October
5,
2006
OGIS,
San
Francisco
Disclaimer
Issuer
Free Writing
Prospectus
Filed
Pursuant To
Rule 433
Registration Statement No.
333-128888
October
2,
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:
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 of 4 MMcfe/d.
717
TEXAS
AVENUE
HOUSTON,
TEXAS
ROSETTA
CORPORATE HEADQUARTERS
|
v
Stock
Trades on NASDAQ, Symbol:
|
“ROSE”
|
|
v
Shares
Outstanding:
|
50
Million
|
|
v
Total
Assets (as
of
6/30/06):
|
$1,135
million
|
|
v
Long
Term Debt (as
of
6/30/06):
|
$240
million
|
|
v
Stock
Holders Equity (as
of
6/30/06):
|
$777
million
|
|
v
Cash
and
Cash Equivalents (as
of6/30/06):
|
$
93
million
|
|
•
12/31/05
SEC Proved Reserves:
|
379
Bcfe
*
|
|
•
12/31/05
SEC Proved PV10:
|
$1.4
Billion
**
|
|
•
Proved
Developed Reserves:
|
65%*
|
|
•
Current
Production (as of Sept 2006):
|
105
MMcfe/D
**
|
|
•
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.
2006
Goals
|
Ø
Well
Activity
|
|
|
•
Drill
|
188
Wells
|
|
•
Recompletions
/ Workovers
|
68
Wells
|
|
Ø
Average
Production
|
105
MMcfe/d
|
|
Ø
Capital
Expenditures
|
$190
MM
|
|
Ø
Proved
Reserve Additions
|
80
Bcfe
|
*
Includes non-consent properties – (approx. 4 MMcfe/d)
110
126
(MMCFE/D)
Production
Actual
Actual
Forecast
Exit
Rate
Forecast
87
*
Includes non-consent properties – (approx. 4 MMcfe/d)
|
2006
|
|
|
v
COSTS/MCFE
|
|
|
• Direct LOE
|
$0.64
|
|
• Ad-Valorem Tax
|
0.23
|
|
• Workover
|
0.14
|
|
• Insurance
|
0.04
|
|
v
Total
Lifting Costs
|
1.05
|
|
• Production Tax
|
0.21
|
|
• TG&M
|
0.15
|
|
• G&A (1)
|
0.65
|
|
• Interest Expense
|
0.48
|
|
Total
|
$2.54
|
(1) Includes
costs of becoming Public company, SOX implementation
and
the Calpine
Transaction. Expect to be below $0.50 per MCFE by
mid 2007
mid 2007
2006
Cash
Cost Structure
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
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 $7 MM.
§
Settlement
statement finalized.
§
Other
administrative matters settled to satisfaction of Rosetta.
Operations
Update
DRIVER
20-1
SACRAMENTO
BASIN, CALIFORNIA
Drilling
Activity Recap – 2006
Year To
Date
84%
Success
Rate
|
Wells
Drilled
|
||
|
(as
of
September 25,
2006)
|
Gross
|
Net
|
|
California
|
18
|
18.0
|
|
Rockies
|
37
|
35.5
|
|
MidCon
|
2
|
0.3
|
|
Offshore
|
2
|
0.8
|
|
Lobo
|
14
|
14.0
|
|
Perdido
|
4
|
2.0
|
|
State
Waters
|
5
|
1.2
|
|
Other
|
12
|
4.7
|
|
Total
|
94
|
76.5
|
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
proved and
probable drilling locations
and numerous workover and
recompletion projects.
and numerous 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 20 wells to date,
19 successful one dry hole, 11 of these
wells currently on production, 2 additional
wells to be producing by the end of Sept.
2006.
19 successful one dry hole, 11 of these
wells currently on production, 2 additional
wells to be producing by the end of Sept.
2006.
•
Expect
to
drill an additional 6 to 7 wells in
2006.
One drilling
rig active in field. May
get deep rig in January 2007.
get deep rig in January 2007.
•
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 25, 2006)
Rio
Vista
Production (MMCFE/D)
Forecast
Rio
Vista
Daily Wellhead Production – Gross Operated
Current
rate = 52
MMCFE/D
•
Recently
drilled
wells have
extended
the Upper,
Middle, Lower
Capay and also the Martinez within
the Rio Vista Gas Field.
