UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 3, 2005
DORCHESTER MINERALS, L.P.
(Exact name of Registrant as specified in its charter)
| Delaware | 000-50175 | 81-0551518 | ||
| (State or other jurisdiction of incorporation or organization) |
Commission File Number |
(I.R.S. Employer Identification No.) |
| 3838 Oak Lawn, Suite 300 Dallas, Texas 75219 | ||
| (Address of principal executive offices) (Zip Code) | ||
Registrant’s telephone number, including area code: (214) 559-0300
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 |
Results of Operations and Financial Condition | |
| The Registrant is furnishing its press release dated May 3, 2005 which announces the Registrant’s 2005 first quarter results. The press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. | ||
| Item 7.01 |
Regulation FD Disclosure. | |
On May 4, 2005, Dorchester Minerals, L.P. will hold its 2005 Annual Meeting of Limited Partners. As the Chairman of the meeting, William Casey McManemin, the Chief Executive Officer of Dorchester Minerals, L.P., will discuss historical financial and operational information of Dorchester Minerals, L.P. The slide presentation Mr. McManemin will use in connection with his presentation is attached as Exhibit No. 99.2.
| Item 9.01 | Financial Statements and Exhibits |
| (c) | Exhibits | |
| 99.1 | Press Release dated May 3, 2005 announcing the Registrant’s 2005 first quarter results. The press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. | |
| 99.2 | Slide Presentation is attached hereto as Exhibit 99.2 and incorporated herein by reference. | |
Limitation on Incorporation by Reference
In accordance with general instructions B.2 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Items 2.02, 7.01 and 9.01 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| DORCHESTER MINERALS, L.P. | ||||||||
| Registrant | ||||||||
| by |
Dorchester Minerals Management LP | |||||||
| its General Partner, | ||||||||
| by |
Dorchester Minerals Management GP LLC | |||||||
| its General Partner | ||||||||
| Date: May 3, 2005 |
By: |
/s/ William Casey McManemin | ||||||
| William Casey McManemin | ||||||||
| Chief Executive Officer | ||||||||
Exhibit 99.1
| NEWS RELEASE | Dorchester Minerals, L.P. | |||
| Release Date: | May 3, 2005 | 3838 Oak Lawn Ave., Suite 300 | ||
| Dallas, Texas 75219-4541 | ||||
| Contact: | Casey McManemin | (214) 559-0300 | ||
DORCHESTER MINERALS, L.P. ANNOUNCES FIRST QUARTER RESULTS
DALLAS, TEXAS — Dorchester Minerals, L.P. (the “Partnership”) announced today the Partnership’s net earnings for the first quarter ended March 31, 2005 of $7,876,000, or $0.27 per common unit.
A comparison of results for the periods ending March 31, 2005 and March 31, 2004 are set forth below:
| Three Months Ended March 31, |
||||||||
| 2005 |
2004 |
|||||||
| Operating Revenues |
$ | 14,397,000 | $ | 13,441,000 | ||||
| Depletion and Amortization |
(5,137,000 | ) | (5,301,000 | ) | ||||
| All Other Expenses, Net |
(1,384,000 | ) | (1,489,000 | ) | ||||
| Net Earnings |
$ | 7,876,000 | $ | 6,651,000 | ||||
| Net Earnings Per Common Unit |
$ | 0.27 | $ | 0.24 | ||||
The Partnership previously declared its first quarter distribution in the amount of $0.481242 per common unit payable on May 9, 2005 to common unit holders of record as of April 29, 2005. The Partnership’s cash distributions are not comparable to its net earnings due to timing and other differences including depletion.
On May 2, 2005 the Partnership filed a shelf registration statement with the Securities and Exchange Commission authorizing the issuance of up to 5,000,000 common units for acquisition purposes.
Dorchester Minerals, L.P. is a Dallas based owner of producing and non-producing crude oil and natural gas mineral, royalty, overriding royalty, net profits, and leasehold interests and its common units trade on the Nasdaq Stock Market under the symbol DMLP.
FORWARD-LOOKING STATEMENTS
Portions of this document may constitute “forward-looking statements” as defined by federal law. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Examples of such uncertainties and risk factors include, but are not limited to, changes in the price or demand for oil and natural gas, changes in the operations on or development of the Partnership’s properties, changes in economic and industry conditions and changes in regulatory requirements (including changes in environmental requirements) and the Partnership’s financial position, business strategy and other plans and objectives for future operations. These and other factors are set forth in the Partnership’s filings with the Securities and Exchange Commission.
