mineral aggregator valuation multiples
TRANSCRIPT
MERCER CAPITAL
Mineral Aggregator Valuation Multiples
With Market Data as of August 24, 2021
Mineral Aggregator Overview
2Source: Company filings, Capital IQ, and Mercer Capital analysis.© 2021 Mercer Capital // www.mercercapital.com
Ticker BSM MNRL DMLP FLMN KRP VNOM
Basin Focus Diversified Diversified Diversified Eagle Ford Diversified Permian
Equity Market Capitalization ($mm) $2,094.8 $1,044.3 $572.1 $390.1 $645.8 $2,777.8
Enterprise Value ($mm) $2,488.1 $1,080.9 $564.2 $423.6 $850.8 $3,277.3
LTM EBITDA ($mm) $276.2 $91.9 $50.9 $34.9 $89.0 $248.2
Current Production (mboe/d) 38.2 9.0 6.2 5.0 14.4 27.3
Proved Reserves (mmboe) 56.0 25.1 15.0 20.0 42.4 99.4
1-Year Stock Price Performance
3Source: Capital IQ and Mercer Capital analysis© 2021 Mercer Capital // www.mercercapital.com
BSM: 42%
MNRL: 57%
DMLP: 39%
FLMN: 56%
KRP: 24%
VNOM: 74%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
8/24/2020 11/24/2020 2/24/2021 5/24/2021 8/24/2021
Reserve and Production Mix
4Source: Company filings© 2021 Mercer Capital // www.mercercapital.com
2020 Proved Reserves by Commodity (mmboe) 2020 Proved Reserves by Category (mmboe)
2020 PDP Reserves by Commodity (mmboe) Current Production by Commodity (mboe/d)
58%
28% 29% 53% 49% 62%
22%
14% 18% 11%
20%
72%57%
29%40% 38%
99.4
56.0 42.4
25.1 20.0 15.0
VNOM BSM KRP MNRL FLMN DMLP
Gas
NGLs
Oil
73%93% 100%
61% 35% 100%
4%
12%4%
27%
3%
28%61%
99.4
56.0 42.4
25.1 20.0 15.0
VNOM BSM KRP MNRL FLMN DMLP
PUD
PDNP
PDP
55%
30% 29% 51% 62% 43%
23%
14%19%
15%
22%
70% 57%
30% 38% 42%
72.5
52.3 42.4
15.2 15.0 7.0
VNOM BSM KRP MNRL DMLP FLMN
Gas
NGLs
Oil
25%60%
26% 52% 57% 49%
18%
13% 18%14%
75% 22%
61%30%
43%37%
38.2
27.3
14.4 9.0
6.2 5.0
BSM VNOM KRP MNRL DMLP FLMN
Gas
NGLs
Oil
Valuation Multiples
EBITDA-Based Valuation Multiples
6Note: See appendix for derivation of multiples© 2021 Mercer Capital // www.mercercapital.com
Enterprise Value / LTM EBITDA Enterprise Value / LQA EBITDA
Enterprise Value / 2021E EBITDA Enterprise Value / 2022E EBITDA
13.2x12.1x 11.8x 11.1x
9.6x 9.0x
Average: 11.1x
VNOM FLMN MNRL DMLP KRP BSM
9.8x8.8x 8.7x 7.9x 7.6x 7.4x
Average: 8.4x
VNOM MNRL FLMN BSM KRP DMLP
8.4x 8.1x 7.8x 7.5x6.1x
nm
Average: 7.6x
MNRL BSM KRP VNOM FLMN DMLP
10.4x 10.1x8.8x 8.4x 8.0x
nm
Average: 9.2x
BSM VNOM MNRL FLMN KRP DMLP
Dividend-Based Yields
7Note: See appendix for derivation of multiples© 2021 Mercer Capital // www.mercercapital.com
Dividend Yield (Current Dividend) Dividend Yield (LTM Dividends)
4.6%
6.4%
7.5%
8.4% 8.6%9.0%
Average: 7.4%
VNOM MNRL BSM DMLP FLMN KRP
7.4% 7.6%
10.0%
11.6% 11.9%
13.3%
Average: 10.3%
VNOM MNRL BSM KRP DMLP FLMN
Production-Based Valuation Multiples
8Note: See appendix for derivation of multiples© 2021 Mercer Capital // www.mercercapital.com
Enterprise Value / Current Production ($/boe/d) Enterprise Value / 2021E Production ($/boe/d)
Enterprise Value / 2022E Production ($/boe/d) 2021E - 22E Production Growth
$120,223 $119,846
$91,662 $84,146 $65,200 $59,115
Average: $90,032
MNRL VNOM DMLP FLMN BSM KRP
$121,192 $116,033
$91,087
$68,448 $60,350
nm
Average: $91,422
VNOM MNRL FLMN BSM KRP DMLP
$113,145 $102,026
$77,341 $67,920
$57,840
nm
Average: $83,654
VNOM MNRL FLMN BSM KRP DMLP
17.8%
13.7%
7.1%
4.3%
0.8% nm
Average:8.7%
FLMN MNRL VNOM KRP BSM DMLP
Reserve-Based Valuation Multiples
9Note: See appendix for derivation of multiples© 2021 Mercer Capital // www.mercercapital.com
Enterprise Value / Proved Reserves ($/boe) Enterprise Value / PDP Reserves ($/boe)
Enterprise Value / Proved PV-10 Enterprise Value / PDP PV-10
$44 $43 $38
$33
$21 $20
Average:$33
BSM MNRL DMLP VNOM FLMN KRP
502%
