EnerCom’s
11th Oil & Gas
Conference
August
17,
2006
Issuer
Free Writing
Prospectus
Filed
Pursuant To
Rule 433
Registration
Statement No.
333-128888
August
17,
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:
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:
Disclaimer
WILCOX
#14
NORTHERN
CALIFORNIA
Corporate
Profile
*Includes
non-consent properties 19.6 Bcfe. Reserve information based
on12/31/05.
717
TEXAS
AVENUE
HOUSTON,
TEXAS
ROSETTA CORPORATE HEADQUARTERS
ROSETTA CORPORATE HEADQUARTERS
Corporate
Profile (as
of 12/31/05)
Ø
Established
as separate entity July 2005.
Ø
Total
employee
count:
111
Ø
Principal
Offices:
Houston,
Texas
Denver, Colorado Ø
Field
Offices: Rio Vista, California
Laredo, Texas
Ø
Net producing
wells:
487
Ø
Proved SEC
Reserves*:
379 Bcfe
Ø
Significant
Proved & Probable drilling
location
inventory of just under 600.
Ø
Historical
drilling success: >
80%
Corporate
Profile (continued)
Ø
Issued
50 MM
common shares July 2005 under Section 144A.
Ø
Initial
financing included borrowings of $325 MM.
Ø
Became
publicly traded entity in February 2006.
Ø
Stock
trades
on NASDAQ under symbol “ROSE”.
Ø
First
Half
2006 production of 15.7 Bcfe, up 16% from Second Half
2005.
Ø
Cumulative
earnings of $37 MM from July 7, 2005 through June 30,
2006.
Ø
Book
capitalization at June 30, 2006
Debt $240
MM
Equity
777
Total
$1,017 MM
Proved
SEC
Reserves (at 12/31/05)
*Includes
non-consent properties, representing 19.6
Bcfe.
Proved
SEC
Reserves & Values (at
12/31/05)
Proved
Undeveloped
133
Bcfe
Proved
Developed
246
Bcfe
Proved
Undeveloped
$474
MM
Proved
Developed
$925
MM
Reserves
=
379 Bcfe*
PV10
=
$1,399 MM*
*Includes
non-consent
properties, representing $72.5 MM (PV10) and19.6 Bcfe.
Drillable
Locations for Proved and Probable Reserves
(at
6/30/06)
|
Sacramento
Basin
|
127
|
|
DJ
Basin
|
208
|
|
San
Juan Basin
|
44
|
|
Uinta
|
35
|
|
Lobo
|
95
|
|
Perdido
|
48
|
|
Offshore
/ State Waters
|
8
|
|
Other
Onshore
|
9
|
|
Total
|
574
|
STATE
TRACT
100 #1
GALVESTON
BAY,
TEXAS
2nd Quarter
2006 Financial
Results
Quarterly
Results (in
Millions)
|
Three
Months
Ended
June
30, 2006
|
|||
|
(unaudited)
|
|||
|
Production
(Bcfe)
|
8.0
|
||
|
MMcfe/day
|
87.9
|
||
|
Realized
Price ($/Mcfe)
|
$7.92
|
||
|
Total
Revenues
|
$63.4
|
||
|
Net
Income
|
$10.0
|
||
|
EPS
Diluted
|
$0.20
|
||
|
Avg
Shares
Outstanding(Diluted)
|
50.4
|
Financial
Highlights (in
Millions)
|
Six
Months
Ended
June
30, 2006
|
|||
|
(unaudited)
|
|||
|
Cash
and Cash Equivalents
|
$93.2
|
||
|
Total
Assets
|
$1,134.6
|
||
|
Long
Term Debt
|
$240.0
|
||
|
Stockholder’s
Equity
|
$776.7
|
||
|
Cash
from Operations
|
$93.4
|
||
|
Debt/Total
Capital
|
24%
|
Our
current capital expenditure program on an annual basis is funded from
cash from
operations.
Hedge
Position (Mmbtu/day)
|
|
2006
|
2007
|
2008
|
2009
|
|
Total
Fixed Swaps
|
45,000
|
36,300
|
30,876
|
26,141
|
|
Average Price
|
$7.92
|
$7.62
|
$7.30
|
$6.99
|
|
Total
Collars
|
10,000
|
--
|
--
|
--
|
|
Average Price
|
|
|
|
|
|
Floor
|
$8.83
|
--
|
--
|
--
|
|
Ceiling
|
$14.00
|
--
|
--
|
--
|
§
Rosetta
uses
hedges to lower exposure to commodity
volatility.
