Denbury Resources Inc. (NYSE: DNR) (“Denbury” or the “Company”)
today announced net income of $73 million, or $0.14 per diluted
share, for the third quarter of 2019. Adjusted net income(1)
(a non-GAAP measure) was $41 million, or $0.08(1)(2) per diluted
share, with the difference from GAAP net income primarily due to a
$35 million gain from noncash fair value adjustments ($26 million
after tax) on the Company’s commodity derivative positions (see
reconciliation of GAAP and non-GAAP measures in tables beginning on
page 9 of this press release).
THIRD QUARTER AND RECENT
HIGHLIGHTS
- Generated cash flow from operations
of $131 million and free cash flow(1) (a non-GAAP measure) of $44
million after considering development capital expenditures,
capitalized interest and interest treated as debt reduction, with
2019 year-to-date free cash flow(1) of $109 million
- Continued debt reduction through
debt repurchases and exchanges which reduced debt by $87 million
since June 30, 2019 (including October transactions) and by $139
million since January 1, 2019
- Reaffirmed borrowing base of $615
million on senior secured bank credit facility
- Production of 56,441 barrels of oil
equivalent (“BOE”) per day (“BOE/d”), in-line with expectations and
on track for the midpoint of previously raised full-year
guidance
- Two successful Mission Canyon
exploitation wells recently drilled and completed with a projected
combined IP-30 rate of 1,000 barrels of oil per day
- Completed $9 million of surface
acreage sales during the third quarter of 2019 and an additional $5
million in October 2019
| ____________ |
|
(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
547.2 million, 467.4 million, and 458.5 million for the three
months ended September 30, 2019, June 30, 2019, and September 30,
2018, respectively. |
SELECTED QUARTERLY COMPARATIVE
DATA
| |
|
Quarter Ended |
| (in
millions, except per-share and per-unit data) |
|
September 30, 2019 |
|
June 30, 2019 |
|
September 30, 2018 |
|
Net income |
|
$ |
73 |
|
|
$ |
147 |
|
|
$ |
78 |
|
|
Adjusted net income(1) (non-GAAP measure) |
|
41 |
|
|
59 |
|
|
59 |
|
|
Adjusted EBITDAX(1) (non-GAAP measure) |
|
145 |
|
|
169 |
|
|
148 |
|
| Net income per diluted
share |
|
0.14 |
|
|
0.32 |
|
|
0.17 |
|
|
Adjusted net income per diluted share(1)(2) (non-GAAP measure) |
|
0.08 |
|
|
0.13 |
|
|
0.13 |
|
| Cash flows from
operations |
|
131 |
|
|
149 |
|
|
148 |
|
|
Adjusted cash flows from operations(1) (non-GAAP measure) |
|
126 |
|
|
145 |
|
|
135 |
|
| Development capital
expenditures |
|
51 |
|
|
77 |
|
|
86 |
|
| |
|
|
|
|
|
|
| Oil, natural gas, and related
product sales |
|
$ |
293 |
|
|
$ |
330 |
|
|
$ |
380 |
|
| CO2, purchased oil sales and
other |
|
22 |
|
|
13 |
|
|
15 |
|
|
Total revenues and other income |
|
$ |
315 |
|
|
$ |
343 |
|
|
$ |
395 |
|
| |
|
|
|
|
|
|
| Receipt (payment) on
settlements of commodity derivatives |
|
$ |
8 |
|
|
$ |
(2 |
) |
|
$ |
(62 |
) |
| |
|
|
|
|
|
|
| Average realized oil price per
barrel (excluding derivative settlements) |
|
$ |
57.64 |
|
|
$ |
62.22 |
|
|
$ |
71.44 |
|
| Average realized oil price per
barrel (including derivative settlements) |
|
59.23 |
|
|
61.92 |
|
|
59.78 |
|
| |
|
|
|
|
|
|
| Total production (BOE/d) |
|
56,441 |
|
|
59,719 |
|
|
59,181 |
|
| Total continuing production
(BOE/d)(3) |
|
56,441 |
|
|
59,313 |
|
|
58,412 |
|
| ____________ |
|
(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
547.2 million, 467.4 million, and 458.5 million for the three
months ended September 30, 2019, June 30, 2019 and September 30,
2018, respectively. |
|
(3) |
Continuing production excludes production from Citronelle Field
sold on July 1, 2019 and production from Lockhart Crossing Field
sold in the third quarter of 2018. |
MANAGEMENT COMMENT
Chris Kendall, Denbury’s President and CEO,
commented, “Denbury’s third quarter results once again demonstrate
our commitment to exceptional execution, cost efficiency, and
capital discipline. We generated $44 million of free cash
flow in the third quarter, keeping us on course to generate $140 –
$150 million in free cash flow for the full year.
“We continue to execute on our key priorities
for 2019 and we remain on track to reach the midpoint of our
previously raised 2019 production guidance, despite third quarter
production curtailments relating mainly to a planned maintenance
shut-down of the Rockies CO2 source plant impacting our Bell Creek
production and Tropical Storm Imelda impacting our Gulf Coast
production. Our spending discipline is evident across the
board, with capital spend, lease operating expense, and G&A
spend each on target to be at or below full-year guidance.
“Our unique portfolio of assets and high
quality, low decline, oil-weighted production are the driving
forces behind our ability to generate sustainable free cash flow,
enabling us to actively allocate capital to manage our debt
maturities and reduce leverage. We continued to make
meaningful progress on improving our balance sheet by repurchasing
or exchanging $54 million of 2022 and 2023 senior subordinated
notes at a significant discount, and we further reduced our
borrowings under our senior secured bank credit facility by $30
million. Importantly, our flagship Cedar Creek Anticline EOR
development continues to progress on schedule with first CO2
injection projected in early 2021.
“None of these results would have been possible
without the dedication to success and commitment to safety of
Denbury’s team members across the business. As we move into
the final quarter of 2019, I am excited about where the Company is
headed. We continue to perform, to consistently deliver on
our promises, and to make steady progress toward securing our
long-term success. Additionally, the low carbon footprint of
our CO2 EOR focused strategy will continue to differentiate us from
the industry, providing an ideal solution that significantly
reduces the CO2 emissions associated with the production of oil, a
vital energy source today and for the foreseeable future.”
REVIEW OF OPERATING AND FINANCIAL
RESULTS
Denbury’s oil and natural gas production
averaged 56,441 BOE/d during third quarter 2019, a decrease of 5%
from continuing production on a sequential-quarter basis and a
decrease of 3% compared to continuing production in the prior-year
third quarter. The sequential-quarter decrease was primarily
due to an expected reduction in production at Bell Creek Field
associated with planned maintenance at the Company’s primary CO2
source in the Rocky Mountain region. Third quarter production
was also impacted by approximately 400 BOE/d due to unplanned
downtime from power outages and flooding caused by Tropical Storm
Imelda. Further production information is provided on page 15
of this press release.
