enercom conference august 2009. 2 safe harbor this presentation contains projections and other...
TRANSCRIPT
Enercom Conference
August 2009
2August 2009August 2009
Safe Harbor
This presentation contains projections and other forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These projections and statements reflect the
Company’s current view with respect to future events and financial performance.
No assurances can be given, however, that these events will occur or that these
projections will be achieved, and actual results could differ materially from those
projected as a result of certain factors. A discussion of these factors is included in
the Company documents filed with the Securities and Exchange Commission.
This presentation does not constitute an offer to sell, or a solicitation of an offer to
buy, any securities, or the solicitation of a proxy or an attempt to influence any
voting of securities, by any person.
3August 2009August 2009
Capital Structure NYSE AMEX: DNE
140 MM Primary Shares o/s
$17 MM Market Capitalization of common
$300 MM Senior LTD 10.5% Interest – Cash
$222 MM Convertible preferred stock (6/30/09) 12% Coupon - PIK
$35 MM Revolver – Up for Redetermination $17 MM borrowed
$12.8 MM Cash (6/30/09)
4August 2009August 2009
Overview
Critical mass built through the Acquisition of under-exploited and under-explored Gulf Coast legacy fields
Focused on Exploration, Exploitation & Development activity in South Louisiana and the Texas Gulf Coast
Prolific inventory of Exploration, Development and Workover Opportunities to Add Reserves and Grow Production through applied Drilling and Imaging Technology
5August 2009August 2009
Field Areas
Producing Fields 23
Gross Acres ~104,553
Malo Domingo
Comite
Welder Ranch
Toro Grande
Columbus
Chocolate Bayou
Hitchcock NE
Pearsall
Bateman Lake
Live Oak
East Lake Sand
High Island 30
Lake Arthur
South Florence
North Broussard
Bayou Choctaw NW
Lake Boeuf SW
Leeville
Garden Island Bay
Murphy Lake
Bayou Couba
Manchester SW
Abbeville
Exploration Potential Exploitation Focus
Houston Headquarters
Alvin Townsite Prospect
6August 2009August 2009
Field Characteristics Large acreage tracts with high Working
Interests More than 90% of wells operatedRe-completion, PUD and Extension
Opportunities Significant Deeper Exploration Upside
Attractive Margins with sustainable Cashflow
Legacy assets of Major oil companies Capital and Technology StarvedSparsely drilled at depth
7August 2009August 2009
Garden Island Bay
TXLA
HoustonHeadquarters
PROJECT FACTS Newly reprocessed seismic data Significant subsalt potential Over 22 MMBOe shallow potential
OWNERSHIP 100% W.I. Operator 16,600 acres
CURRENT STATUS
30 wells producing 900 BOPD & 1.5 MMCFG/D
2009 9000 Acre Subsalt Joint Venture
commenced 2010 Drilling
Exploration / Exploitation 3 Well Joint Venture post-Hurricane Season
8August 2009August 2009
Garden Island Bay“Building Block Prospects”
Potential Reserves of over 21.6 MMBOe
9899 26
27
101 100 37 36102
105106
107 3839
110
108 49
48
113112
10
3
34
2
109
50 51
243
1
2
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5
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12 13
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2526
28
30
31
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3335
1
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7
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9
14
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1617
1818s tk 118s tk 2
19
19s tk 1
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2222s tk 122s tk 2
23
23s tk 1
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24s tk 1
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70
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139139s tk 1
312
53136
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135
75
6755
68
105
56
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6060s tk 1
6161s tk 162
6363s tk 1
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90s tk 1
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162s tk 1162ST
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177177-D177
