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Annual Meeting – Dorchester Minerals Lp

Dorchester Minerals Lp · May 14, 2014 · 41 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. Annual Meeting – Dorchester Minerals Lp – slide 1
    Dorchester Minerals NASDAQ: DMLP Dorchester Minerals, LP Annual Meeting May 14, 2014 1
  2. Annual Meeting – Dorchester Minerals Lp – slide 2
    Dorchester Minerals NASDAQ: DMLP Overview of 2013 Results Activity Reserves Production Distributions 3
  3. Annual Meeting – Dorchester Minerals Lp – slide 3
    Dorchester Minerals NASDAQ: DMLP Overview of 2013 Results Activity Reserves Production Distributions 4
  4. Annual Meeting – Dorchester Minerals Lp – slide 4
    Dorchester Minerals NASDAQ: DMLP 2013 Activity Decreased activity in dry gas plays Fayetteville Shale and Barnett Shale Sustained Bakken activity Transition to infield development and downspacing Expanding Permian activity…
  5. Annual Meeting – Dorchester Minerals Lp – slide 5
    Dorchester Minerals NASDAQ: DMLP Overview of 2013 Results Activity Reserves Production Distributions 6
  6. Annual Meeting – Dorchester Minerals Lp – slide 6
    Dorchester Minerals NASDAQ: DMLP 2013 Reserves Total Proved Reserves of 91.0 Bcfe on 12/31/2013 All reserves are Proved Developed Producing (PDP) Demonstrated history of positive revisions Cumulative revisions since inception…
  7. Annual Meeting – Dorchester Minerals Lp – slide 7
    Dorchester Minerals NASDAQ: DMLP 2013 Reserves Revisions to Reported PDP Reserves Equivalent Reserves (Bcfe) 100 2013 Production 91.0 Total Reserves 90 12.6 Bcfe 80 17.6 2013 Revisions 70 60 50 86.0 40 73.4 73.4 2013 Pro…
  8. Annual Meeting – Dorchester Minerals Lp – slide 8
    Dorchester Minerals NASDAQ: DMLP 2013 Reserves Composition of Proved Reserves Geographic Breakdown Royalty-NPI Split Equivalent Reserves (Bcfe) Bakken 70 57.7 Rockies 6% 4% 60 Bcfe Royalty 63% Other NPI 37% 9% Permian 50…
  9. Annual Meeting – Dorchester Minerals Lp – slide 9
    Dorchester Minerals NASDAQ: DMLP Overview of 2013 Results Activity Reserves Production Distributions 10
  10. Annual Meeting – Dorchester Minerals Lp – slide 10
    Dorchester Minerals NASDAQ: DMLP 2013 Production Total Production of 12.6 Bcfe 75% of total production was natural gas, 25% oil, condensate and NGLs High quality properties + Diverse portfolio Low decline rate Historical…
  11. Annual Meeting – Dorchester Minerals Lp – slide 11
    Dorchester Minerals NASDAQ: DMLP 2013 Production Diverse Sources of Production New plays have replaced declines in legacy assets Opportunities for production growth in mature basins Daily Equivalent Rate (Mcfed) 40,000…
  12. Annual Meeting – Dorchester Minerals Lp – slide 12
    Dorchester Minerals NASDAQ: DMLP 2013 Production Components of Production Oil production has increased due to robust Bakken and Permian activity Gas production has decreased due to reduced Barnett and Fayetteville activity and…
  13. Annual Meeting – Dorchester Minerals Lp – slide 13
    Dorchester Minerals NASDAQ: DMLP Overview of 2013 Results Activity Reserves Production Distributions 14
  14. Annual Meeting – Dorchester Minerals Lp – slide 14
    Dorchester Minerals NASDAQ: DMLP 2013 Distributions Cash Distributions Paid in Calendar 2013 Reflects Q4 2012 to Q3 2013 activity Royalty NPI Other Revenue Revenue Revenue 48.6 MM 10.8 MM 1.5 MM Total Revenue 60.9 MM LP…
  15. Annual Meeting – Dorchester Minerals Lp – slide 15
    Dorchester Minerals NASDAQ: DMLP 2013 Distributions Distribution Components and Prices Royalty properties contributed 78% to total 2013 distributions Gross Revenue 26% gas sales, 70% oil & NGL sales, 4% other revenue Relative…
  16. Annual Meeting – Dorchester Minerals Lp – slide 16
    Dorchester Minerals NASDAQ: DMLP Dorchester Minerals, LP Annual Meeting May 14, 2014 17
  17. Annual Meeting – Dorchester Minerals Lp – slide 17
    Dorchester Minerals NASDAQ: DMLP Appendix 18
  18. Annual Meeting – Dorchester Minerals Lp – slide 18
    Dorchester Minerals NASDAQ: DMLP Portfolio Overview Geographically Diverse 574 counties in 25 states 378,000 net mineral acres (2,308,000 gross acres) Varying NPRIs, ORRIs and leasehold interests in an additional 860,000 gross…
  19. Annual Meeting – Dorchester Minerals Lp – slide 19
    Dorchester Minerals NASDAQ: DMLP 2013 Reserves History of Positive Reserve Revisions Cumulative Reserve Revisions have exceeded 100% of Current Reserves Equivalent Reserves (Bcfe) 120 106.5 Initial Reserves 100 91.0 Total 12.5…
  20. Annual Meeting – Dorchester Minerals Lp – slide 20
    Dorchester Minerals NASDAQ: DMLP 2013 Production Portfolio Has Shifted Toward Royalties Largely due to mineral acquisitions, new drilling on legacy properties, and natural declines in Hugoton field But the trend is reversing…
  21. Annual Meeting – Dorchester Minerals Lp – slide 21
    Dorchester Minerals NASDAQ: DMLP 2013 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, bushels,…