Denbury’s third quarter 2019 average realized
oil price, including derivative settlements, was $59.23 per barrel
(“Bbl”), a decrease of 4% from the prior quarter and 1% from the
prior-year third quarter. Denbury’s NYMEX differential for
the third quarter 2019 was $1.30 per Bbl above NYMEX WTI oil
prices, compared to $2.35 per Bbl above NYMEX WTI in the prior
quarter and $1.84 per Bbl above NYMEX WTI in third quarter
2018. The sequential decrease was primarily attributable to a
lower Gulf Coast premium in the third quarter of 2019, which
represents approximately 60% of the Company’s crude oil
production.
Total lease operating expenses in third quarter
2019 were $118 million, or $22.70 per BOE, relatively unchanged on
an absolute-dollar basis compared to the prior quarter. When
compared to third quarter 2018, lease operating expenses decreased
$5 million, or 4%, on an absolute-dollar basis, primarily due to
lower workover and power costs.
General and administrative expenses were $18
million in third quarter 2019, up slightly from the prior quarter,
and a $3 million decrease compared to third quarter 2018, primarily
due to lower performance-based compensation expense in the
current-year period.
Interest expense, net of capitalized interest,
totaled $23 million in third quarter 2019, a $2 million increase
from the prior quarter and an increase of $4 million compared to
third quarter 2018. The sequential-quarter and prior-year
increases were primarily due to noncash expense for amortization of
debt discounts associated with the Company’s recently issued 7¾%
Senior Secured Second Lien Notes due 2024 and 6⅜% Convertible
Senior Notes due 2024. The discount on these notes was
initially recorded during the second quarter of 2019 and will
continue to be amortized as interest expense over the terms of
these notes. A schedule detailing the components of interest
expense is included on page 17 of this press release.
Depletion, depreciation, and amortization
(“DD&A”) was $55 million during third quarter 2019, compared to
$58 million in second quarter 2019 and $51 million in third quarter
2018. The sequential-quarter decrease was primarily due to
lower depletion on CO2 assets resulting from lower CO2 production
in the Rocky Mountain region, and the increase compared to prior
year was due primarily to an increase in depletable costs.
Denbury’s effective tax rate for third quarter
2019 was approximately 34%, higher than the Company’s estimated
statutory rate of 25% due primarily to a valuation allowance
applied against a portion of the Company’s business interest
expense deduction that it estimates will be disallowed in the
current year as a result of limitations enacted under the Tax Cuts
and Jobs Act. The Company currently forecasts that its
effective tax rate for the fourth quarter and full-year 2019 will
be approximately 32%, depending in part on taxable income.
RECENT DEBT TRANSACTIONS AND BANK CREDIT
FACILITY
During the third quarter, Denbury repurchased
$11 million in aggregate principal amount of its then outstanding
5½% Senior Subordinated Notes due 2022 (“5½% Senior Subordinated
Notes”) in open market transactions for a total purchase price of
$5 million, excluding accrued interest. In connection with
these transactions, the Company recognized a $6 million gain on
debt extinguishment, net of unamortized debt issuance costs written
off, during the three and nine months ended September 30, 2019.
During October 2019, the Company repurchased
(principally through exchanges) an additional $13 million in
aggregate principal amount of its then outstanding 5½% Senior
Subordinated Notes and $29 million in aggregate principal amount of
its then outstanding 4⅝% Senior Subordinated Notes due 2023 for $6
million in cash and issuance of 14 million shares of Denbury Common
Stock. The Company currently expects to record a noncash gain
on debt extinguishment of approximately $22 million, net of
unamortized debt issuance costs written off, in fourth quarter 2019
related to these transactions.
Pursuant to the fall 2019 semiannual borrowing
base redetermination completed in late October 2019, the Company’s
borrowing base and commitment levels of the banks were reaffirmed
at $615 million. As of September 30, 2019, the Company
had $50 million of outstanding borrowings on its $615 million
senior secured bank credit facility, compared to $80 million of
outstanding borrowings as of June 30, 2019 and no outstanding
borrowings as of December 31, 2018, leaving $510 million of
liquidity available after consideration of $55 million of currently
outstanding letters of credit. Based on current 2019
projections using recent oil price futures, the Company currently
expects to have the capacity to repay all of its outstanding
borrowings on the senior secured bank credit facility by the end of
the year.
2019 CAPITAL BUDGET AND ESTIMATED
PRODUCTION
The Company’s 2019 estimated development
capital, excluding acquisitions and capitalized interest, remains
unchanged from the previously estimated range of $240 million to
$260 million. The capital budget consists of approximately
$200 million for tertiary and non-tertiary field investments and
CO2 supply, plus approximately $50 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, $189 million (76%) has
been incurred through the third quarter 2019, which is
significantly less than cash flow from operations during that
period. Denbury’s estimated 2019 production remains unchanged
from the previously disclosed updated guidance range of 57,000 –
59,500 BOE/d.
THIRD QUARTER CONFERENCE CALL
INFORMATION
Denbury management will host a conference call
to review and discuss third quarter 2019 financial and operating
results, as well as financial and operating guidance for 2019,
today, Thursday, November 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 877.705.6003
or 201.493.6725 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 approximately one month after the call by dialing 844.512.2921
or 412.317.6671 and entering confirmation number 13695520.
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.
FINANCIAL AND STATISTICAL DATA TABLES
AND RECONCILIATION SCHEDULES
Following are unaudited financial highlights for
the comparative three and nine-month periods ended September 30,
2019 and 2018 and the three-month period ended June 30, 2019.
