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1 IPPA Private Capital Conference Houston, Texas January 19, 2006 IPPA Private Capital Conference Houston, Texas January 19, 2006 PETRIE PARKMAN & Co.

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Presentation on theme: "1 IPPA Private Capital Conference Houston, Texas January 19, 2006 IPPA Private Capital Conference Houston, Texas January 19, 2006 PETRIE PARKMAN & Co."— Presentation transcript:

1 1 IPPA Private Capital Conference Houston, Texas January 19, 2006 IPPA Private Capital Conference Houston, Texas January 19, 2006 PETRIE PARKMAN & Co. Mike Bock, CFA Principal and Director of Corporate Finance Petrie Parkman & Co.

2 2 PETRIE PARKMAN & Co. Petrie Parkman Recent Experience – IPO’s YTD

3 3 PETRIE PARKMAN & Co. E&P Equity Market Performance

4 4 PETRIE PARKMAN & Co. IPO Issuance Volume deals 3 deals 0 deals 1 deal 3 deals 2 deals

5 5 PETRIE PARKMAN & Co. E&P IPO’s by Class 2000 Westport Res Energy Prtnrs 2001 Encore GMX Res ATP Oil & Gas 2002 None 2003 Whiting 2005 Bois d’Arc W&T Offshore 2004 Bill Barrett Warren Res Atlas America 2006 Linn Energy Mariner Stroud Rosetta CNX Gas

6 6 PETRIE PARKMAN & Co. Bois d’ Arc 5/5/ million shares priced at $13.00 Use of proceeds: Repay outstanding debt to Comstock Lead managed by Raymond James, Co-managed by Petrie Parkman and others % Change Since Pricing Capital Market Environment- Recent IPO’s

7 7 PETRIE PARKMAN & Co. % Change Since Pricing W&T Offshore- 1/27/ million shares priced at $19.00 Use of proceeds: Secondary sale of shares by management and Jefferies & Company Lead managed by Jefferies and Lehman Brothers Capital Market Environment- Recent IPO’s

8 8 PETRIE PARKMAN & Co. Bill Barrett Corporation- 12/9/ million shares at $25.00 Use of proceeds: Repay indebtedness in connection with acquisitions, in order to free up availability under credit facility to fund capex and future acquisitions Lead managed by Goldman Sachs, Co-managed by Petrie Parkman and others % Change Since Pricing Capital Market Environment- Recent IPO’s

9 9 PETRIE PARKMAN & Co. % Change Since Pricing Warren Resources- 12/17/ million shares priced at $7.50 Use of proceeds: To accelerate and fund exploration and development activities in the Atlantic and Pacific Rim projects of the Washakie Basin, as well as in the Willmington unit and Powder River Basin Lead managed by Keybanc Capital Markets Capital Market Environment- Recent IPO’s

10 10 PETRIE PARKMAN & Co. Exit Alternatives: IPO vs. Sale of Assets

11 11 PETRIE PARKMAN & Co. Exit Alternatives: IPO vs. Sale of Assets

12 12 PETRIE PARKMAN & Co. Exit Alternatives: IPO vs. Sale of Assets

13 13 PETRIE PARKMAN & Co. Exit Alternatives: IPO vs. Sale of Assets

14 14 PETRIE PARKMAN & Co. Cons- Potential to bust general solicitation rules Pros- Sometimes patience paysPros- Quicker financing, avoids SEC delays Cons- SEC Delays Pros- Better if market declines Pros- More coverage Pros- Lesser discount / Better valuation Cons- Worse if market declines Cons- 20% discount versus typical 5-15% on IPO’s Market Risk IPO144A Cons- More analysts Valuation Pros- Fewer analysts to deal with Cons- Lesser coverage Research Coverage Exit Alternatives: IPO vs. 144A

15 15 PETRIE PARKMAN & Co. Basic Requirements for an Institutionally-Embraced IPO Offering at least $100 million Market capitalization of at least $250 million SARBOX compliant, notably: -No loans to management -Independent board of directors Growth potential Use of proceeds Management team with desire to run a public company

16 16 PETRIE PARKMAN & Co. Market Preferences Offering of at least $200 million Market capitalization of at least $1 billion Geographic and strategic focus Resource-oriented plays Solid future organic growth potential combined with company-maker exposure Well-articulated use of proceeds Seasoned management with public experience

17 17 PETRIE PARKMAN & Co. The Hidden Costs of Public Market Capital Regulatory compliance- a drain on financial and human resources ― Sarbanes Oxley ― SEC filings and reviews ― Trading exchange regulations Short-term demands of public markets can influence executive decision-making Increased personal scrutiny of and liability for executives Increased costs of audit and reservoir engineering services


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