Friedman Billings Ramsey
Investor Conference, New York
November 28-29, 2006
Disclaimer
Issuer
Free
Writing Prospectus
Filed
Pursuant To
Rule 433
Registration
Statement No.
333-128888
November
28,
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:
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:
|
$1.4
Billion
**
|
|
§
Proved
Developed Reserves:
|
65%*
|
|
§
Net
Producing Wells:
|
Over
500
|
|
§
Proved
and Probable locations:
|
Over
600
|
|
§
Historical drilling success:
|
Over
80%
|
|
Number
of employees: § |
120
|
|
§
Principal Offices:
|
Houston,
Denver
|
|
§
Field
Offices:
|
Rio
Vista,
CA
Laredo,
TX
|
Proved
SEC Reserves (at 12/31/05)
*Includes
non-consent properties, representing 19.6
Bcfe.
Production
(MMCFE/D)
*
Excludes non-consent properties – (approx. 4
MMcfe/d)
Quarterly
Results (in Millions)
|
Three
Months Ended
September
30, 2006
(Unaudited)
|
Nine
Months Ended
September
30, 2006
(Unaudited)
|
||
|
Avg.
Production (MMcfe/Day)
|
95.0
|
89.5
|
|
|
Realized
Price
($/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
|
$
812.3
|
|
Debt/Total
Capital
|
23%
|
(1) Includes
costs of becoming Public Company, SOX implementation and the Calpine
Transaction. Performance target 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
|
|
§
Total
Lifting Costs
|
1.11
|
|
• Production Tax
|
0.21
|
|
• TG&M
|
0.15
|
|
• G&A (1)
|
0.75
|
|
Total
|
$2.22 |
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
|
--
|
--
|
|||
|
TOTAL
VOLUME HEDGED
|
55,000
|
55,341
|
39,909
|
26,141
|
•
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 46 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.
§
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.
§
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.
*Includes
cured non-consent
properties.
Rio
Vista
Wells
(November
5,
2005 to September 30, 2006)
Rio
Vista
Production (MMCFE/D)
Forecast
Rio
Vista
Daily Wellhead Production – Gross Operated
Current
rate
= 56
MMCFE/D
§
Recently
drilled
wells have extended the Upper, Middle, Lower Capay and also the Martinez
within
the Rio Vista Gas Field.
§
Two
Capay wells
drilled in the Southern 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. (~7700acres) proprietary 3D seismic data over the Southern Rio Vista
Gas
Unit. Approximately 70% (~5400 acres) of the 3D covers
acreage with no seismic coverage.
acreage with no seismic coverage.
•
Prospective
zones include the
Nortonville,
Capay,
Hamilton,
Martinez, and McCormick.
Martinez, and McCormick.
•
Historically
only 17
wells in
survey
–
only
4
below 5000’
•
Estimated
20 BCF
reserve potential.
•
Total
Estimated cost
$1.5 Million
•
Expect
to complete
acquisition inDecember 2006
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 3.4 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 Amplitude Plays
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
•
Drilled
18 successful
wells to date.
Net
production for
the first 17 wells is
currently 25.4 MMcfe/d.
currently 25.4 MMcfe/d.
2006
Dry
Hole
Next
12 months
Drilling Inventory
Future
Location
2006
Discovery
Currently
Drilling
Current
Producer
•
The
Company has
approximately 70,000 net acres (est.) square miles of 3-D
seismic.
•
Current
net
production is 43
•
277
active operated
and 117 non-operated wells.
MMcfe/day
which is over double the
January 2006 rate of 21 MMcfe/day.
January 2006 rate of 21 MMcfe/day.
•
Over
100 proved and
probable
locations.
•
Two
rigs under
contract.
•
Plan
to drill 4
additional wells in 2006
(2
drilling
now).
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
- Lobo
Current
Gross Production
59
MM per day
AVERAGE
GROSS
MMCFE/D
ESTIMATED FUTURE DRILLING *
PROVED DEVELOPED
*
Does not include any new acreage or acquisitions
and
Assumes drilling of 30 successful wells per year and spending an estimated
$53
MM
per
year.
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).
(gross).
§
48
future locations
planed as horizontal wells.
§
There
are 2 wells
currently drilling.
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.
Gulf
of
Mexico Activity Areas
§
Working
interest in
11 blocks ranging from 20% to 100% (NRI of 15% - 79%).
§
Current
net
production is 8.5 MMcfe/day from 8 producing
wells.
§
22,000
net acres
(est.) under lease.
§
A
recent discovery at
Main Pass 118 tested 12.4 MMcf/day and 512
Bbls/day,
gross.
gross.
§
Successful
bidder in
2006 offshore lease sale with 50% working interest as non-operator in
S.
TimbalierBlock 293 and Block 226 and 25% in East 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
•
Currently
drilling
Dolphin Project with TD of 15,250
T
B -
2
St
Tr 100
Ut
Bonefish
Kerr
McGee
Farm-Out
Dolphin
Producing
Waiting
on
Completion
Location
Rosetta
Acreage
TEXAS
STATE
WATERS
•
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.
pursuing sands that exhibit strong hydrocarbon indicators on 3-D seismic.
•
Current
net
production is 2.1 MMcfe/day.
•
Four
successful wells
drilled to date. One is shut-in waiting on
fracture-stimulation.
•
Five
additional
locations are planned, with working interest of 28.9% to 40%.
•
We
have entered into
a Joint Venture with Davis Petroleum in Sabine Lake (2100 gross
acres) slated to drill in 2007. Rosetta will be the operator.
acres) slated to drill in 2007. Rosetta will be the operator.
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.
§
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 approximately $225,000.
DJ
Basin
Rosetta Leases
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.