August 7, 2018 - 6:30 AM EDT
Print Email Article Font Down Font Up Charts

Denbury Reports Second Quarter 2018 Results

PLANO, Texas, Aug. 07, 2018 (GLOBE NEWSWIRE) -- Denbury Resources Inc. (NYSE: DNR) (“Denbury” or the “Company”) today announced net income of $30 million, or $0.07 per diluted share, for the second quarter of 2018.  Adjusted net income(1) (a non-GAAP measure) was $61 million, or $0.13(1)(2) per diluted share, with the difference from GAAP net income primarily due to the exclusion of $41 million ($31 million after tax) of expense from noncash fair value adjustments on commodity derivatives(1) (a non-GAAP measure), with the GAAP and non-GAAP measures reconciled in tables beginning on page 7.

2018 SECOND QUARTER HIGHLIGHTS

  • Production of 61,994 barrels of oil equivalent (“BOE”) per day in Q2 2018, up 3% from Q1 2018 and 4% from Q2 2017
  • Adjusted cash flow from operations(1) (a non-GAAP measure) of $134 million for Q2 2018, up 7% from Q1 2018 and 106% from Q2 2017
  • Adjusted EBITDAX(1) (a non-GAAP measure) of $153 million for Q2 2018, up from $142 million in Q1 2018 and $86 million in Q2 2017
  • Reduced debt principal by $189 million in Q2 2018, and over $1 billion since Q4 2014
  • Continued improvement in leverage metrics, debt to annualized Q2 2018 Adjusted EBITDAX of 4.1x (including hedge settlements) and 3.0x (excluding hedge settlements)
  • Sanctioned the enhanced oil recovery (“EOR”) development project at Cedar Creek Anticline, with total recoverable oil potential estimated to be in excess of 400 million barrels

SELECTED QUARTERLY COMPARATIVE DATA

  Quarter Ended
(in millions, except per-share data) June 30, 2018 March 31, 2018 June 30, 2017
Net income $30  $40  $14 
Adjusted net income(1) (non-GAAP measure) 61  54  1 
Net income per diluted share 0.07  0.09  0.04 
Adjusted net income per diluted share(1)(2) (non-GAAP measure) 0.13  0.12  0.00 
Cash flows from operations 154  92  53 
Adjusted cash flows from operations(1) (non-GAAP measure) 134  125  65 
Adjusted EBITDAX(1) (non-GAAP measure) 153  142  86 

(1) A non-GAAP measure.  See accompanying schedules that reconcile GAAP to non-GAAP measures along with a statement indicating why the Company believes the non-GAAP measures provide useful information for investors.
(2) Calculated using weighted average diluted shares outstanding of 457.2 million, 451.5 million, and 391.8 million for the three months ended June 30, 2018, March 31, 2018 and June 30, 2017, respectively.

SELECTED QUARTERLY COMPARATIVE DATA (CONTINUED)

  Quarter Ended
(in millions, except per-unit data) June 30, 2018 March 31, 2018 June 30, 2017
Revenues $382  $348  $257 
Payment on settlements of commodity derivatives (55) (33) (12)
Revenues and commodity derivative settlements combined $327  $315  $245 
       
Average realized oil price per barrel (excluding derivative settlements) $68.24  $64.25  $47.16 
Average realized oil price per barrel (including derivative settlements) 58.23  57.89  44.92 
       
Total production (BOE/d) 61,994  60,338  59,774 

MANAGEMENT COMMENT

Chris Kendall, Denbury’s President and CEO, commented, “Denbury’s performance in the second quarter improved across the board from what was already an outstanding first quarter.  Enhanced by further reductions in our cost structure, solid operational performance, and stronger oil prices, our operating margin increased to nearly $40 per BOE.  We continued to rapidly strengthen our balance sheet, reducing debt by nearly $200 million and our leverage ratio by another full turn, with total debt principal reduction exceeding $1 billion since the end of 2014.  The sanction of EOR development at Cedar Creek Anticline provides a clear line of sight to the near-term development of this significant, low-risk, long-lived oil asset.

