Southwestern
Showcase
Dallas, Texas
November 15, 2006
&
Lehman Brothers 3rd Annual Small Cap Conference
Dallas, Texas
November 15, 2006
&
Lehman Brothers 3rd Annual Small Cap Conference
Dana
Point, California
November 16, 2006
November 16, 2006
Disclaimer
Issuer
Free
Writing Prospectus
Filed Pursuant To Rule
433
Registration Statement
No.
333-128888
November 15,
2006
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:
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:
DETERDING
#8
- RIO VISTA, CA
CORPORATE
PROFILE
Corporate
Profile
* Includes non-consent properties of 19.6 Bcfe and PV-10 value of $73
million.
**
Includes non-consent properties.
717
TEXAS
AVENUE
HOUSTON,
TEXAS
ROSETTA
CORPORATE HEADQUARTERS
|
§
Completed
144A
Transaction
|
July
7,
2005
|
|
|
§
Stock
Trades on NASDAQ,Symbol:
|
“ROSE”
|
|
|
§
Shares
Outstanding:
|
50
Million
|
|
|
•
12/31/05
SEC Proved Reserves:
|
379
Bcfe
*
|
|
|
•
12/31/05
SEC Proved PV10:
|
$1.4
Billion
**
|
|
|
•
Proved
Developed Reserves:
|
65%*
|
|
|
•
Net
Producing Wells:
|
Over
500
|
|
|
•
Proved
and Probable locations:
|
Over
600
|
|
|
•
Historical drilling success:
|
Over
80%
|
|
|
•
Number
of employees:
|
120
|
|
|
•
Principal Offices:
|
Houston,
Denver
|
|
|
•
Field
Offices:
|
Rio
Vista,
CA
Laredo,
TX
|
|
Proved
SEC
Reserves (at
12/31/05)
*Includes
non-consent properties, representing 19.6
Bcfe.
(MMCFE/D)
Production
Quarterly
Results (in Millions)
|
Three
Months
Ended
September
30,
2006
(Unaudited)
|
Nine
Months
Ended
September
30, 2006
(Unaudited)
|
||
|
Production
(MMcfe/Day)
|
95.0
|
89.5
|
|
|
Realized
Price
($/MCFE)
|
8.15
|
8.15
|
|
|
Total
Revenues
|
71.2
|
199.1
|
|
|
Net
Income
|
11.9
|
31.4
|
|
|
EPS
Diluted
|
0.24
|
0.62
|
|
|
Average
Shares
Outstanding
(Diluted)
|
50.4
|
50.4
|
|
Financial
Highlights (in Millions)
|
September
30,
2006
(Unaudited)
|
|
|
Cash
and Cash
Equivalents
|
$
93.7
|
|
Total
Assets
|
$
1,190.3
|
|
Long
Term
Debt
|
$
240.0
|
|
Stockholder’s
Equity
|
$
812.2
|
|
Debt/Total
Capital
|
23%
|
(1) Includes
costs of becoming Public company, SOX implementation and the Calpine
Transaction. Expect to be below $0.50 per MCFE
by
(1) Includes
costs of becoming Public company, SOX implementation and the Calpine
Transaction.
Expect
to be below $0.50 per MCFE by mid
2007.
2006
Estimated Cash Cost Structure
|
2006
|
|
|
§
COSTS/MCFE
|
|
|
• Direct
LOE
|
$0.67
|
|
• Ad-Valorem Tax
|
0.25
|
|
• Work over
|
0.15
|
|
• Insurance
|
0.04
1.11
|
|
§
Total
Lifting Costs
|
|
|
• Production Tax
|
0.21
|
|
• TG&M
|
0.15
|
|
• G&A (1)
|
0.75
|
|
• Interest Expense
|
0.50
|
|
Total
|
$2.72
|
Hedge
Position
(Mmbtu/day)
|
|
2006
|
2007
|
2008
|
2009
|
|||
|
Fixed
Swaps
|
45,000
|
36,300
|
30,876
|
26,141
|
|||
|
Average Price
|
$7.92
|
$7.62
|
$7.30
|
$6.99
|
|||
|
Additional
Fixed Swaps*
|
--
|
9,041
|
9,033
|
--
|
|||
|
Average Price
|
--
|
$8.21
|
$8.04
|
--
|
|||
|
Collars
|
10,000
|
--
|
--
|
--
|
|||
|
Floor
|
$8.83
|
--
|
--
|
--
|
|||
|
Ceiling
|
$14.00
|
--
|
--
|
--
|
|||
|
Additional
Collars*
|
--
|
10,000
|
--
|
--
|
|||
|
Floor
|
--
|
$7.19
|
--
|
--
|
|||
|
Ceiling
|
--
|
$10.03
|
--
|
--
|
•
Rosetta
uses
hedges to lower exposure to commodity volatility.
•
It
also
provides a stable cash flow for future acquisitions and our extensive
capital
program.
