Denbury Resources Inc. (NYSE: DNR) (“Denbury” or the “Company”)
today announced net income of $78 million, or $0.17 per diluted
share, for the third quarter of 2018. Adjusted net income(1)
(a non-GAAP measure) was $59 million, or $0.13(1)(2) per diluted
share, with the difference from GAAP net income primarily due to
the exclusion of $17 million ($13 million after tax) of income from
noncash fair value adjustments on commodity derivatives(1) (a
non-GAAP measure), with the GAAP and non-GAAP measures reconciled
in tables beginning on page 9.
2018 THIRD QUARTER
HIGHLIGHTS
- Adjusted EBITDAX(1) (a non-GAAP measure) of $148 million.
- Net debt to annualized third quarter 2018 Adjusted EBITDAX of
4.2x (including hedge settlements) and 2.9x (excluding hedge
settlements).
- Generated more than $100 million of free cash flow(1) (a
non-GAAP measure) YTD 2018.
- Extended maturity date of senior secured bank credit facility
to December 2021. No amounts were outstanding under this
facility as of September 30, 2018, with $67 million cash on
hand.
- Total production of 59,181 barrels of oil equivalent (“BOE”)
per day.
SELECTED QUARTERLY COMPARATIVE
DATA
|
|
Quarter Ended |
(in millions, except per-share and per-unit
data) |
|
Sept. 30, 2018 |
|
June 30, 2018 |
|
Sept. 30, 2017 |
Net income |
|
$ |
78 |
|
|
$ |
30 |
|
|
$ |
0 |
|
Adjusted net income(1) (non-GAAP measure) |
|
59 |
|
|
61 |
|
|
14 |
|
Net income per diluted share |
|
0.17 |
|
|
0.07 |
|
|
0.00 |
|
Adjusted net income per diluted share(1)(2) (non-GAAP measure) |
|
0.13 |
|
|
0.13 |
|
|
0.04 |
|
Cash flows from operations |
|
148 |
|
|
154 |
|
|
66 |
|
Adjusted cash flows from operations(1) (non-GAAP measure) |
|
135 |
|
|
134 |
|
|
68 |
|
Adjusted EBITDAX(1) (non-GAAP measure) |
|
148 |
|
|
153 |
|
|
102 |
|
|
|
|
|
|
|
|
Revenues |
|
$ |
388 |
|
|
$ |
382 |
|
|
$ |
266 |
|
Receipt (payment) on settlements of commodity derivatives |
|
(62 |
) |
|
(55 |
) |
|
0 |
|
Revenues and commodity derivative settlements
combined |
|
$ |
326 |
|
|
$ |
327 |
|
|
$ |
266 |
|
|
|
|
|
|
|
|
Average realized oil price per barrel (excluding derivative
settlements) |
|
$ |
71.44 |
|
|
$ |
68.24 |
|
|
$ |
47.78 |
|
Average realized oil price per barrel (including derivative
settlements) |
|
59.78 |
|
|
58.23 |
|
|
47.80 |
|
|
|
|
|
|
|
|
Total production (BOE/d) |
|
59,181 |
|
|
61,994 |
|
|
60,328 |
|
(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 458.5 million, 457.2 million, and 393.0
million for the three months ended September 30, 2018, June 30,
2018 and September 30, 2017, respectively.
MANAGEMENT COMMENT
Chris Kendall, Denbury’s President and CEO,
commented, “Denbury’s performance in the third quarter continued to
highlight the sustained advances across our business. We
maintained strong capital discipline and we remain on track to
spend within our full-year guidance. Each of our key safety
and environmental performance metrics is at a record rate. We
amended our bank credit facility and extended the maturity to 2021,
while also enhancing our debt maturity profile with the complete
repayment of our credit facility and issuance of new second lien
notes maturing in 2024. Our balance sheet continued to
strengthen, with our leverage ratio reduced by nearly a half-turn
from the second quarter. While our production was below the
second quarter as we expected, we continued to generate significant
free cash flow, with an operating margin now approaching $41 per
BOE.
“We are particularly excited about the recently
announced acquisition of Penn Virginia and what our combined
company will be. The Penn Virginia team has done an
outstanding job of building and efficiently operating a large,
contiguous, high value Eagle Ford position. Penn Virginia’s
high oil weighting, strong margins, large short-cycle investment
inventory, and significant EOR potential set the stage for the
combined company to deliver years of growth and free cash flow,
providing significant long-term value to stakeholders of both
companies.”