“We are committed to retaining the focus and discipline put in place while oil was at $50, even with today’s oil prices well above that point.  That focus and discipline will make us even more profitable in today’s environment, and well prepared to succeed for the long term.”

REVIEW OF OPERATING AND FINANCIAL RESULTS

Denbury’s production averaged 61,994 BOE/d during second quarter 2018, up 4% from second quarter 2017 due principally to higher production from the redevelopment project at Hastings Field in mid-2017, production response from continued expansion at Bell Creek Field, and a full quarter of production from the mid-2017 acquisition at Salt Creek Field.  Sequentially, production increased 3% from first quarter 2018, due primarily to production increases at Cedar Creek Anticline, which benefited from the strong performance of two new Mission Canyon wells completed during March and April of 2018, and also due in part to higher production in the Gulf Coast region due to non-recurring weather downtime which lowered first quarter 2018’s production.  Further production information is provided on page 12 of this press release.

The Company’s average realized oil price during second quarter 2018 was $0.39 per Bbl above NYMEX oil prices, compared to $1.29 per Bbl above NYMEX in the prior quarter, and $1.16 per Bbl below NYMEX in second quarter 2017.  The sequential decrease was primarily attributable to a lower LLS to NYMEX index premium in the second quarter of 2018, with the year-over-year improvement driven both by improvement in LLS index prices relative to NYMEX and continued improvement in Rocky Mountain region differentials.

The Company’s total lease operating expenses in second quarter 2018 were $120 million or $21.34 per BOE, an increase of $2 million, or 2%, on an absolute-dollar basis and a decrease of nearly $0.50, or 2%, on a per-BOE basis compared to the prior quarter, and an increase of $9 million, or 8%, on an absolute-dollar basis and $0.88, or 4%, on a per-BOE basis, compared to second quarter 2017.  The sequential per-BOE basis decrease was driven by an increase in quarterly production.  The year-over-year increase was primarily impacted by operating expenses related to the Company’s non-operated working interest in Salt Creek Field, which was acquired in June 2017, as well as higher CO2 expense due to increases in oil prices and an increase in power and fuel costs, partially offset by lower workover expense during the current-year period.

Taxes other than income, which include ad valorem, production and franchise taxes, were consistent with the first quarter of 2018 and increased $7 million from the prior-year second quarter, generally due to the impact of higher oil prices on production taxes.

General and administrative expenses were $19 million in second quarter 2018, a 4% decrease from the prior quarter and a 25% decrease compared to second quarter 2017, with the year-over-year decrease attributable to lower employee-related costs as a result of the August 2017 workforce reduction and other cost savings initiatives.

Interest expense, net of capitalized interest, was $16 million in second quarter 2018, a decrease of $1 million from first quarter 2018 and a decrease of $8 million from the prior-year second quarter.  Interest expense excludes approximately $22 million and $13 million in the second quarters of 2018 and 2017, respectively, of interest recorded as a reduction of debt for financial reporting purposes instead of as interest expense, due to the accounting associated with debt exchange transactions completed in 2016, 2017, and 2018.  A schedule detailing the components of interest expense is included on page 14 of this press release.

Depletion, depreciation, and amortization (“DD&A”) increased slightly to $53 million in second quarter 2018, compared to $51 million in second quarter 2017.  The slight increase was primarily driven by an increase in depletable costs.

Denbury’s effective tax rate for the second quarter of 2018 was approximately 24%, consistent with the Company’s estimated statutory rate of 25%.  The Company’s statutory rate decreased from the prior year rate of 38% due to reduction of the federal income tax rate from 35% to 21% as enacted by the Tax Cut and Jobs Act in December 2017.

BANK CREDIT FACILITY AND OTHER RECENT DEBT REDUCTION

The Company had $415 million outstanding under its $1.05 billion senior secured bank credit facility as of June 30, 2018, a decrease of $35 million from the level outstanding as of March 31, 2018 and a decrease of $60 million from December 31, 2017.  At June 30, 2018, the Company had $573 million of liquidity available under its bank credit facility after consideration of $62 million of outstanding letters of credit.  In addition to reductions of senior secured bank credit facility debt outstanding, the Company has reduced the outstanding principal of its long-term notes by $329 million over the last 7 months through a series of exchange transactions completed in December 2017 and January 2018 and related conversions of all of its convertible notes into equity in April and May 2018.