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 |
|
Nine Months Ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
| In
thousands, except per-share data |
|
2019 |
|
2018 |
|
2019 |
|
2019 |
|
2018 |
|
Revenues and other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil sales |
|
$ |
292,100 |
|
|
$ |
377,329 |
|
|
$ |
328,571 |
|
|
$ |
912,636 |
|
|
$ |
1,088,021 |
|
|
Natural gas sales |
|
1,092 |
|
|
2,299 |
|
|
1,850 |
|
|
5,554 |
|
|
7,193 |
|
|
CO2 sales and transportation fees |
|
8,976 |
|
|
8,149 |
|
|
7,986 |
|
|
25,532 |
|
|
22,416 |
|
|
Purchased oil sales |
|
5,468 |
|
|
265 |
|
|
2,591 |
|
|
8,274 |
|
|
1,668 |
|
|
Other income |
|
7,817 |
|
|
6,931 |
|
|
2,367 |
|
|
12,274 |
|
|
15,972 |
|
|
Total revenues and other income |
|
315,453 |
|
|
394,973 |
|
|
343,365 |
|
|
964,270 |
|
|
1,135,270 |
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
117,850 |
|
|
122,527 |
|
|
117,932 |
|
|
361,205 |
|
|
361,267 |
|
|
Transportation and marketing expenses |
|
10,067 |
|
|
11,116 |
|
|
11,236 |
|
|
32,076 |
|
|
31,671 |
|
|
CO2 discovery and operating expenses |
|
879 |
|
|
708 |
|
|
581 |
|
|
2,016 |
|
|
1,670 |
|
|
Taxes other than income |
|
22,010 |
|
|
27,344 |
|
|
25,517 |
|
|
71,312 |
|
|
81,897 |
|
|
Purchased oil expenses |
|
5,436 |
|
|
264 |
|
|
2,564 |
|
|
8,213 |
|
|
1,426 |
|
|
General and administrative expenses |
|
18,266 |
|
|
21,579 |
|
|
17,506 |
|
|
54,697 |
|
|
61,223 |
|
|
Interest, net of amounts capitalized of $8,773, $9,514, $8,238,
$27,545 and $26,817, respectively |
|
22,858 |
|
|
18,527 |
|
|
20,416 |
|
|
60,672 |
|
|
51,974 |
|
|
Depletion, depreciation, and amortization |
|
55,064 |
|
|
51,316 |
|
|
58,264 |
|
|
170,625 |
|
|
156,711 |
|
|
Commodity derivatives expense (income) |
|
(43,155 |
) |
|
44,577 |
|
|
(24,760 |
) |
|
15,462 |
|
|
189,601 |
|
|
Gain on debt extinguishment |
|
(5,874 |
) |
|
— |
|
|
(100,346 |
) |
|
(106,220 |
) |
|
— |
|
|
Other expenses |
|
2,140 |
|
|
2,980 |
|
|
2,386 |
|
|
8,664 |
|
|
10,544 |
|
|
Total expenses |
|
205,541 |
|
|
300,938 |
|
|
131,296 |
|
|
678,722 |
|
|
947,984 |
|
| Income before income
taxes |
|
109,912 |
|
|
94,035 |
|
|
212,069 |
|
|
285,548 |
|
|
187,286 |
|
| Income tax provision
(benefit) |
|
|
|
|
|
|
|
|
|
|
|
Current income taxes |
|
(859 |
) |
|
(1,888 |
) |
|
3,354 |
|
|
1,214 |
|
|
(3,674 |
) |
|
Deferred income taxes |
|
37,909 |
|
|
17,504 |
|
|
62,023 |
|
|
90,454 |
|
|
42,741 |
|
| Net
income |
|
$ |
72,862 |
|
|
$ |
78,419 |
|
|
$ |
146,692 |
|
|
$ |
193,880 |
|
|
$ |
148,219 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Net income per common
share |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.16 |
|
|
$ |
0.17 |
|
|
$ |
0.32 |
|
|
$ |
0.43 |
|
|
$ |
0.35 |
|
|
Diluted |
|
$ |
0.14 |
|
|
$ |
0.17 |
|
|
$ |
0.32 |
|
|
$ |
0.41 |
|
|
$ |
0.33 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Weighted average
common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
455,487 |
|
|
451,256 |
|
|
452,612 |
|
|
453,287 |
|
|
426,036 |
|
|
Diluted |
|
547,205 |
|
|
458,450 |
|
|
467,427 |
|
|
490,054 |
|
|
455,934 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DENBURY RESOURCES
INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
Nine Months Ended |
|
|
|
September 30, |
| In
thousands |
|
2019 |
|
2018 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
193,880 |
|
|
$ |
148,219 |
|
|
Adjustments to reconcile net income to cash flows from operating
activities |
|
|
|
|
|
Depletion, depreciation, and amortization |
|
170,625 |
|
|
156,711 |
|
|
Deferred income taxes |
|
90,454 |
|
|
42,741 |
|
|
Stock-based compensation |
|
9,866 |
|
|
8,711 |
|
|
Commodity derivatives expense |
|
15,462 |
|
|
189,601 |
|
|
Receipt (payment) on settlements of commodity derivatives |
|
14,714 |
|
|
(149,738 |
) |
|
Gain on debt extinguishment |
|
(106,220 |
) |
|
— |
|
|
Debt issuance costs and discounts |
|
7,607 |
|
|
4,980 |
|
|
Other, net |
|
(6,862 |
) |
|
(7,066 |
) |
|
Changes in assets and liabilities, net of effects from
acquisitions |
|
|
|
|
|
Accrued production receivable |
|
(1,428 |
) |
|
(17,140 |
) |
|
Trade and other receivables |
|
(147 |
) |
|
139 |
|
|
Other current and long-term assets |
|
27 |
|
|
(4,467 |
) |
|
Accounts payable and accrued liabilities |
|
(33,167 |
) |
|
27,435 |
|
|
Oil and natural gas production payable |
|
(1,819 |
) |
|
(3,764 |
) |
|
Other liabilities |
|
(9,414 |
) |
|
(2,832 |
) |
| Net cash provided by
operating activities |
|
343,578 |
|
|
393,530 |
|
| |
|
|
|
|
| Cash flows from
investing activities |
|
|
|
|
|
Oil and natural gas capital expenditures |
|
(204,904 |
) |
|
(210,504 |
) |
|
Pipelines and plants capital expenditures |
|
(25,965 |
) |
|
(19,134 |
) |
|
Net proceeds from sales of oil and natural gas properties and
equipment |
|
10,494 |
|
|
7,308 |
|
|
Other |
|
5,797 |
|
|
5,598 |
|
| Net cash used in
investing activities |
|
(214,578 |
) |
|
(216,732 |
) |
| |
|
|
|
|
| Cash flows from
financing activities |
|
|
|
|
|
Bank repayments |
|
(641,000 |
) |
|
(1,943,653 |
) |
|
Bank borrowings |
|
691,000 |
|
|
1,468,653 |
|
|
Proceeds from issuance of senior secured notes |
|
— |
|
|
450,000 |
|
|
Interest payments treated as a reduction of debt |
|
(59,808 |
) |
|
(37,233 |
) |
|
Cash paid in conjunction with debt exchange |
|
(125,268 |
) |
|
— |
|
|
Costs of debt financing |
|
(11,017 |
) |
|
(15,933 |
) |
|
Pipeline financing and capital lease debt repayments |
|
(10,279 |
) |
|
(18,353 |
) |
|
Other |
|
5,470 |
|
|
(13,288 |
) |
| Net cash used in
