JRCO
Emerging Growth Conference
New
York -
March 20, 2007
Forward
Looking Statements
All
statements, other than statements of historical fact, included in this
press
release are “forward-looking” statements within the meaning of
Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the intent, belief or current expectations of Rosetta Resources Inc. and its subsidiaries (the “Company”) and its management. These forward-looking statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those herein described. Accordingly, Recipients are cautioned that these forward-looking statements are not guarantees of future performance. Please refer to Company’s risks, uncertainties and assumptions as it discloses from time to time in the Company’s reports and registration statements filed with the SEC, including the risk factors identified in its Annual report on Form 10-K for the year ended December 31, 2006, which can also be found on the Company’s website at www.rosettaresources.com. The Company undertakes no duty to update the information contained herein except as required by law.
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the intent, belief or current expectations of Rosetta Resources Inc. and its subsidiaries (the “Company”) and its management. These forward-looking statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those herein described. Accordingly, Recipients are cautioned that these forward-looking statements are not guarantees of future performance. Please refer to Company’s risks, uncertainties and assumptions as it discloses from time to time in the Company’s reports and registration statements filed with the SEC, including the risk factors identified in its Annual report on Form 10-K for the year ended December 31, 2006, which can also be found on the Company’s website at www.rosettaresources.com. The Company undertakes no duty to update the information contained herein except as required by law.
-
2
-
Forward
Looking Statements
Issuer
Free Writing Prospectus
Filed
Pursuant To Rule 433
Registration
Statement No. 333-128888
March
20, 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.
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.
717
TEXAS
AVENUE
HOUSTON,
TEXAS
ROSETTA
CORPORATE HEADQUARTERS
-
3
-
Corporate
Profile
•
Established
Rosetta July 7, 2005
•
Stock
Trades
on NASDAQ, Symbol: “ROSE”
•
Shares
Outstanding = 50.8 Million
•
Market
Cap
Value = $915 MM (as of
03/15/07)
•
Enterprise
Value = $1.1 Billion (as of
03/15/07)
•
Total
Producing Wells: Over 800
•
Proved
Reserves at 12/31/2006 = 408 BCFE (96% gas)
•
Company
Operates Over 90% of Value
•
530
Remaining Drillable Locations
•
Historical
Drilling Success: 85%
•
Management
has a proven track record
135
Employees
Principal
Offices: Houston, Texas & Denver, Colorado
Field
Offices: Rio Vista, California & Loredo,
Texas
|
12/31/06
|
|
|
Sacramento
Basin
|
112
|
|
DJ
Basin
|
193
|
|
San
Juan Basin
|
40
|
|
Utah
|
8
|
|
Lobo
|
90
|
|
Perdido
|
52
|
|
Offshore
|
5
|
|
State
Waters
|
12
|
|
Other
|
22
|
|
Total
|
534
|
-
7
-
Drillable
Locations
Actual
Forecast
2006
to
2007
36%
92
MMcfe/D
125
MMcfe/D
34%
-
8
-
Production
(MMcfe/d)
|
142
|
Wells
Drilled
|
|
85%
|
Success
Rate
|
|
$2.70
|
Organic
Finding Costs
|
|
14%
|
Proved
Reserve Increase
|
|
245%
|
Reserve
Replacement
|
|
110
|
New
Locations Created
|
INCREASED
VALUE!
