Market conditions, shareholder opposition cited

Denbury Resources Inc. (NYSE: DNR) and Penn Virginia Corporation (NASDAQ: PVAC) agreed to terminate the previously announced Denbury acquisition of Penn Virginia.

Chris Kendall, Denbury’s President and CEO, commented, “While we firmly believed in the strategic merits of the combination with Penn Virginia, the difficult market conditions since announcement, combined with the opposition of certain Penn Virginia shareholders, led us to the conclusion that the transaction was unlikely to receive the necessary super majority approval from Penn Virginia shareholders.

“We remain optimistic about the significant resource potential that CO2 enhanced oil recovery could deliver in the Eagle Ford, and the work we have completed to date has only increased that optimism. We will continue to pursue practical opportunities to expand Denbury’s business, particularly in areas where our EOR expertise, experience and extensive CO2 resources can create value for the benefit of all Denbury stakeholders.

“Longer term, we believe that CO2 EOR will become an even more vital component of the world’s oil supply, with the smallest possible carbon footprint for an oil producer, and that Denbury is uniquely positioned in the industry to benefit from an increasing need to limit or reduce CO2 emissions.

“As we move forward, we are highly confident in Denbury’s position and are committed to executing our strategic plan, including the significant ongoing EOR development at the Cedar Creek Anticline. Through leveraging our resilient, high margin, low decline asset base, we will continue to drive incremental, high value growth opportunities. At the same time, we will maintain our disciplined operating approach, which we expect will enable us to generate well over $100 million of free cash flow in 2019 at current oil prices, providing us with significant flexibility going forward.”

As a result of the termination, the special meeting of Denbury stockholders, which was to be held on April 17, 2019, will not take place. Under the terms of the merger agreement and the termination agreement, neither Denbury nor Penn Virginia will be responsible for any payments to the other party as a result of the termination of the merger agreement.


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