2018 CAPITAL BUDGET AND ESTIMATED PRODUCTION

The Company’s 2018 capital budget, excluding acquisitions and capitalized interest, remains unchanged from the previously estimated range of approximately $300 million to $325 million, which, based on current projections, is expected to be significantly less than the Company’s estimated 2018 cash flow from operations.  The capital budget consists of approximately $270 million for tertiary and non-tertiary field costs and CO2 supply, plus approximately $45 million of estimated capitalized costs (including capitalized internal acquisition, exploration and development costs and pre-production tertiary startup costs).  Of this combined capital expenditure amount, approximately $129 million (41%) has been incurred through the second quarter of 2018, which was fully funded with $246 million of cash flow from operations.  Denbury’s estimated 2018 production is also unchanged from the previously disclosed range of 60,000 to 64,000 BOE/d.

CONFERENCE CALL

Denbury management will host a conference call to review and discuss second quarter 2018 financial and operating results, as well as financial and operating guidance for 2018, today, Tuesday, August 7, at 10:00 A.M. (Central).  Additionally, Denbury will post presentation materials on its website which will be referenced during the conference call.  Individuals who would like to participate should dial 800.230.1093 or 612.332.0226 ten minutes before the scheduled start time.  To access a live webcast of the conference call and accompanying slide presentation, please visit the investor relations section of the Company’s website at www.denbury.com.  The webcast will be archived on the website, and a telephonic replay will be accessible for at least one month after the call by dialing 800.475.6701 or 320.365.3844 and entering confirmation number 426560.

Denbury is an independent oil and natural gas company with operations focused in two key operating areas: the Gulf Coast and Rocky Mountain regions.  The Company’s goal is to increase the value of its properties through a combination of exploitation, drilling and proven engineering extraction practices, with the most significant emphasis relating to CO2 enhanced oil recovery operations.  For more information about Denbury, please visit www.denbury.com.

This press release, other than historical financial information, contains forward-looking statements that involve risks and uncertainties including estimated 2018 production, capital expenditures, along with potential recoverable reserves of Cedar Creek Anticline and other risks and uncertainties detailed in the Company’s filings with the Securities and Exchange Commission, including Denbury’s most recent report on Form 10-K.  These risks and uncertainties are incorporated by this reference as though fully set forth herein.  These statements are based on engineering, geological, financial and operating assumptions that management believes are reasonable based on currently available information; however, management’s assumptions and the Company’s future performance are both subject to a wide range of business risks, and there is no assurance that these goals and projections can or will be met.  Actual results may vary materially.  In addition, any forward-looking statements represent the Company’s estimates only as of today and should not be relied upon as representing its estimates as of any future date.  Denbury assumes no obligation to update its forward-looking statements.

FINANCIAL AND STATISTICAL DATA TABLES AND RECONCILIATION SCHEDULES

Following are unaudited financial highlights for the comparative three and six month periods ended June 30, 2018 and 2017 and the three month period ended March 31, 2018.  All production volumes and dollars are expressed on a net revenue interest basis with gas volumes converted to equivalent barrels at 6:1.

DENBURY RESOURCES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

The following information is based on GAAP reported earnings (along with additional required disclosures) included or to be included in the Company’s periodic reports:

  Three Months Ended Six Months Ended
  June 30, March 31, June 30,
In thousands, except per-share data 2018 2017 2018 2018 2017
Revenues and other income          
Oil sales $373,286  $248,317  $337,406  $710,692  $512,291 
Natural gas sales 2,279  2,563  2,615  4,894  4,767 
CO2 sales and transportation fees 6,715  6,555  7,552  14,267  11,943 
Other income 4,783  3,749  5,661  10,444  7,637 
Total revenues and other income 387,063  261,184  353,234  740,297  536,638 
Expenses          
Lease operating expenses 120,384  111,318  118,356  238,740  225,158 
Marketing and plant operating expenses 11,549  13,877  12,424  23,973  27,942 
CO2 discovery and operating expenses 500  513  462  962  1,106 
Taxes other than income 27,234  20,175  27,319  54,553  42,615 
General and administrative expenses 19,412  25,789  20,232  39,644  54,030 
Interest, net of amounts capitalized of $8,851, $8,147, $8,452, $17,303 and $12,801, respectively 16,208  24,061  17,239  33,447  51,239 
Depletion, depreciation, and amortization 52,944  51,152  52,451  105,395  102,347 
Commodity derivatives expense (income) 96,199  (10,373) 48,825  145,024  (34,975)
Other expenses 2,980    2,328  5,308   
Total expenses 347,410  236,512  299,636  647,046  469,462 
Income before income taxes 39,653  24,672  53,598  93,251  67,176 
Income tax provision (benefit)          
Current income taxes (754) (5,965) (1,032) (1,786) (19,900)
Deferred income taxes 10,185  16,238  15,052  25,237  51,147 
Net income $30,222  $14,399  $39,578  $69,800  $35,929 
           
Net income per common share          
Basic $0.07  $0.04  $0.10  $0.17  $0.09 
Diluted $0.07  $0.04  $0.09  $0.15  $0.09 
           
Weighted average common shares outstanding          
Basic 433,467  389,904  392,742  413,217  389,652 
Diluted 457,165  391,827  451,543  454,466  392,414 

DENBURY RESOURCES INC.
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED)

Reconciliation of net income (GAAP measure) to adjusted net income (loss) (non-GAAP measure)

Adjusted net income (loss) is a non-GAAP measure provided as a supplement to present an alternative net income (loss) measure which excludes expense and income items (and their related tax effects) not directly related to the Company’s ongoing operations.  Management believes that adjusted net income (loss) may be helpful to investors by eliminating the impact of noncash and/or special or unusual items not indicative of the Company’s performance from period to period, and is widely used by the investment community, while also being used by management, in evaluating the comparability of the Company’s ongoing operational results and trends.  Adjusted net income (loss) should not be considered in isolation, as a substitute for, or more meaningful than, net income or any other measure reported in accordance with GAAP, but rather to provide additional information useful in evaluating the Company’s operational trends and performance.

  Three Months Ended
  June 30, March 31,
  2018 2017 2018
In thousands, except per-share data Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share
Net income (GAAP measure) $30,222  $0.07  $14,399  $0.04  $39,578  $0.09 
Adjustments to reconcile to adjusted net income (non-GAAP measure)            
Noncash fair value adjustments on commodity derivatives(1) 41,429  0.09  (22,140) (0.06) 15,468  0.03 
Other adjustments(2) (26) 0.00      2,075  0.00 
Estimated income taxes on above adjustments to net income and other discrete tax items(3) (10,654) (0.03) 8,609  0.02  (3,140) 0.00 
Adjusted net income (non-GAAP measure) $60,971  $0.13  $868  $0.00  $53,981  $0.12 


  Six Months Ended
  June 30,
  2018 2017
In thousands, except per-share data Amount Per Diluted Share Amount Per Diluted Share
Net income (GAAP measure) $69,800  $0.15  $35,929  $0.09 
Adjustments to reconcile to adjusted net income (loss) (non-GAAP measure)        
Noncash fair value adjustments on commodity derivatives(1) 56,897  0.13  (73,682) (0.19)
Other adjustments(2) 2,049  0.00     
Estimated income taxes on above adjustments to net income (loss) and other discrete tax items(3) (13,794) (0.03) 31,768  0.08 
Adjusted net income (loss) (non-GAAP measure) $114,952  $0.25  $(5,985) $(0.02)

(1) The net change between periods of the fair market values of open commodity derivative positions, excluding the impact of settlements on commodity derivatives during the period.
(2) Other adjustments include a $3 million gain on land sales, offset by a similar amount of other expense accrued for litigation matters during the three months ended June 30, 2018 and $2 million of transaction costs related to the Company’s privately negotiated debt exchanges during the three months ended March 31, 2018.
(3) The estimated income tax impacts on adjustments to net income are generally computed based upon a statutory rate of 25% and 38% for 2018 and 2017, respectively, with the exception of the tax impact of a shortfall (benefit) on the stock-based compensation deduction which totaled <($1) million, <$1 million, and $1 million during the three months ended June 30, 2018, June 30, 2017, and March 31, 2018, respectively, and $1 million and $4 million for the six months ended June 30, 2018 and 2017, respectively.