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 0.6
and 1.5 MMCFE/D respectively
and the two Martinez wells drilled in
the extension, Twitchell 4 and
Twitchell 5 are producing 1.8 and
3.2 MMCFE/D respectively.
and RVGU 270 are producing 0.6
and 1.5 MMCFE/D respectively
and the two Martinez wells drilled in
the extension, Twitchell 4 and
Twitchell 5 are producing 1.8 and
3.2 MMCFE/D respectively.
•
This
extension has
added 18 Bcf of
proved
and probable
reserves to
date.
date.
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.
data over the Southern Rio Vista
Gas Unit. Approximately 70% (~
5400 acres) of the 3D covers
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’
•
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.
Only 5 penetrations to date in this
90-square mile field area.
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).
(net).
•
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.
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.
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
•
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 38
MMcfe/day.
•
Over
100 proved and
probable
locations.
•
Drilled
12 successful
wells to date.
Net
production
for the first 9 wells is
currently 21.6 MMcfe/d. (3 are
completing.)
currently 21.6 MMcfe/d. (3 are
completing.)
•
Plan
to drill 8
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
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
TD
8740’
TD
8176’
TD
8883’
TD
7600’
TD
8850’
TD
7956’
TD
8078’
TD
6850’
TD
8795’
TD
8425’
SCR
232
SCR
234
SCR
235
SCR
236
SCR
238
SCR
237
SCR
242
ECR
3
ECR
1
ECR
2
ECR
11
SCR
244
TD
8070’
TD
8612’
Lobo
Wells
LOBO
TYPE
CURVES –
ALL RESERVOIRS
LOBO
NORMALIZED
PRODUCTION CUMULATIVES
LOBO
GROSS
MMCFE/D
*
Does not include any new acreage or acquisitions
**
Assumes drilling of 23 wells per year and spending $41 MM per
year.
Future
Drilling
Current Gross production
Proved
Developed
52 MM per day
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 12 MMcfe/d.
•
4
new horizontal
wells drilled in 2006 to date.
They
are producing a
total of 13.6 MMcfe/d
(gross).
(gross).
•
48
future locations
will be horizontal.
•
There
are 3
additional wells planned for 2006.
Current
horizontal
producers
Approved
horizontal
locations
Future
horizontal
locations
Perdido
Acreage
Currently
drilling
PERDIDO
TYPE
CURVES –
ALL RESERVOIRS
PERDIDO
NORMALIZED
PRODUCTION CUMULATIVES
Gulf
of
Mexico Activity Areas
•
Working
interest in 11
blocks
ranging from
20% to
100% (NRI of 15% - 79%).
100% (NRI of 15% - 79%).
•
Current
net
production is 9
MMcfe/day
from
7
producing wells.
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.
MMcf/day and 512 Bbls/day,
gross.
•
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
•
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.
in Galveston Bay, Texas,
pursuing sands that exhibit
strong hydrocarbon indicators
on 3-D seismic.
•
Current
net
production is 3
MMcfe/day.
•
Four
successful wells
drilled to
date.
One
is
shut-in waiting on
fracture-stimulation.
fracture-stimulation.
•
Five
additional
locations are
planned,
with working
interest
of 28.9% to 40%.
of 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
77,400 net acres in this shallow
gas
play.
•
34 wells
drilled through September 27th to
date, 30
successful
(88%
success rate). All of the wells
(14) 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.
(14) 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.
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
Rocky
Mountains – San Juan Basin
•
8,481
net acres
with
Fruitland
Coal
potential at
1,600 feet.
1,600 feet.
•
Company
has
identified
44
drillable
development
locations.
locations.
•
Drilling
and
completion
costs
of $280,000
per
well.
well.
•
14
wells drilled
and
completed
to
date.
Rosetta
Leases
San
Juan
Basin
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.
Technology.
Conclusion
EAST
CAMERON
BLOCK 89
#16
OFFSHORE,
LOUISIANA
LOUISIANA
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.
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.