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, 2006
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 7.01 | Regulation FD Disclosure. |
On May 3, 2006, Dorchester Minerals, L.P. will hold its 2006 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. 99.1.
| Item 9.01 | Financial Statements and Exhibits |
| (c) | Exhibits | |
| 99.1 | Slide Presentation is attached hereto as Exhibit 99.1 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 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, 2006 |
By: |
/s/ William Casey McManemin | ||||||
| William Casey McManemin | ||||||||
| Chief Executive Officer | ||||||||
 Dorchester Minerals 2006 Annual Meeting May 3, 2006 Exhibit 99.1 |
 Dorchester Minerals 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. |
 Dorchester Minerals • 2005 Highlights • Reserves and Production • Peer Group Comparison • Activity Highlights – Leasing Activity – Royalty Properties – Net Profits Interests – Fayetteville Shale • Looking Ahead Presentation Outline |
 Dorchester Minerals 2005 Highlights |
 Dorchester Minerals 2005 Highlights Net Income $52.8 MM $30.1 MM Lease Bonus $1.7 MM $1.6 MM Leasing Activity 78 leases 42 leases Drilling Activity 289 wells 196 wells Cash Distributed $56.5 MM $46.5 MM 2005 2004 |
 Dorchester Minerals Quick Look at 2005 Distributions Royalty Revenue $36.8 MM Total Revenue $62.9 MM Other Revenue $1.1 MM NPI Revenue $25.0 MM LP Distribution $56.5 MM GP Distribution $1.6 MM Total Expenses $4.8 MM Distributions Paid in 2005 – Reflects Q4 2004 to Q3 2005 Activity |
 Dorchester Minerals 0.97 1.05 1.14 1.11 1.11 1.05 1.05 1.05 1.02 1.07 1.12 1.01 - 0.20 0.40 0.60 0.80 1.00 1.20 1.40 Mcfepd per 1000 Units Volumes – Prices – Distributions Gas Price per Mcf 2005 2003 2004 Q1 Q3 Q2 Q4 Q1 Q3 Q2 Q4 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90$1.20 $1.00 $- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 Q1 Q3 Q2 Q4 0.46 0.42 0.39 0.42 0.42 0.48 0.43 0.48 0.51 0.58 0.81 0.00 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.40 |
 Dorchester Minerals Reserves and Production |
 Dorchester Minerals • Total Proved Reserves 90.5 Bcfe • Reserves per Unit 3.20 Mcf • Proved Developed 99.7% • Production Replacement 77% • SEC PV 10 $344 million • Reserve Life Index (R/P) 8.2 Reserves and Production |
 Dorchester Minerals • Production Replacement Calculation Reserves and Production Actual 12/31/04 Reserves Projected 12/31/05 Reserves 2005 Production Actual 12/31/05 Reserves Reserve Revisions Total Reserves (Bcfe) 90.5 93.1 81.7 |
 Dorchester Minerals Reserves and Production Product Mix Property Allocation • Proved Reserves on December 31, 2005 Gas 73% Oil 27% NPI 42% 58% Royalty |
 Dorchester Minerals Reserves and Production • DMLP volumetric variance by prod. month Daily Production (MMcfepd) 2003 2004 2005 2006 0 5 10 15 20 25 30 35 Projected Volume Actual Volume |
 Dorchester Minerals Peer Group Comparison |
 Dorchester Minerals Q4 05 Value of $100 from Q1 2005 through Q1 2006 Q1 05 Q2 05 Q3 05 Q1 06 Peer Group Comparison • Total Return (Distributions Reinvested) $80 $100 $120 $140 $160 $180 DMLP SJT NASDAQ SBR |
 Dorchester Minerals Q4 05 Value of $100 from Q3 2005 through Q1 2006 Q3 05 Q1 06 Peer Group Comparison • Total Return (Distributions Reinvested) Q2 06 $90 $100 $110 $120 $130 $140 DMLP SJT NASDAQ SBR |
 Dorchester Minerals Activity Highlights Leasing Activity |
 Dorchester Minerals Deal Structuring • Structure of deal can increase exploratory exposure above conventional lease Reward Risk Participate 100% Look-Back Working Interest Back-In Working Interest Lease 100% (Low Bonus, High Royalty) Lease 100% (High Bonus, Low Royalty) |
 Dorchester Minerals Hybrid Lease “A” 100% 90% 30% 80% 70% 60% 40% 20% 0% 50% 10% Traditional Lease NRI Royalty Interest 25% Lessee Interest 56.25% Look-Back Interest 18.75% DMLP “Look-Back” Optional participation at casing point Lessee Interest 75% Royalty Interest 25% |
 Dorchester Minerals Hybrid Lease “B” 100% 90% 30% 80% 70% 60% 40% 20% 0% 50% 10% Lessee Interest 75% Traditional Lease NRI DMLP “Back-In” Lessee Interest 70% Lessee Interest 56.25% ORRI 5% Royalty Interest 25% Royalty Interest 25% APO Back- in Interest 18.75% Royalty Interest 25% |
 Dorchester Minerals Significant Hybrid Leases • Hybrid Lease “A” – 19 transactions – Haley Field Area (Loving and Winkler, TX) – Granite Wash (Hemphill and Wheeler, TX) • Hybrid Lease “B” – 4 transactions – Jeffress Field (Hidalgo, TX) |
 Dorchester Minerals Activity Highlights Royalty Properties |
