EX-99.1 2 a05-7317_1ex99d1.htm EX-99.1


























 

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Annual Meeting

April 26, 2005

 



 

The following information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue,” or comparable words.  In addition, all statements other than statements of historical facts that address activities that Tipperary expects or anticipates will or may occur in the future are forward-looking statements.  You are encouraged to read the SEC reports of Tipperary, particularly its Form 10-K for the Fiscal Year Ended December 31, 2004, for meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management.

 



 

Overview

 

                  AMEX listed company (TPY)

 

                  Offices in Denver, Houston and Brisbane, Australia

 

                  62 employees; 13 in the U.S. and 49 in Australia

 

                  Focused on Coalseam Gas and Conventional Natural Gas

 

                  41,355,994 shares outstanding

 



 

Tipperary Corporation
Operating Results (in thousands)

 

 

 

2004

 

2003

 

2002

 

Revenues

 

 

 

 

 

 

 

Australia

 

$

8,498

 

$

6,235

 

$

4,506

 

United States

 

8

 

18

 

434

 

Total

 

8,506

 

6,253

 

4,940

 

Operating costs and expenses

 

(16,421

)

(13,537

)

(7,060

)

Operating loss

 

(7,915

)

(7,284

)

(2,120

)

 

 

 

 

 

 

 

 

Net loss

 

$

(15,388

)

$

(15,369

)

$

(4,811

)

 



 

Tipperary Corporation
Balance Sheet (in thousands)

 

 

 

12/31/04

 

12/31/03

 

Current Assets

 

$

6,290

 

$

4,925

 

PP&E

 

 

 

 

 

Cost

 

149,084

 

125,134

 

Accumulated DD&A

 

(9,833

)

(8,078

)

 

 

139,251

 

117,056

 

Non-current Assets

 

5,143

 

1,627

 

Total Assets

 

$

150,684

 

$

123,608

 

 

 

 

 

 

 

Current Liabilities

 

$

3,738

 

$

4,287

 

L-T Debt - Related Parties

 

17,000

 

74,126

 

L-T Debt

 

91,352

 

 

Other L-T Debt

 

273

 

268

 

Minority Interest

 

 

418

 

Stockholders’ Equity

 

38,321

 

44,509

 

Total Liabilities and Equity

 

$

150,684

 

$

123,608

 

 



 

Areas of Operation

 

[GRAPHIC]

 

 

 

Gross Acreage

 

3P

 

PV10

 

 

 

(in thousands)

 

(Bcfe)

 

($ in millions)

 

Lay Creek

 

92

 

221

 

161

 

Frenchman

 

162

 

17

 

27

 

Republican

 

170

 

13

 

18

 

Stateline

 

113

 

10

 

14

 

Sand Hill

 

51

 

19

 

27

 

Total

 

588

 

280

 

247

 

 

[GRAPHIC]

 

 

 

Gross Acreage

 

3P

 

PV10

 

 

 

(in thousands)

 

(Bcf)*

 

($ in millions)

 

Comet Ridge / Bandanna

 

1,231

 

3,400

 

643

 

Rewan, Walloon & Wallabella

 

68

 

445

 

200

 

Total

 

1,299

 

3,845

 

843

 

 


* Fairview/Bandanna reserves based on Schlumberger reserve report as of 1/1/05, assuming $2.00/Mcf; Rewan, ATP 655 / Walloon and Wallabella based on the Company’s estimates

 



 

Australia Summary

 

                  Litigation resolution

 

                  Reserve overview

 

                  Maps of Comet Ridge Project

 

                  Market demand

 

                  Production and capacity

 

                  2005 plans

 

                  Economics

 



 

Litigation Resolution

 

Tri-Star Petroleum Settlement finalized Dec. 17, 2004

 

                  Tri-Star relinquished all claims to operatorship

 

                  Tri-Star assigned to Tipperary substantially all of its rights in Comet Ridge, including its 2.25% working interest

 

                  Tipperary paid Tri-Star $5 million, plus royalty equal to 1.5% of total project revenue

 



 

Tipperary’s Total Estimated
Reserves in Australia

 

 

 

Net Volumes (Bcf)

 

PV10 (MM$)

 

 

 

2004

 

2003

 

2004

 

2003

 

 

 

 

 

 

 

 

 

 

 

Proved

 

578

 

540

 

$

174

 

$

139

 

 

 

 

 

 

 

 

 

 

 

Probable

 

787

 

511

 

$

175

 

$

167

 

 

 

 

 

 

 

 

 

 

 

Possible

 

2,480

 

2,627

 

$

486

 

$

286

 

 

Cautionary Note to U.S. Investors – The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. The SEC’s guidelines strictly prohibit us from including probable and possible reserves in filings with the SEC. Investors are urged to consider closely the disclosure in our Annual Report on 10-K for the fiscal year ended December 31, 2004.