DENBURY RESOURCES INC.
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED)

Reconciliation of cash flows from operations (GAAP measure) to adjusted cash flows from operations (non-GAAP measure) to adjusted cash flows from operations less interest treated as debt reduction (non-GAAP measure)

Adjusted cash flows from operations is a non-GAAP measure that represents cash flows provided by operations before changes in assets and liabilities, as summarized from the Company’s Unaudited Condensed Consolidated Statements of Cash Flows.  Adjusted cash flows from operations measures the cash flows earned or incurred from operating activities without regard to the collection or payment of associated receivables or payables.  Adjusted cash flows from operations less interest treated as debt reduction is an additional non-GAAP measure that removes interest associated with the Company’s senior secured second lien notes and convertible senior notes not reflected as interest expense for financial reporting purposes.  Management believes that it is important to consider these additional measures, along with cash flows from operations, as it believes the non-GAAP measures can often be a better way to discuss changes in operating trends in its business caused by changes in production, prices, operating costs and related factors, without regard to whether the earned or incurred item was collected or paid during that period.

  Three Months Ended Six Months Ended
In thousands June 30, March 31, June 30,
 2018 2017 2018 2018 2017
Net income (GAAP measure) $30,222  $14,399  $39,578  $69,800  $35,929 
Adjustments to reconcile to adjusted cash flows from operations          
Depletion, depreciation, and amortization 52,944  51,152  52,451  105,395  102,347 
Deferred income taxes 10,185  16,238  15,052  25,237  51,147 
Stock-based compensation 2,560  4,835  2,592  5,152  8,941 
Noncash fair value adjustments on commodity derivatives 41,429  (22,140) 15,468  56,897  (73,682)
Other (3,138) 781  299  (2,839) 2,338 
Adjusted cash flows from operations (non-GAAP measure) 134,202  65,265  125,440  259,642  127,020 
Net change in assets and liabilities relating to operations 19,797  (12,319) (33,813) (14,016) (49,812)
Cash flows from operations (GAAP measure) $153,999  $52,946  $91,627  $245,626  $77,208 
           
Adjusted cash flows from operations (non-GAAP measure) $134,202  $65,265  $125,440  $259,642  $127,020 
Interest payments treated as debt reduction (21,614) (12,588) (22,049) (43,663) (25,157)
Adjusted cash flows from operations less interest treated as debt reduction (non-GAAP measure) $112,588  $52,677  $103,391  $215,979  $101,863 

DENBURY RESOURCES INC.
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED)

Reconciliation of commodity derivatives income (expense) (GAAP measure) to noncash fair value adjustments on commodity derivatives (non-GAAP measure)

Noncash fair value adjustments on commodity derivatives is a non-GAAP measure and is different from “Commodity derivatives expense (income)” in the Unaudited Condensed Consolidated Statements of Operations in that the noncash fair value adjustments on commodity derivatives represents only the net change between periods of the fair market values of open commodity derivative positions, and excludes the impact of settlements on commodity derivatives during the period.  Management believes that noncash fair value adjustments on commodity derivatives is a useful supplemental disclosure to “Commodity derivatives expense (income)” because the GAAP measure also includes settlements on commodity derivatives during the period; the non-GAAP measure is widely used within the industry and by securities analysts, banks and credit rating agencies in calculating EBITDA and in adjusting net income (loss) to present those measures on a comparative basis across companies, as well as to assess compliance with certain debt covenants.