REVIEW OF OPERATING AND FINANCIAL
RESULTS
Denbury’s production averaged 59,181 BOE/d
during third quarter 2018, including 37,562 barrels per day
(“Bbls/d”) from tertiary properties and 21,619 BOE/d from
non-tertiary properties, including production from Lockhart
Crossing Field, which was sold in September 2018. The Company
previously guided that third quarter 2018 production would be lower
than its second quarter 2018 production, due primarily to a
scheduled pause in the Company’s Mission Canyon drilling program,
production downtime at Cedar Creek Anticline and Oyster Bayou
fields, and the seasonal impacts of summer temperatures at certain
Gulf Coast fields. These items were the primary reasons for
the 5% sequential quarterly production decline. Further
production information is provided on page 14 of this press
release.
The Company’s average realized oil price during
third quarter 2018 was $1.84 per Bbl above NYMEX oil prices,
compared to $0.39 per Bbl above NYMEX in the prior quarter and
$0.34 per Bbl below NYMEX in third quarter 2017. The
increases were primarily attributable to an improvement in LLS
index prices relative to NYMEX prices and continued improvement in
Rocky Mountain region differentials.
The Company’s total lease operating expenses in
third quarter 2018 were $123 million or $22.50 per BOE, an increase
of $2 million, or 2%, compared to the prior quarter, and an
increase of $5 million, or 4%, compared to third quarter
2017. The sequential and year-over-year increases were most
significantly impacted by higher workover expense and contract
labor for repair work, with the per-BOE changes mainly impacted by
the decrease in quarterly production.
Taxes other than income, which include ad
valorem, production and franchise taxes, were consistent with
levels in the second quarter of 2018 and increased $7 million from
the prior-year third quarter, generally due to the impact of higher
oil prices.
General and administrative expenses were $22
million in third quarter 2018, a $2 million increase from the prior
quarter and a $6 million decrease compared to third quarter
2017. The year-over-year decrease is primarily attributable
to severance-related payments recognized in the prior-year
period.
Interest expense, net of capitalized interest,
was $19 million in third quarter 2018, an increase of $2 million
from second quarter 2018 due to the write-off of debt issuance
costs associated with the Company’s third quarter 2018 credit
facility amendment. Interest expense excludes approximately
$21 million and $13 million in the third quarters of 2018 and 2017,
respectively, of interest recorded as a reduction of debt for
financial reporting purposes instead of as interest expense, due to
the accounting associated with debt exchange transactions. A
schedule detailing the components of interest expense is included
on page 16 of this press release.
Depletion, depreciation, and amortization
(“DD&A”) was $51 million in third quarter 2018, consistent with
third quarter 2017.
Denbury’s effective tax rate for the third
quarter of 2018 was approximately 17%, lower than the Company’s
estimated statutory rate of 25% due to the impact of recognizing
tax benefits in the current quarter for enhanced oil recovery
credits, as well as the stock-based compensation tax deduction
being greater than book expense recognized. The Company’s
statutory rate decreased from the prior-year rate of 38% due to
reduction of the federal income tax rate from 35% to 21% as enacted
by the Tax Cut and Jobs Act in December 2017.
BANK CREDIT FACILITY AND LONG-TERM
DEBT
As previously announced, in August 2018, the
Company entered into a Sixth Amendment to the Bank Credit Agreement
which primarily extended the maturity date from December 9, 2019 to
December 9, 2021 (or earlier in 2021 in certain circumstances) and
reduced the borrowing base and total commitments from $1.05 billion
to $615 million. Pursuant to the fall 2018 semiannual
borrowing base redetermination recently completed in early November
2018, the Company’s borrowing base was reaffirmed at $615
million.
In August 2018, the Company issued $450 million
of 7½% Senior Secured Second Lien Notes due 2024 (the “2024 Senior
Secured Notes”). The 2024 Senior Secured Notes were issued at
par to repay outstanding borrowings on the Company’s senior secured
bank credit facility, with additional proceeds used for general
corporate purposes. As a result of this new issuance, the
Company had no outstanding borrowings under its $615 million senior
secured bank credit facility as of September 30, 2018, a decrease
of $415 million from the level outstanding as of June 30, 2018 and
a decrease of $475 million from December 31, 2017 levels. At
September 30, 2018, the Company had $67 million in cash on hand and
$553 million of liquidity available under its bank credit facility
after consideration of $62 million of outstanding letters of
credit.
