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Announces Year-Long 200,000 Share Stock Repurchase Program DALLAS, August 12, 2003--Denbury Resources Inc. (NYSE:DNR) ("Denbury" or the "Company") announced today that it has adopted a stock repurchase plan (the "Plan") that is consistent with the requirements of Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934. The Plan allows the Company to maintain an adequate amount of stock available for purchase by Denbury's employees each fiscal quarter under Denbury's Employee Stock Purchase Plan. The Plan authorizes the purchase on the New York Stock Exchange of 50,000 shares of the Company's common stock per fiscal quarter through an independent securities broker for a period of approximately twelve months, for a total of 200,000 shares, beginning August 13, 2003 and ending on July 31, 2004. Purchases are to be made at prices and times determined in the discretion of the independent broker; however, no purchases may be made during the last ten business days of the fiscal quarter, which is the pricing period for shares purchased by employees pursuant to Denbury's Employee Stock Purchase Plan. Denbury Resources Inc. (www.denbury.com) is a growing independent oil and gas company. The Company is the largest oil and natural gas operator in Mississippi, holds key operating acreage onshore Louisiana and has a growing presence in the offshore Gulf of Mexico areas. Files
$350 Million Universal Shelf Registration Statement
DALLAS, August 5, 2003 -- Denbury Resources Inc. (NYSE:DNR) announced that it filed a universal shelf registration statement today with the SEC to give Denbury and certain selling shareholders, if they so choose, the flexibility to offer up to $350 million of Denbury securities in the future. The registration statement has not been declared effective by the SEC. Under the registration statement, Denbury may offer up to $150 million of common stock, debt securities, preferred stock, depositary shares or warrants, or any combination of such securities, and certain selling shareholders, including affiliates of the Texas Pacific Group, may resell up to $200 million of outstanding common stock that they own. Following effectiveness of the registration statement, Denbury or the selling shareholders may periodically offer one or more of these securities in amounts, at prices, and on terms to be announced when, and if, the securities are offered. These offering specifics, along with the use of proceeds of any securities sold by Denbury, will be set out in a prospectus supplement at the time of any such offering. This shelf registration statement replaces a universal shelf registration filed in March 2001, which had approximately $97 million of current unused availability. The securities registered under the shelf registration statement may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective and a prospectus supplement setting forth the specific terms of any applicable offering is available. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such state. Denbury Resources Inc. (www.denbury.com) is a growing independent oil and gas company. The Company is the largest oil and natural gas operator in Mississippi, holds key operating acreage onshore Louisiana and has a growing presence in the offshore Gulf of Mexico areas. The Company increases the value of acquired properties in its core areas through a combination of exploitation drilling and proven engineering extraction practices. This press release, other than historical financial information, contains forward looking statements that involve risks such as those involved in drilling activity and those due to price volatility, and uncertainties as to drilling results, production levels, commodity prices, and financial results as detailed in the Company's filings with the Securities and Exchange Commission, including its most recent reports on Form 10-K and 10-Q. These reports are incorporated by reference as though fully set forth herein. These statements are based on assumptions concerning commodity prices, existing market conditions, scheduling, drilling and completion results and costs and engineering 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.
Announces Second Quarter 2003 Results
DALLAS, July 31, 2003--Denbury Resources Inc.
(NYSE:DNR) ("Denbury" or the "Company") today announced its second
quarter 2003 financial and operating results. The Company posted
earnings for the quarter of $5.1 million, or $0.10 per common share,
as compared to earnings of $13.5 million, or $0.25 per common share
for the second quarter of 2002. For purposes of period to period
comparability, if you exclude the $17.6 million pre-tax ($11.5 million
after tax) non-recurring charge to earnings on early retirement of
debt in the second quarter of 2003 relating to the Company's
refinancing of its subordinated debt, earnings for the second quarter
of 2003 would have been $16.6 million or $0.31 per common share.
Adjusted cash flow from operations for the quarter was $49.0
million, as compared to $43.4 million during the second quarter of
2002. (Please see the accompanying schedules for a reconciliation of
adjusted cash flow, a non-GAAP measure, to net cash flow provided by
operations, the GAAP measure). Net cash flow provided by operating
activities, as defined by generally accepted accounting principles
(GAAP), totaled $55.0 million during the second quarter of 2003,
compared to $46.6 million during the second quarter of 2002.
Second Quarter 2003 Financial Results
Denbury's second quarter 2003 average daily production of 35,050
BOE/d was 1% lower than the 35,526 BOE/d production average for the
comparable period in 2002. Production decreased due to normal
depletion, less than expected production increases from first half
exploration and development results, unexpected delays offshore and
temporary CO2 curtailments (see review of operations below). Oil
production from the Company's tertiary recovery operations averaged
4,522 BOE/d during the second quarter, a 4% increase over the level of
this production in the first quarter of 2003, in spite of a nine day
curtailment of CO2 production as a result of a CO2 pipeline leak in
early May.
Commodity prices were higher in the second quarter of 2003 as
compared to prices in the second quarter of the prior year. NYMEX oil
prices averaged almost $29.00 per Bbl and natural gas prices averaged
almost $5.50 per Mcf in the second quarter of 2003, as compared to
NYMEX averages of around $26.25 per Bbl and $3.40 per Mcf in the
second quarter of 2002. On a weighted average price per BOE received
net to the Company, prices were $7.71 per BOE and $13.05 per BOE
higher (excluding hedges) in the second quarter and first half of
2003, respectively, than in the comparable periods of 2002. However,
approximately $4.19 per BOE and $6.37 per BOE of this increase was
paid out on the Company's oil and natural gas hedges in the current
quarter and first half of 2003, respectively, as compared to minor
hedging cash receipts in the 2002 periods. As a result of the hedging
payments, the net realized per BOE price increase received by the
Company between the respective second quarters was reduced to $3.52
per BOE and to approximately $6.27 per BOE between the respective
first six months.
Partially offsetting the higher revenues were increases in
expenses, particularly operating expenses and loss on early
extinguishment of debt. Lease operating expenses increased from $5.30
per BOE in the second quarter of 2002 to $7.23 per BOE in the second
quarter of 2003. The primary reason for the increase was a mechanical
failure in two Louisiana gas wells late in the first quarter of 2003,
which continued into the second quarter, at a total repair cost of
approximately $850,000 in the first quarter and $2.0 million in the
second quarter. Continued high expenses on the properties acquired
from COHO, continued expansion of CO2 tertiary projects, which
typically have a higher than average operating cost per BOE, and
higher lease fuel costs due to high natural gas prices also
contributed to the higher than historical operating costs. The Company
anticipates that its lease operating expenses on a per BOE basis will
decrease later this year, assuming normal operating parameters.
Late in the first quarter, the Company issued $225 million of 7.5%
subordinated notes due 2013 and called its existing $200 million
principal amount of 9% subordinated notes due 2008. The old notes were
retired on April 16th and the refinancing is expected to save the
Company approximately $2.6 million per year in interest expense. As a
result of the refinancing, the Company recorded a $17.6 million
pre-tax charge ($11.5 million after tax) in the second quarter of 2003
relating to the call premium paid to retire the old notes and the
write-off of the remaining debt issue costs and unamortized discount
on the old notes. The refinancing was the primary reason for the
reduction in interest expense in the second quarter of 2003, as
compared to interest expense in the comparable quarter in 2002.