§
It
also
provides a stable cash flow for future
acquisitions
and our extensive capital program.
Ø
Contractual
gas sales continuing.
Ø
Non-consent property status report presented to
Calpine.
Ø
Settlement discussions underway.
Ø
Objective is global solution:
§
Calpine
conveys good title for non-consent properties for $68 MM.
§
Preferential
right properties retained by Calpine. Rosetta retains $7MM.
§
Settlement
statement finalized.
§
Other
administrative matters settled to satisfaction of Rosetta.
Calpine
Transaction
DRIVER
20-1
SACRAMENTO
BASIN, CALIFORNIA
Operations
Update
83%
Success
Rate
|
Wells
Drilled
|
||
|
(as
of July
31, 2006)
|
Gross
|
Net
|
|
California
|
14
|
14.0
|
|
Rockies
|
22
|
20.4
|
|
MidCon
|
2
|
0.3
|
|
Offshore
|
2
|
0.8
|
|
Lobo
|
8
|
8.0
|
|
Perdido
|
3
|
1.5
|
|
State
Waters
|
4
|
1.2
|
|
Other
|
9
|
4.5
|
|
Total
|
64
|
50.7
|
Drilling
Activity Recap – 2006 Year To Date
*Includes
cured non-consent properties.
Sacramento
Basin
Ø
167
producing
wells and over 62,000 net
acres
in the Rio
Vista Field.
Ø
Current
average net production 33 MMcfe/d*.
Ø
143
currently
shut-in or idle wells, over 50
potential
drilling
locations, 33 other potential
development drilling locations, and
numerous workover and recompletion
projects.
development drilling locations, and
numerous workover and recompletion
projects.
Ø
Over
50 leads
and prospects in the
Sacramento
Basin
Extension have been
catalogued to date, with numerous wells
identified and believed to contain bypassed
pay.
catalogued to date, with numerous wells
identified and believed to contain bypassed
pay.
Ø
Began
a
drilling program in early November
2005,
drilled 16
wells to date, all successful.
7 of these wells currently on production, 5 to
6 additional wells to be producing by the
end of August 2006.
7 of these wells currently on production, 5 to
6 additional wells to be producing by the
end of August 2006.
Ø
Expect
to
drill an additional 12 to 14 wells in
2006.
One drilling
rig active in field. May get
deep rig in September.
deep rig in September.
Ø
Two
completion rigs currently working onRosetta
properties in the Rio
Vista Field area. Performed 20 recompletions since
June 30, 2005. Expect to get 1 more completion rig by the end of August 2006.
June 30, 2005. Expect to get 1 more completion rig by the end of August 2006.
Rio
Vista
Wells (November
5, 2005 – July 26, 2006)
Ø
Over
1.1 Tcf of gas produced to the
North,
East and South of Rio Vista
field.
field.
Ø
Only
5 penetrations to date in this
90-square
mile field area.
Ø
Welch
13 well, completed in the
Winters
with initial producing rate of
3 MMcfe/d.
3 MMcfe/d.
Ø
Wilcox
14 well has reached total
depth
with good mud log shows and
calculated pay on open hole logs.
The well is currently testing.
calculated pay on open hole logs.
The well is currently testing.
Ø
Identification
of additional locations
is
currently underway.
Rio
Vista Unit
Sacramento
Basin Winters
Play
Sacramento
Basin – Bradford Island 3D Shoot
Ø
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.
Southern Rio Vista Gas Unit.
Approximately 70% (~ 5400 acres) of
the 3D covers acreage with no seismic
coverage.
Ø
Prospective
zones include the
Nortonville,
Capay, Hamilton, Martinez,
and McCormick.
and McCormick.
Ø
Low
risk 20
BCF reserve potential –
shallow
zones only.
Ø
Established
Upper Capay production in 2000.
Ø
Determined
lower limit to gas at or near -4510
ss.
Ø
In
Feb. 2006
drilled RVGU 263 and
established
new lower limit to gas.
Ø
Followed
by
the drilling of RVGU 265, 266,
and
270 which
established the lower limit
-4560 ss.