*
Added
additional hedges in September 2006
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.
DRIVER
20-1
SACRAMENTO
BASIN, CALIFORNIA
Operations
Update
Sacramento
Basin
§
167
producing wells
and over 62,000 net
acres
in the Rio
Vista Field.
§
Current
average net
production 40
MMcfe/d*.
§
143
currently
shut-in or idle wells, over 130
workover
and
recompletion projects.
§
Numerous
wells
identified that are
believed
to contain
bypassed pay.
Currently attempting to acquire rights to
these wellbores.
Currently attempting to acquire rights to
these wellbores.
§
Began
a drilling
program in early
November
2005,
drilled 22 wells to date,
21 successful one dry hole, 13 of these
wells currently on production, 4 additional
wells to be producing by the end of
November 2006.
21 successful one dry hole, 13 of these
wells currently on production, 4 additional
wells to be producing by the end of
November 2006.
§
Expect
to drill an
additional 3 to 4 wells in
2006.
One drilling
rig active in field.
§
Four
completion rigs
currently working on
Rosetta
properties
in the Rio Vista Field
area. Performed 21 recompletions since
June 30, 2005.
area. Performed 21 recompletions since
June 30, 2005.
*Includes
cured non-consent
properties.
Rio
Vista
Wells
(November
5,
2005 to September 30, 2006)
§
Recently
drilled
wells have extendedthe Upper,
Middle, Lower Capay and also the Martinez within the Rio Vista Gas
Field.
§
Two
Capay wells
drilled in theSouthern Extension,
RVGU 265 and RVGU 270 are producing 0.7 and 1.2 MMCFE/D respectively
and the two
Martinez wells drilled in the extension, Twitchell 4 and Twitchell 5
are
producing 2.0 and 3.5 MMCFE/D respectively.
§
This
extension has
added 18 Bcf of reserve potential.
Rio
Vista –
Upper Capay and Martinez
Capay
Extension
Martinez
Extension
S
o
u t h e r n E x t e n s I o
n
Sacramento
Basin – Bradford Island 3D Shoot
§
Acquiring
12.0 sq.
mi. (~7700 acres) proprietary 3D seismic
data over the Southern Rio Vista Gas
Unit.
Approximately 70% (~ 5400 acres) of the 3D covers acreage with no seismic coverage.
Approximately 70% (~ 5400 acres) of the 3D covers acreage with no seismic coverage.
§
Prospective
zones
include the Nortonville,Capay,
Hamilton, Martinez, and McCormick.
§
Historically
only 17
wells in survey – only 4
below 5000’.
§
20
BCF reserve
potential.
Rio
Vista -
Winters Play
Rio
Vista
Unit
§
Over
1.1 Tcf of gas
produced to the North, East
and South of Rio Vista field through the end of the third quarter. Only 5
penetrations to date in this 90-square mile field area.
§
Welch
13 well drilled
in April in the Winters with producing rate
of 3 MMcfe/d (net) as of the end of the third
quarter.
§
Wilcox
13 has good
mud log shows in the K1 but
not logged due to hole conditions.
§
Wilcox
14 well has
good mud log shows and calculated
pay on open hole logs but tests show zone to be wet. Maddie location
to be
drilled with deep rig in 2007.
§
Identification
of
additional locations is currently underway.
Plans underway for K1 test in
Wilcox 13 fault block. May
sidetrack Wilcox 14.
South
Texas
Trends
Miocene
and Frio
Amplitude Plays
Anomalina
and
Vicksburg AmplitudePlays
Upper
Wilcox
Structural Plays
Lobo
Play
Perdido
Play
Middle
and Lower
Wilcox Plays
Sligo
Reef Structural
Plays
EL
COROZON
RANCH #2
WEBB
COUNTY,
TEXAS
LOBO
DISTRICT
S.
Callaghan
and El Corazon Ranch (42,000
est. of the total)
acreage
South
Texas
– Lobo
§
The
Company has
approximately 70,000 net
acres (est.) square miles of 3-D
seismic.
§
277
active operated
and 117 non-operated
wells.
§
Current
net
production is 39 MMcfe/day.
§
Over
100 proved and
probable locations.
§
Drilled
16
successful wells to date. Net production for
the first 14 wells is currently 22.3 MMcfe/d. (2
are completing.)
§
Plan
to drill 7
additional wells in 2006 (2
drilling now).
§
Two
rigs under
contract.
2006
Dry
Hole
Next
12 months
Drilling Inventory
Future
Location
2006
Discovery
Currently
Drilling
Current
Producer
Updated
11/6/06
Lobo
Wells
Lobo
Stratigraphic
Column
LOBO
STRAYS
LOBO
'B'
SAND
WALKER
LOBO
1
L1
PAY
LOBO
2
LOBO
3
LOBO
6a
SAND
LOBO
6b
SAND
LOBO
6c
SAND
LOBO
6d
SAND
2006
New
Wells
SCR
232
SCR
234
SCR
235
SCR
236
SCR
238
SCR
237
SCR
242
ECR
3
ECR
1
ECR
2
ECR
11
SCR
244
SCR
239
SCR
240
ECR
7
ECR
6
LOBO
TYPE
CURVES
– ALL RESERVOIRS
Average
Gross
Production by
well
based on 161
wells drilled
through July, 2006.
through July, 2006.