General and administrative expenses increased slightly, averaging
$1.06 per BOE in the second quarter of 2003, up from $1.02 per BOE in
the comparable quarter of 2002. The increase primarily relates to
incremental expenses associated with the requirements of the
Sarbanes-Oxley Act. The sale of stock by the Texas Pacific Group early
in 2003, higher expenses relating to year-end reporting than in the
prior year for items such as engineering fees and audit fees, and an
overall increase in personnel and associated expenses also contributed
to the six month comparative increase.
Operational Update
The Company recently drilled an exploratory discovery well at
North Lirette Field, the Exxon Fee A1, that is in the process of being
completed. The Company estimates that this initial discovery well
developed between 10 to 15 Bcf of reserves, net to the Company, with
an additional 10 to 15 Bcf of net potential reserves to be evaluated
by a second well in this area that is expected to be drilled and
completed early in the fourth quarter. The Company anticipates that
each well could produce as much as 7.5 MMcf/d, net to the Company.
Production from the initial well is expected to commence within the
next three weeks. The preliminary estimates of reserves and production
from this discovery more than make up for the less than expected
exploration and development results during the first half of the year,
a significant factor in the second quarter 1% production decrease from
the prior year's quarter.
During July, the Company completed its third CO2 well drilled
during the last twelve months, all of which are producing, or capable
of producing, at levels almost double the originally forecasted rates.
Due to these positive CO2 production rates, the Company has
accelerated the timing of a scheduled expansion shutdown of its CO2
facility from early 2004 to this last week of July. This shutdown is
necessary in order to upgrade equipment at the Jackson Dome treating
facility, expected to increase capacity of the facility from
approximately 200 MMcf/d to approximately 300 MMcf/d. However, due to
the facility shutdown, which started on July 28th and is expected to
last approximately one week, and the resulting temporary curtailment
of CO2 injections, the anticipated third quarter 2003 oil production
from the Company's tertiary operations is not expected to increase
over the second quarter levels. Oil production levels from these
fields are expected to resume their growth in the fourth quarter after
the additional CO2 production volumes become available for injection
following the facility upgrade.
Five offshore wells scheduled for the first seven months of 2003
have been delayed while waiting for partner approvals and clearance of
other logistical issues. The Company has up to six wells scheduled for
the last five months of 2003, although due to the timing, these wells
will not have a meaningful production impact in 2003. The installation
of production facilities at North Padre Island, the Company's year-end
2002 discovery, is still on schedule, and this field is expected to
commence production during the fourth quarter.
2003 Outlook
Denbury's 2003 development and exploration budget is currently set
at $143 million, including approximately $8 million of projects
carried over from 2002, but excluding any acquisitions. During the
first half of 2003, the Company made several minor acquisitions,
primarily consisting of incremental interests in existing properties,
at an aggregate cost of approximately $11.6 million.
The Company has revised its average daily production forecast for
2003 to a range of 35,000 BOE/d to 36,000 BOE/d, depending on the
results and ultimate timing of wells drilled in the second half of the
year. This is a reduction from its previously announced annual
production target of 37,500 BOE/d, caused by the timing delays
discussed above and less than expected exploration and development
results during the first half of the year (see operational update
above). Overall, third quarter average daily production is expected to
be slightly less than second quarter production, although as
previously mentioned, oil production from tertiary operations is
expected to be approximately the same. Production increases are
expected to resume in the fourth quarter. Subsequent to May, the
Company has not processed natural gas liquids, but has chosen to sell
them in the natural gas stream due to the relative natural gas and
liquid prices, and does not anticipate doing so in the near term. This
decision, made monthly, has minimal effect on total revenue but does
affect production volumes. The Company has excluded any natural gas
liquid production from this revised forecast, which impacts production
by 300 to 400 BOE/d.
Denbury's total debt as of June 30, 2003 is approximately $335
million, with $110 million undrawn on its bank borrowing base of $220
million. Even though the Company added approximately $15 million of
additional debt as part of its recent subordinated debt refinancing,
the Company still expects to reduce its debt during 2003 to its target
of $300 million, based on anticipated cash flow computed using the
current commodity prices.
Gareth Roberts, Chief Executive Officer, said: "We are pleased
with our recent exploration success at North Lirette Field. Although
we have additional testing to do on this play, it appears to be
significant enough to make our entire 2003 exploration program a
success, with five additional exploratory wells elsewhere still
scheduled to be drilled during the remainder of 2003. At Jackson Dome,
our CO2 wells are performing better than anticipated, and with the
facility upgrade that is almost completed, we will be capable of
producing approximately 220 MMcf/d of CO2, almost double our CO2
production rate a year earlier. However, with the temporary
curtailments of CO2 necessary to upgrade our facilities to deliver CO2
at this rate, our oil production response will effectively be delayed
about one quarter. Although we needed to lower our production forecast
for the next two quarters, we are confident that this is primarily
just a timing issue. The Company is gradually working toward our debt
target of $300 million and still anticipates achieving that goal by
year-end. Looking forward to 2004, we are fortunate in that we have a
significant inventory of internal projects to choose from, the cost of
which significantly exceeds our expected cash flow available for these
projects. The hardest part will be choosing which projects to invest
in during 2004. We continue to be enthusiastic about the future."
Conference Call
The public is invited to listen to the Company's conference call
set for today, July 31, 2003, at 10:00 A.M. CDT. The call will be
broadcast live over the Internet at our web site: www.denbury.com. If
you are unable to participate during the live broadcast, the call will
be archived on our web site for approximately 30 days and will also be
available for playback for one week by dialing 888-286-8010, passcode
58276745.
Non-GAAP Measure
Adjusted cash flow from operations is a non-GAAP measure that
represents cash flow provided by operations before changes in assets
and liabilities, as summarized from our Consolidated Statements of
Cash Flows. Adjusted cash flow from operations measures the cash flow
earned or incurred from operating activities without regard to the
collection or payment of associated receivables or payables. We
believe that this is important to consider separately, as we believe
it can often be a better way to discuss changes in operating trends in
our business caused by changes in production, prices, operating costs,
and so forth, without regard to whether the earned or incurred item
was collected or paid during that period. For a further discussion,
see "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Operating Results" in our latest Form 10-Q.
Denbury Resources Inc. is a growing independent
oil and gas company. The Company is the largest oil and natural gas
operator in Mississippi, holds key operating acreage onshore Louisiana
and has a growing presence in the offshore Gulf of Mexico areas. The
Company increases the value of acquired properties in its core areas
through a combination of exploitation drilling and proven engineering
extraction practices.
This press release, other than historical financial information,
contains forward-looking statements that involve risks such as those
involved in drilling activity and those due to price volatility, and
uncertainties as to drilling results, production levels, commodity
prices, and financial results as detailed in the Company's filings
with the Securities and Exchange Commission, including its reports on
Form 10-K and 10-Q. These reports are incorporated by reference as
though fully set forth herein. These statements are based on
assumptions concerning commodity prices, existing market conditions,
scheduling, drilling and completion results and costs and engineering
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.