 

 

 

2004

 

2003

 

Proved reserve reconciliation (MM$):

 

 

 

 

 

Discounted cash flows pre tax

 

$

174

 

$

139

 

Discounted income tax

 

(35

)

(31

)

Discounted cash flows after tax

 

$

139

 

$

108

 

 



 

Australian Gas Basins and Pipelines

 

[GRAPHIC]

 



 

Overview of Comet Ridge Field

 

[GRAPHIC]

 

Field Overview

 

                  Tipperary (operator) holds 75.25% interest in the field

 

                  Comet Ridge discovered 1994

 

Proven deliverability with over 8 years of production history

 

50 wells currently selling 27 MMcf/d

 

32 wells awaiting hookup

 

11 wells planned 2005

 

3 horizontal wells

 

Reserve Summary

 

 

 

Reserves

 

% of Region

 

Capex

 

PV10

 

Category

 

Bcf

 

Total Proved

 

$MM

 

$MM

 

PDP

 

82

 

14

%

$

1

 

$

56

 

PDNP

 

52

 

9

%

2

 

32

 

PUD

 

444

 

77

%

88

 

108

 

Proved Costs

 

 

 

15

 

(22

)

Total Proved

 

578

 

100

%

$

106

 

$

174

 

Probable

 

787

 

 

 

176

 

175

 

Possible

 

2480

 

 

 

435

 

494

 

Comet Ridge Total

 

3,845

 

 

 

$

717

 

$

843

 

 



 

Eastern Australia Projected Gas
Supply and Demand Comparison

 

Eastern Australia (excluding NT)

Gas Supply / Demand 2005 - 2015 comparison

 

[CHART]

 

Source:  ABARE, ACIL Tasman and the Company projections

 



 

Gas Markets

 

                  ENERGEX

 

                  QFAL

 

                  OERL

 

                  Orica

 

                  Santos

 

                  CS Energy

 

                  Other

 



 

Summary of Tipperary’s
Annual Contracted Volumes

 

Tipperary Existing Contracts and Identified Sales Opportunities

 

[CHART]

 



 

Total Fairview Production

 

Energy Sold, Mcf/Day

 

[CHART]

 



 

Highlights of Australia
2005 Development Plan

 

                  Complete Southern Gathering System

 

                  Drill Three Horizontal Wells

 

                  Obtain New Seismic in Petroleum Leases

 

                  Drill 11 Development Wells

 

                  Set 3,600 hp Compression, 15MMcf/d Capacity

 

                  Increase Sales Capacity to 45 MMcf/d

 

                  Capital Budget U.S. $20 million

 



 

Economics
Comet Ridge Development

 

From the Form 10-K Standardized Measure Disclosures at December 31, 2004:

 

 

 

US $ (000)

 

US $ / mcf

 

Future Revenue

 

$

1,079,348

 

$

1.87

 

Less Future Production Cost

 

(300,103

)

(.52

)

Less Future Development Cost

 

(106,228

)

(.18

)

Net Cash Flow (before tax)

 

$

673,017

 

$

1.17

 

 

 

 

 

 

 

 

 

Discounted Cash Flow (after tax)

 

$

138,946

 

$

.24

 

 



 

Overview of Domestic Strategy

 

                  Starting in 2001 Company began to focus its domestic operations on assembling large scale natural gas exploration plays in the Rocky Mountain region

 

                  Over the last three years Tipperary has successfully leased over 625,000 acres in Colorado and Nebraska

 

                  Strategy of identifying prospects with significant running room and opportunistically recouping investment by selling down its interest to respected industry partners on favorable terms

 

                  Current project partners include:

 

                  Koch Exploration (Lay Creek)

 

                  Houston Exploration (Frenchman / Republican)

 

                  Western Gas Resources (Stateline)

 



 

Colorado & Western Nebraska Activity

 

[GRAPHIC]

 



 

Overview of Frenchman

 

[GRAPHIC]

 

Field Overview

 

                  Tipperary holds 25% WI; Partner with Houston Exploration (75% WI, operator)

 

                  Active Drilling Program

 

                  7 100% Tipperary wells completed

 