LOBO
NORMALIZED
PRODUCTION CUMULATIVES
Average
Gross
Production by
well
based on 161
wells drilled
through July, 2006.
through July, 2006.
South
Texas
– Perdido
§
Company
owns a 50%
non-operated working interest in approximately
18,000 net acres (est.) in the Perdido
Sand Trend.
§
Horizontal
drilling
has been very successful in developing these sands
at 9,500 to 12,000 feet.
§
Currently
have 31
producing wells of which 10 are horizontal.
§
Current
net
production is 9 MMcfe/d.
§
5
new horizontal
wells drilled in 2006 to date.They are producing
a total of 9.5 MMcfe/d (gross).
§
48
future locations
will be horizontal.
§
There
is 1
additional well planned for 2006.
Current
horizontal
producers
Approved
horizontal
locations
Future
horizontal
locations
Perdido
Acreage
Currently
drilling
PERDIDO
TYPE
CURVES
HORIZONTAL WELLS – ALL RESERVOIRS
Average
Gross
Production by
well
based on 7 wells
drilled
through August, 2006.
through August, 2006.
PERDIDO
NORMALIZED
HORIZONTAL WELLS PRODUCTION
CUMULATIVES
Average
Gross
Production by
well
based on 7 wells
drilled
through August, 2006.
through August, 2006.
Gulf
of
Mexico Activity Areas
§
Working
interest in
11 blocksranging from 20% to
100%
(NRI of 15% - 79%).
(NRI of 15% - 79%).
§
Current
net
production is MMcfe/day
from 8 producing
wells.
wells.
§
22,000
net acres
(est.) under lease.
§
A
recent discovery
at MainPass 118 tested 12.4
MMcf/day and 512 Bbls/day, gross.
§
Successful
bidder in
2006offshore lease sale
with 50%
working interest in S. Timbalier Block 293 and Block 226 and 25% in
East
Cameron Block 178.
Cameron Block 178.
HIGH
ISLAND BLOCK 442
EAST
CAMERON BLOCKS 88-89
EAST
CAMERON BLOCK 178
MAIN
PASS BLOCK 118
SOUTH
TIMBALIER BLOCK 226
SOUTH
TIMBALIER BLOCK 293
SOUTH
PELTO BLOCK 17
New
Leases
Current
Producer
Awaiting
Platform
Updated
11/8/06
Texas
State
Waters
§
The
Company is
exploring in theVicksburg and
Frio trends in
Galveston Bay, Texas, pursuing
sands that exhibit strong
hydrocarbon indicators on 3-D
seismic.
Galveston Bay, Texas, pursuing
sands that exhibit strong
hydrocarbon indicators on 3-D
seismic.
§
Current
net
production is 2.5 MMcfe/day.
§
Four
successful
wells drilled todate. One
is shut-in waiting on
fracture-stimulation.
fracture-stimulation.
§
Five
additional
locations areplanned, with
working interest of
28.9% to 40%.
28.9% to 40%.
T
B -
2
St
Tr 100
Ut
Bonefish
Kerr
McGee
Farm-Out
Dolphin
Producing
Waiting
on
Completion
Location
Rosetta
Acreage
TEXAS
STATE
WATERS
Rocky
Mountains – DJ Basin
§
Producing
formation
– Niobrara chalk at 2,300- 2,500
feet.
§
Company
owns 81,500
net acres in this shallow
gas play.
§
54
wells drilled
through November 9th, 48 successful (88% success
rate). All of the wells (28) in the
Republican River 3D look very good on logs, averaging 7 ohms resistively
up to a
maximum of 17 ohms with gas effect over the Niobrara Chalk. Continuing
to
stake
locations on two other 3-D surveys.
locations on two other 3-D surveys.
§
Expect
to drill
approximately 200 additional locations on our existing
leases and leases being finalized with 60
planned in 2006.
§
61
square miles of
3-D seismic acquired in 2006 on this 3-D supported
play.
§
Drilling
and
completion cost per well is $225,000.
DJ
Basin
Rosetta Leases
Updated
11/9/06
Investment
Considerations
§
Quality
Asset
Base
§
Production
Growth Momentum
§
Significant
Drilling Location Inventory
§
Competitive
Cost Structure
§
Strong
Balance
Sheet
§
Experienced
Technical Staff, Making Use of Industry Best Practices and State of the
Art Technology
EAST
CAMERON BLOCK
89
#16
OFFSHORE,
LOUISIANA
CONCLUSION
Forward-Looking
Statements
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.