2018 CAPITAL BUDGET AND ESTIMATED
PRODUCTION
The Company’s 2018 capital budget, excluding
acquisitions and capitalized interest, is expected to be in the
upper half of its previously estimated range of $300 million to
$325 million. This level of capital expenditures is expected
to be significantly less than the Company’s estimated 2018 cash
flow from operations. Approximately $215 million, or 66%, of
the expected capital spend has been incurred through the third
quarter of 2018, which was fully funded with $394 million of cash
flow from operations. Denbury’s estimated 2018 production is
currently expected to be between 60,100 and 60,600 BOE/d, within
the Company’s original guidance range of 60,000 to 64,000
BOE/d.
CONFERENCE CALL
Denbury management will host a conference call
to review and discuss third quarter 2018 financial and operating
results, financial and operating guidance for 2018 and additional
information related to the acquisition of Penn Virginia, today,
Thursday, November 8, at 10:00 A.M. (Central).
Additionally, Denbury will post presentation materials on its
website which will be referenced during the conference call.
Individuals who would like to participate should dial 800.230.1093
or 612.332.0228 ten minutes before the scheduled start time.
To access a live webcast of the conference call and accompanying
slide presentation, please visit the investor relations section of
the Company’s website at www.denbury.com. The webcast will be
archived on the website, and a telephonic replay will be accessible
for at least one month after the call by dialing 800.475.6701 or
320.365.3844 and entering confirmation number 426561.
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.
No Offer or Solicitation
This communication relates in part to a proposed
business combination transaction (the “Transaction”) between Penn
Virginia Corporation (“Penn Virginia”) and the Company. This
communication is for informational purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval, in any
jurisdiction, pursuant to the Transaction or otherwise, nor shall
there be any sale, issuance, exchange or transfer of the securities
referred to in this document in any jurisdiction in contravention
of applicable law. No offer of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act.
Additional Information and Where to Find
It
In connection with the Transaction, the Company
will file with the Securities and Exchange Commission (the “SEC”) a
registration statement on Form S-4 that will include a joint proxy
statement of the Company and Penn Virginia and a prospectus of the
Company. The Transaction will be submitted to the Company’s
stockholders and Penn Virginia’s shareholders for their
consideration. The Company and Penn Virginia may also file other
documents with the SEC regarding the Transaction. The definitive
joint proxy statement/prospectus will be sent to the stockholders
of the Company and the shareholders of Penn Virginia. This document
is not a substitute for the registration statement and joint proxy
statement/prospectus that will be filed with the SEC or any other
documents that the Company or Penn Virginia may file with the SEC
or send to stockholders of the Company or shareholders of Penn
Virginia in connection with the Transaction. INVESTORS AND
SECURITY HOLDERS OF THE COMPANY AND PENN VIRGINIA ARE URGED TO READ
THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS
REGARDING THE TRANSACTION WHEN THEY BECOME AVAILABLE AND ALL OTHER
RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS
WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY
AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE TRANSACTION AND RELATED MATTERS.
Investors and security holders will be able to
obtain free copies of the registration statement and the joint
proxy statement/prospectus (when available) and all other documents
filed or that will be filed with the SEC by the Company or Penn
Virginia through the website maintained by the SEC at www.sec.gov.
Copies of documents filed with the SEC by the Company will be made
available free of charge on the Company’s website at
www.denbury.com or by directing a request to John Mayer, Director
of Investor Relations, Denbury Resources Inc., 5320 Legacy Drive,
Plano, TX 75024, Tel. No. (972) 673-2000. Copies of documents filed
with the SEC by Penn Virginia will be made available free of charge
on Penn Virginia’s website at www.pennvirginia.com, under the
heading “SEC Filings,” or by directing a request to Investor
Relations, Penn Virginia Corporation, 16285 Park Ten Place,
Houston, TX 77084, Suite 500, Tel. No. (713) 722-6500.
Participants in
Solicitation
The Company, Penn Virginia and their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies in respect to the Transaction.
Information regarding the Company’s directors
and executive officers is contained in the proxy statement for the
Company’s 2018 Annual Meeting of Stockholders filed with the SEC on
April 12, 2018, and certain of its Current Reports on Form 8-K. You
can obtain free copies of these documents at the SEC’s website at
www.sec.gov or by accessing the Company’s website at
www.denbury.com. Information regarding Penn Virginia’s executive
officers and directors is contained in the proxy statement for Penn
Virginia’s 2018 Annual Meeting of Shareholders filed with the SEC
on March 28, 2018, and certain of its Current Reports on Form 8-K.