financing activities |
|
(150,902 |
) |
|
(109,807 |
) |
| Net increase
(decrease) in cash, cash equivalents, and restricted
cash |
|
(21,902 |
) |
|
66,991 |
|
| Cash, cash equivalents, and
restricted cash at beginning of period |
|
54,949 |
|
|
15,992 |
|
| Cash, cash
equivalents, and restricted cash at end of period |
|
$ |
33,047 |
|
|
$ |
82,983 |
|
| |
|
|
|
|
|
|
|
|
DENBURY RESOURCES
INC.SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Reconciliation of net income (GAAP
measure) to adjusted net income (non-GAAP measure)
Adjusted net income is a non-GAAP measure
provided as a supplement to present an alternative net income
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 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 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 |
| |
|
September 30, |
|
June 30, |
| |
|
2019 |
|
2018 |
|
2019 |
| In
thousands, except per-share data |
|
Amount |
|
Per DilutedShare |
|
Amount |
|
Per DilutedShare |
|
Amount |
|
Per DilutedShare |
|
Net income (GAAP measure)(1) |
|
$ |
72,862 |
|
|
$ |
0.14 |
|
|
$ |
78,419 |
|
|
$ |
0.17 |
|
|
$ |
146,692 |
|
|
$ |
0.32 |
|
| Adjustments to reconcile to
adjusted net income (non-GAAP measure) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncash fair value gains on commodity derivatives(2) |
|
(35,098 |
) |
|
(0.06 |
) |
|
(17,034 |
) |
|
(0.04 |
) |
|
(26,309 |
) |
|
(0.06 |
) |
|
Gain on debt extinguishment(3) |
|
(5,874 |
) |
|
(0.01 |
) |
|
— |
|
|
— |
|
|
(100,346 |
) |
|
(0.21 |
) |
|
Other adjustments(4) |
|
(5,247 |
) |
|
(0.01 |
) |
|
1,497 |
|
|
0.00 |
|
|
1,399 |
|
|
0.00 |
|
|
Estimated income taxes on above adjustments to net income and other
discrete tax items(5) |
|
14,499 |
|
|
0.02 |
|
|
(3,886 |
) |
|
0.00 |
|
|
37,692 |
|
|
0.08 |
|
| Adjusted net income
(non-GAAP measure) |
|
$ |
41,142 |
|
|
$ |
0.08 |
|
|
$ |
58,996 |
|
|
$ |
0.13 |
|
|
$ |
59,128 |
|
|
$ |
0.13 |
|
| |
|
Nine Months Ended |
| |
|
September 30, |
| |
|
2019 |
|
2018 |
| In
thousands, except per-share data |
|
Amount |
|
Per DilutedShare |
|
Amount |
|
Per DilutedShare |
|
Net Income (GAAP measure)(1) |
|
$ |
193,880 |
|
|
$ |
0.41 |
|
|
$ |
148,219 |
|
|
$ |
0.33 |
|
| Adjustments to reconcile to
adjusted net income (non-GAAP measure) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncash fair value losses on commodity derivatives(2) |
|
30,176 |
|
|
0.06 |
|
|
39,863 |
|
|
0.09 |
|
|
Gain on debt extinguishment(3) |
|
(106,220 |
) |
|
(0.22 |
) |
|
— |
|
|
— |
|
|
Other adjustments(4) |
|
(793 |
) |
|
0.00 |
|
|
3,546 |
|
|
0.01 |
|
|
Estimated income taxes on above adjustments to net income and other
discrete tax items(5) |
|
28,483 |
|
|
0.06 |
|
|
(17,680 |
) |
|
(0.05 |
) |
| Adjusted net income
(non-GAAP measure) |
|
$ |
145,526 |
|
|
$ |
0.31 |
|
|
$ |
173,948 |
|
|
$ |
0.38 |
|
- Diluted net income per common share
includes the impact of potentially dilutive securities including
nonvested restricted stock, nonvested performance-based equity
awards, and shares into which the Company’s convertible senior
notes are convertible. The basic and diluted earnings per
share calculations are included on page 10.
- 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.
- Gain on extinguishment related to
the Company’s 2019 debt exchanges and open market repurchases.
- Other adjustments include (a) $6
million gain on land sales, <$1 million of transaction costs
related to the Company’s privately negotiated debt exchanges, and
<$1 million of costs associated with the helium supply contract
ruling during the three months ended September 30, 2019, (b) $2
million write-off of debt issuance costs associated with the
Company’s 2018 reduction and extension of the senior secured bank
credit facility and $1 million gain on land sales, partially offset
by a $1 million accrual for litigation matters during the three
months ended September 30, 2018, and (c) $1 million of transaction
costs related to the Company’s privately negotiated debt exchanges
and <$1 million of costs associated with the helium supply
contract ruling during the three months ended June 30, 2019.
The nine months ended September 30, 2019 was further impacted by $1
million of expense related to an impairment of assets and <$1
million of costs associated with a helium supply contract court
ruling during the three months ended March 31, 2019, and the nine
months ended September 30, 2018 was further impacted by $3 million
gain on land sales, offset by a similar amount of other expense
accrued for litigation matters, and $2 million of transaction costs
related to the Company’s privately negotiated debt exchanges.
- The estimated income tax impacts on
adjustments to net income are generally computed based upon a
statutory rate of 25% with the exception of (a) the periodic tax
impacts of a shortfall (benefit) on the stock-based compensation
deduction which totaled $2 million, ($2) million, and <$1
million during the three months ended September 30, 2019, September
30, 2018 and June 30, 2019, respectively, and $2 million and $1
million for the nine months ended September 30, 2019 and 2018,
respectively, (b) $22 million of tax expense associated with the
gain on debt extinguishment and $9 million of valuation allowances
established against a portion of the Company’s business interest
expense deduction during the three months ended June 30, 2019, and
(c) a tax benefit for enhanced oil recovery income tax credits of
$5 million during the three and nine months ended September 30,
2018, respectively.