  22. Annual Meeting – Dorchester Minerals Lp – slide 22
    Dorchester Minerals NASDAQ: DMLP 2013 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 natural…
  23. Annual Meeting – Dorchester Minerals Lp – slide 23
    Dorchester Minerals NASDAQ: DMLP Royalty Overview Leasing and Development Activity Consummated 33 leases in 21 counties/ parishes in six states Lease bonus payments up to 5,500/acre Initial royalty terms up to 25% Identified…
  24. Annual Meeting – Dorchester Minerals Lp – slide 24
    Dorchester Minerals NASDAQ: DMLP Net Profits Interests Overview NPI Provides Exposure to Working Interest Potential Without Generating UBTI Four NPI groups were created at the time of formation in 2003 and two additional NPI…
  25. Annual Meeting – Dorchester Minerals Lp – slide 25
    Dorchester Minerals NASDAQ: DMLP Net Profits Interests Production Relative contribution of NPIs has shifted over time Hugoton accounted for 96% of NPI production at inception 53% in Q4 2013 Minerals NPI volumes prior to Q3 2011…
  26. Annual Meeting – Dorchester Minerals Lp – slide 26
    Dorchester Minerals NASDAQ: DMLP Net Profits Interests Production Non-Hugoton NPI Production New Areas: MT Bakken (2005), Fayetteville (2006), ND Bakken (2008), Permian (2010) Additional participation opportunities in West Texas…
  27. Annual Meeting – Dorchester Minerals Lp – slide 27
    Dorchester Minerals 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…
  28. Annual Meeting – Dorchester Minerals Lp – slide 28
    Dorchester Minerals 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% of…
  29. Annual Meeting – Dorchester Minerals Lp – slide 29
    Dorchester Minerals NASDAQ: DMLP Minerals NPI Minerals NPI Cash Flow Inception through Q1 2014 Cumulative Revenue 67.5 MM Cumulative Expense (LOE, taxes, etc) (14.0 MM) Cumulative Operating Income 53.5 MM 5.4 MM Distributed…
  30. Annual Meeting – Dorchester Minerals Lp – slide 30
    Dorchester Minerals NASDAQ: DMLP Fayetteville Shale Eastern Arkoma Basin Northern Arkansas DMLP owns 23,336 gross/11,464 net acres in 196 sections 403 wells producing 4.6 MMcfd at year-end 2013 45% from Working Interests…
  31. Annual Meeting – Dorchester Minerals Lp – slide 31
    Dorchester Minerals NASDAQ: DMLP Bakken/Three Forks Williston Basin Northwestern North Dakota Diversified acreage position 70,390 gross acres/8,905 net acres Operators: Continental, COP, EOG, Hess, Marathon, Oasis Elected…
  32. Annual Meeting – Dorchester Minerals Lp – slide 32
    Dorchester Minerals NASDAQ: DMLP Bakken/Three Forks Six County Core Area Current development activity on DMLP acreage 379 wells completed as producers 88 wells in various stages of drilling or completion (or confidential) 526…
  33. Annual Meeting – Dorchester Minerals Lp – slide 33
    Dorchester Minerals NASDAQ: DMLP Permian Basin Legacy Permian and emerging Wolfcamp Unleased at some depth in numerous tracts Gross Net Gross Region Mineral Mineral NPRI/ORRI Acres Acres Acres Midland 263,750 22,207 155,469…
  34. Annual Meeting – Dorchester Minerals Lp – slide 34
    Dorchester Minerals NASDAQ: DMLP Hugoton Operated Properties Hugoton Field Oklahoma Panhandle & SW Kansas 2013 production within 2.7% of projection Year-over-year production decline of 7.0% with a 0.4% increase in net reserves…
  35. Annual Meeting – Dorchester Minerals Lp – slide 35
    Dorchester Minerals NASDAQ: DMLP Appalachia Marcellus Shale New York and Pennsylvania Concentrated acreage position 32,395 gross acres/24,494 net acres 70% in Allegany and Steuben Counties, NY Challenging political environment…
  36. Annual Meeting – Dorchester Minerals Lp – slide 36
    Dorchester Minerals NASDAQ: DMLP Appalachia Southern Tier NY & Northern Tier PA Schuyler 459 nma Allegany Steuben Cattaraugus 13,216 nma 4,714 nma Chemung Tioga NY 308 nma 163 nma NY PA McKean Potter Tioga PA 1,158 nma 846…
  37. Annual Meeting – Dorchester Minerals Lp – slide 37
    Dorchester Minerals NASDAQ: DMLP Distributions Distribution Determinations Period from October 2012 through September 2013 ( thousands) Limited General Partners Partner 4% of Net Cash Receipts from Royalty Properties --------…
  38. Annual Meeting – Dorchester Minerals Lp – slide 38
    Dorchester Minerals 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 dilutive…
  39. Annual Meeting – Dorchester Minerals Lp – slide 39
    Dorchester Minerals 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…
  40. Annual Meeting – Dorchester Minerals Lp – slide 40
    Dorchester Minerals 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…
  41. Annual Meeting – Dorchester Minerals Lp – slide 41
    Dorchester Minerals NASDAQ: DMLP Peer Group Comparison Market Performance Pure royalties lack operating leverage inherent in net profits interests Less volatility Outperformance in low price environment (mid-2009) due to lower…

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