Attached files
| file | filename |
|---|---|
| 8-K - 8K ROSE RBC CAP ENERGY & POWER CONFERENCE - NBL Texas, LLC | roserbcconf.htm |
Rosetta Resources Inc.
John Clayton
SVP, Asset Development
RBC Capital Markets Energy & Power Conference
New York - June 6, 2011
www.rosettaresources.com / NASDAQ: ROSE
High Asset Quality - Executing on Business Plan - Upcoming Future Growth Catalysts - Financial Strength
EXHIBIT 99.1
This presentation includes forward-looking statements, which give the Company's current expectations or forecasts of future
events based on currently available information. Forward-looking statements are statements that are not historical facts, such as
expectations regarding drilling plans, including the acceleration thereof, production rates and guidance, resource potential,
incremental transportation capacity, exit rate guidance, net present value, development plans, progress on infrastructure
projects, exposures to weak natural gas prices, changes in the Company's liquidity, changes in acreage positions, expected
expenses, expected capital expenditures, and projected debt balances. The assumptions of management and the future
performance of the Company are subject to a wide range of business risks and uncertainties and there is no assurance that
these statements and projections will be met. Factors that could affect the Company's business include, but are not limited to:
the risks associated with drilling of oil and natural gas wells; the Company's ability to find, acquire, market, develop, and produce
new reserves; the risk of drilling dry holes; oil and natural gas price volatility; derivative transactions (including the costs
associated therewith and the abilities of counterparties to perform thereunder); uncertainties in the estimation of proved,
probable, and possible reserves and in the projection of future rates of production and reserve growth; inaccuracies in the
Company's assumptions regarding items of income and expense and the level of capital expenditures; uncertainties in the timing
of exploitation expenditures; operating hazards attendant to the oil and natural gas business; drilling and completion losses that
are generally not recoverable from third parties or insurance; potential mechanical failure or underperformance of significant
wells; availability and limitations of capacity in midstream marketing facilities, including processing plant and pipeline
construction difficulties; climatic conditions; availability and cost of material, supplies, equipment and services; the risks
associated with operating in a limited number of geographic areas; actions or inactions of third-party operators of the Company's
properties; the Company's ability to retain skilled personnel; diversion of management's attention from existing operations while
pursuing acquisitions or dispositions; availability of capital; the strength and financial resources of the Company's competitors;
regulatory developments; environmental risks; uncertainties in the capital markets; general economic and business conditions
(including the effects of the worldwide economic recession); industry trends; and other factors detailed in the Company's most
recent Form 10-K, Form 10Q and other filings with the Securities and Exchange Commission. If one or more of these risks or
uncertainties materialize (or the consequences of such a development changes), or should underlying assumptions prove
incorrect, actual outcomes may vary materially from those forecasted or expected. The Company undertakes no obligation to
publicly update or revise any forward-looking statements except as required by law.
events based on currently available information. Forward-looking statements are statements that are not historical facts, such as
expectations regarding drilling plans, including the acceleration thereof, production rates and guidance, resource potential,
incremental transportation capacity, exit rate guidance, net present value, development plans, progress on infrastructure
projects, exposures to weak natural gas prices, changes in the Company's liquidity, changes in acreage positions, expected
expenses, expected capital expenditures, and projected debt balances. The assumptions of management and the future
performance of the Company are subject to a wide range of business risks and uncertainties and there is no assurance that
these statements and projections will be met. Factors that could affect the Company's business include, but are not limited to:
the risks associated with drilling of oil and natural gas wells; the Company's ability to find, acquire, market, develop, and produce
new reserves; the risk of drilling dry holes; oil and natural gas price volatility; derivative transactions (including the costs
associated therewith and the abilities of counterparties to perform thereunder); uncertainties in the estimation of proved,
probable, and possible reserves and in the projection of future rates of production and reserve growth; inaccuracies in the
Company's assumptions regarding items of income and expense and the level of capital expenditures; uncertainties in the timing
of exploitation expenditures; operating hazards attendant to the oil and natural gas business; drilling and completion losses that
are generally not recoverable from third parties or insurance; potential mechanical failure or underperformance of significant
wells; availability and limitations of capacity in midstream marketing facilities, including processing plant and pipeline
construction difficulties; climatic conditions; availability and cost of material, supplies, equipment and services; the risks
associated with operating in a limited number of geographic areas; actions or inactions of third-party operators of the Company's
properties; the Company's ability to retain skilled personnel; diversion of management's attention from existing operations while
pursuing acquisitions or dispositions; availability of capital; the strength and financial resources of the Company's competitors;
regulatory developments; environmental risks; uncertainties in the capital markets; general economic and business conditions
(including the effects of the worldwide economic recession); industry trends; and other factors detailed in the Company's most
recent Form 10-K, Form 10Q and other filings with the Securities and Exchange Commission. If one or more of these risks or
uncertainties materialize (or the consequences of such a development changes), or should underlying assumptions prove
incorrect, actual outcomes may vary materially from those forecasted or expected. The Company undertakes no obligation to
publicly update or revise any forward-looking statements except as required by law.