-
9
-
Summary
of
2006 Activity
Rio
Vista
Deep
Rio
Vista
Extension
Bradford
Island 3-D Results
Main
Pass
125
South
Timbalier 293
Clayton
Deep
“Sligo Reef Play”
Four
Sabine
Lake Wells
Four
Galveston Bay Wells
-
12
-
2007
Potential High Impact
Exploratory
Activity
Sacramento
Basin
General
Info
§
16
productive
zones from 2,000 to 10,000’
§
3.6
Tcf
cumulative production (Rio Vista only)
§
Approximately
net
70,000
acres
§
85%
to 100%
working interest
§
Approximately
150
producing
wells
§
Typical
well:
$1.5 to $2.0 million to drill and complete 1.5 to 2.0 Bcfe reserves,
1 to 3
MMcfe/d IP
§
Over
110
drillable locations
2006
Activity
§
Drilled
23
wells (2 deep), 83% successful
§
Leased
16,400
acres
§
Shot
12
square mile 3-D survey on Bradford
Island
§
Made
a deep
discovery
§
Extended
pays
on south end of field
§
Improved
productivity on low pressure zones by
air
drilling
§
Uncovered
low
contrast pay opportunities
2007
Plans
§
Drill
30
wells (3 deep)
§
Lease
5,000
acres
§
Purchase
PG&E low pressure gathering system
§
Reprocess
3-D
seismic surveys
§
Develop
prospects on southern end of the field
§
East
extension of Winters (deep) play
-
14
-
General
Info
§
Target
zone –
Niobrara Chalk at 2,500’
§
Approximately
80,000
acres with average of 80%
working
interest
§
Typical
well – costs
$220,000 to drill and complete,
0.3
to 0.4 Bcfe of
reserves and 100 to 150 Mcfe/d
initial production
initial production
§
Approximately
200
drillable locations
2006
Activity
§
Drilled
46 wells, 93%
successful
§
Leased
33,700
acres
§
Shot
61 square miles
of 3-D seismic
§
Extended
productive
limits of Republican Field
§
Installed
13 mile
gathering system in South
Republican
2007
Plans
§
Tie-in
existing wells
(add 7 MMcfe/d)
§
Drill
70
wells
§
Lease
12,000
acres
§
Shoot
40 square miles
of 3-D seismic
DJ
Basin
-
16
-
Texas
Activity / Growth Areas
Miocene/Frio
Anomalina,
Hackberry
and
Vicksburg
Wilcox
Perdido
Lobo
Olmos
-
17
-
General
Info
§
Company
owns
approximately 70,000 net
acres
and 320 square
miles of 3-D seismic.
Majority of the acreage Rosetta has 90% to
100% working interest
Majority of the acreage Rosetta has 90% to
100% working interest
§
Lobo
formation occurs
at approximately
7,500
to 8,500
depth
§
Typical
well costs
$1.7 to $1.8 million,
yielding
1.3 to 2.0
Bcfe of reserves, and
stabilized average initial rates of 2.0
MMcfe/d
stabilized average initial rates of 2.0
MMcfe/d
§
The
company has
approximately 90
locations
2006
Activity
§
Drilled
26
wells
§
Added
over 8,000 net
acres of land
§
Increased
production over 50% (from Jan
2006)
§
Created
significant
new drilling
opportunities
2007
Plans
§
Drill
30 wells using
two rigs
§
Shoot
additional 3-D
Seismic
§
Continue
to lease
infill and field extension
acreage
South
Texas
– Lobo
-
18
-
South
Texas
– Perdido
General
Info
§
Rosetta
owns 50%
working interest in
approximately
18,000
net acres
§
Perdido
horizons are
at approximately 8,000’
to
9,500’ in three
different sand intervals
§
Wells
are drilled
horizontally and fractured
with
total well cost
of $5.5 million, reserves of
3.5 Bcfe and initial stabilized first month
average rates of 9 MMcfe/d
3.5 Bcfe and initial stabilized first month
average rates of 9 MMcfe/d
§
Company
has 52
remaining drillable locations
2006
Activity
§
Drilled
7 horizontal