  Three Months Ended Six Months Ended
  June 30, March 31, June 30,
In thousands 2018 2017 2018 2018 2017
Payment on settlements of commodity derivatives $(54,770) $(11,767) $(33,357) $(88,127) $(38,707)
Noncash fair value adjustments on commodity derivatives (non-GAAP measure) (41,429) 22,140  (15,468) (56,897) 73,682 
Commodity derivatives income (expense) (GAAP measure) $(96,199) $10,373  $(48,825) $(145,024) $34,975 

DENBURY RESOURCES INC.
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED)

Reconciliation of net income (GAAP measure) to Adjusted EBITDAX (non-GAAP measure)

Adjusted EBITDAX is a non-GAAP financial measure which management uses and is calculated based upon (but not identical to) a financial covenant related to “Consolidated EBITDAX” in the Company’s senior secured bank credit facility, which excludes certain items that are included in net income, the most directly comparable GAAP financial measure.  Items excluded include interest, income taxes, depletion, depreciation and amortization, impairments, and items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring.  Management believes Adjusted EBITDAX may be helpful to investors in order to assess our operating performance as compared to that of other companies in our industry, without regard to financing methods, capital structure or historical costs basis.  It is also commonly used by third parties to assess our leverage and our ability to incur and service debt and fund capital expenditures.  Adjusted EBITDAX should not be considered in isolation, as a substitute for, or more meaningful than, net income, cash flow from operations, or any other measure reported in accordance with GAAP.  Our Adjusted EBITDAX may not be comparable to similarly titled measures of another company because all companies may not calculate Adjusted EBITDAX, EBITDAX or EBITDA in the same manner.  The following table presents a reconciliation of our net income to Adjusted EBITDAX.

  Three Months Ended Six Months Ended
In thousands June 30, March 31, June 30,
 2018 2017 2018 2018 2017
Net income (GAAP measure) $30,222  $14,399  $39,578  $69,800  $35,929 
Adjustments to reconcile to Adjusted EBITDAX          
Interest expense 16,208  24,061  17,239  33,447  51,239 
Income tax expense 9,431  10,273  14,020  23,451  31,247 
Depletion, depreciation, and amortization 52,944  51,152  52,451  105,395  102,347 
Noncash fair value adjustments on commodity derivatives 41,429  (22,140) 15,468  56,897  (73,682)
Stock-based compensation 2,560  4,835  2,592  5,152  8,941 
Noncash, non-recurring and other(1) 226  3,817  790  1,016  6,275 
Adjusted EBITDAX (non-GAAP measure) $153,020  $86,397  $142,138  $295,158  $162,296 

(1) Excludes proforma adjustments related to qualified acquisitions or dispositions under the Company’s senior secured bank credit facility.

DENBURY RESOURCES INC.
OPERATING HIGHLIGHTS (UNAUDITED)

  Three Months Ended Six Months Ended
  June 30, March 31, June 30,
  2018 2017 2018 2018 2017
Production (daily – net of royalties)          
Oil (barrels) 60,109  57,867  58,354  59,236  58,084 
Gas (mcf) 11,314  11,444  11,904  11,607  10,616 
BOE (6:1) 61,994  59,774  60,338  61,171  59,853 
Unit sales price (excluding derivative settlements)          
Oil (per barrel) $68.24  $47.16  $64.25  $66.29  $48.73 
Gas (per mcf) 2.21  2.46  2.44  2.33  2.48 
BOE (6:1) 66.57  46.12  62.61  64.63  47.73 
Unit sales price (including derivative settlements)          
Oil (per barrel) $58.23  $44.92  $57.89  $58.07  $45.05 
Gas (per mcf) 2.21  2.46  2.44  2.33  2.48 
BOE (6:1) 56.86  43.96  56.47  56.67  44.16 
NYMEX differentials          
Gulf Coast region          
Oil (per barrel) $1.12  $(0.78) $2.05  $1.59  $(1.09)
Gas (per mcf) 0.04  (0.03) 0.10  0.07  0.03 
Rocky Mountain region          
Oil (per barrel) $(0.84) $(1.96) $(0.06) $(0.39) $(2.02)
Gas (per mcf) (1.25) (1.42) (0.92) (1.08) (1.19)
Total company          
Oil (per barrel) $0.39  $(1.16) $1.29  $0.87  $(1.39)
Gas (per mcf) (0.62) (0.69) (0.40) (0.51) (0.63)

