SLIDE 1
Q2 2020 Investor Presentation
August 2020
Page 2
MNRL
Disclaimer
The financial projections and other estimates contained herein are forward-looking statements with respect to the anticipated performance of Brigham Minerals, Inc. and its affiliates (collectively, “Brigham,” the “Company” or “MNRL”). Such financial projections and estimates are as to future events and are not to be viewed as facts, and reflect various assumptions of management of the Company concerning the future performance of the Company and are subject to significant business, financial, economic, operating, competitive and other risks and uncertainties and contingencies (many of which are difficult to predict and beyond the control of the Company) that could cause actual results to differ materially from the statements included herein. In addition, such financial projections and estimates were not prepared with a view to public disclosure or compliance with published guidelines of the Securities and Exchange Commission (the “SEC”), the guidelines established by the American Institute of Certified Public Accountants or U.S. generally accepted accounting principles (“GAAP”). Accordingly, although the Company’s management believes the financial projections and estimates contained herein represent a reasonable estimate of the Company’s projected financial condition and results of operations based on assumptions that the Company’s management believes to be reasonable at the time such estimates are made and at the time the related financial projections and estimates are delivered, there can be no assurance as to the reliability or correctness of such financial projections and estimates, nor should any assurances be inferred, and actual results may vary materially from those projected. Additionally, this presentation also includes other forward-looking statements. All statements, other than statements of historical fact included in this presentation regarding Brigham’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words “could”, “believe”, “anticipate”, “intend”, “estimate”, “expect”, “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future
- events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements that are disclosed from time to time in the Company’s filings with the SEC, including those described
under the heading “Risk Factors” included in the Company’s Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. These include, but are not limited to, downturns in operator activity due to commodity price fluctuations, the Company’s ability to integrate acquisitions into its existing business, changes in oil, natural gas and NGL prices, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions,
- perational factors affecting the commencement or maintenance of producing wells on the Company’s properties, the condition of the capital markets generally, as well as the Company’s ability to access them, global or national health
concerns, including the ongoing spread and economic effects of COVID-19, potential future pandemics, the actions of the Organization of Petroleum Exporting Countries and other significant producers and governments and the ability
- f such producers to agree to and maintain oil price and production controls, the proximity to and capacity of transportation and storage facilities, and uncertainties regarding environmental regulations or litigation and other legal or
regulatory developments affecting the Company’s business and other important factors. Except as otherwise required by applicable law, Brigham disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this presentation. Without limiting the generality of the foregoing, forward-looking statements contained in this presentation specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company’s minerals acquisition capital budget and other guidance including 2020 production guidance within this presentation. The Company uses Adjusted net income, Adjusted EBITDA, Adjusted LTM EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA margin and discretionary cash flow financial measures that are not presented in accordance with
- GAAP. Adjusted net income, Adjusted EBITDA, Adjusted LTM EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA margin and discretionary cash flow are supplemental non-GAAP financial measures that are used by the
Company’s management and external users of the Company’s financial statements such as investors, research analysts and others to assess the financial performance of the Company’s assets and their ability to sustain dividends
- ver the long term without regard to financing methods, capital structure or historical cost basis.
The Company defines Adjusted net income as net income (loss) before loss on extinguishment of debt. The Company defines Adjusted EBITDA as net income (loss) before depreciation, depletion and amortization, interest expense, gain or loss on sale and distribution of equity securities, gain or loss on derivative instruments and income tax expense, less other income and gain or loss on sale of oil and gas properties. The Company defines Adjusted LTM EBITDA as net income (loss) before depreciation, depletion and amortization, interest expense, gain or loss on sale and distribution of equity securities, gain or loss on derivative instruments and income tax expense, less other income and gain
- r loss on sale of oil and gas properties over the last twelve months. The Company defines Adjusted EBITDA ex lease bonus as Adjusted EBITDA further adjusted to eliminate the impacts of lease bonus revenue the Company
receives due to the unpredictability of timing and magnitude of the revenue. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by total revenue. The Company defines discretionary cash flow as Adjusted EBITDA less cash interest expense and cash taxes. Adjusted net income, Adjusted EBITDA, Adjusted LTM EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA margin and discretionary cash flow do not represent and should not be considered alternatives to, or more meaningful than, net income (loss), income from operations, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of the Company’s financial performance. Adjusted net income, Adjusted EBITDA, Adjusted LTM EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA margin and discretionary cash flow have important limitations as analytical tools because they exclude some but not all items that affect net income (loss), the most directly comparable GAAP financial measure. The Company’s computation of Adjusted net income, Adjusted EBITDA, Adjusted LTM EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA margin and discretionary cash flow may differ from computations of similarly titled measures of other companies. Please see Appendix for a reconciliation of Adjusted net income, Adjusted EBITDA, Adjusted LTM EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA margin and discretionary cash flow to net income (loss), the Company’s most directly comparable financial measure calculated in accordance with GAAP. This presentation has been prepared by the Company and includes market data and other statistical information from third-party sources, including independent industry publications, government publications or other published independent sources. Although the Company believes these third-party sources are reliable as of their respective dates, the Company has not independently verified the accuracy or completeness of this information. Some data are also based on the Company’s good faith estimates, which are derived from its review of internal sources as well as the third-party sources described above. The SEC generally permits oil and gas companies, in filings made with the SEC, to disclose estimated proved reserves, which are estimates of reserve quantities that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, and certain probable and possible reserves that meet the SEC’s definitions for such terms. Additional information regarding the Company's estimated reserves is contained in other documents filed by the Company with the SEC. Actual quantities of oil, natural gas and natural gas liquids that may be ultimately recovered may differ substantially from
- estimates. Factors affecting ultimate recovery include the scope of the operators' ongoing drilling programs, which will be directly affected by the availability of capital, drilling and production costs, availability of drilling services and
equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and other factors, and actual drilling results, including geological and mechanical factors affecting recovery rates. Estimates of potential resources may also change significantly as the development of the properties underlying the Company's mineral interests provides additional data. This presentation also contains the Company's internal estimates of its potential drilling locations, which may prove to be incorrect in a number of material ways. The actual number of locations that may be drilled may differ substantially from estimates. Neither the Company nor any of its affiliates, representatives or advisors assumes any responsibility for, and makes no representation or warranty (express or implied) as to, the reasonableness, completeness, accuracy or reliability of the financial projections, estimates and other information contained herein, which speak only as of the date identified on cover page of this presentation. The Company and its affiliates, representatives and advisors expressly disclaim any and all liability based, in whole or in part, on such information, errors therein or omissions therefrom. Neither the Company nor any of its affiliates, representatives or advisors intends to update or otherwise revise the financial projections, estimates and other information contained herein to reflect circumstances existing after the date identified on the cover page of this presentation to reflect the occurrence of future events even if any or all of the assumptions, judgments and estimates on which the information contained herein is based are shown to be in error, except as required by law.