Sets Conference Call for Second Quarter
DALLAS, July 17,
2003 -- Denbury Resources Inc. (DNR) ("Denbury" or the "Company")
today announced that it will release its second quarter 2003 results
on Thursday, July 31, 2003 before the market opens.
You are invited to listen to our conference call broadcast live over the Internet on Thursday, July 31, 2003 at 10:00 a.m. CDT. Gareth Roberts, President and Chief Executive Officer, Phil Rykhoek, Sr. Vice President and Chief Financial Officer, Mark Worthey, Senior Vice President - Operations and Tracy Evans, Senior Vice President of Reservoir Engineering, will lead the call. The call may be accessed at our website at www.denbury.com Denbury Resources Inc. is a growing independent oil and gas company. The Company is the largest oil and natural gas operator in Mississippi and holds key operating acreage in the onshore Louisiana and offshore Gulf of Mexico areas. The Company increases the value of acquired properties in its core areas through a combination of exploitation drilling and proven engineering extraction practices.
Announces
Completion of Its Exchange of $225,000,000
DALLAS, July 9, 2003--Denbury Resources Inc.
(NYSE:DNR)("Denbury" or the "Company") announced today that it has
completed the exchange of $225 million of its previously issued 7 1/2%
Senior Subordinated Notes Due 2013, which were privately placed in
March 2003, for $225 million of 7 1/2% Senior Subordinated Notes Due
2013 that have been registered under the Securities Act of 1933.
One-hundred percent of the privately placed notes were tendered for
exchange.
The new exchange notes are being issued under the same indenture
as the privately placed notes. This announcement does not constitute
an offer to sell or the solicitation of an offer to buy the notes.
Denbury Resources Inc. is a growing independent
oil and gas company. The Company is the largest oil and natural gas
operator in Mississippi, holds key operating acreage onshore Louisiana
and has a growing presence in the offshore Gulf of Mexico areas.
This press release contains forward-looking statements that
involve risk and uncertainties.
Announces Exchange Offer for Previously Issued $225 Million Notes
DALLAS, June 5,
2003 -- Denbury Resources Inc. (DNR) ("Denbury" or the "Company")
announced that it is commencing an offer today to exchange $225,000,000
of its 7 1/2% Senior Subordinated Notes Due 2013, which were privately
placed in March 2003, for a like principal amount of 7 1/2% Senior
Subordinated Notes Due 2013 that have been registered under the Securities
Act of 1933.
The terms of the new registered notes are substantially identical to the outstanding $225,000,000 of notes. The offering will expire at 5:00 p.m. New York time on July 7, 2003, unless otherwise extended by the Company. JPMorgan Chase Bank will serve as exchange agent for the exchange offer. The offering is not conditioned upon any minimum principal amount of notes being tendered for exchange. The exchange offer will be made by means of a prospectus.
The foregoing shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Denbury Resources Inc. is a growing independent oil and gas company. The Company is the largest oil and natural gas operator in Mississippi, holds key operating acreage onshore Louisiana and has a growing presence in the offshore Gulf of Mexico areas.
This press release contains forward-looking statements that involve risk and uncertainties.
Announces First Quarter 2003 Results
DALLAS, May 1, 2003--Denbury Resources Inc.
(NYSE:DNR) ("Denbury" or the "Company") today announced its first
quarter 2003 financial and operating results.
The Company's production increased slightly over the prior
quarter's production, averaging 36,093 barrels of oil equivalent per
day ("BOE/d") in the first quarter of 2003, the Company's highest
quarterly-average to date. The Company posted earnings for the quarter
of $21.1 million, or $0.39 per common share, as compared to earnings
of $4.5 million, or $0.09 per common share for the first quarter of
2002, with the increase primarily due to higher commodity prices. Cash
flow from operations for the quarter was $35.5 million, as compared to
cash flow from operations during the first quarter of 2002 of $12.0
million.
Continued Production Increases
Denbury's first quarter 2003 average daily production of 36,093
BOE/d was 2% higher than the 35,361 BOE/d production average for the
comparable period in 2002 and 1% higher than fourth quarter 2002
production, despite the sale of Laurel Field effective January 31,
2003. Production from Laurel Field had been averaging between 1,500
and 1,700 BOE/d since the Company acquired it in August 2002. The
Company recognized higher production from its offshore, onshore
Louisiana and tertiary oil recovery properties, with increases there
more than offsetting the lost production from the Laurel Field sale.
The Company's first quarter 2003 production was negatively affected by
a mechanical failure in two of the Company's Louisiana gas wells,
lowering overall production (primarily natural gas) by approximately
500 BOE/d. These two workovers were significant factors in the
increase in the quarter's operating expenses per BOE. First quarter
2003 production was weighted slightly towards oil, with 54% of
production oil and 46% natural gas.
The Company's tertiary recovery projects at Little Creek and
Mallalieu Fields demonstrated additional response in the first quarter
as a result of incremental CO2 injections made possible by the
completion of one CO2 well, the Denkmann #1, in December 2002 and
another CO2 well, the IP 15-4 #1, late in the first quarter of 2003.
Total CO2 production increased from around 120 million cubic feet of
CO2 per day ("MMcf/d") late in 2002 to approximately 175 MMcf/d by
mid-April. Oil production from the tertiary projects averaged 4,345
Bbls/d in the first quarter of 2003, a 12% increase over the 2002
fourth quarter average of 3,863 Bbls/d for these projects. During the
months of March and April 2003, oil production from Little Creek and
Mallalieu was even higher, averaging between 4,500 and 4,750 Bbls/d.
First Quarter 2003 Financial Results
Commodity prices were significantly higher in the first quarter of
2003 as compared to prices in the first quarter of the prior year.
NYMEX oil prices averaged almost $34.00 per Bbl and natural gas prices
averaged almost $6.00 per Mcf in the first quarter of 2003, as
compared to NYMEX averages of around $21.50 per Bbl and $2.50 per Mcf
in the first quarter of 2002. On a weighted average price per BOE net
to the Company, prices were $18.41 per BOE higher in the first quarter
of 2003 than in the comparable period of 2002. However, the Company
recognized only a portion of this benefit, as it paid out
approximately $8.52 per BOE on its oil and natural gas hedges in the
current quarter, as compared to cash receipts of $0.83 per BOE in the
prior year quarter, leaving a net realized price increase of
approximately $9.06 per BOE.
Partially offsetting the higher revenues were increases in several
expense items. Lease operating expenses increased from $4.85 per BOE
in the first quarter of 2002 to $6.90 per BOE in the first quarter of
2003. The two aforementioned workovers totaling approximately $850,000
were the biggest source of the increase, although continued high
expenses on the properties acquired from COHO, continued expansion of
CO2 tertiary projects, which typically have a higher than average cost
per BOE, and higher lease fuel costs also contributed to the higher
than historical operating costs. The Company expects to incur between
$1.8 million and $2.0 million of additional expense in the second
quarter of 2003 on the two workovers, which were not completed until
late April. The Company anticipates that its lease operating expenses
on a per BOE basis will decrease later this year, assuming normal
operating parameters.
General and administrative expenses also increased, averaging
$1.17 per BOE in the first quarter of 2003, up from $1.01 per BOE in
the prior year's first quarter. The increase relates to expenses
associated with the recent sale of stock by the Texas Pacific Group,
higher year-end expenses than in the prior year for items such as
engineering fees and audit fees, and an overall increase in personnel
and associated expenses.