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182182s tk 1
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188188D
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191191
192192D
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205205-D206
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185s tk 1
219219s tk 1
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318s tk 1
321
1
2255
3
3
1
B-1
1
11
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89
335
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3stk1
3stk2
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387s tk 1
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403s tk 1
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349s tk 1
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388
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421A
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516s tk 3
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679s tk 1
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836s tk 1
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T
EEE
189ST
184ST
320ST
1BH
D
E
F
G
H
J
K
L
M
N
O
P
Q
R
R2
S
T
Y
Z
23
B-1A
24
21
29
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1
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6577
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913
908B
908C
Alpha
Beta
Delta
L1
1
P1
T2
GI
MINN
X
SALT
Proposed 2009 - 10 Drilling
Lead “S”14,000’
3.2 MMBOe Potential
Lead “Alpha”6,700’
2.0 MMBOe Potential
Lead “Epsilon”7,000’
1.2 MMBOe Potential
Lead “P”8,600’
2.6 MMBOe Potential
Lead “E”8,000’
2.5 MMBOe Potential
Lead “Z”11,000’
1.2 MMBOe Potential
Lead “Delta”7,800’
330 MBOe Potential
Lead “908 B”11,000’
500 MBOe Potential
Lead “NU”5,000’
830 MBOe Potential
Lead “Theta”13,000’
1.2 MMBOe Potential
Lead “Y- Y Deep”9,000’
1.2 MMBOE Potential
Lead “Kappa”7,500’
416 MBOe Potential
Lead “MU”4,750’
2.3 MMBOe Potential
Lead “Argos”9,500’
330 MBOe Potential
Lead “203 Offset”9,800’
330 MBOe Potential
Lead “O SE”7,700’
400 MBOe Potential
Lead “233 Updip”7,700’
380 MBOe Potential
Lead “Epsilon East”6,500’
266 MBOe Potential
Lead “X”6,100’
180 MBOe Potential
Lead “Gromit”6,000’
300 MBOe Potential
2009 - 10
9August 2009August 2009
Garden Island Bay Shallow Prospect Inventory
Prospect Reservoir Depth Reserve Potential Drill Cost Finding Cost
“S” 170 Sand 14,000’ 3,200 MBOe $8.8 MM $ 2.75 / BOe
“Y – Y Deep” 111 – 169 BC Sand 9,000’ 1,200 MBOe $3.7 MM $3.08 / BOe
“Alpha” D2 Sand 6,700’ 2,000 MBOe $2.0 MM $1.00 / BOe
“P” F1 Sand 8,600’ 2,600 MBOe $4.2 MM $1.61 / BOe
“Epsilon” 169BC Sand 7,000’ 1,200 MBOe $2.5 MM $2.08 / BOe
“Z” Cib Carst Sand 11,000’ 1,200 MBOe $4.9 MM $4.08 / BOe
“E” 119 Sand 8,000’ 2,500 MBOe $4.0 MM $1.60 / BOe
“908 B” 169 Sand 11,000’ 500 MBOe $4.9 MM $9.80 / BOe
“Delta” 158 Sand 7,800’ 330 MBOe $2.7 MM $8.18 / BOe
“X” 111-3 Sand 6,100’ 180 MBOe $1.9 MM $10.55 / BOe
“Nu” B Sand 5,200’ 830 MBOe $2.5 MM $3.01 / BOe
“Theta” 170 Sand 13,000’ 1,200 MBOe $7.7 MM $6.41 / BOe
“Argos” 170 Sand 9,500’ 330 MBOe $4.0 MM $12.10 / BOe
“O Southeast” 8500 Sand 7,700’ 400 MBOe $2.3 MM $5.75 / BOe
“203 Offset” 8500 Sand 9,800’ 330 MBOe $4.4 MM $13.33 / BOe
“Epsilon East” 169 Sand 6,500’ 266 MBOe $2.1 MM $7.89 / BOe
“Gromit” G Sand 6,000’ 300 MBOe $1.9 MM $6.33 / BOe
“233 Updip” 8500 Sand 7,700’ 380 MBOe $2.7 MM $7.10 / BOe
“Kappa” 177 Sand 7,500’ 416 MBOe $2.3 MM $5.52 / BOe
“Mu” 4500 Sand 4,750’ 2,300 MBOe $1.7 MM $0.74 / BOe
TOTALS 21,662 MBOe $71.2 MM $3.29 / BOe
100% Unrisked
10
August 2009August 2009
Garden Island BayProposed 2009 Drilling
“Epsilon” Prospect “Gromit” Prospect
SALT
NR
NR
NR
NRNR
1227919
12410107
12410107
12410107
1269100
1338708
133stk18275
10058
145
10058
145stk1
7705
1539005
1628800
162stk18800
162ST8800
1709005
170stk110192
1889800
188D9800
1969400
1979343
2019000
3398680
3738333
3898000
4018400
4018400
4018400
5827504
8376900
8406600
8416737
8526645
8566700
8839205
EEE9523
L19000
“Kappa Prospect”
11
August 2009August 2009
Subsalt Exploration Partnership formed to Market & Explore Deep Potential (~
9,000 acres.).