BASIC AND DILUTED NET INCOME PER COMMON
SHARE
| |
|
Three Months Ended |
| |
|
September 30, |
|
June 30, |
| |
|
2019 |
|
2018 |
|
2019 |
| In
thousands, except per-share data |
|
Amount |
|
Per DilutedShare |
|
Amount |
|
Per DilutedShare |
|
Amount |
|
Per DilutedShare |
|
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income – basic |
|
$ |
72,862 |
|
|
$ |
0.16 |
|
|
$ |
78,419 |
|
|
$ |
0.17 |
|
|
$ |
146,692 |
|
|
$ |
0.32 |
|
| Effect of potentially dilutive
securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on convertible senior notes, net of tax |
|
5,101 |
|
|
(0.02 |
) |
|
— |
|
|
— |
|
|
548 |
|
|
0.00 |
|
| Net income – diluted |
|
$ |
77,963 |
|
|
$ |
0.14 |
|
|
$ |
78,419 |
|
|
$ |
0.17 |
|
|
$ |
147,240 |
|
|
$ |
0.32 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average common shares
outstanding – basic |
|
455,487 |
|
|
|
|
451,256 |
|
|
|
|
452,612 |
|
|
|
| Effect of potentially dilutive
securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted stock and performance-based equity awards |
|
865 |
|
|
|
|
7,194 |
|
|
|
|
2,835 |
|
|
|
|
Convertible senior notes |
|
90,853 |
|
|
|
|
— |
|
|
|
|
11,980 |
|
|
|
| Weighted average common shares
outstanding – diluted |
|
547,205 |
|
|
|
|
458,450 |
|
|
|
|
467,427 |
|
|
|
| |
|
Nine Months Ended |
| |
|
September 30, |
| |
|
2019 |
|
2018 |
| In
thousands, except per-share data |
|
Amount |
|
Per DilutedShare |
|
Amount |
|
Per DilutedShare |
|
Numerator |
|
|
|
|
|
|
|
|
|
Net income – basic |
|
$ |
193,880 |
|
|
$ |
0.43 |
|
|
$ |
148,219 |
|
|
$ |
0.35 |
|
| Effect of potentially dilutive
securities |
|
|
|
|
|
|
|
|
|
Interest on convertible senior notes, net of tax |
|
5,649 |
|
|
(0.02 |
) |
|
538 |
|
|
(0.02 |
) |
| Net income – diluted |
|
$ |
199,529 |
|
|
$ |
0.41 |
|
|
$ |
148,757 |
|
|
$ |
0.33 |
|
| |
|
|
|
|
|
|
|
|
|
Denominator |
|
|
|
|
|
|
|
|
| Weighted average common shares
outstanding – basic |
|
453,287 |
|
|
|
|
426,036 |
|
|
|
| Effect of potentially dilutive
securities |
|
|
|
|
|
|
|
|
|
Restricted stock and performance-based equity awards |
|
2,489 |
|
|
|
|
6,983 |
|
|
|
|
Convertible senior notes |
|
34,278 |
|
|
|
|
22,915 |
|
|
|
| Weighted average common shares
outstanding – diluted |
|
490,054 |
|
|
|
|
455,934 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
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) and free cash
flow (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 and other special
items. Free cash flow is a non-GAAP measure that represents
adjusted cash flows from operations less interest treated as debt
reduction, development capital expenditures and capitalized
interest, but before acquisitions. 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 |
|
Nine Months Ended |
| |
|
September 30, |
|
June 30, |
|
September 30, |
| In
thousands |
|
2019 |
|
2018 |
|
2019 |
|
2019 |
|
2018 |
|
Net income (GAAP measure) |
|
$ |
72,862 |
|
|
$ |
78,419 |
|
|
$ |
146,692 |
|
|
$ |
193,880 |
|
|
$ |
148,219 |
|
| Adjustments to reconcile to
adjusted cash flows from operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation, and amortization |
|
55,064 |
|
|
51,316 |
|
|
58,264 |
|
|
170,625 |
|
|
156,711 |
|
|
Deferred income taxes |
|
37,909 |
|
|
17,504 |
|
|
62,023 |
|
|
90,454 |
|
|
42,741 |
|
|
Stock-based compensation |
|
3,001 |
|
|
3,559 |
|
|
3,602 |
|
|
9,866 |
|
|
8,711 |
|
|
Noncash fair value losses (gains) on commodity derivatives |
|
(35,098 |
) |
|
(17,034 |
) |
|
(26,309 |
) |
|
30,176 |
|
|
39,863 |
|
|
Gain on debt extinguishment |
|
(5,874 |
) |
|
— |
|
|
(100,346 |
) |
|
(106,220 |
) |
|
— |
|
|
Other |
|
(2,099 |
) |
|
753 |
|
|
673 |
|
|
745 |
|
|
(2,086 |
) |
| Adjusted cash flows
from operations (non-GAAP measure) |
|
125,765 |
|
|
134,517 |
|
|
144,599 |
|
|
389,526 |
|
|
394,159 |
|
|
Net change in assets and liabilities relating to operations |
|
4,813 |
|
|
13,387 |
|
|
4,035 |
|
|
(45,948 |
) |
|
(629 |
) |
| Cash flows from
operations (GAAP measure) |
|
$ |
130,578 |
|
|
$ |
147,904 |
|
|
$ |
148,634 |
|
|
$ |
343,578 |
|
|
$ |
393,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted cash flows
from operations (non-GAAP measure) |
|
$ |
125,765 |
|
|
$ |
134,517 |
|
|
$ |
144,599 |
|
|
$ |
389,526 |
|
|
$ |
394,159 |
|
|
Interest on notes treated as debt reduction |
|
(21,372 |
) |
|
(21,186 |
) |
|
(21,355 |
) |
|
(64,006 |
) |
|
(64,849 |
) |
| Adjusted cash flows
from operations less interest treated as debt reduction (non-GAAP
measure) |
|
104,393 |
|
|
113,331 |
|
|
123,244 |
|
|
325,520 |
|
|
329,310 |
|
|
Development capital expenditures |
|
(51,420 |
) |
|
(85,999 |
) |
|
(76,856 |
) |
|
(189,439 |
) |
|
(215,219 |
) |
|
Capitalized interest |
|
(8,773 |
) |
|
(9,514 |
) |
|
(8,238 |
) |
|
(27,545 |
) |
|
(26,817 |
) |
| Free cash flow
(non-GAAP measure) |
|
$ |
44,200 |
|
|
$ |
17,818 |
|
|
$ |
38,150 |
|
|
$ |
108,536 |
|
|
$ |
87,274 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DENBURY RESOURCES
INC.SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Reconciliation of commodity derivatives
income (expense) (GAAP measure) to noncash fair value gains
(losses) 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 gains (losses) 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 gains (losses) 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 to present those
measures on a comparative basis across companies, as well as to
assess compliance with certain debt covenants.
| |
|
Three Months Ended |
|
Nine Months Ended |
| |
|
September 30, |
|
June 30, |
|
September 30, |
| In
thousands |
|
2019 |
|
2018 |
|
2019 |
|
2019 |
|
2018 |
|
Receipt (payment) on settlements of commodity
derivatives |
|
$ |
8,057 |
|
|
$ |
(61,611 |
) |
|
$ |
(1,549 |
) |
|
$ |
14,714 |
|
|
$ |
(149,738 |
) |
| Noncash fair value gains
(losses) on commodity derivatives (non-GAAP measure) |
|
35,098 |
|
|
17,034 |
|
|
26,309 |
|
|
(30,176 |
) |
|
(39,863 |
) |
|
Commodity derivatives income (expense) (GAAP measure) |
|
$ |
43,155 |
|
|
$ |
(44,577 |
) |
|
$ |
24,760 |
|
|
$ |
(15,462 |
) |
|
$ |
(189,601 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 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 the Company’s operating
performance as compared to that of other companies in the industry,
without regard to financing methods, capital structure or
historical costs basis. It is also commonly used by third
parties to assess leverage and the Company’s 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. The Company’s
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 the Company’s net income to
Adjusted EBITDAX.