                  10 100% Tipperary wells planned for 2005

 

                  Gas sales to commence April 2005

 

                  Initial rates of 1.7 MMcf/d

 

                  Expect 3.0 MMcf/d by August 2005

 

                  Future 3-D shoot planned fall 2005

 

Reserve Summary

 

 

 

Reserves

 

% of Project

 

Capex

 

PV10

 

Category

 

MMcf

 

Total Proved

 

$M

 

$M

 

PDNP

 

1,596

 

55

%

$

60

 

$

4,228

 

PUD

 

1,331

 

45

%

1,540

 

1,734

 

Proved Costs

 

 

 

595

 

(1,444

)

Total Proved

 

2,927

 

100

%

$

2,195

 

$

4,518

 

PROB

 

288

 

 

 

470

 

259

 

POSS

 

14,276

 

 

 

11,789

 

21,870

 

Frenchman Total

 

17,491

 

 

 

$

14,454

 

$

26,646

 

 



 

Overview of Republican

 

[GRAPHIC]

 

Field Overview

 

                  Tipperary holds 20% WI; Partner with Houston Exploration (80%, operator)

 

                  Active Drilling Program

 

                  25 wells completed

 

                  22 additional wells planned with AFE approval

 

                  Gathering System construction to be completed by 2Q’05

 

                  Currently processing 155 square mile 3-D shoot

12 new locations already identified

 

                  Expect first gas sales by June 2005 at 750 Mcf/d net to Tipperary

 

Reserve Summary

 

 

 

Reserves

 

% of Project

 

Capex

 

PV10

 

Category

 

MMcf

 

Total Proved

 

$M

 

$M

 

PDNP

 

303

 

66

%

$

10

 

$

569

 

PUD

 

157

 

34

%

135

 

201

 

Proved Costs

 

 

 

24

 

(3

)

Total Proved

 

460

 

100

%

$

169

 

$

767

 

PROB

 

239

 

 

 

192

 

311

 

POSS

 

11,986

 

 

 

10,176

 

17,094

 

Republican Total

 

12,685

 

 

 

$

10,537

 

$

18,172

 

 



 

Overview of Lay Creek

 

[GRAPHIC]

 

Field Overview

 

                  Tipperary holds 50% WI; Partner with Koch (50% WI, operator)

 

                  Active CBM Dewatering Program

 

                  16 Niobrara, 6 Frontier locations identified with 2-D Seismic

 

                  Receiving third party proposals which include cash and carry-on wells / seismic

 

                  Deep drilling in the area by Stephens Energy

 

                  Recent discovery in Niobrara at 150 Bbls per day

 

                  February Colorado lease sale results were $500–900 per acre

 

Reserve Summary

 

 

 

Reserves

 

Capex

 

PV10

 

Category

 

Bcfe

 

$MM

 

$MM

 

PROB

 

221

 

$

65

 

$

161

 

 



 

Overview of Stateline

 

[GRAPHIC]

 

Field Overview

 

                  Tipperary holds 25% WI; Partner with Western Gas (75% WI, operator)

 

                  Offsets Active Drilling Program

 

                  On trend with 17 new wells drilled by Western Gas

 

                  Processing 27 square mile 3-D shoot

 

                  Expect drilling in 2Q’05

 

Reserve Summary

 

 

 

Reserves

 

Capex

 

PV10

 

Category

 

Bcf

 

$MM

 

$MM

 

POSS

 

10

 

$

9

 

$

14

 

 



 

Overview of Sand Hill

 

[GRAPHIC]

 

Field Overview

 

                  Tipperary holds 100% ownership in the field

 

                  2-D Seismic Identified Deep Lansing Oil Location

 

                  Barrett-Berry currently drilling horizontal Niobrara wells to the south

 

Reserve Summary

 

 

 

Reserves

 

Capex

 

PV10

 

Category

 

Bcf

 

$MM

 

$MM

 

POSS

 

19

 

$

16

 

$

27

 

 



 

Tipperary’s Plans

 

                  Increase Comet Ridge gas production and sign additional sales contracts

 

                  Evaluate substantial U.S. acreage position with industry partners

 

                  Create and increase proved gas reserves in Australia and the United States

 



 

Financing

 

                  Slough Estates USA has initiated a process to sell all of its Tipperary holdings – represented by Petrie Parkman

 

                  Tipperary’s independent directors engaged investment banker Houlihan Lokey Howard & Zukin to assist and advise the
non-Slough directors

 

                  The process is underway

 



 

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