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Annual Meeting – Dorchester Minerals Lp

Dorchester Minerals Lp · May 16, 2012 · 51 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 16, 2012 1
  2. Annual Meeting – Dorchester Minerals Lp – slide 2
    Dorchester Minerals NASDAQ: DMLP P Presentation t ti Outline O tli Overview of 2011 Distributions and Financial Results Production Reserves Royalty Overview Net Profits Interest Overview Minerals NPI Property Highlights…
  3. Annual Meeting – Dorchester Minerals Lp – slide 3
    Dorchester Minerals NASDAQ: DMLP Overview of 2011 Results 4
  4. Annual Meeting – Dorchester Minerals Lp – slide 4
    Dorchester Minerals NASDAQ: DMLP 2011 Di Distributions t ib ti Cash Distributions Paid in Calendar 2011 Reflects Q4 2010 to Q3 2011 activity Royalty NPI Other Revenue Revenue Revenue 47.1 MM 10.5 MM 0.6 MM Total Revenue…
  5. Annual Meeting – Dorchester Minerals Lp – slide 5
    Dorchester Minerals NASDAQ: DMLP 2011 Fi Financial i l Results R lt Revenue Price Distributions Royalty properties contributed 78% to total operating revenues Gross Revenue 51% gas & plant product sales, 48% oil sales, 1%…
  6. Annual Meeting – Dorchester Minerals Lp – slide 6
    Dorchester Minerals NASDAQ: DMLP 2011 P Production d ti O Overview i Total Production of 12.7 Bcfe 82% of total production was gas and plant products, 18% oil and condensate High quality properties + Diverse portfolio Low…
  7. Annual Meeting – Dorchester Minerals Lp – slide 7
    Dorchester Minerals NASDAQ: DMLP 2011 Production P d ti Overview O i Historical Production Profile Portfolio has shifted toward royalties over time, but net profits interests have a new source of production growth after…
  8. Annual Meeting – Dorchester Minerals Lp – slide 8
    Dorchester Minerals NASDAQ: DMLP 2011 R Reserves O Overview i Total Proved Reserves of 88.4 Bcfe on 12/31/11 All reserves are Proved Developed Producing Oil Demonstrated history of positive revisions Gas & 24% Revisions…
  9. Annual Meeting – Dorchester Minerals Lp – slide 9
    Dorchester Minerals NASDAQ: DMLP 2011 Reserves R O Overview i 12/31/2011 Revisions to Reported PDP Reserves Equivalent Reserves (Bcfe) 100 2011 88 88.4 Total Reserves 90 Production 12.7 Bcfe 7.2 Minerals Min NPI NPI 80…
  10. Annual Meeting – Dorchester Minerals Lp – slide 10
    Dorchester Minerals NASDAQ: DMLP 2011 R Reserves O Overview i Composition of DMLP reserves Geographic Breakdown Royalty-NPI Split Bakken Equivalent Reserves (Bcfe) 2% 70 58.8 Other Mid Other Bcfe Royalty 67% Continent…
  11. Annual Meeting – Dorchester Minerals Lp – slide 11
    Dorchester Minerals NASDAQ: DMLP Royalty Overview 12
  12. Annual Meeting – Dorchester Minerals Lp – slide 12
    Dorchester Minerals NASDAQ: DMLP R Royalty lt Overview O i Diverse Portfolio 574 counties in 25 states 378,000 net mineral acres (2,308,000 gross acres) Varying NPRIs, ORRIs and leasehold interests in 862,000 gross acres…
  13. Annual Meeting – Dorchester Minerals Lp – slide 13
    Dorchester Minerals NASDAQ: DMLP R Royalty lt Overview O i Diverse Sources of Production New plays are replacing declines in legacy assets Opportunities for production growth in mature basins Dailyy Equivalent q Rate…
  14. Annual Meeting – Dorchester Minerals Lp – slide 14
    Dorchester Minerals NASDAQ: DMLP R Royalty lt Overview O i Revenue by y Geographic g Area Permian Basin revenue share: 32% in March 2009 50% in December 2011 South Texas/Gulf Coast share: 30% in March 2009 8% in December…
  15. Annual Meeting – Dorchester Minerals Lp – slide 15
    Dorchester Minerals NASDAQ: DMLP R Royalty lt Overview O i Leasing g and Development Activity y Consummated 42 leases/elections on 1,127 net acres in 26 counties/ parishes in seven states Lease bonus payments up to…
  16. Annual Meeting – Dorchester Minerals Lp – slide 16
    Dorchester Minerals NASDAQ: DMLP N tP Net Profits fit Interests I t t Overview 17
  17. Annual Meeting – Dorchester Minerals Lp – slide 17