| |
|
Three Months Ended |
|
Nine Months Ended |
| |
|
September 30, |
|
June 30, |
|
September 30, |
| In
thousands |
|
2019 |
|
2018 |
|
2019 |
|
2019 |
|
2018 |
|
Net income (GAAP measure) |
|
$ |
72,862 |
|
|
$ |
78,419 |
|
|
$ |
146,692 |
|
|
$ |
193,880 |
|
|
$ |
148,219 |
|
| Adjustments to reconcile to
Adjusted EBITDAX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
22,858 |
|
|
18,527 |
|
|
20,416 |
|
|
60,672 |
|
|
51,974 |
|
|
Income tax expense |
|
37,050 |
|
|
15,616 |
|
|
65,377 |
|
|
91,668 |
|
|
39,067 |
|
|
Depletion, depreciation, and amortization |
|
55,064 |
|
|
51,316 |
|
|
58,264 |
|
|
170,625 |
|
|
156,711 |
|
|
Noncash fair value losses (gains) on commodity derivatives |
|
(35,098 |
) |
|
(17,034 |
) |
|
(26,309 |
) |
|
30,176 |
|
|
39,863 |
|
|
Stock-based compensation |
|
3,001 |
|
|
3,559 |
|
|
3,602 |
|
|
9,866 |
|
|
8,711 |
|
|
Gain on debt extinguishment |
|
(5,874 |
) |
|
— |
|
|
(100,346 |
) |
|
(106,220 |
) |
|
— |
|
|
Noncash, non-recurring and other |
|
(4,744 |
) |
|
(2,155 |
) |
|
1,417 |
|
|
1,459 |
|
|
(1,139 |
) |
| Adjusted EBITDAX (non-GAAP
measure) |
|
$ |
145,119 |
|
|
$ |
148,248 |
|
|
$ |
169,113 |
|
|
$ |
452,126 |
|
|
$ |
443,406 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DENBURY RESOURCES
INC.OPERATING HIGHLIGHTS (UNAUDITED)
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
2019 |
|
2018 |
| Production (daily –
net of royalties) |
|
|
|
|
|
|
|
|
|
|
|
Oil (barrels) |
|
55,085 |
|
|
57,410 |
|
|
58,034 |
|
|
56,836 |
|
|
58,621 |
|
|
Gas (mcf) |
|
8,135 |
|
|
10,623 |
|
|
10,111 |
|
|
9,681 |
|
|
11,275 |
|
|
BOE (6:1) |
|
56,441 |
|
|
59,181 |
|
|
59,719 |
|
|
58,449 |
|
|
60,500 |
|
| Unit sales price
(excluding derivative settlements) |
|
|
|
|
|
|
|
|
|
|
|
Oil (per barrel) |
|
$ |
57.64 |
|
|
$ |
71.44 |
|
|
$ |
62.22 |
|
|
$ |
58.82 |
|
|
$ |
67.99 |
|
|
Gas (per mcf) |
|
1.46 |
|
|
2.35 |
|
|
2.01 |
|
|
2.10 |
|
|
2.34 |
|
|
BOE (6:1) |
|
56.46 |
|
|
69.73 |
|
|
60.80 |
|
|
57.54 |
|
|
66.31 |
|
| Unit sales price
(including derivative settlements) |
|
|
|
|
|
|
|
|
|
|
|
Oil (per barrel) |
|
$ |
59.23 |
|
|
$ |
59.78 |
|
|
$ |
61.92 |
|
|
$ |
59.77 |
|
|
$ |
58.63 |
|
|
Gas (per mcf) |
|
1.46 |
|
|
2.35 |
|
|
2.01 |
|
|
2.10 |
|
|
2.34 |
|
|
BOE (6:1) |
|
58.02 |
|
|
58.41 |
|
|
60.52 |
|
|
58.46 |
|
|
57.24 |
|
| NYMEX
differentials |
|
|
|
|
|
|
|
|
|
|
|
Gulf Coast region |
|
|
|
|
|
|
|
|
|
|
|
Oil (per barrel) |
|
$ |
3.11 |
|
|
$ |
3.21 |
|
|
$ |
4.85 |
|
|
$ |
4.08 |
|
|
$ |
2.10 |
|
|
Gas (per mcf) |
|
(0.24 |
) |
|
0.06 |
|
|
0.10 |
|
|
(0.06 |
) |
|
0.07 |
|
|
Rocky Mountain region |
|
|
|
|
|
|
|
|
|
|
|
Oil (per barrel) |
|
$ |
(1.65 |
) |
|
$ |
(0.54 |
) |
|
$ |
(1.48 |
) |
|
$ |
(1.85 |
) |
|
$ |
(0.47 |
) |
|
Gas (per mcf) |
|
(1.61 |
) |
|
(1.05 |
) |
|
(1.13 |
) |
|
(0.90 |
) |
|
(1.07 |
) |
|
Total company |
|
|
|
|
|
|
|
|
|
|
|
Oil (per barrel) |
|
$ |
1.30 |
|
|
$ |
1.84 |
|
|
$ |
2.35 |
|
|
$ |
1.79 |
|
|
$ |
1.16 |
|
|
Gas (per mcf) |
|
(0.87 |
) |
|
(0.51 |
) |
|
(0.50 |
) |
|
(0.47 |
) |
|
(0.51 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DENBURY RESOURCES
INC.OPERATING HIGHLIGHTS (UNAUDITED)
| |
|
Three Months Ended |
|
Nine Months Ended |
| |
|
September 30, |
|
June 30, |
|
September 30, |
|
Average Daily Volumes (BOE/d) (6:1) |
|
2019 |
|
2018 |
|
2019 |
|
2019 |
|
2018 |
| Tertiary oil
production |
|
|
|
|
|
|
|
|
|
|
| Gulf Coast
region |
|
|
|
|
|
|
|
|
|
|
|
Delhi |
|
4,256 |
|
|
4,383 |
|
|
4,486 |
|
|
4,405 |
|
|
4,315 |
|
|
Hastings |
|
5,513 |
|
|
5,486 |
|
|
5,466 |
|
|
5,506 |
|
|
5,634 |
|
|
Heidelberg |
|
4,297 |
|
|
4,376 |
|
|
4,082 |
|
|
4,123 |
|
|
4,384 |
|
|
Oyster Bayou |
|
3,995 |
|
|
4,578 |
|
|
4,394 |
|
|
4,373 |
|
|
4,863 |
|
|
Tinsley |
|
4,541 |
|
|
5,294 |
|
|
4,891 |
|
|
4,697 |
|
|
5,698 |
|
|
West Yellow Creek |
|
728 |
|
|
240 |
|
|
586 |
|
|
584 |
|
|
147 |
|
|
Mature properties(1) |
|
6,415 |
|
|
6,612 |
|
|
6,448 |
|
|
6,448 |
|
|
6,687 |
|
|
Total Gulf Coast region |
|
29,745 |
|
|
30,969 |
|
|
30,353 |
|
|
30,136 |
|
|
31,728 |
|
| Rocky Mountain
region |
|
|
|
|
|
|
|
|
|
|
|
Bell Creek |
|
4,686 |
|
|
3,970 |
|
|
5,951 |
|
|
5,096 |
|
|
4,010 |
|
|
Salt Creek |
|
2,213 |
|
|
2,274 |
|
|
2,078 |
|
|
2,116 |
|
|
2,109 |
|
|
Other |
|
58 |
|
|
6 |
|
|
41 |
|
|
50 |
|
|
2 |
|
|
Total Rocky Mountain region |
|
6,957 |
|
|
6,250 |
|
|