DENBURY RESOURCES INC.
OPERATING HIGHLIGHTS (UNAUDITED)

  Three Months Ended Six Months Ended
  June 30, March 31, June 30,
Average Daily Volumes (BOE/d) (6:1) 2018 2017 2018 2018 2017
Tertiary oil production          
Gulf Coast region          
Delhi 4,391  4,965  4,169  4,281  4,978 
Hastings 5,716  4,400  5,704  5,710  4,344 
Heidelberg 4,330  4,996  4,445  4,387  4,864 
Oyster Bayou 4,961  5,217  5,056  5,008  5,146 
Tinsley 5,755  6,311  6,053  5,903  6,487 
Other 142  10  57  100  12 
Mature properties(1) 7,160  7,727  7,174  7,167  7,912 
Total Gulf Coast region 32,455  33,626  32,658  32,556  33,743 
Rocky Mountain region          
Bell Creek 4,010  3,060  4,050  4,030  3,134 
Salt Creek(2) 2,049  23  2,002  2,026  12 
Total Rocky Mountain region 6,059  3,083  6,052  6,056  3,146 
Total tertiary oil production 38,514  36,709  38,710  38,612  36,889 
Non-tertiary oil and gas production          
Gulf Coast region          
Mississippi 901  1,004  875  888  1,172 
Texas 4,947  5,002  4,386  4,668  4,669 
Other 400  460  445  422  477 
Total Gulf Coast region 6,248  6,466  5,706  5,978  6,318 
Rocky Mountain region          
Cedar Creek Anticline 15,742  15,124  14,437  15,093  15,096 
Other 1,490  1,475  1,485  1,488  1,550 
Total Rocky Mountain region 17,232  16,599  15,922  16,581  16,646 
Total non-tertiary production 23,480  23,065  21,628  22,559  22,964 
Total production 61,994  59,774  60,338  61,171  59,853 

(1) Mature properties include Brookhaven, Cranfield, Eucutta, Little Creek, Lockhart Crossing, Mallalieu, Martinville, McComb and Soso fields.

(2) Includes production related to the acquisition of a 23% non-operated working interest in Salt Creek Field in Wyoming, which closed on June 30, 2017.

DENBURY RESOURCES INC.
PER-BOE DATA (UNAUDITED)

  Three Months Ended Six Months Ended
  June 30, March 31, June 30,
  2018 2017 2018 2018 2017
Oil and natural gas revenues $66.57  $46.12  $62.61  $64.63  $47.73 
Payment on settlements of commodity derivatives (9.71) (2.16) (6.14) (7.96) (3.57)
Lease operating expenses (21.34) (20.46) (21.80) (21.56) (20.78)
Production and ad valorem taxes (4.50) (3.36) (4.61) (4.55) (3.61)
Marketing expenses, net of third-party purchases, and plant operating expenses (1.69) (1.83) (1.75) (1.72) (1.85)
Production netback 29.33  18.31  28.31  28.84  17.92 
CO2 sales, net of operating and exploration expenses 1.10  1.12  1.30  1.20  1.00 
General and administrative expenses (3.44) (4.74) (3.73) (3.58) (4.99)
Interest expense, net (2.87) (4.42) (3.17) (3.02) (4.73)
Other (0.33) 1.72  0.39  0.01  2.53 
Changes in assets and liabilities relating to operations 3.51  (2.26) (6.23) (1.27) (4.60)
Cash flows from operations 27.30  9.73  16.87  22.18  7.13 
DD&A (9.38) (9.40) (9.66) (9.52) (9.45)
Deferred income taxes (1.81) (2.99) (2.77) (2.28) (4.72)
Noncash fair value adjustments on commodity derivatives (7.34) 4.07  (2.85) (5.14) 6.80 
Other noncash items (3.41) 1.24  5.70  1.06  3.56 
Net income $5.36  $2.65  $7.29  $6.30  $3.32 