    Dorchester Minerals NASDAQ: DMLP N tP Net Profits fit Interests I t t Overview O i NPI Provides LP Exposure to Working g Interest Potential Without Generating UBTI Four NPI groups were created at the time of formation in 2003…
  18. Annual Meeting – Dorchester Minerals Lp – slide 18
    Dorchester Minerals NASDAQ: DMLP N tP Net Profits fit Interests I t t Overview O i Actual Capital Expenditures Through g Year-end 2011 33.3 million of cumulative investments in all net profits interest properties Majority of…
  19. Annual Meeting – Dorchester Minerals Lp – slide 19
    Dorchester Minerals NASDAQ: DMLP N tP Net Profits fit Interests I t t Overview O i Relative contribution of NPIs has shifted over time Hugoton accounted for 96% of NPI production at inception 64% at year-end 2011 Minerals NPI…
  20. Annual Meeting – Dorchester Minerals Lp – slide 20
    Dorchester Minerals NASDAQ: DMLP N tP Net Profits fit Interests I t t Overview O i Minerals NPI Performance Production and reserves have grown steadily since inception 337 wells/units producing in Q4 2011 (301 in pay status)…
  21. Annual Meeting – Dorchester Minerals Lp – slide 21
    Dorchester Minerals NASDAQ: DMLP N tP Net Profits fit Interests I t t Overview O i Minerals NPI Production New Areas: MT Bakken (2005), Fayetteville (2006), ND Bakken (2008), Permian (2010) Additional participation…
  22. Annual Meeting – Dorchester Minerals Lp – slide 22
    Dorchester Minerals NASDAQ: DMLP N tP Net Profits fit Interests I t t Overview O i Minerals NPI Cash Flow Inception through g Q1 2012 Cumulative Revenue 39.4 MM Cumulative Expense (LOE, taxes, etc) (7.4 MM) Cumulative…
  23. Annual Meeting – Dorchester Minerals Lp – slide 23
    Dorchester Minerals NASDAQ: DMLP Property Highlights Barnett Shale 24
  24. Annual Meeting – Dorchester Minerals Lp – slide 24
    Dorchester Minerals NASDAQ: DMLP B Barnett tt Sh Shale l (Royalty) (R lt ) Fort Worth Basin Tarrant County, y Texas NRIs range from 0.5% to 20% in 1,824 net mineral acres Current Development Activity (CHK Operated) 42…
  25. Annual Meeting – Dorchester Minerals Lp – slide 25
    Dorchester Minerals NASDAQ: DMLP Property Highlights Hugoton Operated Properties 26
  26. Annual Meeting – Dorchester Minerals Lp – slide 26
    Dorchester Minerals NASDAQ: DMLP H Hugoton t O Operated t d Properties P ti (NPI) Hugoton g Field Oklahoma Panhandle & SW Kansas 2011 production within 4% of projection Year-over-year production decline of 7.5% with a 11%…
  27. Annual Meeting – Dorchester Minerals Lp – slide 27
    Dorchester Minerals NASDAQ: DMLP Property Highlights Fayetteville Shale 28
  28. Annual Meeting – Dorchester Minerals Lp – slide 28
    Dorchester Minerals NASDAQ: DMLP F Fayetteville tt ill ShShale l (Royalty (R lt & NPI) Eastern Arkoma Basin Northern Arkansas Ownership Summary 23,336 gross/11,464 net acres in 196 sections June 2006: Leased 9,800 net acres…
  29. Annual Meeting – Dorchester Minerals Lp – slide 29
    Dorchester Minerals NASDAQ: DMLP F Fayetteville tt ill ShShale l (Royalty (R lt & NPI) Permitting, g Drilling g and Payment y History y Development activity by major operators (SWN, BHP, XOM) has slowed In 2011 well spuds…
  30. Annual Meeting – Dorchester Minerals Lp – slide 30
    Dorchester Minerals NASDAQ: DMLP F Fayetteville tt ill ShShale l (Royalty (R lt & NPI) Capital Expenditures 2011 Reserves Total Fayetteville investments of Year-end reserves of 11.3 Bcf (285 wells) 21.6 MM through year-end 2011…
  31. Annual Meeting – Dorchester Minerals Lp – slide 31
    Dorchester Minerals NASDAQ: DMLP F Fayetteville tt ill ShShale l (Royalty (R lt & NPI) Production Results Well Performance 301 wells producing at year-end 2011 Results indicate that average initial test 3.3 MMcfd (WI) rates…
  32. Annual Meeting – Dorchester Minerals Lp – slide 32
    Dorchester Minerals NASDAQ: DMLP F Fayetteville tt ill ShShale l (Royalty (R lt & NPI) Historical production and reserve additions +17% 7,000 e (Mcfd) 2011 +47% 6,000 2010 5,000 2009 +76% Daily Gas Rate 4,000…
  33. Annual Meeting – Dorchester Minerals Lp – slide 33