8,070 |
|
|
7,262 |
|
|
6,121 |
|
| Total tertiary oil
production |
|
36,702 |
|
|
37,219 |
|
|
38,423 |
|
|
37,398 |
|
|
37,849 |
|
| Non-tertiary oil and
gas production |
|
|
|
|
|
|
|
|
|
|
| Gulf Coast
region |
|
|
|
|
|
|
|
|
|
|
|
Mississippi |
|
873 |
|
|
1,038 |
|
|
1,025 |
|
|
977 |
|
|
938 |
|
|
Texas |
|
4,268 |
|
|
4,533 |
|
|
4,243 |
|
|
4,285 |
|
|
4,622 |
|
|
Other |
|
6 |
|
|
5 |
|
|
6 |
|
|
7 |
|
|
17 |
|
|
Total Gulf Coast region |
|
5,147 |
|
|
5,576 |
|
|
5,274 |
|
|
5,269 |
|
|
5,577 |
|
| Rocky Mountain
region |
|
|
|
|
|
|
|
|
|
|
|
Cedar Creek Anticline |
|
13,354 |
|
|
14,208 |
|
|
14,311 |
|
|
14,211 |
|
|
14,795 |
|
|
Other |
|
1,238 |
|
|
1,409 |
|
|
1,305 |
|
|
1,285 |
|
|
1,461 |
|
|
Total Rocky Mountain region |
|
14,592 |
|
|
15,617 |
|
|
15,616 |
|
|
15,496 |
|
|
16,256 |
|
| Total non-tertiary
production |
|
19,739 |
|
|
21,193 |
|
|
20,890 |
|
|
20,765 |
|
|
21,833 |
|
| Total continuing
production |
|
56,441 |
|
|
58,412 |
|
|
59,313 |
|
|
58,163 |
|
|
59,682 |
|
| Property
sales |
|
|
|
|
|
|
|
|
|
|
|
Citronelle(2) |
|
— |
|
|
416 |
|
|
406 |
|
|
286 |
|
|
398 |
|
|
Lockhart Crossing(3) |
|
— |
|
|
353 |
|
|
— |
|
|
— |
|
|
420 |
|
| Total
production |
|
56,441 |
|
|
59,181 |
|
|
59,719 |
|
|
58,449 |
|
|
60,500 |
|
- Mature properties include
Brookhaven, Cranfield, Eucutta, Little Creek, Mallalieu,
Martinville, McComb and Soso fields.
- Includes production from Citronelle
Field sold in July 2019.
- Includes production from Lockhart
Crossing Field sold in the third quarter of 2018.
DENBURY RESOURCES
INC.PER-BOE DATA (UNAUDITED)
| |
|
Three Months Ended |
|
Nine Months Ended |
| |
|
September 30, |
|
June 30, |
|
September 30, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
2019 |
|
2018 |
|
Oil and natural gas revenues |
|
$ |
56.46 |
|
|
$ |
69.73 |
|
|
$ |
60.80 |
|
|
$ |
57.54 |
|
|
$ |
66.31 |
|
| Receipt (payment) on
settlements of commodity derivatives |
|
1.56 |
|
|
(11.32 |
) |
|
(0.28 |
) |
|
0.92 |
|
|
(9.07 |
) |
| Lease operating expenses |
|
(22.70 |
) |
|
(22.50 |
) |
|
(21.70 |
) |
|
(22.64 |
) |
|
(21.87 |
) |
| Production and ad valorem
taxes |
|
(3.89 |
) |
|
(4.66 |
) |
|
(4.33 |
) |
|
(4.12 |
) |
|
(4.59 |
) |
| Transportation and marketing
expenses |
|
(1.94 |
) |
|
(2.04 |
) |
|
(2.07 |
) |
|
(2.01 |
) |
|
(1.92 |
) |
|
Production netback |
|
29.49 |
|
|
29.21 |
|
|
32.42 |
|
|
29.69 |
|
|
28.86 |
|
| CO2 sales, net of operating
and exploration expenses |
|
1.56 |
|
|
1.37 |
|
|
1.36 |
|
|
1.47 |
|
|
1.26 |
|
| General and administrative
expenses |
|
(3.52 |
) |
|
(3.96 |
) |
|
(3.22 |
) |
|
(3.43 |
) |
|
(3.71 |
) |
| Interest expense, net |
|
(4.40 |
) |
|
(3.40 |
) |
|
(3.76 |
) |
|
(3.80 |
) |
|
(3.15 |
) |
| Other |
|
1.09 |
|
|
1.49 |
|
|
(0.19 |
) |
|
0.48 |
|
|
0.61 |
|
| Changes in assets and
liabilities relating to operations |
|
0.93 |
|
|
2.46 |
|
|
0.74 |
|
|
(2.88 |
) |
|
(0.04 |
) |
|
Cash flows from operations |
|
25.15 |
|
|
27.17 |
|
|
27.35 |
|
|
21.53 |
|
|
23.83 |
|
| DD&A |
|
(10.60 |
) |
|
(9.43 |
) |
|
(10.72 |
) |
|
(10.69 |
) |
|
(9.49 |
) |
| Deferred income taxes |
|
(7.30 |
) |
|
(3.21 |
) |
|
(11.41 |
) |
|
(5.67 |
) |
|
(2.59 |
) |
| Gain on debt
extinguishment |
|
1.13 |
|
|
— |
|
|
18.46 |
|
|
6.66 |
|
|
— |
|
| Noncash fair value gains
(losses) on commodity derivatives |
|
6.75 |
|
|
3.13 |
|
|
4.84 |
|
|
(1.89 |
) |
|
(2.41 |
) |
| Other noncash items |
|
(1.10 |
) |
|
(3.26 |
) |
|
(1.53 |
) |
|
2.21 |
|
|
(0.37 |
) |
|
Net income |
|
$ |
14.03 |
|
|
$ |
14.40 |
|
|
$ |
26.99 |
|
|
$ |
12.15 |
|
|
$ |
8.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL EXPENDITURE SUMMARY
(UNAUDITED)(1)
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
| In
thousands |
|
2019 |
|
2018 |
|
2019 |
|
2019 |
|
2018 |
| Capital expenditure
summary |
|
|
|
|
|
|
|
|
|
|
|
Tertiary oil fields |
|
$ |
17,547 |
|
|
$ |
43,047 |
|
|
$ |
28,758 |
|
|
$ |
72,333 |
|
|
$ |
107,133 |
|
|
Non-tertiary fields |
|
19,385 |
|
|
18,975 |
|
|
14,880 |
|
|
55,939 |
|
|
51,714 |
|
|
Capitalized internal costs(2) |
|
11,175 |
|
|
11,280 |
|
|
12,324 |
|
|
35,389 |
|
|
34,027 |
|
|
Oil and natural gas capital expenditures |
|
48,107 |
|
|
73,302 |
|
|
55,962 |
|
|
163,661 |
|
|
192,874 |
|
|
CO2 pipelines, sources and other |
|
3,313 |
|
|
12,697 |
|
|
20,894 |
|
|
25,778 |
|
|
22,345 |
|
|
