CK
Cooper & Company
Annual
Small Cap Oil & Gas Conference
February 22-23, 2007
February 22-23, 2007
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Forward
Looking
Statements
Issuer
Free Writing Prospectus
Filed
Pursuant To Rule 433
Registration
Statement No. 333-128888
February
22, 2007
The
issuer has filed a registration statement (including a prospectus)
with the SEC
for the offering to which this communication relates. Before you invest,
you
should read the prospectus in that registration statement and other
documents
the issuer has filed with the SEC for more complete information about
the issuer
and this offering. You may get these documents for free by visiting
EDGAR on the
SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter
or any
dealer participating in the offering will arrange to send you the prospectus
if
you request it by calling (713) 335-4000. The prospectus relating to
this
offering is available by clicking on the following link:
http://www.sec.gov/Archives/edgar/data/1340282/000119312506027644/d424b3.htm.
Forward-Looking
Statements
All
statements,
other than statements of historical fact, included in this presentation
are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based upon current
expectations and are subject to a number of risks, uncertainties
and
assumptions, which are more fully described in Rosetta Resources
Inc.’s Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q filed with
the Securities
and Exchange Commission. These risks, uncertainties and assumptions could
cause actual results to differ materially from those described in
the
forward-looking statements. Rosetta Resources Inc. assumes no obligation
and
expressly disclaims any duty to update the information contained
herein except
as required by law.
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717
TEXAS AVENUE, HOUSTON, TEXAS ROSETTA CORPORATE
HEADQUARTERS
Corporate
Profile
n
Established
Rosetta July 7, 2005
n
Stock
Trades on NASDAQ, Symbol: “ROSE”
n
Shares
outstanding = 50.6 million
n
$946
million market cap value
n
Net
Producing Wells: Over 500
n
Historical
Drilling Success: 85%
n
Replaced
245% of Production in 2006
n
Increased
Reserves 14% from 2005
n
Management
has a proven track record
•
130
Employees
•
Principal
Offices: Houston, Texas & Denver, Colorado
•
Field
Offices: Rio Vista, California & Laredo, Texas
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Corporate
Profile
n
Track
Record
•
Double-digit
production and reserve growth in 2006.
n
Organic
Growth Potential
•
Extensive,
low risk drilling location inventory.
n
Exploration
Upside
•
Multiple,
high-quality exploration plays.
n
Financial
Strength
•
Strong
balance sheet and hedge position, which
provides
flexibility to grow.
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INCREASED
VALUE
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142 Wells Drilled
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85% Success Rate
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$2.70 Organic Finding Costs
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14% Proved Reserve Increase
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245% Replacement Ratio
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26% Production Growth
Summary
of 2006
Activity
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Positive
Production
Trend
Includes
costs of becoming public company, SOX implementation
and
the
Calpine
transition costs.
Estimated
Cash Cost Structure
|
2006
|
|
|
COSTS/MCFE
|
|
|
Direct
LOE
|
$0.65
|
|
Ad-Valorem
Tax
|
0.20
|
|
Work
over
|
0.19
|
|
Insurance
|
0.04
|
|
Total
Lifting Costs
|
1.08
|
|
Production
Tax
|
0.19
|
|
TG&M
|
0.15
|
|
G&A
(1)
|
0.82
|
|
Total
|
$2.24
|
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Protected
65 BBTU/D of 2007 natural gas production with 55 BBtu/d swapped
at $7.79
per MMBtu and 10 BBtu/d collared at $7.19/$10.03 per
MMbtu. § |
|
§
Revolving
line of credit – borrowing base of $325
million.
§
$159
million unused capacity.
§
Currently
have $240 million debt outstanding.
|
| Revolving Credit |
$
|
165
|
| Second Lien Term Loan |
75
|
|
|
$
|
240
|
|
Protected
50 BBtu/d of 2008 naturalgas production with swaps at
$7.62 per MMbtu. § |
Financial
Flexibility to Grow
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2007
Average Swap Price is $7.79/MMbtu.
§2007
collar with floor of $7.19 MMbtu and $10.03 MMbtu CAP.
§
2008
Average Swap Price is $7.62/MMbtu.
§2009
Average Swap Price is $6.99/MMbtu.
§Hedge
Position
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*
as of 12/31/06
Growing
Reserve
Base
Calpine
Transaction
Contractual
gas sales continuing.
§Non-consent
property status report presented to Calpine.
§Settlement
discussions underway.
§Objective
is global solution:
§Calpine
conveys good title for non-consent properties for $68 MM.
•
Preferential
right properties retained by Calpine. Rosetta retains approximately $7
MM.
•
Settlement
statement finalized.
•
•
Other
administrative matters settled to satisfaction of
Rosetta.
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Sacramento
Basin –
2006 Activity
Acquired
16,400 net
acres in and around the RioVista
Field and the Sac Valley Extension areas in 2006, and
drilled 23 wells with a 83% success rate.
§110
locations
at year end 2006.
§Air
drilling
technology was applied to the Hamilton reservoir
as a means of establishing
higher gas production rates from the low pressure
reservoirs.
§Six
innovative wells
were drilled in the southern portion
of the Rio Vista field that were successful in extending
pays in three reservoirs: Upper Capay, Lower Capay and
Martinez.
§Three
breakthrough
wells were drilled in Rio Vista
that encountered low contrast, sand intervals in the Martinez
that had previously been overlooked in Martinez development
drilling.
§A
12 square
mile 3-D seismic program was shot over the Bradford Island area of the
Rio Vista
field.
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Sacramento
Basin
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S.
Callaghan and El Corazon Ranch
42,000
est. of the total
acreage
South
Texas, Lobo – 2006 Activity
n
Drilled
26 wells in 2006.
n
90
locations at year end 2006.
n
Recent
drilling has resulted in post frac rates of 3-7 Mmcfe/d per
well.
n
Recently
added several key leases offsetting South Callaghan Ranch.
2006
Dry
Hole
Current
Drilling
Inventory
Future
Location
2006
Discovery
Currently
Drilling
Current
Producer
2007
Discovery
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Rocky
Mountains, DJ Basin – 2006 Activity
n
Added
33,600 net acres in the DJ Niobrara Play.
n
200
locations at year end in 2006.
n
Drilled
46 wells.
n
New
wells have 7 Mmcfe/d of production capacity.
n
Gathering
system construction for the Republican River area expected to be in service
in
the second quarter of 2007.
DJ
Basin
Rosetta Leases
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Federal
Offshore
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Key
Investment Highlights
•
26%
annual growth in production (2005-2006)
•
14%
annual growth in reserves (2005-2006)
Significant
drilling location inventory.
§ Competitive
cost structure.
§ Financial
flexibility to pursue growth strategy.
§Positioned
for visible, long-term reserve and production growth:
§Experienced
technical staff, making use of industry Best Practices and state of the
art
technology.
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Conclusion