Exhibit 99.2
Dorchester Minerals, LP
2005 Annual Meeting
Annual Meeting of the Limited Partners
May 4, 2005
Forward-Looking Statements
Portions of this document may constitute “forward-looking statements” as defined by federal law. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Examples of such uncertainties and risk factors include, but are not limited to, changes in the price or demand for oil and natural gas, changes in the operations on or development of the Partnership’s properties, changes in economic and industry conditions and changes in regulatory requirements (including changes in environmental requirements) and the Partnership’s financial position, business strategy and other plans and objectives for future operations. These and other factors are set forth in the Partnership’s filings with the Securities and Exchange Commission.
Presentation Outline
2004 Highlights
– Financial – Operational
2004 Reserves
Peer Group Comparison 2004 Activity Highlights
– Royalty Properties
– Net Profits Interests (NPI)
Looking Ahead to 2005
2004 Highlights
2004 Financial Highlights
Increase in Net Income
– 2004: $30.08 million
– 2003: ($26.83 million)
Increase in Lease Bonus and Other Income
– 2004: $1.61 million
– 2003: $0.29 million
Increase in Limited Partner Distributions
– 2004: $47.95 million
– 2003: $39.97 million
2004 Highlights
Quick Look at 2004 Distributions
Distributions Paid in 2004 – Reflects Q4 2003 to Q3 2004 Activity
Royalty Revenue $26.3 MM NPI Revenue $23.3 MM Other Revenue $2.0 MM
Total Revenue $51.6 MM
LP Distribution $46.5 MM GP Distribution $1.2 MM Total Expenses $3.9 MM
2004 Highlights
2004 Operational Highlights
Acquired High-Quality Assets in Exchange for 1.2 million Limited Partner Units 196 New Wells Completed on Royalty Properties 25 New Wells Drilled on NPI Properties Reserves Increased to 93.1 Bcfe Integrated Garland and Dallas Offices Successful Certification of Internal Controls under Sarbanes-Oxley Act of 2002
2004 Highlights
Volumes – Prices – Distributions
Mcfepd per 1000 Units
$1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2003
2004 2005
0.974 1.052 1.145 1.107 1.108 1.052 1.055 1.048 1.025
Volumes – Prices – Distributions
Average Gas Price per Mcf
$10.00 $8.00 $6.00 $4.00 $2.00 $0.00
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2003
2004 2005
0.974 1.052 1.145 1.107 1.108 1.052 1.055 1.048 1.025
Volumes – Prices – Distributions
Quarterly Distribution per Unit
$1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2003
2004 2005
0.974 1.052 1.145 1.107 1.108 1.052 1.055 1.048 1.025
0.458 0.423 0.391 0.415 0.415 0.476 0.426 0.481
2004 Reserves
2004 Reserves
Total Proved Reserves 93.1 Bcfe
Reserves per Unit 3.30 Mcf
Proved Developed 99.4%
Reserve Replacement 100.4%
SEC PV10 $256 million
Reserve Life Index (R/P) 8.8
2004 Reserves
Oil 25%
Gas 75%
Product Mix
Royalty 57%
NPI 43%
Property Allocation
Peer Group Comparison
Distributions
Distributed $46.5 million ($1.70 per Unit) 8.8% Annual Yield on Common Units
2004 Yield based on 01/02/04 price (DMLP: $19.31 )
15% 12% 9% 6% 3% 0%
PBT SJT SBR HGT
Peer Average
DMLP CRT MTR
Peer Group Comparison
11.6%
10.8%
9.7%
9.3% 9.3%
8.8% 8.7% 8.5%
Unit Price
Price Appreciation of 24% ($4.61 per Unit) Market Capitalization Increased to $676 MM
Normalized 2004 Returns
40% 30% 20% 10% 0% -10% -20%
Q1 Q2 Q3 Q4
Peer Group Comparison
DMLP Peer Average NASDAQ Composite
Reserve Replacement
2004 Reserve Replacement (Proved Developed)
115% 110% 105% 100% 95% 90% 85% 80%
SJT PBT SBR DMLP CRT
Peer Average