Capital expenditures, before acquisitions and capitalized
interest |
|
51,420 |
|
|
85,999 |
|
|
76,856 |
|
|
189,439 |
|
|
215,219 |
|
| Acquisitions of oil and
natural gas properties |
|
25 |
|
|
129 |
|
|
68 |
|
|
122 |
|
|
150 |
|
|
Capital expenditures, before capitalized
interest |
|
51,445 |
|
|
86,128 |
|
|
76,924 |
|
|
189,561 |
|
|
215,369 |
|
| Capitalized interest |
|
8,773 |
|
|
9,514 |
|
|
8,238 |
|
|
27,545 |
|
|
26,817 |
|
|
Capital expenditures, total |
|
$ |
60,218 |
|
|
$ |
95,642 |
|
|
$ |
85,162 |
|
|
$ |
217,106 |
|
|
$ |
242,186 |
|
- Capital expenditure amounts include accrued capital.
- 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 |
|
Nine Months Ended |
| |
|
September 30, |
|
June 30, |
|
September 30, |
| In
thousands |
|
2019 |
|
2018 |
|
2019 |
|
2019 |
|
2018 |
|
Cash interest(1) |
|
$ |
48,297 |
|
|
$ |
46,515 |
|
|
$ |
48,371 |
|
|
$ |
144,616 |
|
|
$ |
138,660 |
|
| Interest not reflected as
expense for financial reporting purposes(1) |
|
(21,372 |
) |
|
(21,186 |
) |
|
(21,355 |
) |
|
(64,006 |
) |
|
(64,849 |
) |
| Noncash interest expense |
|
1,060 |
|
|
2,712 |
|
|
1,194 |
|
|
3,517 |
|
|
4,980 |
|
| Amortization of debt
discount(2) |
|
3,646 |
|
|
— |
|
|
444 |
|
|
4,090 |
|
|
— |
|
| Less: capitalized
interest |
|
(8,773 |
) |
|
(9,514 |
) |
|
(8,238 |
) |
|
(27,545 |
) |
|
(26,817 |
) |
|
Interest expense, net |
|
$ |
22,858 |
|
|
$ |
18,527 |
|
|
$ |
20,416 |
|
|
$ |
60,672 |
|
|
$ |
51,974 |
|
- Cash interest 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, and the Company’s previously outstanding 5% Convertible
Senior Notes due 2023 and 3½% Convertible Senior Notes due
2024. As a result of the accounting for certain exchange
transactions in previous years, most of the future interest related
to these notes was recorded as debt as of the debt issuance dates,
which is reduced as semiannual interest payments are made, and
therefore not reflected as interest for financial reporting
purposes.
- Represents the amortization of debt
discounts related to the Company’s 7¾% Senior Secured Second Lien
Notes due 2024 (“7¾% Senior Secured Notes”) and 6⅜% Convertible
Senior Notes due 2024 (“6⅜% Convertible Senior Notes”) issued in
June 2019. In accordance with FASC 470-50, Modifications and
Extinguishments, the 7¾% Senior Secured Notes and 6⅜% Convertible
Senior Notes were recorded on the Company’s balance sheet at a
discount of $30 million and $80 million, respectively, which will
be amortized as interest expense over the term of the notes.
SELECTED BALANCE SHEET DATA
(UNAUDITED)
| |
|
September 30, |
|
June 30, |
|
December 31, |
| In
thousands |
|
2019 |
|
2019 |
|
2018 |
| Cash and cash
equivalents |
|
$ |
514 |
|
|
$ |
341 |
|
|
$ |
38,560 |
|
| Total assets |
|
4,753,710 |
|
|
4,732,034 |
|
|
4,723,222 |
|
| |
|
|
|
|
|
|
| Borrowings under senior
secured bank credit facility |
|
$ |
50,000 |
|
|
$ |
80,000 |
|
|
$ |
— |
|
| Borrowings under senior
secured second lien notes (principal only)(1) |
|
1,623,049 |
|
|
1,623,251 |
|
|
1,520,587 |
|
| Borrowings under senior
convertible notes (principal only)(2) |
|
245,548 |
|
|
245,548 |
|
|
— |
|
| Borrowings under senior
subordinated notes (principal only) |
|
346,735 |
|
|
357,783 |
|
|
826,185 |
|
| Financing and capital
leases |
|
171,067 |
|
|
174,310 |
|
|
185,435 |
|
|
Total debt (principal only) |
|
$ |
2,436,399 |
|
|
$ |
2,480,892 |
|
|
$ |
2,532,207 |
|
| |
|
|
|
|
|
|
| Total stockholders’
equity |
|
$ |
1,346,120 |
|
|
$ |
1,270,676 |
|
|
$ |
1,141,777 |
|
- Excludes $190 million, $208 million, and $250 million of future
interest payable on the notes as of September 30, 2019, June 30,
2019, and December 31, 2018, respectively, accounted for as debt
for financial reporting purposes and also excludes a $28 million
and $29 million discount to par on the 7¾% Senior Secured Notes as
of September 30, 2019 and June 30, 2019, respectively.
- Excludes a $77 million and $80 million discount to par on the
6⅜% Convertible Senior Notes as of September 30, 2019 and June
30, 2019, respectively.
DENBURY CONTACTS:
Mark C. Allen, Executive Vice President and Chief Financial Officer, 972.673.2000
John Mayer, Director of Investor Relations, 972.673.2383
Denbury Resources (NYSE:DNR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Denbury Resources (NYSE:DNR)
Historical Stock Chart
From Apr 2023 to Apr 2024
