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A Growth Company

A Growth Company. IPAA OGIS Small Cap Conference The Ritz-Carlton Palm Beach Manalapan, Florida February 7, 2005. Forward-Looking Statements.

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A Growth Company

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  1. A Growth Company IPAA OGIS Small Cap Conference The Ritz-Carlton Palm Beach Manalapan, Florida February 7, 2005

  2. Forward-Looking Statements • Some statements contained in this presentation are "forward-looking statements". All statements other than statements of historical facts included in this report, including, without limitation, statements regarding planned capital expenditures, the availability of capital resources to fund capital expenditures, estimates of proved reserves, our financial position, business strategy and other plans and objectives for future operations, are forward-looking statements. You can identify forward-looking statements by the use of forward-looking terminology like "may," "will," "expect," "intend," "anticipate," "estimate," "continue," "present value," "future" or "reserves" or other variations or comparable terminology. We believe the assumptions and expectations reflected in these forward-looking statements are reasonable. However, we can't give any assurance that our expectations will prove to be correct or that we will be able to take any actions that are presently planned. All of these statements involve assumptions of future events and risks and uncertainties. Risks and uncertainties associated with forward-looking statements include, but are not limited to: fluctuations in prices of oil and gas; future capital requirements and availability of financing; geological concentration of our reserves; risks associated with the drilling of wells; competition; general economic conditions; governmental regulations; potential defaults in the payment of amounts owed to us by purchasers of our production and counterparties to our hedging contracts; and risks of hedging activities. • For these and other reasons, actual results may differ materially from those projected or implied. We caution you against putting undue reliance on forward-looking statements or projecting any future results based on such statements.

  3. Predictable Growth…Through a Proven Strategy Growth Acquire & Exploit Niche Player People - Skill Sets

  4. Overview • Independent, domestic onshore E&P company, established 1979 • Publicly traded on the NASDAQ National Market – “PLLL” • Equity market capitalization of approximately $130 million • Focused operations in three key areas • The Permian Basin of West Texas and New Mexico • North Texas (Fort Worth Basin) • The Onshore Gulf Coast area of South Texas • Substantial and diversified proved reserve base • 21.7 MMBOE proved reserves • $266.2 million SEC PV-10 • Long life, 18.3 year proved R/P ratio and 13.8 year proved developed R/P ratio

  5. Experienced technical team focused on accelerated production growth and reserve development Excellent Industry Peer Comparisons F&D costs Full cycle economics Balanced portfolio of long-life, high-quality assets Significant re-investment opportunities in 5 active low-risk oil projects Significant investment opportunities in 4 low-risk, technology-driven gas projects Exposure to high impact exploration projects Investment Considerations Technology driven strategy to realize enhanced returns while minimizing risks

  6. Management Team130 Years Combined Oil and Gas Experience Larry OldhamPresident & CEO Don Tiffin, P.E.Chief OperatingOfficer John Rutherford, CPLVice PresidentLand & Admin Eric Bayley, P.E. Vice PresidentCorp. Engineering Steve Foster, CPAChief FinancialOfficer

  7. Technical and Operations125 Years Combined Oil and Gas Experience Jerry NevansDirector Business Development Mike MoylettSenior Geologist Bobby KuhlProduction Superintendent Kerry Meise, P.E.Senior Engineer Brian McCurryManager of Operations

  8. 1,465% 575% 100% Production Reserve Volumes Reserve Value PLLL…a Growth Company! Since 2001

  9. Production Growth. . . Since 2001 3,740 Boe per Day 2,954 OIL 2,450 GAS 65% 1,834 1,868 62% 378 20% 1,490 1,290 1,120 80% 35% 38% Dec 01 Dec 04E

  10. Reserve Volume Growth. . . Since 2001 21.7 MMBoe OIL GAS 3.2

  11. Reserve Value Growth. . .Since 2001SEC PV-10 $266 Millions of Dollars OIL GAS $17

  12. 2004 Operating Summary

  13. New Mexico Abo Gas ProjectAcquired April 2003 Utah ProjectAcquired June 2002 Barnett Shale Gas ProjectAcquired April 2003 Carm-Ann / N Means Queen Andrews Co. Acquired Oct & Dec 2004 Cotton Valley ProjectAcquired Dec 2003 Fullerton San Andres Andrews Co. Acquired December 2002 Cook Mountain GasLiberty Co.Acquired June 2002 Diamond M Field Scurry Co.Acquired December 2001 Yegua/Frio Gas Jackson/Wharton Cos.Acquired November 1994 Areas of Operations • Proved Reserves • 21.7 MMBoe • 71% Proved Developed • 87% of Proved Reserves -Oil assets • 90% Operational control • SEC PV10 = $266.2 Million • R/P Ratio = 18.3 Years

  14. Reserves and Production by Area Proved Reserves Daily Production 21.7 MMBoe at December 31, 2004 3.74 MBoepd Current Estimate

  15. Small-cap U.S. average = $10.72 Peer Comparisons 2001-2003 Reserve Replacement Costs - $ per BOE Sources: Public company data; Global Upstream Performance Review, 2004, John S. Herold, Inc. and Harrison Lovegrove & Co.