Late in the first quarter, the Company issued $225 million of 7.5%
subordinated notes due 2013 and called its existing $200 million
principal amount of 9% subordinated notes due 2008. The old notes were
retired on April 16th and the refinancing is expected to save
approximately $2.6 million per year in interest expense. As a result
of the refinancing, the Company anticipates an $11 million after tax
charge in the second quarter of 2003 relating to the call premium paid
to retire the old notes and the write-off of unamortized discount on
the old notes.
The Company recognized current income tax expense of $2.7 million
in the first quarter of 2003, as compared to a benefit of $481,000 in
the first quarter of 2002. The current income taxes relate to
anticipated alternative minimum taxes due for 2003, due to the Company
utilizing almost all of its remaining alternative minimum tax loss
carryforwards in 2002.
On January 1, 2003, the Company implemented SFAS No.143,
"Accounting for Asset Retirement Obligations." As a result, the
Company recorded a liability of $41.0 million representing the
discounted present value of the retirement obligations and an increase
to oil and gas properties of $34.4 million. The liability will be
accreted to its future value each period and the capitalized cost is
depreciated over the useful life of the related asset. The cumulative
effect of this change in accounting principle for the prior years, net
of related income tax expense, is $2.6 million, which was a credit to
earnings in the first quarter of 2003.
2003 Outlook
Denbury's 2003 development and exploration budget is currently set
at $138 million, including approximately $8 million of projects
carried over from 2002. Any acquisitions made by the Company will
increase these capital budget amounts. During the first quarter of
2003, the Company made two minor acquisitions consisting of
incremental interests in two offshore blocks at an aggregate cost of
approximately $3.2 million.
Denbury's total debt as of May 1, 2003 is approximately $350
million, with $95 million undrawn on its recently reaffirmed bank
borrowing base of $220 million. Even though the Company added
approximately $15 million of additional debt as part of its recent
subordinated debt refinancing, the Company still expects to reduce its
debt during 2003 to its target of $300 million, based on anticipated
cash flow computed using the current commodity prices. At this time,
the Company is leaving its targeted 2003 average production level
unchanged at 37,500 BOE/d.
Gareth Roberts, Chief Executive Officer, said: "Even with the
unforeseen mechanical problems, we were able to keep our production on
budget and are still on track to meet our previously stated 2003
production target. Based on 2003's current futures prices, we expect
to generate $50 million to $60 million of excess cash flow above our
current $138 million budget. While we may consider a modest increase
to our capital expenditure budget of $10 million to $15 million, any
remaining excess cash flow will be used to repay debt and/or fund, or
partially fund, any potential acquisitions. Most significantly, the
production from our tertiary recovery projects is increasing as we
were able to increase our CO2 injections with the incremental
production from our recently completed CO2 wells. Since these CO2
wells are performing better than anticipated, we are now ahead of
schedule on CO2 production. In addition, we have a third CO2 well in
progress that has reached total depth and is undergoing completion
operations."
Conference Call
The public is invited to listen to the Company's conference call
set for today, May 1, 2003, at 10:00 A.M. CDT. The call will be
broadcast live over the Internet at our web site: www.denbury.com. If
you are unable to participate during the live broadcast, the call will
be archived on our web site for approximately 30 days and will also be
available for playback for one week by dialing 888-286-8010, passcode
34949979.
Denbury Resources Inc. is a growing independent
oil and gas company. The Company is the largest oil and natural gas
operator in Mississippi, holds key operating acreage onshore Louisiana
and has a growing presence in the offshore Gulf of Mexico areas. The
Company increases the value of acquired properties in its core areas
through a combination of exploitation drilling and proven engineering
extraction practices.
This press release, other than historical financial information,
contains forward looking statements that involve risks such as those
involved in drilling activity and those due to price volatility, and
uncertainties as to drilling results, production levels, commodity
prices, and financial results as detailed in the Company's filings
with the Securities and Exchange Commission, including its reports on
Form 10-K and 10-Q. These reports are incorporated by reference as
though fully set forth herein. These statements are based on
assumptions concerning commodity prices, existing market conditions,
scheduling, drilling and completion results and costs and engineering
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.
Sets Conference Call for First Quarter
DALLAS--April 24, 2003--Denbury Resources Inc.
(NYSE:DNR) ("Denbury" or the "Company") today announced that it will
release its First Quarter 2003 results on Thursday, May 1, 2003.
You are invited to listen to our conference call broadcast live
over the Internet on Thursday, May 1, 2003 at 10:00 a.m. CDT. Gareth
Roberts, President and Chief Executive Officer, Phil Rykhoek, Sr. Vice
President and Chief Financial Officer, Mark Worthey, Senior Vice
President - Operations and Tracy Evans, Senior Vice President of
Reservoir Engineering, will lead the call. The call may be accessed at
our Web site at www.denbury.com. If you are unable to participate
during the live broadcast, the call will be archived on our Web site
for approximately 30 days. The audio portion of the call will also be
available for playback by phone for one month after the call by
dialing 888/286-8010 or 617/801-6888, passcode 34949979.
Denbury Resources Inc. is a growing independent
oil and gas company. The Company is the largest oil and natural gas
operator in Mississippi and holds key operating acreage in the onshore
Louisiana and offshore Gulf of Mexico areas. The Company increases the
value of acquired properties in its core areas through a combination
of exploitation drilling and proven engineering extraction practices.
Announces Pricing of $225 Million Senior Subordinated Notes Offering
DALLAS, March 18, 2003--Denbury Resources Inc. (NYSE:DNR; "Denbury" or the "Company") announced today that it has priced its private offering of $225 million of Senior Subordinated Notes due 2013, which will carry a coupon interest rate of 7.5%.
The notes are being sold at 99.135% of their face amount. The Company expects to close the sale of the notes on March 25, 2003, subject to the satisfaction of customary closing conditions.
Denbury plans to use the estimated net proceeds of approximately $218.5 million from the offering to refinance the Company's currently outstanding $125 million aggregate principal amount of 9% Senior Subordinated Notes Due 2008 and $75 million aggregate principal amount of 9% Series B Senior Subordinated Notes due 2008.
Today Denbury called for redemption the full $200 million of these 9% notes, such redemption to take place on April 16, 2003, conditioned upon the closing of the sale of the new 7.5% Senior Subordinated Notes.
The notes have not been registered under the Securities Act of 1933 or applicable state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy the notes.
This press release, other than historical financial information, contains forward-looking statements that involve risks and uncertainties, including whether the sale of the notes will be closed.
Announces Refinancing of Senior Subordinated Notes
DALLAS, March 17, 2003--Denbury Resources Inc. (NYSE:DNR; "Denbury" or the "Company") announced today that it intends to offer $200 million of Senior Subordinated Notes Due 2013 in a private Rule 144A offering.
Denbury plans to use the estimated net proceeds of approximately $194.25 million from the offering to refinance the Company's currently outstanding $125 million aggregate principal amount of 9% Senior Subordinated Notes Due 2008 and $75 million aggregate principal amount of 9% Series B Senior Subordinated Notes Due 2008. Denbury intends to call these 9% notes today, with such call to be effective as early as April 16, 2003, conditioned upon the closing of the new Senior Subordinated Notes. The Company expects to use bank debt to fund the estimated $14.75 million of redemption costs not funded by the net proceeds of the offering.