You can obtain free copies of these documents at the SEC’s website
at www.sec.gov or by accessing Penn Virginia’s website at
www.pennvirginia.com.
Investors may obtain additional information
regarding the interests of those persons and other persons who may
be deemed participants in the Transaction by reading the joint
proxy statement/prospectus regarding the Transaction when it
becomes available. You may obtain free copies of this document as
described above.
Forward-Looking Statements and
Cautionary Statements
This communication contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act. All statements, other than
statements of historical fact, included in this communication that
address activities, events or developments that the Company or Penn
Virginia expects, believes or anticipates will or may occur in the
future are forward-looking statements, including estimated 2018
production, capital expenditures and other risks and uncertainties
detailed in the Company’s filings with the Securities and Exchange
Commission, including Denbury’s most recent report on Form
10-K. These risks and uncertainties are incorporated by this
reference as though fully set forth herein. Words such as
“estimate,” “project,” “predict,” “believe,” “expect,”
“anticipate,” “potential,” “create,” “intend,” “could,” “may,”
“foresee,” “plan,” “will,” “guidance,” “look,” “outlook,” “goal,”
“future,” “assume,” “forecast,” “build,” “focus,” “work,”
“continue” or the negative of such terms or other variations
thereof and words and terms of similar substance used in connection
with any discussion of future plans, actions, or events identify
forward-looking statements. However, the absence of these words
does not mean that the statements are not forward-looking. These
forward-looking statements include, but are not limited to,
statements regarding Penn Virginia and its properties, margins, EOR
potential, or regarding the Transaction, pro forma descriptions of
the combined company and its operations, growth, cash flows,
integration and transition plans, synergies, opportunities and
anticipated future performance. These statements are based on
engineering, geological, financial and operating assumptions that
Company and Penn Virginia management believes are reasonable based
on currently available information; however, managements’
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. There are a number
of risks and uncertainties that could cause actual results to
differ materially from the forward-looking statements included in
this communication. These include the expected timing and
likelihood of completion of the Transaction, including the timing,
receipt and terms and conditions of any required governmental and
regulatory approvals of the Transaction that could reduce
anticipated benefits or cause the parties to abandon the
Transaction, the ability to successfully integrate the businesses,
the occurrence of any event, change or other circumstances that
could give rise to the termination of the merger agreement, the
possibility that stockholders of the Company may not approve the
issuance of new shares of common stock in the Transaction or the
amendment of the Company’s charter or that shareholders of Penn
Virginia may not approve the merger agreement, the risk that the
parties may not be able to satisfy the conditions to the
Transaction in a timely manner or at all, the risk that any
announcements relating to the Transaction could have adverse
effects on the market price of the Company’s common stock or Penn
Virginia’s common stock, the risk that the Transaction and its
announcement could have an adverse effect on the Company’s and Penn
Virginia’s operating results and businesses generally, or cause
them to incur substantial costs, the risk that problems may arise
in successfully integrating the businesses of the companies, which
may result in the combined company not operating as effectively and
efficiently as expected, the risk that the combined company may be
unable to achieve synergies or it may take longer than expected to
achieve those synergies and other important factors that could
cause actual results to differ materially from those projected. All
such factors are difficult to predict and are beyond the Company’s
or Penn Virginia’s control, including those detailed in the
Company’s annual reports on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K that are available on its
website at www.denbury.com and on the SEC’s website at www.sec.gov,
and those detailed in Penn Virginia’s annual reports on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K that
are available on Penn Virginia’s website at www.pennvirginia.com
and on the SEC’s website at www.sec.gov. All forward-looking
statements are based on assumptions that the Company or Penn
Virginia believe to be reasonable but that may not prove to be
accurate. Any forward-looking statement speaks only as of the date
on which such statement is made, and the Company and Penn Virginia
undertake no obligation to correct or update any forward-looking
statement, whether as a result of new information, future events or
otherwise, except as required by applicable law. Readers are
cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date hereof.
FINANCIAL AND STATISTICAL DATA TABLES
AND RECONCILIATION SCHEDULES
Following are unaudited financial highlights for
the comparative three and nine month periods ended September 30,
2018 and 2017 and the three month period ended June 30, 2018.
All production volumes and dollars are expressed on a net revenue
interest basis with gas volumes converted to equivalent barrels at
6:1.