  16. Small-cap U.S. average = 205% Peer Comparisons 2001-2003 Reserve Replacement Percentage Sources: Public company data; Global Upstream Performance Review, 2004, John S. Herold, Inc. and Harrison Lovegrove & Co.

  17. Small-cap U.S. average = 211% NM NM Peer Comparisons Full-cycle Economics:Per Unit Revenue Less Production Costs (including production related G&A) Divided by 3-Year Reserve Replacement Costs Per Unit Sources: Public company data; Global Upstream Performance Review, 2004, John S. Herold, Inc. and Harrison Lovegrove & Co.

  18. Exploitation of PUD Reserve Inventory Fullerton, Diamond M, N. Means Queen and Carm-Ann Projects 2005 Estimated CAPEX - $22.2 million Exploitation of Gas Projects New Mexico Abo and North Texas Barnett Shale 2005 Estimated CAPEX - $15.4 million Exploration Projects Utah and East Texas Cotton Valley Reef 2005 Estimated CAPEX - $2.5 million Acquisition Targets Long-life oil and/or gas reserves (R/P 15) Low-risk (POS >50%) and low-cost PUD reserves Accretive to earnings and cash flow Deal size - $1 million - $100 million Future Growth

  19. 100% Historic Success Diamond M Canyon ReefDeepenings & Reactivations New Projects New Projects Diamond M Canyon Barnett Shale Other Permian Basin Carm-Ann / N. Means Queen Barnett Shale & New Mexico Gas Extension Wells New Mexico Abo Gas 90% Historic Success Fullerton, Carm-Ann,Diamond M Shallow & Other Infill Drilling & Waterflood Implementation Diamond M Shallow 70+% Historic Success Cook Mountain & Yegua Extension Wells Cook Mountain & Yegua Fullerton 2005 Capital Investment Budget – $43.7 Million Geographic Dispersion ($Millions) Risk Dispersion ($Millions)

  20. New Mexico Abo Gas ProjectAcquired April 2003 Utah ProjectAcquired June 2002 Barnett Shale Gas ProjectAcquired April 2003 Carm-Ann / N Means Queen Andrews Co. Acquired Oct & Dec 2004 Cotton Valley ProjectAcquired Dec 2003 Fullerton San Andres Andrews Co. Acquired December 2002 Cook Mountain GasLiberty Co.Acquired June 2002 Diamond M Field Scurry Co.Acquired December 2001 Yegua/Frio Gas Jackson/Wharton Cos.Acquired November 1994 Areas of Operations

  21. Project Attributes 3,640 gross acres San Andres - 4,400' Immature waterflood Shallow decline rate Long reserve life Future Work 2005 budget is $3.7 million 13 new infill wells Waterflood enhancement Exploitation of Clearfork Formation Fullerton San Andres

  22. PLLL Acquired Dec. 2002 Development response associated with 2003 and 2004 capital activity Projected development response associated with 2005 capital activity Fullerton San Andres Gross Daily Oil Production (Bopd) Historical Projection PLLL's Net Revenue Interest  71% 13 new wells 80+ workovers& 6 new wells

  23. Diamond M – Canyon Reef • Project Attributes • 5,500 gross acres • Canyon Reef – 6,500’ • Significant original oil in place • Prolific primary production • Low recovery factor relative to offsets • Future Work • 2005 budget is $9.4 million • 24 well deepeningsand recompletions • Additional 3D seismic dataacquisition • 3 infill wells • Waterflood enhancement • Tertiary (CO2) enhancement Diamond M 43 Million Bbls RF<30% SACROC 1.25 Billion BblsRF >50% Sharon Ridge 201 Million BblsRF>50%

  24. Development response associated with 2003 and 2004 capital activity Projected development response associated with 2005 capital activity Diamond M – Canyon Reef Gross Daily Production (Boepd) Historical Projection PLLL's Net Revenue Interest ≅ 57% PLLL Assumed OperationsMarch 2003 24 workovers & 3 new wells 4 workovers & 2 new wells

  25. Diamond M Shallow • Project Attributes • 2,600 gross productive acres • 2,450' - 4,000' • Proven primary well performance • Inefficient waterflood on 20-acre spacing • Demonstrated successful 10-acre waterfloods to north and south • Future Work • 2005 Budget is $5.0 million • 15 infill wells • 16 workovers Anadarko Activity Diamond M Shallow 4.0 Million Bbls Anadarko Activity

  26. Diamond M Shallow Gross Production Curve (Bopd) Historical Projection PLLL's Net Revenue Interest ≅ 57% PLLL Assumed Operations March 2003 16 workovers & 15 new wells 11 workovers & 33 new wells Development response associated with 2003 and 2004 capital activity(excludes flood response) Projected development response associated with 2005 capital activity (excludes flood response)