The notes have not been registered under the Securities Act of 1933 or applicable state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy the notes.
This press release, other than historical financial information, contains forward-looking statements that involve risks and uncertainties, including whether the sale of the notes will be closed.
Announces Sale of 2,500,000 Shares by Texas Pacific Group
DALLAS, March 7, 2003--Denbury Resources Inc.
(NYSE:DNR) ("Denbury" or the "Company") today announced the sale of
2.5 million shares of Denbury common stock owned by affiliates of the
Texas Pacific Group ("TPG"), which will reduce TPG's ownership of
Denbury from approximately 36.8% to 32.2%. Closing is expected to
occur on or about March 12, 2002.
Additionally, TPG has granted the underwriter a 30-day option to
purchase up to an additional 375,000 shares to cover over-allotments,
if any. Denbury will not receive any of the proceeds from the sale of
shares by TPG. This offering will not affect the number of Denbury
shares issued and outstanding.
This sale of 2.5 million shares, together with TPG's sale of 7.5
million shares in late 2002, equals the total of 10 million shares of
Denbury common stock that TPG originally announced it intended to
offer in November 2002.
Lehman Brothers Inc. will serve as underwriter for the offering.
This press release contains forward-looking statements that
involve risk and uncertainties.
Announces Record Quarterly Production
DALLAS, February 20, 2003--Denbury Resources Inc.
(NYSE:DNR) ("Denbury" or the "Company") today announced its fourth
quarter and 2002 financial and operating results. The Company posted a
new quarterly production record of 35,894 BOE/d and an annual
production average of 35,573 BOE/d, a 14% increase in annual
production in 2002 over 2001. The Company sustained this production
increase even though its total capital spending, net of dispositions,
was less than its cash flow from operations (excluding the change in
other assets and liabilities). The Company posted earnings for the
full year 2002 of $46.8 million or $0.88 per common share, and fourth
quarter 2002 net income of $15.3 million, or $0.29 per share. Cash
flow from operations for 2002 (excluding the change in other assets
and liabilities) was $164.6 million, with fourth quarter of 2002 cash
flow from operations of $48.4 million. The Company previously
announced record quantities (130.7 MMBOE) and valuation ($1.426
billion) for its proved reserves.
Continued Production and Reserve Growth
Denbury's fourth quarter oil production averaged 20,706 Bbls/d and
91.1 MMcf/d, with the drop in natural gas production from
approximately 105 MMcf/d earlier in the year due primarily to the
temporary halt of offshore natural gas production related to Hurricane
Lili and Tropical Storm Isidore. The decrease in natural gas
production resulted in a fourth quarter oil and natural gas production
ratio of 58% oil to 42% natural gas. The Company expects this ratio to
return to around 50/50 for the first quarter of 2003 as the Company
expects its natural gas production to return to prior levels and its
oil production to decline due to the Company's sale of Laurel Field,
which closed last week. Laurel Field was producing approximately 1,600
to 1,700 Bbls/d at the time of the sale. The Company expects its 2003
production to average approximately 37,500 BOE/d after adjusting for
the sale of Laurel Field, a 5% increase over the average 2002
production levels.
Most of the production increase in the fourth quarter is
attributable to the properties acquired from COHO in August 2002,
partially offset by the suspended production due to Hurricane Lili.
Oil production from the Company's CO2 tertiary activities was
relatively unchanged from the third to fourth quarter of 2002,
averaging just under 3,900 Bbls/d in both quarters. The oil production
from these fields is expected to increase in 2003 as the Company has
corrected its temporary shortfall in CO2 production by the addition of
an incremental 25 million cubic feet of CO2 production per day in
December 2002, resulting from the hookup of its first recently drilled
CO2 well. The Company expects to complete its second CO2 well within
the next 30 days and has already commenced the drilling of a third
well. Production is expected to increase to approximately 200 million
cubic feet of CO2 per day by year-end 2003. The increased CO2
production will be used primarily by the Company in its tertiary
recovery operations and will enable the Company to continue its
expansion of these tertiary floods, which is expected to lead to
increased oil production.
Along with the growth in production, the Company's proved reserves
quantities increased 19% from 109.5 MMBOE as of December 31, 2001 to
130.7 MMBOE as of December 31, 2002. During 2002, the Company added
35.1 MMBOEs of estimated reserves from drilling, extensions,
acquisitions and net revisions. With total capital expenditures for
2002 of $155.6 million (excluding expenditures on CO2 properties), of
which $56.4 million related to acquisitions, the Company's finding
cost for 2002 was $4.43 per BOE. Approximately 7.4 MMBbls of these
reserves were sold in February 2003 with the sale of Laurel Field for
$27 million in cash and other consideration with an estimated value of
$1.0 million.
2002 Financial Results
As a result of higher production and good commodity prices,
Denbury posted a 2002 profit of $46.8 million, or $0.88 per common
share. Net income was 23% less per share than the $1.15 reported in
2001 due to a 7% drop in commodity prices on a per BOE basis, a 95%
decrease in the proceeds from derivative contracts and a 5% increase
in total expenses, with the largest increase in cash expenses due to
the COHO properties acquired in August 2002. Correspondingly, the
Company's cash flow from operations (excluding the change in other
assets and liabilities) decreased 12% year over year, with 2002 cash
flow from operations of $164.6 million, down from $186.8 million of
cash flow from operations during 2001.
On a per BOE basis, net to the Company before any effect of
hedging, product prices were 7% lower in 2002 than 2001. The decline
in proceeds from the Company's hedging program further reduced
revenue, as the Company collected only $932,000 from its hedging
program in 2002, down from the $18.7 million collected in 2001. Most
of the 2001 receipts were a result of natural gas hedges purchased in
conjunction with the Matrix acquisition in July 2001.
Capital expenditures for 2002 totaled $172.1 million, as compared
to total capital expenditures of $372.7 million in 2001. Of the 2002
total, $16.4 million related to acquisitions of and expenditures on
CO2 properties and $56.4 million related to oil and natural gas
property acquisitions, the largest being the $48.2 million COHO
acquisition. During 2001, the Company spent $170.1 million on oil and
natural gas expenditures, $157.1 million on acquisitions, primarily
the Matrix acquisition, and $45.6 million on CO2 assets, including the
$41.7 million acquisition of CO2 assets in February 2001. The Company
increased its debt during 2002 by $9.1 million, primarily to fund an
overall increase in working capital, bringing the Company's total debt
as of December 31, 2002 to $350.0 million (excluding the unamortized
discount).
Lease operating expenses increased 13% on a per BOE basis between
2001 and 2002, primarily due to higher than usual workover expenses,
principally on the offshore properties, for repairs relating to the
storm damage from Hurricane Lili that were not covered by insurance or
were within the insurance deductible. Additionally, the Company
experienced higher per BOE cost due to the suspended production from
Hurricane Lili and Tropical Storm Isidore and significant repairs and
clean-up required on the properties acquired from COHO.