Retained 15% Working Interest plus
Promote yields +/- 20% Interest
Garden Island BaySubsalt Marketing Program
Merged Big Hum and NE Subsalt Prospect Maps
+/- 500 BCFe Potential
156
13000
224
10725
262
10868
1
13675
2
15036
3
14008
1
16327
861
14480
5
8731
1
19000
2
12000
1_2
16000
SALT
12
August 2009August 2009
Chocolate Bayou Field• Working interest varies from 20% to 100% in 1,281 acres are held under lease.
• Recently reprocessed Depth-migrated seismic data
• Successfully drilled and completed the Wieting #30 well. • The Wieting #32 well will test the 12,600’ “S” sand and will be drilled on a 2:1 promoted basis
• The Wieting #33 well will test the Andrau sand and the large exploratory potential (>30 BCF) in the deeper IP Farms section on a 50% WI basis. Drilling is anticipated in late 2009 or 2010.
Wieting #33 – IP Farms SandWieting #33 – Andrau Sand
Dune
Wieting #30
Wieting #32 – 12,000’ “S” Sand
13
August 2009August 2009
2009 Drilling Program
Alvin Townsite Prospect
LOPT # 10ST Prospect – Live Oak Field
10,900’ MD, Estimated DHC of $1.4 MM. 100% Reserve Potential 6.3 BCFe (77.6% WI,
79.6% NRI)
10,100’ MD, Estimated DHC of $1.2 MM. 100% Reserve Potential 150 MBO (100% WI, 76% NRI)
14
August 2009August 2009
Financial and Operating Results
2007 2008 Q1 2009 Q2 2009
Production (BCFe) 9.0 11.4 2.4 2.3
Revenue ($MM) 84.3 147.2 14.3 14.9
Total LOE ($MM) 32.4 43.5 7.0 8.0
G&A (Cash $MM) 14.1 13.2 3.4 2.7
Interest / Financing ($MM) 31.1 32.1 8.7 8.7
Capital ($MM) 147.0 52.9 3.0 2.4
EBITDAX ($MM) 46.6 81.1 6.3 6.4
15
August 2009August 2009
Mid-Year Reserves
BCFe PV10* (MM$)
PDP 54.3 149
PDNP 37.8 99
PUD 45.9 162
Total Proved (P1) 138.0 460
PROBABLE (P2) 10.2 22
POSSIBLE (P3) 13.0 21
Total Probable and Possible (P2 & P3) 23.2 43
EXPLORATION (P4) 141.6** 388
Total 302.8 891*PV-10 based on June 30, 2009 NYMEX Strip Pricing
**Net Interest after Industry Joint Ventures
16
August 2009August 2009
Looking Ahead
2009 Operations Manage Program to Available Cash, Cash
Flow and Revolver Availability
Continue Organic Growth Define and Exploit Deeper Pool Opportunities Add new Projects within Core Areas Joint Venture Exploration Programs
Promote Existing Interests