  27. Carm-Ann San Andres / N. Means Queen • Project Attributes • 5,360 gross acres • San Andres - 4,900' • 40 acre well spacing on primary depletion • Queen - 4,300' • Inefficient abandoned waterflood • Future Work • 2005 Budget is $4.1 million • San Andres • 9 infill wells • Stimulation of existing wells • Waterflood initiation • Queen • 4 infill wells • Well reactivation • Waterflood redevelopment

  28. Carm-Ann San Andres / N. Means Queen Gross Daily Production (Boepd) Historical Projection PLLL's Net Revenue Interest  59% 24 workovers & 13 new wells PLLL Acquired Oct. 2004 Projected development response associated with 2005 capital activity

  29. North Texas Barnett Shale Gas Project • Project Attributes • 5,000 gross acres; 28-40% working interest • First gas well drilled and awaitingcompletion • Second well currently drilling • Estimated pay of more than 250gross feet of Barnett Shale • Future Work • 2005 budget is $7.6 million • 7 horizontal wells • Water frac completions • Pipeline installation

  30. Barnett Shale Development – 5 County Area

  31. North Texas Barnett Shale GasXTO Energy - Brumbaugh No. 2 Horizontal Well - Average Daily Rate PLLL owns no interest in this property Initial Potential-7,000 Mcfg per Day 12 Months Cum 1.36 BCF of gas

  32. North Texas Barnett Shale • Newark East Field • 3,700 wells • 1.0 Bcfepd • Largest producing gas field in Texas Recently Announced Acquisitions COOKE MONTAGUE • XTO Energy Acquisition of Antero • $685 million • 440 Bcfe - 41% proved developed • 60 MMcfepd - production • 61,000 acres • Tarrant, Parker & Johnson Counties WISE DENTON JACK TARRANT PLLL Leasehold 5,000 Acres PARKER PALO PINTO • Chesapeake Acquisition of Hallwood • $277 million • 135 Bcfe - 15% proved developed • 25 MMcfepd - production • 18,000 acres • Johnson County Ft. Worth JOHNSON HOOD Cleburne Field Cleburne ERATH

  33. New Mexico New Mexico Abo Gas Project • Project Attributes • Technology driven gasdevelopment play • Area 1 - 50,000 gross acres (4,250 net); 8.5% working interest • Area 2 - 30,000 gross acres (25,500 net); 85.0% working interest • Future Work • 2005 Budget is $7.6 million • 3 re-entries • 6 horizontal wells • Fracture stimulation • Pipeline installation

  34. Best Vertical Abo Well Average Daily Rate Initial Rate 1,450 Mcfg per Day PLLL owns no interest in this property ( 15 Year Cum .78 BCF of gas

  35. First Abo Horizontal Producer – Area 1 Average Daily Rate Area 1 - PLLL's Net Revenue Interest ≅ 6.8% Initial Rate 2,300 Mcfg per Day Area 2 - PLLL's Net Revenue Interest ≅ 68.0% 6 Months Cum .356 BCF of gas

  36. Other Projects • Utah CBM (Coal Bed Methane) Gas / Conventional Oil & Gas Projects • 125,000 gross acres with both shallow gas and oil targets; 100% working interest • First test well expected to spud in first half of 2005 • 2005 Budget is $1.4 million • East Texas Cotton Valley Reef Gas Project • 5,000 gross acres; 13.125% working interest • Existing long-life natural gas fields nearby with impressive production histories from similar reef facies • 2005 Budget is $1.1 million

  37. Financial Overview

  38. Balance Sheet Data Millions of Dollars

  39. Statement of Operations Millions of Dollars

  40. 2,450 1,900@$30.80 1,421@$30.80 1,300@$34.36 700@$39.96 1,200@$33.37 500@$36.36 1,200@$25.56 921@$25.56 Oil Hedges and Prices

  41. 7,800 1,700@$4.91 Gas Hedges and Price

  42. Realized Oil and Gas Prices

  43. 2 Year Stock Performance $13 MM Equity Placement December 23, 2003 Jefferies Report June 3, 2004 Sterne, Agee & Leach Report Nov. 23, 2004 DE Investment Report July 30, 2004 Fulcrum Report Sept. 2, 2004

  44. Investment Considerations Technology driven strategy to realize enhanced returns while minimizing risks • Experienced technical team focused on accelerated production growth and reserve development • Excellent Industry Peer Comparisons • F&D costs • Full cycle economics • Balanced portfolio of long-life, high-quality assets • Significant re-investment opportunities in 5 active low-risk oil projects • Significant investment opportunities in 4 low-risk, technology-driven gas projects • Exposure to high impact exploration projects

  45. Corporate Information • Cindy Thomason • Manager Investor Relations • cindyt@plll.com • Steve Foster • Chief Financial Officer • foster@plll.com • Don Tiffin • Chief Operating Officer • tiffin@plll.com • Larry Oldham • President & CEO • oldham@plll.com Parallel Headquarters Contacts 1004 N. Big Spring, Suite 400 Midland, TX 79701 (432) 684-3727 Web site http://www.plll.com Common Stock Nasdaq: PLLL

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