General and administrative expenses increased 8% on a per BOE
basis between 2001 and 2002 due to overall increases in costs,
although the Company's average cost per BOE still averaged below $1.00
per BOE for 2002, one of the lowest yearly averages in the Company's
history. Net cash interest expense decreased slightly (1%) on a per
BOE basis in 2002. The overall higher average level of debt was offset
by lower interest rates, a higher portion of interest expenses
consisting of non-cash interest expense from the amortization of the
discount on $75.0 million of subordinated debt issued in August 2001,
and higher production levels. Depreciation and depletion increased 16%
on a per BOE basis primarily as a result of the Matrix acquisition in
July 2001, as the DD&A rate of $7.26 per BOE for 2002 was almost the
same as the depreciation and depletion rate for the second half of
2001 after adjusting for the Matrix acquisition.
2003 Outlook
Denbury's 2003 development and exploration budget is $130 million,
plus approximately $7.7 million of uncompleted 2002 projects. Any
acquisitions made by the Company would increase these capital budget
amounts. Denbury's total debt is currently $325 million, with $95
million undrawn on its bank credit line. The Company plans to reduce
its overall debt level during 2003 to $300 million or less using
currently projected 2003 cash flow from operations (based on the
current futures market). This level of cash flow is expected to be
substantially higher than Denbury's planned capital expenditure
program. Once total debt is reduced to $300 million, the Company may
consider increasing its capital budget, depending on other factors at
that time, including then anticipated oil and natural gas prices. The
Company expects to increase production by approximately 5% during 2003
based on this level of spending, even after adjusting for the 1,600 to
1,700 BOE/d of production from the Laurel Field sold in February of
2003.
Gareth Roberts, Chief Executive Officer, said: "We continue to
execute on our plan to increase production and reserves and to reduce
debt. With the completion of the sale of Laurel Field last week, our
debt has been reduced to $325 million, lower than year-end 2001
levels, even though our production and proven reserves are both
higher. The net result is a continued increase in our proved net asset
value per share. We have a strong inventory of projects, anchored by
our CO2 tertiary recovery projects in western Mississippi and the
potential development of our 22,000 undeveloped acres in the Barnett
Shale play west of Fort Worth, Texas. These two plays, coupled with
our proved undeveloped reserves, provide us with identified projects
requiring capital expenditures of between $120 and $150 million each
year for the next four years. We consider ourselves fortunate to be in
that position. We will continue to look at acquisitions, but with our
inventory of projects, we can be opportunistic in what we acquire. We
look forward to our future."
Conference Call
The public is invited to listen to the Company's conference call
set for today, February 20, 2003, at 10:00 A.M. CDT. The call will be
broadcast live over the Internet at our web site: www.denbury.com. If
you are unable to participate during the live broadcast, the call will
be archived on our Web site for approximately 30 days and will also be
available for playback for one week by dialing 888-203-1112, passcode
430890.
Annual Meeting
The Company today announced its 2003 Annual Meeting of
Shareholders will be held on Tuesday, May 20th at 3:00 P.M., local
time, at the offices of the Company located at 5100 Tennyson Parkway,
Plano, Texas. The record date for determination of shareholders
entitled to vote at the annual meeting will be the close of business
on April 4, 2003.
Following are financial highlights for the comparative fourth
quarters and annual periods ended December 31, 2002 and December 31,
2001. All dollar amounts are in U.S. dollars and 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. (www.denbury.com) is a growing independent
oil and gas company. The Company is the largest oil and natural gas
operator in Mississippi, holds key operating acreage onshore Louisiana
and has a growing presence in the offshore Gulf of Mexico areas. The
Company increases the value of acquired properties in its core areas
through a combination of exploitation drilling and proven engineering
extraction practices.
This press release, other than historical financial information,
contains forward looking statements that involve risks such as those
involved in drilling activity and those due to price volatility, and
uncertainties as to drilling results, production levels, commodity
prices, and financial results as detailed in the Company's filings
with the Securities and Exchange Commission, including its reports on
Form 10-K and 10-Q. These reports are incorporated by reference as
though fully set forth herein. These statements are based on
assumptions concerning commodity prices, existing market conditions,
scheduling, drilling and completion results and costs and engineering
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.
DALLAS, December 26, 2002--Denbury Resources Inc.
(NYSE:DNR) ("Denbury" or the "Company") today gave an update on
certain of its drilling results.
North Padre Island Discovery
The Company has drilled and logged its initial well at North Padre
Island Block A-9, offshore Texas and based on initial internal
estimates, believes that it has made a new field discovery with total
potential gross natural gas reserves of approximately 90 Bcf (34 Bcf
net to the Company). The Company is currently in the process of
reviewing this well data with its independent engineers as part of the
preparation of its year-end reserves, but anticipates that little, if
any, of these reserves will be proven at year-end primarily due to the
lack of production flow tests. Positive results from future wells,
flows tests and production results will be required in order to
classify these potential natural gas reserves as proven. None of this
testing is expected until late 2003.
The Company is expected to spud its second well in this field in a
different fault block within the next week which, if successful, could
add an additional 35 Bcf of gross reserve potential (13 Bcf net). This
second well should reach total depth by late January. There may also
be additional wells drilled in this field in late 2003 or during 2004
to test other additional potential in this block. The production
facilities necessary to produce any reserves in this block are not
expected to be installed until late 2003.
New CO2 Well on Production
The Company has recently put the first CO2 well it has drilled,
the Denkmann #1, on production at initial rates up to 22 million cubic
feet of CO2 per day, bringing the Company's total CO2 production
capacity to about 140 million cubic feet of CO2 per day. The Company
expects to further increase the production rate on this well in early
2003 to production rates as high as 30 million cubic feet per day. The
Company's second CO2 well, the IP 15-4, is currently drilling at
approximately 14,800 feet, with two additional CO2 wells scheduled for
2003.
Natural Gas Hedges
Separately, the Company announced that as part of its regular
hedging program it has recently hedged natural gas for calendar 2005
in the form of a no-cost natural gas collar for 15 MMcf/d, consisting
of a price floor of $3.00 per MMBtu and an average price ceiling of
$5.50 per MMBtu. Although the Company has not completed its production
forecast for 2005, it expects that this hedge will cover between 10%
and 15% of its anticipated 2005 natural gas production.
Denbury Resources Inc. is a growing independent oil and gas company. The Company
is the largest oil and natural gas operator in Mississippi and holds
key operating acreage onshore Louisiana and in the offshore Gulf
of Mexico. The Company increases the value of acquired properties
in its core areas through a combination of exploitation drilling
and proven engineering extraction practices.
This press release, other than historical financial information,
contains forward looking statements that involve risks and
uncertainties, including expected drilling activity and results,
production levels, commodity prices, financial results, sales proceeds
and other risks and uncertainties detailed in the Company's filings
with the Securities and Exchange Commission, including the reports on
Forms 10-K and 10-Q. These reports are incorporated by this reference
as though fully set forth herein. These statements are based on
assumptions concerning pricing, scheduling, drilling and completion
results and engineering 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.