DENBURY RESOURCES
INC.CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
The following information is based on GAAP
reported earnings (along with additional required disclosures)
included or to be included in the Company’s periodic reports:
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
In thousands, except per-share data |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Revenues and other income |
|
|
|
|
|
|
|
|
|
|
Oil sales |
|
$ |
377,329 |
|
|
$ |
256,621 |
|
|
$ |
373,286 |
|
|
$ |
1,088,021 |
|
|
$ |
768,912 |
|
Natural gas sales |
|
2,299 |
|
|
2,409 |
|
|
2,279 |
|
|
7,193 |
|
|
7,176 |
|
CO2 sales and transportation fees |
|
8,149 |
|
|
6,590 |
|
|
6,715 |
|
|
22,416 |
|
|
18,533 |
|
Other income |
|
7,196 |
|
|
939 |
|
|
4,783 |
|
|
17,640 |
|
|
8,576 |
|
Total revenues and other income |
|
394,973 |
|
|
266,559 |
|
|
387,063 |
|
|
1,135,270 |
|
|
803,197 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
122,527 |
|
|
117,768 |
|
|
120,384 |
|
|
361,267 |
|
|
342,926 |
|
Marketing and plant operating expenses |
|
12,427 |
|
|
11,816 |
|
|
11,549 |
|
|
36,400 |
|
|
39,758 |
|
CO2 discovery and operating expenses |
|
708 |
|
|
1,346 |
|
|
500 |
|
|
1,670 |
|
|
2,452 |
|
Taxes other than income |
|
27,344 |
|
|
20,233 |
|
|
27,234 |
|
|
81,897 |
|
|
62,848 |
|
General and administrative expenses |
|
21,579 |
|
|
27,273 |
|
|
19,412 |
|
|
61,223 |
|
|
81,303 |
|
Interest, net of amounts capitalized of $9,514,
$9,416, $8,851, $26,817 and $22,217, respectively |
|
18,527 |
|
|
24,546 |
|
|
16,208 |
|
|
51,974 |
|
|
75,785 |
|
Depletion, depreciation, and amortization |
|
51,316 |
|
|
52,101 |
|
|
52,944 |
|
|
156,711 |
|
|
154,448 |
|
Commodity derivatives expense (income) |
|
44,577 |
|
|
25,263 |
|
|
96,199 |
|
|
189,601 |
|
|
(9,712 |
) |
Other expenses |
|
1,933 |
|
|
— |
|
|
2,980 |
|
|
7,241 |
|
|
— |
|
Total expenses |
|
300,938 |
|
|
280,346 |
|
|
347,410 |
|
|
947,984 |
|
|
749,808 |
|
Income (loss) before income taxes |
|
94,035 |
|
|
(13,787 |
) |
|
39,653 |
|
|
187,286 |
|
|
53,389 |
|
Income tax provision (benefit) |
|
|
|
|
|
|
|
|
|
|
Current income taxes |
|
(1,888 |
) |
|
1,072 |
|
|
(754 |
) |
|
(3,674 |
) |
|
(18,828 |
) |
Deferred income taxes |
|
17,504 |
|
|
(15,301 |
) |
|
10,185 |
|
|
42,741 |
|
|
35,846 |
|
Net income |
|
$ |
78,419 |
|
|
$ |
442 |
|
|
$ |
30,222 |
|
|
$ |
148,219 |
|
|
$ |
36,371 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.17 |
|
|
$ |
0.00 |
|
|
$ |
0.07 |
|
|
$ |
0.35 |
|
|
$ |
0.09 |
|
Diluted |
|
$ |
0.17 |
|
|
$ |
0.00 |
|
|
$ |
0.07 |
|
|
$ |
0.33 |
|
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
Basic |
|
451,256 |
|
|
392,013 |
|
|
433,467 |
|
|
426,036 |
|
|
390,448 |
|
Diluted |
|
458,450 |
|
|
393,023 |
|
|
457,165 |
|
|
455,934 |
|
|
392,625 |
|
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, |
|
|
2018 |
|
2017 |
|
2018 |
In thousands, except per-share data |
|
Amount |
|
Per Diluted Share |
|
Amount |
|
Per Diluted Share |
|
Amount |
|
Per Diluted Share |
Net income (GAAP measure) |
|
$ |
78,419 |
|
|
$ |
0.17 |
|
|
$ |
442 |
|
|
$ |
0.00 |
|
|
$ |
30,222 |
