Denbury Resources presents at EnerCom’s The Oil & Gas Conference®
During Denbury Resources’ breakout session, management was asked the following questions:
- What did you mean in your presentation by opportunities to expand your footprint?
- How do you think technology has improved for EOR projects?
- Are you evaluating any of the ROZ zones?
- Can you do a breakdown of the cost for CO2? Is there a commercial market for CO2? So that’s $2 per bbl?
- How was the price set for the 20% royalties?
- Do you anticipate further non-core divestitures?
- What are your hedging costs?
- Can you frame the medium term outlook?
- Where is the Mississippi power plant? Does that industrial CO2 open up more fields for you on the gulf coast?
- What would your overall finding cost be? Is that your future F & D?
- The Delhi plant will give what kind of ROI?
- Do you own 100% interest in the Delhi plant?
You can listen to Denbury’s presentation by clicking here.
For the company’s second quarter results, click here.
Denbury Resources ( ticker: DNR ) is an upstream oil and gas operator primarily focused on carbon dioxide enhanced oil recovery methods. The company’s portfolio of assets is split between the Rocky Mountain region and the Gulf Coast region. Denbury operates mature fields by utilizing tertiary recovery, which limits field production declines relative to other operators.
During the first quarter of 2016, Denbury reduced net debt by $488 million through repurchases ($152 million of senior subordinated notes in open-market transactions in 1Q16) and exchanges ($923 million of their senior subordinated notes for $531 million in second lien notes in addition to 36.9 million shares of Denbury common stock). The company anticipates a savings of approximately $6 million dollars from the reduction of cash interest payments.
The spring 2016 borrowing base redetermination set Denbury’s commitments and borrowing base at $1.05 billion, giving the company about $700 million in liquidity. In addition to balance sheet improvements, Denbury has recently reduced its workforce by 20% and its lease operating costs down to $16.23/bbl, representing a 16% decrease sequentially and a six year low in LOE per barrel (however, the lease operating costs are expected to increase proportionally with higher workover volumes in 2Q16).
Denbury’s most significant future project is their Delhi NGL plant. This plant will extract NGL’s from the gas stream to sell separately, provide a more pure carbon dioxide stream, and generate power to offset electricity purchases. So far, the plant is on schedule and on budget and should come online by year end 2016.