-4560 ss.
Ø
This
additional gas column in the Upper
Capay
Southern Extension alone has added
18 Bcf of proved and probable reserves to
date.
18 Bcf of proved and probable reserves to
date.
Ø
In
addition,
the north east faultblock has
shown
additional potential with shows in
Welch #12 and RVGU 237.
Welch #12 and RVGU 237.
Rio
Vista
Upper Capay Southern Extension
Miocene
and Frio
Amplitude Plays
Anomalina
and
Vicksburg Amplitude
Plays
Upper
Wilcox
Structural Plays
Lobo
Play
Perdido
Play
Middle
and Lower
Wilcox Plays
Sligo
Reef Structural
Plays
South
Texas
Trends
S.
Callaghan
and El Corazon Ranch (42,000
est. of the total)
acreage
Ø
The
Company has
approximately
70,000
net acres
(est.) square miles of 3-D seismic.
Ø
225
active operated
and 100
non-operated
wells.
Ø
Current
net
production is 28
MMcfe/day*.
Ø
95
proved and
probable locations.
Ø
Drilled
7 successful
wells to date.
Net
production
for the first 5 wells is
currently 10 MMcfe/d.
currently 10 MMcfe/d.
Ø
Plan
to drill
15 additional wells in
2006.
Ø
Two
rigs under
contract.
*Includes
non-consent properties.
2006
Dry
Hole
Next
12 Months
Drilling Location
Future
Location
2006
Discovery
Currently
Drilling
Current
Producer
South
Texas
– Lobo
|
SCR
232
|
|
SCR
234
|
|
SCR
235
|
|
SCR
236
|
|
|
ECR
1
|
|
ECR
2
|
|
ECR
3
|
|
TD
8176’
TD
8883’
TD
8850’
TD
8740’
TD
7600’
TD
7956’
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
TD
8078’
2006
New
Wells
Lobo
Wells
Ø
Company
owns a 50%
non-operated
working
interest in
approximately 18,000 net
acres (est.) in the Perdido Sand Trend.
acres (est.) in the Perdido Sand Trend.
Ø
Horizontal
drilling
has been very successful
in
developing these
sands at 9,500 to
12,000 feet.
12,000 feet.
Ø
Currently
have 28
producing wells of which
8
are
horizontal.
Ø
Last
three infill
horizontal wells are
averaging
a total of
11 MMcfe/d gross.
Ø
Current
net
production is 9 MMcfe/d*.
Ø
All
48 future
locations will be horizontal.
Ø
3
new wells drilled
in 2006 to date. First
two
wells are
producing 5 MMcfe/d (gross)
each. The third well is being fracture
stimulated and is scheduled to be producing
by mid August 2006.
each. The third well is being fracture
stimulated and is scheduled to be producing
by mid August 2006.
Ø
Currently
drilling 1
well with 4 additional
wells
planned for
2006.
*Includes
non-consent properties.
Perdido
Acreage
Current
horizontal
producers
Approved
horizontal
locations
Future
horizontal
locations
South
Texas
– Perdido
Gulf
of
Mexico Activity Areas
Ø
Working
interest in 11 blocks
ranging
from 20% to
100% (NRI
of 15% - 79%).
of 15% - 79%).
Ø
Current
net
production is 9
MMcfe/day
from 7
producing
wells.
wells.
Ø
22,000
net
acres (est.)
under
lease.
Ø
A
recent
discovery at Main
Pass
118 tested 12.4
MMcf/day
and 512 Bbls/day, gross.
and 512 Bbls/day, gross.
Ø
Successful
bidder in 2006
offshore
lease sale
with 50%
working interest in S.
Timbalier Block 293 and Block
226 and 25% in East Cameron
Block 178.
working interest in S.
Timbalier Block 293 and Block
226 and 25% in East Cameron
Block 178.
Gulf
Coast
Offshore Exploration
Texas
State
Waters
Ø
The
Company is
exploring
in
the Vicksburg and
Frio
trends in Galveston Bay,
Texas, pursuing sands that
exhibit strong hydrocarbon
indicators on 3-D seismic.
trends in Galveston Bay,
Texas, pursuing sands that
exhibit strong hydrocarbon
indicators on 3-D seismic.
Ø
Current
net
production is
3.5
MMcfe/day.