|
|
$ |
0.07 |
|
Adjustments to reconcile to adjusted net income (non-GAAP
measure) |
|
|
|
|
|
|
|
|
|
|
|
|
Noncash fair value adjustments on commodity
derivatives(1) |
|
(17,034 |
) |
|
(0.04 |
) |
|
25,352 |
|
|
0.06 |
|
|
41,429 |
|
|
0.09 |
|
Severance-related payments included in general and
administrative expenses(2) |
|
— |
|
|
— |
|
|
6,807 |
|
|
0.02 |
|
|
— |
|
|
— |
|
Other adjustments(3) |
|
1,497 |
|
|
0.00 |
|
|
— |
|
|
— |
|
|
(26 |
) |
|
0.00 |
|
Estimated income taxes on above adjustments to net
income and other discrete tax items(4) |
|
(3,886 |
) |
|
0.00 |
|
|
(18,676 |
) |
|
(0.04 |
) |
|
(10,654 |
) |
|
(0.03 |
) |
Adjusted net income (non-GAAP measure) |
|
$ |
58,996 |
|
|
$ |
0.13 |
|
|
$ |
13,925 |
|
|
$ |
0.04 |
|
|
$ |
60,971 |
|
|
$ |
0.13 |
|
|
|
Nine Months Ended |
|
|
September 30, |
|
|
2018 |
|
2017 |
In thousands, except per-share data |
|
Amount |
|
Per Diluted Share |
|
Amount |
|
Per Diluted Share |
Net income (GAAP measure) |
|
$ |
148,219 |
|
|
$ |
0.33 |
|
|
$ |
36,371 |
|
|
$ |
0.09 |
|
Adjustments to reconcile to adjusted net income (non-GAAP
measure) |
|
|
|
|
|
|
|
|
Noncash fair value adjustments on commodity
derivatives(1) |
|
39,863 |
|
|
0.09 |
|
|
(48,330 |
) |
|
(0.12 |
) |
Severance-related payments included in general and
administrative expenses(2) |
|
— |
|
|
— |
|
|
6,807 |
|
|
0.02 |
|
Other adjustments(3) |
|
3,546 |
|
|
0.01 |
|
|
— |
|
|
— |
|
Estimated income taxes on above adjustments to net
income and other discrete tax items(4) |
|
(17,680 |
) |
|
(0.05 |
) |
|
13,092 |
|
|
0.03 |
|
Adjusted net income (non-GAAP measure) |
|
$ |
173,948 |
|
|
$ |
0.38 |
|
|
$ |
7,940 |
|
|
$ |
0.02 |
|
(1) The net change between periods of the
fair market values of open commodity derivative positions,
excluding the impact of settlements on commodity derivatives during
the period.(2) Severance-related payments associated with the
Company’s August 2017 workforce reduction.(3) Other
adjustments include a $2 million write-off of debt issuance costs
associated with the Company’s 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; a $3 million gain
on land sales, offset by a similar amount of other expense accrued
for litigation matters during the three months ended June 30, 2018;
and $2 million of transaction costs related to the Company’s
privately negotiated debt exchanges during the nine months ended
September 30, 2018.(4) The estimated income tax impacts on
adjustments to net income are generally computed based upon a
statutory rate of 25% and 38% for 2018 and 2017, respectively, with
the exception of the tax impact of a shortfall (benefit) on the
stock-based compensation deduction which totaled ($2) million, $2
million, and <($1) million during the three months ended
September 30, 2018, September 30, 2017, and June 30, 2018,
respectively, and $1 million and $6 million for the nine months
ended September 30, 2018 and 2017, respectively, and a tax benefit
for enhanced oil recovery income tax credits of $5 million and $9
million during the three and nine months ended September 30, 2018
and 2017, respectively.