Forward-Looking Statements and Terminology Used
1
For filings reporting year-end 2010 reserves, the SEC permits the optional disclosure of probable and possible reserves. The
Company has elected not to report probable and possible reserves in its filings with the SEC. We use the term “net risked
resources” to describe the Company’s internal estimates of volumes of natural gas and oil that are not classified as proved
reserves but are potentially recoverable through exploratory drilling or additional drilling or recovery techniques. Estimates of
unproved resources are by their nature more speculative than estimates of proved reserves and accordingly are subject to
substantially greater risk of actually being realized by the Company. Estimates of unproved resources may change significantly
as development provides additional data, and actual quantities that are ultimately recovered may differ substantially from prior
estimates. We use the term “BFIT NPV10” to describe the Company’s estimate of before income tax net present value discounted
at 10 percent resulting from project economic evaluation. The net present value of a project is calculated by summing future cash
flows generated by a project, both inflows and outflows, and discounting those cash flows to arrive at a present value. Inflows
primarily include revenues generated from estimated production and commodity prices at the time of the analysis. Outflows
include drilling and completion capital and operating expenses. Net present value is used to analyze the profitability of a project.
Estimates of net present value may change significantly as additional data becomes available, and with adjustments in prior
estimates of actual quantities of production and recoverable reserves, commodity prices, capital expenditures, and/or operating
expenses.
Company has elected not to report probable and possible reserves in its filings with the SEC. We use the term “net risked
resources” to describe the Company’s internal estimates of volumes of natural gas and oil that are not classified as proved
reserves but are potentially recoverable through exploratory drilling or additional drilling or recovery techniques. Estimates of
unproved resources are by their nature more speculative than estimates of proved reserves and accordingly are subject to
substantially greater risk of actually being realized by the Company. Estimates of unproved resources may change significantly
as development provides additional data, and actual quantities that are ultimately recovered may differ substantially from prior
estimates. We use the term “BFIT NPV10” to describe the Company’s estimate of before income tax net present value discounted
at 10 percent resulting from project economic evaluation. The net present value of a project is calculated by summing future cash
flows generated by a project, both inflows and outflows, and discounting those cash flows to arrive at a present value. Inflows
primarily include revenues generated from estimated production and commodity prices at the time of the analysis. Outflows
include drilling and completion capital and operating expenses. Net present value is used to analyze the profitability of a project.
Estimates of net present value may change significantly as additional data becomes available, and with adjustments in prior
estimates of actual quantities of production and recoverable reserves, commodity prices, capital expenditures, and/or operating
expenses.
Forward-Looking Statements and Terminology Used
2
– High Quality Asset Base
– Executing on Business Plan
– Upcoming Future Growth Catalysts
– Financial Strength
Agenda
3
HIGH QUALITY ASSET BASE: Geographically and geologically focused assets, with size, allow for
significant technical focus, applied learning, and differential performance…
significant technical focus, applied learning, and differential performance…
Alberta Basin
300,000 net acres
6 BBOE hydrocarbon resource in place
1500 potential locations
Exploration underway
11 delineation wells completed
3 horizontal wells planned (‘11)
Eagle Ford Liquids
50,000 net acres
20 TCFE hydrocarbon resource in place
450 potential remaining locations (excluding infill)
27 horizontal wells completed*
115 mmcfepd net*
6-10 years of potential remaining inventory
Eagle Ford Dry Gas
15,000 net acres
5 TCFE hydrocarbon resource in place
145 potential locations (excluding infill)
4 horizontal wells completed*
5 mmcfepd net*
3-4 years of remaining inventory
South Texas
(Non-Eagle Ford)
100,000 net acres
Numerous stacked reservoirs
20 mmcfepd net*
* End of 1Q 2011.