    Dorchester Minerals NASDAQ: DMLP F Fayetteville tt ill ShShale l (Royalty (R lt & NPI) Future Development Potential - Downspacing g Example: 25-9N-16W, Conway Co, AR (SWN) 400 ft offsets (50 ac spacing) DMLP (RI) Ownership:…
  34. Annual Meeting – Dorchester Minerals Lp – slide 34
    Dorchester Minerals NASDAQ: DMLP Property Highlights Bakken/Three Forks 35
  35. Annual Meeting – Dorchester Minerals Lp – slide 35
    Dorchester Minerals NASDAQ: DMLP B kk /Th Bakken/Three F Forks k (R (Royalty lt & NPI) Williston Basin Northwestern North Dakota Diversified acreage position 70,390 gross acres/8,905 net acres Operators: Continental, COP,…
  36. Annual Meeting – Dorchester Minerals Lp – slide 36
    Dorchester Minerals NASDAQ: DMLP B kk /Th Bakken/Three F k (Royalty Forks (R lt & NPI) Six County y Core Area Current development activity on DMLP acreage 161 wells completed as producers (13 reached payout status) 34 wells…
  37. Annual Meeting – Dorchester Minerals Lp – slide 37
    Dorchester Minerals NASDAQ: DMLP Property Highlights Permian Basin 38
  38. Annual Meeting – Dorchester Minerals Lp – slide 38
    Dorchester Minerals NASDAQ: DMLP P Permian i Basin B i (NPI) Bone Springs g Play y Eddy y County, y New Mexico DMOLP owns a 6.25% working interest in 320 acres Declined farm-out offer and elected to participate with full…
  39. Annual Meeting – Dorchester Minerals Lp – slide 39
    Dorchester Minerals NASDAQ: DMLP Developing Plays 40
  40. Annual Meeting – Dorchester Minerals Lp – slide 40
    Dorchester Minerals NASDAQ: DMLP D Developing l i Plays Pl Devonian Shale Appalachia New York and Pennsylvania Concentrated acreage position 32,395 gross acres 24,494 net acres 70% in Allegany and Steuben Counties, NY…
  41. Annual Meeting – Dorchester Minerals Lp – slide 41
    Dorchester Minerals NASDAQ: DMLP D Developing l i Plays Pl 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 P tt…
  42. Annual Meeting – Dorchester Minerals Lp – slide 42
    Dorchester Minerals NASDAQ: DMLP Dorchester Minerals, LP Annual Meeting May 16, 2012 43
  43. Annual Meeting – Dorchester Minerals Lp – slide 43
    Dorchester Minerals NASDAQ: DMLP Appendix 44
  44. Annual Meeting – Dorchester Minerals Lp – slide 44
    Dorchester Minerals NASDAQ: DMLP A Appendix di 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…
  45. Annual Meeting – Dorchester Minerals Lp – slide 45
    Dorchester Minerals NASDAQ: DMLP A Appendix di What is the Minerals NPI and How Does it Work DMLP Lease to third party for Participation P ti i ti right i ht royalty and optional assigned to DMOLP participation right…
  46. Annual Meeting – Dorchester Minerals Lp – slide 46
    Dorchester Minerals NASDAQ: DMLP A Appendix di Distribution Determinations Period from October 2010 through September 2011 ( thousands) Limited General Partners Partner 4% of Net Cash Receipts from Royalty Properties --------…
  47. Annual Meeting – Dorchester Minerals Lp – slide 47
    Dorchester Minerals NASDAQ: DMLP A Appendix di Alignment g 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…
  48. Annual Meeting – Dorchester Minerals Lp – slide 48
    Dorchester Minerals NASDAQ: DMLP A Appendix di Operating g Leverage g Royalty y y 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…
  49. Annual Meeting – Dorchester Minerals Lp – slide 49
    Dorchester Minerals NASDAQ: DMLP A Appendix di Royalty y y Cash Receipts Long delay between production and cash distribution Cash receipts extend over multiple months due to adjustments, releases, etc. Prices can change…
  50. Annual Meeting – Dorchester Minerals Lp – slide 50
    Dorchester Minerals NASDAQ: DMLP P Peer G Group Comparison C i Market Performance Pure royalties lack operating leverage inherent in net profits interests Less volatility Underperforming in high price environment (mid-2008)…
  51. Annual Meeting – Dorchester Minerals Lp – slide 51
    Dorchester Minerals NASDAQ: DMLP P Peer G Group Comparison C i Reserves and Production Performance DMLP is a cross between a royalty trust with 100% net profits interests (SJT) and one with 100% royalties (SBR), plus the…

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