 17
    Falcon’s Hooks Ranch Position 6-well pad brought online in late February 2018 >89% Undeveloped Primary Highlights ? Falcon Minerals has a 22.5% royalty interest in the Hooks Ranch position ? 100% HBP and operated by…
  18. Credit Suisse Energy Summit – Falcon Minerals – slide 18
    Illustrative Fully Diluted Share Count 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 Falcon - Public IPO shares 27.5 27.5 27.5 27.5 27.5 27.5 27.5 27.5 27.5 Falcon -…

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