DENBURY RESOURCES
INC.SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Reconciliation of cash flows from operations
(GAAP measure) to adjusted cash flows from operations (non-GAAP
measure) to adjusted cash flows from operations less interest
treated as debt reduction (non-GAAP measure) 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. Free cash
flow is a non-GAAP measure that represents adjusted cash flows from
operations less interest treated as debt reduction less development
capital expenditures before acquisitions and capitalized
interest. 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 |
In thousands |
|
September 30, |
|
June 30, |
|
September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Net income (GAAP measure) |
|
$ |
78,419 |
|
|
$ |
442 |
|
|
$ |
30,222 |
|
|
$ |
148,219 |
|
|
$ |
36,371 |
|
Adjustments to reconcile to adjusted cash flows from
operations |
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation, and amortization |
|
51,316 |
|
|
52,101 |
|
|
52,944 |
|
|
156,711 |
|
|
154,448 |
|
Deferred income taxes |
|
17,504 |
|
|
(15,301 |
) |
|
10,185 |
|
|
42,741 |
|
|
35,846 |
|
Stock-based compensation |
|
3,559 |
|
|
3,274 |
|
|
2,560 |
|
|
8,711 |
|
|
12,215 |
|
Noncash fair value adjustments on commodity
derivatives |
|
(17,034 |
) |
|
25,352 |
|
|
41,429 |
|
|
39,863 |
|
|
(48,330 |
) |
Other |
|
753 |
|
|
2,351 |
|
|
(3,138 |
) |
|
(2,086 |
) |
|
4,689 |
|
Adjusted cash flows from operations (non-GAAP
measure) |
|
134,517 |
|
|
68,219 |
|
|
134,202 |
|
|
394,159 |
|
|
195,239 |
|
Net change in assets and liabilities relating to
operations |
|
13,387 |
|
|
(2,568 |
) |
|
19,797 |
|
|
(629 |
) |
|
(52,380 |
) |
Cash flows from operations (GAAP measure) |
|
$ |
147,904 |
|
|
$ |
65,651 |
|
|
$ |
153,999 |
|
|
$ |
393,530 |
|
|
$ |
142,859 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted cash flows from operations (non-GAAP
measure) |
|
$ |
134,517 |
|
|
$ |
68,219 |
|
|
$ |
134,202 |
|
|
$ |
394,159 |
|
|
$ |
195,239 |
|
Interest payments treated as debt reduction |
|
(21,186 |
) |
|
(12,604 |
) |
|
(21,614 |
) |
|
(64,849 |
) |
|
(37,761 |
) |
Adjusted cash flows from operations less interest treated
as debt reduction (non-GAAP measure) |
|
113,331 |
|
|
55,615 |
|
|
112,588 |
|
|
329,310 |
|
|
157,478 |
|
Capital expenditures, before acquisitions and
capitalized interest |
|
(85,999 |
) |
|
(56,013 |
) |
|
(81,593 |
) |
|
(215,219 |
) |
|
(180,798 |
) |
Free cash flow (non-GAAP measure) |
|
$ |
27,332 |
|
|
$ |
(398 |
) |
|
$ |
30,995 |
|
|
$ |
114,091 |
|
|
$ |
(23,320 |
) |
DENBURY RESOURCES
INC.SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Reconciliation of commodity derivatives income
(expense) (GAAP measure) to noncash fair value adjustments on
commodity derivatives (non-GAAP measure)
Noncash fair value adjustments on commodity
derivatives is a non-GAAP measure and is different from “Commodity
derivatives expense (income)” in the Unaudited Condensed
Consolidated Statements of Operations in that the noncash fair
value adjustments on commodity derivatives represents only the net
change between periods of the fair market values of open commodity
derivative positions, and excludes the impact of settlements on
commodity derivatives during the period. Management believes
that noncash fair value adjustments on commodity derivatives is a
useful supplemental disclosure to “Commodity derivatives expense
(income)” because the GAAP measure also includes settlements on
commodity derivatives during the period; the non-GAAP measure is
widely used within the industry and by securities analysts, banks
and credit rating agencies in calculating EBITDA and in adjusting
net income (loss) to present those measures on a comparative basis
across companies, as well as to assess compliance with certain debt
covenants.
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
In thousands |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Receipt (payment) on settlements of commodity derivatives |
|
$ |
(61,611 |
) |
|
$ |
89 |
|
|
$ |
(54,770 |
) |
|
$ |
(149,738 |
) |
|
$ |
(38,618 |
) |
Noncash fair value adjustments on commodity derivatives (non-GAAP
measure) |
|
17,034 |
|
|
(25,352 |
) |
|
(41,429 |
) |
|
(39,863 |
) |
|
48,330 |
|
Commodity derivatives income (expense) (GAAP
measure) |
|
$ |
(44,577 |
) |
|
$ |
(25,263 |
) |
|
$ |
(96,199 |
) |
|
$ |
(189,601 |
) |
|
$ |
9,712 |
|
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 our operating performance
as compared to that of other companies in our industry, without
regard to financing methods, capital structure or historical costs
basis. It is also commonly used by third parties to assess
our leverage and our ability to incur and service debt and fund
capital expenditures. Adjusted EBITDAX should not be
considered in isolation, as a substitute for, or more meaningful
than, net income, cash flow from operations, or any other measure
reported in accordance with GAAP. Our Adjusted EBITDAX may
not be comparable to similarly titled measures of another company
because all companies may not calculate Adjusted EBITDAX, EBITDAX
or EBITDA in the same manner. The following table presents a
reconciliation of our net income to Adjusted EBITDAX.