DALLAS, December 11, 2002--Denbury Resources Inc. (NYSE:DNR) ("Denbury" or the "Company") today announced certain operational and financial guidance for 2003, including an update on hedging activities. Capital Expenditure Program The Company has approved its 2003 development and exploration expenditures budget set at an estimated $130 million, excluding any potential acquisitions. Approximately one-third of the budget will be spent on projects relating to the Company's tertiary recovery (CO2) projects in western Mississippi, which includes additional development of the Little Creek and Mallalieu Fields, in addition to the commencement of a new CO2 flood at McComb Field and the drilling of three additional CO2 producing wells. Approximately 25% of the budget is being allocated to the offshore Gulf of Mexico area where the Company expects to drill 8-10 wells during 2003, split almost equally between development and exploration. The balance of the 2003 budget is almost equally weighted between the remaining two core areas of onshore Louisiana and eastern Mississippi and funds reserved for discretionary spending, seismic, acreage and other general corporate costs. Included in this portion of the budget are approximately 15 wells onshore Louisiana and 20 wells in eastern Mississippi. Anticipated Production Growth Based on this capital budget program, the Company anticipates that its production will average around 37,500 BOE/d during 2003, with an estimated 50/50 oil and natural gas production ratio. This represents a production increase of between five and six percent over anticipated 2002 totals, even after adjustment for the estimated 2,200 BOE/d relating to properties that are expected to be sold during the fourth quarter of 2002 or in early 2003. The Company expects fourth quarter of 2002 daily production to average between 35,500 and 36,000 BOE/d, slightly less than originally expected, primarily due to further delays and shut-ins attributable to Tropical Storm Isidore and Hurricane Lili in late September and early October. Natural Gas Hedges Separately, the Company announced that as part of its regular hedging program it has recently hedged additional natural gas for 2004 in the form of a no-cost natural gas collar for 30 MMcf/d, consisting of a price floor of $3.00 per MMBtu and an average price ceiling of $5.84 per MMBtu. Although the Company has not completed its production forecast for 2004, it expects that this hedge, combined with its prior hedges, will cover between 50% and 60% of its anticipated 2004 natural gas production. The Company had previously hedged between 40% and 50% of its anticipated 2004 oil production. "We continue to execute on our plan to increase net asset value per share by increasing production, increasing reserves and at the same time reducing debt," commented Gareth Roberts, Chief Executive Officer of Denbury. "Even though we expect to spend significantly less than our currently anticipated 2003 cash flow and are in the process of selling approximately 2,200 BOE/d to help us reduce debt, we still expect to show overall production growth next year. We expect to pay back an additional $10 million of debt next week with excess cash flow, reducing our total debt to $350 million. With the proposed property sales, some of which may not close until January 2003, plus a portion of the anticipated extra cash flow generated from operations, we believe that our targeted debt level of $300 million is very achievable by mid-year 2003." Denbury Resources Inc. (www.denbury.com) is a growing independent oil and gas company. The Company is the largest oil and natural gas operator in Mississippi and holds key operating acreage onshore Louisiana and in the offshore Gulf of Mexico. The Company increases the value of acquired properties in its core areas through a combination of exploitation drilling and proven engineering extraction practices. This press release, other than historical financial information, contains forward looking statements that involve risks and uncertainties, including expected drilling activity and results, production levels, commodity prices, financial results, sales proceeds and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission, including the reports on Form 10-Q. These reports are incorporated by this reference as though fully set forth herein. These statements are based on assumptions concerning pricing, scheduling, drilling and completion results and engineering 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. Announces Completion of Sale of Shares by Texas Pacific Group DALLAS, November 22, 2002 -- Denbury Resources Inc. (NYSE:DNR) ("Denbury" or the "Company") today announced the sale by affiliates of the Texas Pacific Group ("TPG") of 7.0 million Denbury common shares which they own, representing approximately 26% of TPG's Denbury shares. The shares were priced at $10.00 per share. TPG's ownership of Denbury will drop from approximately 51% prior to the offering to approximately 38% following the offering. Closing is expected to occur on or about Nov. 27, 2002. Additionally, TPG has granted the underwriters a 30-day option to purchase up to an additional 500,000 shares to cover over-allotments, if any. Denbury will not receive any of the proceeds from the sale of shares by the TPG and this offering will not affect the number of Denbury shares issued and outstanding. Lehman Brothers Inc., CIBC World Markets Corp., Raymond James & Associates, Inc., and Johnson Rice & Company L.L.C. served as underwriters for the offering. Denbury Resources Inc. (www.denbury.com) is a growing independent oil and gas company. The Company is the largest oil and natural gas operator in Mississippi, holds key operating acreage onshore Louisiana and has a growing presence in the offshore Gulf of Mexico areas. Announces Offering of Shares by Texas Pacific Group
DALLAS, November 14, 2002--Denbury Resources Inc. (NYSE:DNR) ("Denbury") today announced that it has filed a supplemental prospectus to its March 21, 2001 shelf registration to cover the sale of 10.0 million shares of common stock owned by affiliates of the Texas Pacific Group ("TPG"), which shares represent approximately 37% of TPG's ownership. Additionally, TPG has granted the underwriters a 30-day option to purchase up to an additional 1.5 million shares to cover over-allotments, if any. TPG's ownership of Denbury will drop from approximately 51% prior to the offering to approximately 32% following the offering. TPG has been an investor and significant shareholder in Denbury since December 1995. Denbury will not receive any of the proceeds from the sale of shares by TPG. This offering will not affect the number of Denbury shares issued and outstanding. Lehman Brothers Inc., CIBC World Markets Corp., Raymond James & Associates, Inc., and Johnson Rice & Company L.L.C. will serve as underwriters for the common stock offering. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Denbury Resources Inc. (www.denbury.com) is a growing independent oil and gas company. The Company is the largest oil and natural gas operator in Mississippi, holds key operating acreage onshore Louisiana and has a growing presence in the offshore Gulf of Mexico areas. This press release contains forward looking statements that involve risk and uncertainties, including whether the sale of the shares will be closed. Announces Third Quarter 2002 Results
DALLAS, November 5, 2002--Denbury Resources Inc. (NYSE:DNR) ("Denbury" or the "Company") today announced its third quarter 2002 financial and operating results. The Company posted earnings for the quarter of $13.5 million, or $0.25 per common share, just slightly less than the comparative prior year quarter of $13.9 million, or $0.27 per common share. Cash flow from operations for the quarter (excluding the changes in assets and liabilities) was $44.2 million, or $0.83 per common share, as compared to cash flow for the third quarter of 2001 of $48.7 million, or $0.93 per common share. The slightly lower results in 2002 can be primarily attributed to (i) higher hedging gains in the third quarter of 2001 related to the price floors purchased for the Matrix acquisition, (ii) lower than anticipated production in the third quarter of 2002 due to production shut-ins related to Tropical Storm Isidore, and (iii) higher operating costs in 2002 related to the additional tertiary floods and the addition of the COHO properties for one month of the quarter. Production Denbury's third quarter 2002 average daily production of 35,506 BOE/d was 1% higher than the 35,112 BOE/d average for the comparable period in 2001, and approximately the same as the 2002 second quarter's average of 35,526 BOE/d. The properties from the COHO acquisition, which closed in August 2002, added approximately 1,230 BOE/d to the third quarter of 2002 average production, but this increase was offset by the losses in production due to Tropical Storm Isidore. The shut-ins of primarily offshore natural gas properties also affected the balance of Denbury's oil and natural gas production slightly, with third quarter 2002 production averaging 53% oil and 47% natural gas. Production from our CO2 properties was up 60% year over year, but down 9% from the