Attached files
| file | filename |
|---|---|
| 8-K/A - ROSE 8K DUG EF PRESENTATION - NBL Texas, LLC | rose8-kadugppt.htm |
Exhibit 99.1
Learning, Innovating & Creating
“If it was easy, anybody could do it”
Rosetta Resources Inc.
September 18, 2013
Mark D. Petrichuk
Vice President, Corporate Reserves
& Technical Services
Forward-Looking Statements and Terminology Used
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. There are risks and uncertainties associated
with the Company’s recent acquisition of Permian Basin assets. 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 and operational upsets; 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; industry trends; and other factors detailed in the Company's most recent Form 10-K, Form 10-
Q 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. For filings reporting year-end 2012 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” or “inventory” 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.
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. There are risks and uncertainties associated
with the Company’s recent acquisition of Permian Basin assets. 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 and operational upsets; 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; industry trends; and other factors detailed in the Company's most recent Form 10-K, Form 10-
Q 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. For filings reporting year-end 2012 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” or “inventory” 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.
2
Safety Moment
Can You Spot the Hazard?
3
Safety Moment
Be Seen….Always have your headlights ON!
4
During the last three conferences, we outlined some comments on
Rosetta’s approach in the Eagle Ford …
Rosetta’s approach in the Eagle Ford …
5
• Focus on understanding the rocks; appreciate your technical staffs!
• Faith, hope & luck are not substitutes for brains, initiative & work ethic!
• Focus on quality over quantity; know the difference!
• They are called sweet spots for a reason!
• Focus on optimizing full scale development; not just the next well
• It does you absolutely no good to drill your best well last!
• Focus on profitability
• Admire your activity but track your production and count your pennies!
• Focus on optionality
• There is not a better feeling in the world than knowing you have your future well in hand!
• Focus on ongoing refinement of well spacing and well recoveries
• You rarely go wrong when you grow what you know in your own backyard!
So, building on last year’s message, Rosetta’s Eagle Ford
development plan is leaving no stone unturned in our portfolio …
development plan is leaving no stone unturned in our portfolio …
6
• Focus on ongoing refinement of well spacing and well recoveries
• You rarely go wrong when you grow what you know in your own backyard!
q LEARNING
q INNOVATING
q CREATING
Rosetta Resources Asset Overview
|
Area
|
Window
|
|
Gates Ranch
|
|
|
Non-Gates Ranch
|
|
|
Encinal Area
|
Eagle Ford
64,650 Net Acres
Gaines Co.
Midland Basin - Exploratory
13,124 Net Acres
Reeves Co.
Delaware Basin - Delineated
40,182 Net Acres
7
Rosetta is no longer a pure-
play Eagle Ford producer.
Our “backyard” just got bigger.
play Eagle Ford producer.
Our “backyard” just got bigger.
History of Growing Production
8
Eagle Ford Multiple Takeaway Options
9
• Excess capacity to move our product
• Multiple take points that provide flow optionality
• Marketing team works closely with operations to insure that
Rosetta will always have capacity to move production to market
Rosetta will always have capacity to move production to market
Gates Ranch
|
Average Well Characteristics
|
|
|
Well Costs
|
$6.5 - $7.0 MM
|
|
Spacing
|
55 acres (475 feet apart)
|
|
Composite EUR
|
1.67 MMBoe
|
|
Condensate Yield
|
65 Bbls/MMcf
|
|
NGL Yield
|
110 Bbls/MMcf
|
|
Shrinkage
|
23%
|
Summary
6/30/2013
• 26,230 net acres in Webb County
• 313 net well locations remaining1
18 wells drilled yet to be completed
2Q 2013: 11 completions
1. Under current 55-acre spacing assumptions
10
The more you drill, the more you learn …
11
Gates Ranch Type Curves
South Type Curve
North Type Curve
55 wells
Our largest continuous group
of producing wells spaced on
55 acres
of producing wells spaced on
55 acres
Well Performance on 55 acres
Compared to similar offsetting wells spaced at 100 acres
Compared to similar offsetting wells spaced at 100 acres
The 55 wells are performing in
line with comparable offsetting
wells drilled and completed early
in the development of the area
and spaced on 100 acres…
line with comparable offsetting
wells drilled and completed early
in the development of the area
and spaced on 100 acres…
12
LEARNING: “Buffer Pad” Concept
• Purpose is to reduce production
downtime due to completion activities
downtime due to completion activities
• Wells in blue area remain shut-in after
their completion
their completion
• Producing wells in light orange area
shut-in during completion activities
shut-in during completion activities
• Wells in dark orange being completed
• Wells in blue area are flowed back