Ø
Three
successful
wells
drilled
to
date.
Ø
Five
additional
locations are
planned,
with
working
interest of 28.9% to 40%.
Two will be drilled in 2006.
interest of 28.9% to 40%.
Two will be drilled in 2006.
T
B -
2
St
Tr 100
Ut
Bonefish
Kerr
McGee
Farm-Out
Dolphin
Producing
Waiting
on
Completion
Location
Rosetta
Acreage
TEXAS
STATE
WATERS
KGA
18-13
Colorado
Coiled
Tubing Drilling
|
Basin
|
Locations
|
Planned
2006
Wells
|
|
DJ
|
208
|
70
|
|
San
Juan
|
44
|
26
|
|
Uinta
|
35
|
4
|
|
Green
River
|
2
|
2
|
|
Total
|
289
|
102
|
Rocky
Mountain Focus Areas
Ø
Producing
formation –
Niobrara chalk at
2,500
feet.
Ø
Company
owns 72,000
net acres in this
shallow
gas
play.
Ø
21
wells drilled to
date.
Ø
Expect
to drill
approximately 208 additional
locations,
majority
80-acre spacing, on our
existing leases and leases being finalized
with 70 planned in 2006.
existing leases and leases being finalized
with 70 planned in 2006.
Ø
This
3-D supported
play has been
approved
for 40-acre
spacing. 61 square
miles of 3-D survey acquired in 2006.
miles of 3-D survey acquired in 2006.
Ø
Drilling
and
completion cost per well is
$225,000.
Rosetta Leases
DJ
Basin
Rocky
Mountains – DJ Basin
Ø
8,481
net acres
with
Fruitland
Coal
potential at
1,600 feet.
1,600 feet.
Ø
Company
has
identified 44
drillable
development
locations.
locations.
Ø
Drilling
and
completion costs
of
$280,000 per
well.
Ø
Drilled
and completed
11
wells
to
date.
Rosetta
Leases
San
Juan
Basin
Rocky
Mountains – San Juan Basin
Uinta
Basin
Ø
Actively
pursuing an
emerging Mesa
Verde
and Wasatch
basin-centered
gas play in Eastern Utah, 6500-7500
ft. depths.
gas play in Eastern Utah, 6500-7500
ft. depths.
Ø
The
Company has 2,800
net acres
under
lease in the
Uinta Basin.
Ø
35
drillable
locations.
Ø
Leased
additional
acreage to South.
Rosetta
Leases
Rocky
Mountains – Uinta Basin
Production
87
114
131
Actual
Actual
Forecast
Exit
Rate
Forecast
*
Includes non-consent properties – (approx. 4
MMcfe/d)
(MMCFE/D)
|
Ø
Well
Activity
|
|
|
§
Drill
|
188
Wells
|
|
§
Recompletions
/ Workovers
|
68
Wells
|
|
Ø
Average
Production
|
105
MMcfe/d
|
|
Ø
Capital
Expenditures
|
$199
MM
|
|
Ø
Proved
Reserve Additions
|
80
Bcfe
|
*
Includes non-consent properties – (approx. 4
MMcfe/d)
2006
Goals
Investment
Considerations
Ø
Quality
Asset Base
Ø
Production
Growth Momentum
Ø
Significant
Drilling Location Inventory
Ø
Competitive
Cost Structure
Ø
Strong
Balance Sheet
Ø
Experienced
Technical Staff, Making Use of Industry Best
Practices
and State of the Art Technology.
Conclusion
EAST
CAMERON
BLOCK 89 #1
OFFSHORE, LOUISIANA
Forward-Looking
Statements
This
presentation may contain “forward-looking statements” within the meaning of the
US Private Securities Litigation Reform Act of 1995. Forward-looking
statements
are based on current expectations, estimates and projections that involve
a
number of risks and uncertainties, which could cause actual results to
differ
materially from those reflected in these statements. These risks include,
but
are not limited to:, the risks inherent and specific to, the oil and
gas
industry and risk that effect business’ in general. Additional information on
these and other factors which could affect the Company’s operations or financial
result are included in the Company’s other reports on file with the United
States Securities and Exchange Commission. Forward-looking statements
are based
on the estimate and opinion of the Company’s management at the time the
statements are made. The Company assumes no obligation to update forward-looking
statements should circumstance or management’s estimates or opinions change.