412%362%
317% 288%
166%
Average:341%
BSM DMLP MNRL VNOM KRP FLMN
598%527% 524%
446% 412%
288%
Average:466%
MNRL FLMN BSM VNOM DMLP KRP
$71
$60
$48 $45 $38
$20
Average:$47
MNRL FLMN BSM VNOM DMLP KRP
Appendix
Mineral Aggregator Metrics and Multiples$ in mm, except per share values
11Source: Company filings, Capital IQ, and Mercer Capital analysis. See following page for additional notes.© 2021 Mercer Capital // www.mercercapital.com
Valuation MultiplesDerivation of Enterprise Value Average Median NotesStock Price (8/24/2021) $10.04 $18.39 $16.16 $4.52 $10.67 $17.92Shares Outstanding 208.6 56.8 35.4 86.3 60.5 155.0 (1)Equity Market Capitalization 2,094.8 1,044.3 572.1 390.1 645.8 2,777.8+ Preferred Stock 298.4 0.0 0.0 0.0 55.0 0.0 (2)+ Interest-Bearing Debt 96.0 43.0 0.0 36.5 162.9 541.9- Cash & Cash Equivalents (1.0) (6.4) (20.5) (3.0) (13.0) (42.4)+/- Other 0.0 0.0 12.6 0.0 0.0 0.0 (3)Enterprise Value $2,488.1 $1,080.9 $564.2 $423.6 $850.8 $3,277.3
EBITDA Metric Multiple Metric Multiple Metric Multiple Metric Multiple Metric Multiple Metric MultipleLast Twelve Months (LTM) EBITDA $276.2 9.0x $91.9 11.8x $50.9 11.1x $34.9 12.1x $89.0 9.6x $248.2 13.2x 11.1x 11.4x (4)Last Quarter Annualized (LQA) EBITDA 313.5 7.9 123.1 8.8 76.0 7.4 48.5 8.7 112.3 7.6 333.1 9.8 8.4 8.3 (4)2021E EBITDA 240.3 10.4 122.3 8.8 na nm 50.3 8.4 106.1 8.0 323.3 10.1 9.2 8.8 (5)2022E EBITDA 305.6 8.1 128.7 8.4 na nm 69.1 6.1 109.0 7.8 438.8 7.5 7.6 7.8 (5)
Dividend YieldsLast Twelve Months (LTM) Dividends $0.75 7.5% $1.17 6.4% $1.35 8.4% $0.39 8.6% $0.96 9.0% $0.82 4.6% 7.4% 7.9%Current Dividend (Annualized) 1.00 10.0% 1.40 7.6% 1.92 11.9% 0.60 13.3% 1.24 11.6% 1.32 7.4% 10.3% 10.8%
Production (mboe/d)Current Production 38.2 $65,200 9.0 $120,223 6.2 $91,662 5.0 $84,146 14.4 $59,115 27.3 $119,846 $90,032 $87,904 (6)2021E Production 36.4 68,448 9.3 116,033 na nm 4.7 91,087 14.1 60,350 27.0 121,192 91,422 91,087 (6)2022E Production 36.6 67,920 10.6 102,026 na nm 5.5 77,341 14.7 57,840 29.0 113,145 83,654 77,341 (6)
ReservesProved Reserves (mmboe) 56.0 $44.44 25.1 $43.13 15.0 $37.68 20.0 $21.16 42.4 $20.06 99.4 $32.97 $33.24 $35.33 (7)Proved Developed Producing Reserves (mmboe) 52.3 47.57 15.2 71.17 15.0 37.68 7.0 60.12 42.4 20.06 72.5 45.18 46.96 46.37 (7)Proved PV-10 $495.3 502% $298.8 362% $136.8 412% $255.5 166% $295.3 288% $1,034.5 317% 341% 339%Proved Developed Producing PV-10 475.1 524% 180.8 598% 136.8 412% 80.4 527% 295.3 288% 735.2 446% 466% 485%
Notes(1) Includes non-traded shares.
(2) BSM preferred stock included at carrying value. KRP preferred stock included at face value.
(3) DMLP value reflects calculated value of General Partners interest, based on most recent quarterly distribution and current dividend yield. For Up-C entities, non-controlling interest is not included as the associated value is captured by the inclusion of the non-traded shares in the shares outstanding.
(4) Based on non-GAAP adjusted EBITDA as calculated by management.
(5) Wall Street Research consensus estimates per Capital IQ.
(6) Multiple calculated on a dollar per flowing barrel equivalent basis ($/boe/d).
(7) Multiple calculated on a dollar per barrel equivalent basis ($/boe).
12© 2021 Mercer Capital // www.mercercapital.com
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Oil & Gas Team
Bryce Erickson, ASA, [email protected]
J. David Smith, ASA, [email protected]
Don Erickson, [email protected]
Alex M. Barry, [email protected]
Justin J. F. Ramirez, [email protected]
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© 2021 Mercer Capital // www.mercercapital.com 13
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