second quarter of 2002 level. Production on these properties declined slightly to 3,895 BOE/d for the third quarter of 2002 from the second quarter of 2002 average of 4,278 BOE/d due to a temporary lack of deliverability of CO2 and facility maintenance work performed at Little Creek Field during the quarter, which required the field to be shut-in for a few days. Production had begun to rebound by September as additional CO2 volumes became available. During the third quarter of 2002 the Company added additional compression equipment for its CO2 production and drilled an additional CO2 well which is expected to commence production in late November or early December. By year-end, the Company expects to be able to increase its daily CO2 production from the third quarter of 2002 average of 112 MMcf/d to around 160 MMcf/d (September 2002 averaged 121 MMcf/d with the additional compression). The Company plans to commence the drilling of another CO2 well immediately following the completion of the current one, with two to three more wells tentatively scheduled for 2003. Third Quarter 2002 Financial Results Oil and natural gas revenues increased $6.6 million, or 10%, between the comparable third quarters, primarily due to higher realized commodity prices. On a per BOE basis, our net realized commodity prices were 9% higher in the third quarter of 2002 than in the third quarter of 2001, even though NYMEX oil prices were up only 5% and NYMEX natural gas prices were up 9%. This was possible because the Company's net realized oil price discount to NYMEX was lower than historical averages as a result of certain oil indices and prices. The Company is unable to predict the movement of these indices, but would expect that its oil price discount to NYMEX would increase in the future to a level more in line with historical averages. The Company's oil price discount did increase during the third quarter, after a historically low price differential in the second quarter of 2002. However, in spite of higher oil and natural gas revenues, total revenues were almost the same in the comparable third quarters due to the large gain from natural gas hedges ($7.2 million) in the third quarter of 2001, as compared to a small loss primarily on oil hedges ($218,000) in the third quarter of 2002. Between the respective third quarters, lease operating expenses increased 20% on a per BOE basis, primarily due to increased operating expenses on the properties acquired from COHO and additional facility maintenance work performed at Little Creek Field during the quarter. Production taxes and marketing expenses decreased 11% on a per BOE basis primarily due to a reduction in Louisiana natural gas severance tax rates effective July 1, 2002. General and administrative expenses increased 6% on a per BOE basis between the respective quarters, as a result of higher personnel costs resulting from the Matrix and COHO acquisitions, and a lower percentage of overhead allocated to operations as a result of the lower capital budget and less drilling activity in 2002 as compared to 2001. Net cash interest expense decreased 3% on a per BOE basis in 2002, in spite of higher debt levels due to the Matrix and COHO acquisitions, as a result of higher interest and other income in 2002 and a higher percentage of non-cash interest expense following the issuance of $75 million of subordinated debt at a discount in August 2001. With the addition of the properties acquired in the COHO acquisition, the DD&A rate for the third quarter of 2002 dropped by $0.30 per BOE, from the $7.35 per BOE average rate during the first half of 2002, to reflect the lower cost per barrel of the properties acquired in the COHO acquisition. For the comparative nine month periods, the DD&A rate per BOE was higher in 2002 primarily as a result of the Matrix acquisition in July 2001. Outlook Denbury's 2002 development and exploration budget is currently set at $118 million, (including approximately $6 million of 2001 projects carried over to 2002), of which approximately $83.2 million has been spent through September 30. The Company is in the process of finalizing its 2003 development budget, which is projected to be about $130 million. In August 2002, the Company acquired COHO Energy Inc.'s Gulf Coast properties auctioned in the U.S. Bankruptcy Court in Dallas, Texas, which included nine fields, eight of which are located in Mississippi and one in Texas. The net purchase price, adjusted for interim cash flow from the June 1, 2002 effective date, and purchase adjustments to date, was $48.2 million. As previously announced, the Company's initial estimates indicate the acquisition includes net proven reserves of approximately 14.4 million barrels of oil, with current production, net to the Company, of between 4,000 and 4,500 barrels of oil per day. The Company is pursuing selling Laurel, Bentonia and Glazier fields, three of the acquired COHO fields, along with some of its other minor properties before year-end 2002, assuming that, in the Company's opinion, the prices bid for the properties are adequate. The estimated aggregate proved reserves on the fields that may be sold is approximately 8.0 million barrels with current production of approximately 2,300 BOE/d. The Company currently estimates that these sales will produce net proceeds of as much as $45 million, depending on the level of interest, commodity prices at the time, and the bids that it obtains. The Company plans to use any proceeds that it obtains from property sales to reduce its bank debt. Denbury's total debt is currently $375 million ($200 million of subordinated debt and $175 million of bank debt), with $45 million undrawn on its bank borrowing base of $220 million. In September 2002, the maturity date of the Company's bank credit line was extended from December 2003 to April 2006. The borrowing base remained the same as the Company does not anticipate needing the incremental borrowing capacity as it plans to reduce debt during the next several months. Due to Hurricane Lili in early October and the projected effect and timing of prospective property sales, the Company is expecting its fourth quarter production to be around 37,000 BOE/d, a 6% increase over the prior year's fourth quarter production. Were it not for the hurricane, the Company's production projection would be at least 1,500 BOE/d higher. Based on this forecasted average for the fourth quarter, the Company's average production for 2002 will be approximately 15% higher than 2001 average production levels. Gareth Roberts, Chief Executive Officer, said: "Apart from the production interruptions from the two storms, we are very pleased with our progress this year. We have essentially completed the acquisition phase of the long-term tertiary development plan for those fields in Southwest Mississippi that are close to our CO2 pipeline. The detailed production estimates for this plan can be found in our slide show at our web site, www.denbury.com. We are also optimistic that our property sales will be completed by year-end, allowing us to end 2002 with higher production and reserves than the prior year but with lower debt, consistent with our primary goal of increasing net asset value per share. Our development budget for 2003, preliminarily set at $130 million, should be considerably less than cash flow, assuming current prices hold, and should allow us to reduce our debt to our target of $300 million. Details of next year's development budget will be finalized in the next few weeks, as soon as we have finished picking the best projects out of about $250 million of opportunities identified by our staff." Conference Call The public is invited to listen to the Company's conference call set for today, November 5, 2002, at 9:00 A.M. CDT. The call will be broadcast live over the Internet at our web site: www.denbury.com. If you are unable to participate during the live broadcast, the call will be archived on our web site for approximately 30 days and will also be available for playback for one week by dialing 888-203-1112, passcode 546725. Denbury Resources Inc. is a growing independent oil and gas company. The Company is the largest oil and natural gas operator in Mississippi, holds key operating acreage onshore Louisiana and has a growing presence in the offshore Gulf of Mexico areas. The Company increases the value of acquired properties in its core areas through a combination of exploitation drilling and proven engineering extraction practices. This press release, other than historical financial information, contains forward looking statements that involve risks such as those involved in drilling activity, debt reduction and those due to price volatility, and uncertainties as to drilling results, production levels, commodity prices, and financial results as detailed in the Company's filings with the Securities and Exchange Commission, including its reports on Form 10-K and 10-Q. These reports are incorporated by reference as though fully set forth herein. These statements are based on assumptions concerning commodity prices, existing market conditions, scheduling, drilling and completion results and costs and engineering 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. |