wells, two of which were
drilling
at year-end
and are now producing
§
Established
a third
producing horizon that
could
create
additional drilling opportunities
2007
Plans
§
Drill
7 additional
wells
§
Continue
to lower
costs
§
Create
additional
locations
-
20
-
Gulf
of
Mexico Activity Areas
2/16/07
General
Info
§
Working
interest in
11 blocks ranging
from
20% to 100% (NRI
of 15% -
79%)
79%)
§
27,600
net acres
(est.) under lease
§
800
square mile joint
venture with 3-D
coverage
Typical
well costs
(gross)
§
$25-$50
MM to drill
and complete
§
25-50
BCFE reserves
§
10-20
MMCFE/D
(average first
§
month)
2006
Activity
Facility
work was 80%
complete on
new
productive
blocks: Main Pass 29,
Main Pass 118 and Grand Isle 72
Main Pass 118 and Grand Isle 72
§
Bought
three new
prospects in the
§
Louisiana
Federal
waters lease sale
Drilled
two dry
holes: Main Pass #117
§
and
S.Timbalier 252
#1
2007
Plans
Put
three new blocks
on production at
§
10
MMcfe/d
net
Drill
S. Timbalier
#293
§
Drill
Main Pass
125
§
-
21
-
Texas
State
Waters
Galveston
Bay
General
Info
Company
exploring in
the Vicksburg
§
and
Frio trends in
Galveston Bay,
Texas, pursuing sands that exhibit
strong hydrocarbon indicators on 3-D
seismic
Texas, pursuing sands that exhibit
strong hydrocarbon indicators on 3-D
seismic
Currently
three wells
producing
§
Typical
well
costs
§
•
$5-$8
MM to drill and
complete
•
6-8
BCFE reserves
•
6-10
MMCFE/D (average
first
month)
2006
Activity
§
Drilled
S.T. 85 and
S.T. 116 A-1 (dry
hole)
and S.T. 199-1,
tested 1.2 MM/d
which will be tied in early 2007
which will be tied in early 2007
§
Geoscience
work
resulted in four low
risk
locations which
are offset to and
analogous to three wells which will
produce over 40 Bcfe from Anamolina
reservoirs
analogous to three wells which will
produce over 40 Bcfe from Anamolina
reservoirs
2007
Plans
§
Drill
4 wells to the
Anamolina zone
with
a 28% working
interest
§
Pursue
additional
prospects
-
22
-
General
Info
Company
owns
a 50% working interest in 2,106 acres and 70 square miles of 3-D
seismic
§
Prospective
formations – Vicksburg at 14,000’; Hackberry at 12,000’-13,000’; and Miocene at
6,500’-8,500’ depth
§
Typical
well costs
§
$5-$10
MM to drill and complete
§
10-20
BCFE reserves
§
10-15
MMCFE/D (average first
§
month)
2007
Plans
Drill
four
wells
§
Develop
additional prospects
§
State
Waters – Texas & Louisiana
Sabine
Lake
-
23
-
Includes
costs of becoming Public company, SOX implementation and
Calpine
related transaction costs
|
2006
Actual
|
||
|
•
Operating
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
|
|
|
• Interest
(net)
|
0.39
|
|
| Total Cash Costs per Mcfe | $2.63 |
-
25
-
Cash
Cost
Structure
2006
Year-End Results
|
Three
Months Ended
December,
2006
|
Twelve
Months Ended
December
31, 2006
|
|
|
Average
Production (MMcfe/Day)
|
98
|
92
|
|
Realized
Price ($/MCFE)
|
8.07
|
8.13
|
|
Total
Revenues ($MM)
|
73
|
272
|
|
Net
Income ($MM)
|
13
|
45
|
|
EPS
Diluted ($/Share)
|
0.26
|
0.88
|
|
Average
Shares Outstanding<MM>
(Diluted)
|
50.4
|
50.4
|
-
26
-
|
December
31, 2006
|
||
|
Cash
and Cash Equivalents
$62.8
Total
Assets
$1,219.4
Long
Term
Debt
$240.0
Stockholder's
Equity
$822.3
Debt
/Total
Capital 23%
|
|
|
|
|
|
|
|
|
||
|
|
||
|
|
|
|
-
27
-
Financial
Highlights (in Millions)