4
185 - 195
EXECUTING ON THE BUSINESS PLAN: Despite our divestiture program, we have grown volumes at 25%
annually while increasing our liquids component to nearly 1/3 of our overall rate…
annually while increasing our liquids component to nearly 1/3 of our overall rate…
5
185 - 195
EXECUTING ON THE BUSINESS PLAN: Our established core assets are on track to meet our recently
revised production guidance…
revised production guidance…
6
Direct LOE, $/Mcfe
Note: South Texas includes Eagle Ford, Lobo, Olmos, and Wilcox. Direct LOE excludes Ad Valorem Taxes, Workovers, and Insurance.
EXECUTING ON THE BUSINESS PLAN: Higher cost properties have been divested while our core area
properties continue to have favorable operating costs…
properties continue to have favorable operating costs…
ALL
PROPERTIES
PROPERTIES
SOLD BY
4/15/2011
7
Eagle Ford
Gates Ranch: More than 12 TCFE of “hydrocarbons in place” have been delineated and are now being exploited…
9
Gates Ranch: Well performance continues to outperform our models…
10
EXECUTING ON THE BUSINESS PLAN: Total production from Eagle Ford has grown from start-up to more
than 120 mmcfepd in less than 5 quarters…
than 120 mmcfepd in less than 5 quarters…
120
7
11
Gates Ranch: Using our current development pace, well spacing, and type curve, we will have continued
development through 2016…while recovering less than 20% of the hydrocarbons in place…
development through 2016…while recovering less than 20% of the hydrocarbons in place…
12
Gates Ranch: Operationally we have continued to push the limits and now utilize 3 well pad drilling and
completion designs for our development…a savings of more than $0.5 million per well or $1.5 million per pad.
completion designs for our development…a savings of more than $0.5 million per well or $1.5 million per pad.
13
2010: Single well pads
2011: 3 well pads
FIRM CAPACITY
EXECUTING ON THE BUSINESS PLAN: Total firm capacity has been secured to currently move 115 mmcfepd net
gas equivalents to more than 275 mmcfepd in the next 24 months…with additional capacity being negotiated.
gas equivalents to more than 275 mmcfepd in the next 24 months…with additional capacity being negotiated.
14
Future Growth Catalysts
Non Gates Ranch Potential: Gates Ranch is a tremendous asset, but it makes up only 40% of our Eagle Ford position.
We plan to test a large portion of our additional 23,500 net acres in the liquids window of the play this year…
We plan to test a large portion of our additional 23,500 net acres in the liquids window of the play this year…
16
Gates Ranch Infill Drilling: This year we plan to test downspacing. If successful, our recoveries could approach
25 - 30%, or an incremental 1.5 TCFE…
25 - 30%, or an incremental 1.5 TCFE…
17
Southern Alberta Basin: Our vertical delineation program is now complete and has resulted in a more comprehensive
understanding of the play. We now have plans this year to drill 3 horizontal wells to further test the commerciality…
understanding of the play. We now have plans this year to drill 3 horizontal wells to further test the commerciality…
18
Finance
50
20
5350
5400
2600
Commodity Hedges
20
350
250
377
235
* 1Q11 adjusted for 4/15/2011 divestitures and revolver pay down.
Debt & Liquidity
21
* 1Q11 adjusted for 4/15/2011 divestitures and revolver pay down.
Balance Sheet & Capital Structure
22
– High Quality Asset Base
– Positioned for sustained growth
– 2 Tcfe of inventory
– Simplified and improved cost structure
– Executing on Business Plan
– Divestiture program concluded
– Focused capital on high return Gates Ranch
– Improving cost structure
– Revised volume guidance upward and continued oil growth
– Well pads driving efficiency
– Marketing arrangements
– Upcoming Future Growth Catalysts
– Gates Ranch reserves / well
– Testing new Eagle Ford areas
– Gates Ranch infill tests
– Horizontal drilling underway in the Southern Alberta Basin
– Financial Strength
– Hedge position
– +/- $375 million of liquidity
– Strong balance sheet
Summary
23
Rosetta Resources Inc.
John Clayton
SVP, Asset Development
RBC Capital Markets Energy & Power Conference
New York - June 6, 2011
www.rosettaresources.com / NASDAQ: ROSE
High Asset Quality - Executing on Business Plan - Upcoming Future Growth Catalysts - Financial Strength