after current completions are
completed
after current completions are
completed
• Repeat for next pad completion
13
Frac Hit wells vs. Buffer Pad wells
14
Frac Hit wells vs. Shut In wells
15
Current Eagle Ford Strategy
16
Lower EF
Buda
Current Resource
CREATING: Upper Eagle Ford Potential
17
Gates Ranch
“Upper Eagle Ford” Pilots
“Upper Eagle Ford” Pilots
18
475
’
’
LEARNING: Condensate Stabilization
Inlet Stream
≈18 RVP*
Condensate
≈ 9 RVP*
GAS & NGL
*RVP = Reid Vapor Pressure
Stabilizer - Gates Ranch
Pipeline Specs require RVP* ≤ 9
19
Summary
6/30/2013
Briscoe Ranch
• 3,545 net acres in southern
Dimmit County
Dimmit County
• 64 net well locations remaining
Future
|
Average Well Characteristics
|
|
|
Well Costs
|
$6.5 - $7.0 MM
|
|
Spacing
|
50 acres (425 feet apart)
|
|
Condensate Yield
|
100 Bbls/MMcf
|
|
NGL Yield
|
130 Bbls/MMcf
|
|
Shrinkage
|
23%
|
19 wells drilled yet to be completed
20
INNOVATING: Rosetta’s Pad Drilling History
21
Drilling Time Performance
INNOVATING & CREATING: Lopez Farm-In
• 505 net acres in Live Oak County
• Farm-In from Killam Oil
• BPO: 100% WI, 75% NRI
• APO: 65% WI, 48.75% NRI
• 7-day gross stabilized IP 1,966 Boe/d
(46% oil / 24% NGLs)
(46% oil / 24% NGLs)
• 7 net well locations remaining
Summary
6/30/2013
|
Average Well Characteristics
|
|
|
Well Costs
|
$7.5 - $8.0 MM
|
|
Spacing
|
~ 50 acres (400 feet apart)
|
2Q 2013: 1 completion
23
Tom Hanks
• 3,461 net acres in LaSalle County
• 2 gross total completions
• Well Costs $5.5 - $7.0 MM
• ~ 50-acre spacing (~400 feet apart)
Summary
6/30/2013
1 EF well drilled yet to be completed
2Q 2013: 1 EF completion
Eagle
Ford
• 1 completion - discovery well
• 7-day stabilized IP 657 Boe/d (91% oil)
• 56 net well locations remaining
• 1 well drilled awaiting completion
Pearsall
• 1 completion - exploration
• Un-stabilized test rate at 5 MMcf/d
• Gas content includes 1% H2S
Pearsall
Well
Eagle Ford
Well
24
Summary
6/30/2013
Central Dimmit County Area
• 8,496 net acres located in Dimmit County
• 104 net well locations remaining
2Q 2013: Total 3 completions
|
Average Well Costs
|
|
|
Light Ranch
and Vivion
|
$5.5 - $6.0 MM
|
|
Lasseter &
Eppright
|
$6.5 - $7.0 MM
|
3 completions
2Q 2013: 1 completion
2Q 2013: 1 completion
Lasseter & Eppright
Light Ranch
6 total completions
1 well drilled yet to be completed
1 well drilled yet to be completed
Vivion
3 completions
2Q 2013: 2 completions
2Q 2013: 2 completions
25
|
|
Net acres
|
Drilling rig
activity |
Wells
completed |
Wells awaiting
completion |
Well Spacing
|
Remaining
locations |
Avg Cost /
Well ($M) |
Rig years
(16 wells/year) |
|
Gates Ranch
(75% NRI) |
26,230
|
2 - 3
|
119
|
18
|
55
|
313
|
$6.5 - $7.0
|
20
|
|
Briscoe Ranch
(81.3% NRI) |
3,545
|
1
|
4
|
19
|
50
|
64
|
$6.5 - $7.0
|
4
|
|
Central Dimmit1
(75 - 77% NRI) |
8,496
|
1
|
12
|
1
|
60
|
104
|
$5.5 - $7.0
|
7
|
|
Karnes Trough2
(75 - 80% NRI) |
1,902
|
-
|
19
|
6
|
60
|
0
|
$7.5 - $8.0
|
0
|
|
Tom Hanks
(77% NRI) |
3,461
|
0 - 1
|
1
|
1
|
50
|
56
|
$5.5 - $7.0
|
3
|
|
Lopez
(75% NRI) |
505
|
1
|
1
|
0
|
50
|
7
|
$7.5 - $8.0
|
1
|
|
Undelineated Acreage3
(75 - 77% NRI) |
6,754
|
0 - 1
|
0
|
0
|
50 - 70
|
47
|
$5.5 - $7.0
|
3
|
|
Encinal
(75 - 77% NRI) |
13,756
|
-
|
4
|
0
|
80
|
178
|
$6.5 - $7.0
|
11
|
|
Total Eagle Ford
|
64,650
|
5 - 6
|
160
|
45
|
50 - 80
|
769
|
$5.5 - $8.0
|
48
|
|
Years remaining
|
|
|
|
|
|
|
|
13
(60 wells per year)
|
Eagle Ford Inventory
+/- 770 net wells -- remaining as of 8/1/2013
+/- 770 net wells -- remaining as of 8/1/2013
1. Central Dimmit includes L&E, Vivion and Light Ranch
2. Karnes Trough area includes Dubose and Klotzman
3. Denotes roughly 6,800 net acres in the liquids window of the play
26
The current project inventory reflects our analysis on
reduced well spacing
reduced well spacing
50 to
55-acre
well spacing
(2Q12 Call)
65-acre
well spacing
(3Q11 Call)
100-acre
well spacing
(2009)
Completion pace of 60 wells per year
used as an example to show the true
“running room” of the portfolio
used as an example to show the true
“running room” of the portfolio
The current project inventory reflects our analysis on
reduced well spacing
reduced well spacing
65-acre
well spacing
(3Q11 Call)
100-acre
well spacing
(2009)
Completion pace of 60 wells per year
used as an example to show the true
“running room” of the portfolio
used as an example to show the true
“running room” of the portfolio
Upper
Eagle Ford
Potential
Eagle Ford
Potential
Upper Eagle Ford?
50 to
55-acre
well spacing
(2Q12 Call)
So, building on last year’s message, Rosetta’s Eagle Ford
development plan is leaving no stone unturned in our portfolio…
development plan is leaving no stone unturned in our portfolio…
29
• Focus on ongoing refinement of well spacing and well recoveries
• You rarely go wrong when you grow what you know in your own backyard!
• Be flexible, adjust to changing conditions
• Eagle Ford Shale is like Texas weather, it will change tomorrow
• Take risks and try something new
• You cannot make room for nay sayers in your organization
• Don’t be complacent - Test new ideas!
• Hidden value will stay hidden until you uncover it
But you ain’t seen nothing yet!