Evercore Investment Banking Pitch Book
Financial Analysis
Net Asset Value Analysis - Potential Joint Venture Agreement
NAV Summary -Potential Joint Venture
Evercore also considered the risked net asset value
of MMR assuming the Company enters into a
hypothetical joint venture agreement
-
-
-
MMR would sell a 25.0% working interest in
the Ultra-Deep Assets for $800 million in the
form of a combination of cash and drilling
capex carry
$500 million of upfront cash
$300 million of drilling capex carry
NYMEX strip pricing as of December 3,
2012 through 2017E and then held flat
thereafter
Utilizes the NAV Assumptions
Partner pays its working interest share of
insurance and operating expenses, and after
the carry period, its working interest share of
capex
Partner tax basis step-up based on upfront
cash plus the present value of the capex carry
Taxable gain taxed at 35%
EVERCORE PARTNERS
Proved Developed Producing
Proved Developed Behind-Pipe
Proved Undeveloped
Proved Reserves
Probable
Proved plus Probable Reserves
Possible
3P Reserves
Ultra Deep Upside (Risked)
P&A Developed Properties)
Gross Asset Value
Less: G&A
Less: Insurance
Less: Sulphur Reclaimation Expense
Pre-Tax Net Asset Value
Less: Cash Taxes
27
After-Tax Net Asset Value
Add: Cash
Add: Upfront Cash from Joint Venture
Less: Taxable Gain from Joint Venture
Less: Debt
Less: Preferred Shares
Equity Value
Fully Diluted Shares
$/Share
Discount
Rate
8% - 10%
10% - 12%
15%-20%
20%-30%
30% -40%
10% -12%
8% - 10%
12%-15%
8% - 10%
10% 10%
12%-15%
Confidential
($ in millions)
Commodity Price
NYMEX Strip (12/3/12)
Low
High
$253
513
39
$805
90
$895
80
$975
3,333
(212)
$4,095
(463)
(260)
(19)
$3,352
(649)
$2,704
192
500
(72)
(568)
(700)
$2,056
165.1
$12.46
$258
550
48
$857
128
$985
102
$1,087
4,412
(224)
$5,275
(575)
(327)
(19)
$4,354
(933)
$3,421
192
500
(72)
(300)
$3,741
231.9
$16.13
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