HGT MTR
Peer Group Comparison
107.9%
106.4%
102.6%
100.4% 100.0% 99.8%
91.8%
83.3%
2004 Activity Highlights
Developing Plays
Montana
Horizontal Bakken
Mid-Continent
Granite Wash
Delaware Basin
Pennsylvanian
South Texas
Wilcox Trend
North Texas
Barnett Shale
Alabama
Smackover
Arkansas
Fayetteville Shale
New York
Trenton/BR
2004 Activity Highlights
Royalty Property Highlights
Leasing Activity
– Consummated 41 leases and pooling elections
– Identified 196 new wells on royalty properties
– 109 active lease offers
Maximizing Value of Mineral Assets
– Lease bonus payments up to $500/acre
– Initial royalty terms averaged 24%
– Hybrid Leases—“Back-In” and “Look-Back”
2004 Activity Highlights
Royalty Property Highlights
Unnamed Field (South TX)
Unamed Operator
5 Wells Drilled
Avg. Test Rate: 10 MMcfd, 270 bopd
DMLP: 5.1% NRI
2004 Reserves: 3.8 Bcfe (1 well)
2004 Activity Highlights
Royalty Property Highlights
Canute North (Custer, OK)
Cimarex Energy
Test Rate: 4.9 MMcfd, 21 bopd
DMLP: 5.4% NRI
Additional Well Being Completed
2004 Reserves: 4.1 Bcfe (1 well)
2004 Activity Highlights
Royalty Property Highlights
Little Cedar Creek (Conecuh, AL)
Midroc Operating Company Unitized for Secondary Recovery DMLP: 1.3% NRI
Operator’s Reserves: 11.1 MMboe DMLP 2004 Reserves: 2.0 MMboe
2004 Activity Highlights
Royalty Property Highlights
Brookeland (Tyler, TX)
Anadarko Petroleum
Test Rate: 11.8 MMcfd, 2,752 bopd
DMLP: 1.09% NRI
Additional Well Being Completed
No Reserves Assigned in 2004
2004 Activity Highlights
Net Profits Interest Highlights
Hugoton Operated Properties
– Average gas rate of 14,660 Mcfd
– Continuing well stimulation program
Other Activity
– Participated with working interest in 25 wells
– Oklahoma, Texas, Montana and Arkansas
Maximize Value of Mineral Assets
– Access to well information
– Unburdened working interests from 0.1% to 7.0%
– Leverage geographic diversification
2004 Activity Highlights
Net Profits Interest Highlights
Des Moines (Washita, OK)
Cimarex Energy
13,200 ft
Test Rates up to 6.5 MMcfd
DMLP: 7.03% WI (8.78% NRI)
Estimated Reserves: 2.2 Bcfe/well
2004 Activity Highlights
Net Profits Interest Highlights
Horizontal Bakken (Richland, MT)
Various Operators
Two Multi-Lateral Wells Completed
Test Rates up to 789 bopd
1 Well Drilling and 1 Proposed
DMLP: up to 6.3% WI/NRI
Estimated Reserves: 300 Mboe (1 well)
2004 Activity Highlights
Net Profits Interest Highlights
Cherokee (Roger Mills, OK)
Chesapeake & JMA Energy
15,100 ft
Test Rates up to 6.7 MMcfd
DMLP: 0.2-1.6% WI/NRI
Estimated Reserves: 1.7 Bcf/well
2004 Activity Highlights
Net Profits Interest Highlights
Fayetteville Shale (Northern AR)
Southwestern Energy
1 Well Waiting on completion
DMLP: 6.3% WI/NRI
SWN Estimates 58-65 Bcf/section
Substantial Unleased Acreage
2004 Activity Highlights
Hybrid Lease A (9 Leases During 2004)
NRI Traditional Lease
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
Lessee Interest 75%
Royalty Interest 25%
DMLP “Look-Back”
Lessee Interest 56.25%
Look-Back Interest 18.75% Royalty Interest 25%
Optional participation at casing point
2004 Activity Highlights
Hybrid Lease B (4 Leases During 2004)
NRI Traditional Lease
Lessee Interest 75% Royalty Interest 25%
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
DMLP “Back-In”
Lessee Interest 75% ORRI 5% Royalty Interest 20%
Lessee Interest 60% Back-In Interest 20% (APO) Royalty Interest 20%
2004 Activity Highlights
Looking Ahead to 2005
Dorchester Minerals, LP
2005 Annual Meeting
Annual Meeting of the Limited Partners
May 4, 2005