CAPITAL EXPENDITURE SUMMARY (UNAUDITED)(1)

  Three Months Ended Six Months Ended
  June 30, March 31, June 30,
In thousands 2018 2017 2018 2018 2017
Capital expenditures by project          
Tertiary oil fields $45,813  $43,561  $18,273  $64,086  $64,768 
Non-tertiary fields 17,817  14,332  14,922  32,739  32,772 
Capitalized internal costs(2) 8,662  13,071  14,085  22,747  26,717 
Oil and natural gas capital expenditures 72,292  70,964  47,280  119,572  124,257 
CO2 pipelines, sources and other 9,301  518  347  9,648  528 
Capital expenditures, before acquisitions and capitalized interest 81,593  71,482  47,627  129,220  124,785 
Acquisitions of oil and natural gas properties (14) 73,001  35  21  89,099 
Capital expenditures, before capitalized interest 81,579  144,483  47,662  129,241  213,884 
Capitalized interest 8,851  8,147  8,452  17,303  12,801 
Capital expenditures, total $90,430  $152,630  $56,114  $146,544  $226,685 

(1) Capital expenditure amounts include accrued capital.

(2) Includes capitalized internal acquisition, exploration and development costs and pre-production tertiary startup costs.

DENBURY RESOURCES INC.
INTEREST AND FINANCING EXPENSES (UNAUDITED)

  Three Months Ended Six Months Ended
  June 30, March 31, June 30,
In thousands 2018 2017 2018 2018 2017
Cash interest(1) $45,542  $43,352  $46,603  $92,145  $85,852 
Interest on Senior Secured Notes and Convertible Senior Notes not reflected as interest for financial reporting purposes(1) (21,614) (12,588) (22,049) (43,663) (25,157)
Noncash interest expense 1,131  1,444  1,137  2,268  3,345 
Less: capitalized interest (8,851) (8,147) (8,452) (17,303) (12,801)
Interest expense, net $16,208  $24,061  $17,239  $33,447  $51,239 

(1) Cash interest is presented on an accrual basis and includes interest which is paid semiannually on the Company’s 9% Senior Secured Second Lien Notes due 2021, 9¼% Senior Secured Second Lien Notes due 2022, 5% Convertible Senior Notes due 2023, and 3½% Convertible Senior Notes due 2024, most of which is accounted for as debt and therefore not reflected as interest for financial reporting purposes.


SELECTED BALANCE SHEET AND CASH FLOW DATA (UNAUDITED)

  June 30, December 31,
In thousands 2018 2017
Cash and cash equivalents $116  $58 
Total assets 4,534,235  4,471,299 
     
Borrowings under senior secured bank credit facility $415,000  $475,000 
Borrowings under senior secured second lien notes (principal only)(1) 1,070,587  996,487 
Borrowings under convertible senior notes (principal only)(1)(2)   84,650 
Borrowings under senior subordinated notes (principal only) 826,185  1,000,527 
Financing and capital leases 202,431  218,727 
Total debt (principal only) $2,514,203  $2,775,391 
     
Total stockholders’ equity $885,645  $648,165 

(1) Excludes $293 million and $317 million of future interest payable on the notes as of June 30, 2018 and December 31, 2017, respectively, accounted for as debt for financial reporting purposes.

(2) During the second quarter of 2018, all $85 million principal balance outstanding of the Company’s 3½% Convertible Senior Notes due 2024 and $59 million principal balance outstanding of the Company’s 5% Convertible Senior Notes due 2023 were converted into approximately 55 million shares of the Company’s common stock. 

  Six Months Ended
  June 30,
In thousands 2018 2017
Cash provided by (used in)    
Operating activities $245,626  $77,208 
Investing activities (134,132) (220,295)
Financing activities (110,486) 145,844 
DENBURY CONTACTS:
Mark C. Allen, Executive Vice President and Chief Financial Officer, 972.673.2000
John Mayer, Director of Investor Relations, 972.673.2383

Primary Logo


Source: GlobeNewswire (August 7, 2018 - 6:30 AM EDT)

News by QuoteMedia
www.quotemedia.com

Legal Notice