 Dorchester Minerals Royalty Property Highlights • Leasing Activity – Consummated 78 leases and pooling elections – Identified 289 new wells on royalty properties – 80 active lease offers • Maximizing Value of Mineral Assets – Lease bonus payments up to $800/acre – Initial royalty terms ranged from 25% to 30% – Hybrid leases - “Back-In” and “Look-Back” – Information franchise |
 Dorchester Minerals Royalty Property Highlights Mid-Continent South Texas Alabama |
 Dorchester Minerals Royalty Property Highlights • T-Patch Field (Starr, TX) – 8 wells completed as of 12/31/05 – Production rates ranged up to 21 MMcfpd – Two wells completed in Q1 2006 (10.2% NRI) • Guerra Min. Trust #1: 6.7 MMcfpd, 70 bopd • Guerra Min. Trust #2: 11.7 MMcfpd, 250 bopd – Additional development tracts with higher NRI’s |
 Dorchester Minerals 100 1,000 10,000 100,000 100 1,000 10,000 Royalty Property Highlights • T-Patch Field (Starr, TX) – High initial production rates – High decline rates Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Gas Rate (Mcfpd) Oil Rate (bopd) |
 Dorchester Minerals Royalty Property Highlights • Jeffress Field (Hidalgo, TX) – Negotiated back-in working interest (Hybrid “B”) • BPO: 7.5% NRI • APO: 10.9% NRI – Indication of a significant discovery • Initial flow rate of 3.3 MMcfpd, 96 bopd • Flowing pressure of 5190 psi with 5,990 psi shut-in – 417 acres leased within a 2,000 acre AMI – Evaluating development and exploratory potential |
 Dorchester Minerals 10 100 1,000 10,000 0 2 4 6 8 10 Royalty Property Highlights • Anadarko Basin - Granite Wash – 595 sections in 7 counties, Oklahoma and Texas – Perryman lease demonstrates continuous activity Gas Rate (Mcfpd) Well Count 1985 2005 1990 1995 2000 |
 Dorchester Minerals 10 100 1,000 10,000 0 5 10 15 20 Royalty Property Highlights • Little Cedar Creek Field (Conecuh, AL) – 19 wells producing and 4 wells permitted/drilling – Unitized for secondary recovery Oil Rate (bopd) Well Count 1996 2006 1998 2000 2002 2004 |
 Dorchester Minerals Activity Highlights Net Profits Interests |
 Dorchester Minerals Net Profits Interest Highlights • Increased Exposure to Upside Potential – Participated in 49 wells in Arkansas, Montana, New Mexico, Oklahoma, and Texas – Optional working interest participation in numerous leases • Maximize Value of Mineral Assets – Unburdened working interests (WI = NRI) – Information franchise – Leverage geographic diversification |
 Dorchester Minerals Net Profits Interest Highlights Montana Horizontal Bakken Arkansas Fayetteville Shale Mid-Continent Granite Wash Hugoton Area Chase Group |
 Dorchester Minerals 10 100 1,000 0 1 2 3 4 5 • Horizontal Bakken (Richland, MT) – Participated in 9 wells (5 wells producing) – Technology-driven play, multi-lateral completions Net Profits Interest Highlights Oil Rate (bopd) Well Count Q1 05 Q2 05 Q3 05 Q4 05 Q4 04 Q1 06 |
 Dorchester Minerals Net Profits Interest Highlights • Horizontal Bakken (Richland, MT) – Wells typically drilled on 1280 acre units |
 Dorchester Minerals • Hugoton Area - Operated Properties – 2005 production within 1% of projection – Continuing successful stimulation program Net Profits Interest Highlights 2004 2005 2006 Gas Rate (Mcfpd) 8,000 10,000 12,000 14,000 16,000 Projected Volume Actual Volume |
 Dorchester Minerals Activity Highlights Fayetteville Shale |
 Dorchester Minerals Fayetteville Shale Highlights • Eastern Arkoma Basin – Northern Arkansas – 9,800 net acres in 180 sections in 8 counties Van Buren Pope Cleburne White Conway Faulkner HBP Acreage Leased Acreage Producing Wells Permitted Wells |
 Dorchester Minerals Fayetteville Shale Highlights • Eastern Arkoma Basin – Northern Arkansas – Monitored trend development • Horizontal wells have tested up to 3.7 MMcfd – Elected to participate in two horizontal wells • D&C costs - $1.4 million (6.25% WI) – Circulated request for proposals in January 2006 • Competitive bidding between industry participants – Negotiated agreement in March 2006 • $625 per acre bonus • 25% royalty • Optional working interest participation |
 Dorchester Minerals Fayetteville Shale Highlights • Focus Area – Conway, Van Buren, Faulkner Cove Creek Gravel Hill Griffin Mountian Scotland HBP Acreage Leased Acreage Producing Wells Permitted Wells |
 Dorchester Minerals Looking Ahead |
 Dorchester Minerals Developing Plays New York Trenton/BR Arkansas Deep Shales North Texas Barnett Shale Delaware Basin Pennsylvanian East Texas Deep Bossier North Dakota Horizontal Bakken |
 Dorchester Minerals 2006 Annual Meeting May 3, 2006 |