|
|
Three Months Ended |
|
Nine Months Ended |
In thousands |
|
September 30, |
|
June 30, |
|
September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Net income (GAAP measure) |
|
$ |
78,419 |
|
|
$ |
442 |
|
|
$ |
30,222 |
|
|
$ |
148,219 |
|
|
$ |
36,371 |
|
Adjustments to reconcile to Adjusted EBITDAX |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
18,527 |
|
|
24,546 |
|
|
16,208 |
|
|
51,974 |
|
|
75,785 |
|
Income tax expense (benefit) |
|
15,616 |
|
|
(14,229 |
) |
|
9,431 |
|
|
39,067 |
|
|
17,018 |
|
Depletion, depreciation, and amortization |
|
51,316 |
|
|
52,101 |
|
|
52,944 |
|
|
156,711 |
|
|
154,448 |
|
Noncash fair value adjustments on commodity
derivatives |
|
(17,034 |
) |
|
25,352 |
|
|
41,429 |
|
|
39,863 |
|
|
(48,330 |
) |
Stock-based compensation |
|
3,559 |
|
|
3,274 |
|
|
2,560 |
|
|
8,711 |
|
|
12,215 |
|
Noncash, non-recurring and other(1) |
|
(2,155 |
) |
|
10,610 |
|
|
226 |
|
|
(1,139 |
) |
|
16,885 |
|
Adjusted EBITDAX (non-GAAP measure) |
|
$ |
148,248 |
|
|
$ |
102,096 |
|
|
$ |
153,020 |
|
|
$ |
443,406 |
|
|
$ |
264,392 |
|
(1) Excludes proforma adjustments related to qualified
acquisitions or dispositions under the Company’s senior secured
bank credit facility.
DENBURY RESOURCES
INC.OPERATING HIGHLIGHTS (UNAUDITED)
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Production
(daily – net of royalties) |
|
|
|
|
|
|
|
|
|
|
Oil
(barrels) |
|
57,410 |
|
|
58,376 |
|
|
60,109 |
|
|
58,621 |
|
|
58,182 |
|
Gas
(mcf) |
|
10,623 |
|
|
11,710 |
|
|
11,314 |
|
|
11,275 |
|
|
10,985 |
|
BOE
(6:1) |
|
59,181 |
|
|
60,328 |
|
|
61,994 |
|
|
60,500 |
|
|
60,013 |
|
Unit sales
price (excluding derivative settlements) |
|
|
|
|
|
|
|
|
|
|
Oil (per barrel) |
|
$ |
71.44 |
|
|
$ |
47.78 |
|
|
$ |
68.24 |
|
|
$ |
67.99 |
|
|
$ |
48.41 |
|
Gas (per
mcf) |
|
2.35 |
|
|
2.24 |
|
|
2.21 |
|
|
2.34 |
|
|
2.39 |
|
BOE
(6:1) |
|
69.73 |
|
|
46.67 |
|
|
66.57 |
|
|
66.31 |
|
|
47.37 |
|
Unit sales
price (including derivative settlements) |
|
|
|
|
|
|
|
|
|
|
Oil (per
barrel) |
|
$ |
59.78 |
|
|
$ |
47.80 |
|
|
$ |
58.23 |
|
|
$ |
58.63 |
|
|
$ |
45.98 |
|
Gas (per
mcf) |
|
2.35 |
|
|
2.24 |
|
|
2.21 |
|
|
2.34 |
|
|
2.39 |
|
BOE
(6:1) |
|
58.41 |
|
|
46.69 |
|
|
56.86 |
|
|
57.24 |
|
|
45.01 |
|
NYMEX
differentials |
|
|
|
|
|
|
|
|
|
|
Gulf
Coast region |
|
|
|
|
|
|
|
|
|
|
Oil (per
barrel) |
|
$ |
3.21 |
|
|
$ |
0.01 |
|
|
$ |
1.12 |
|
|
$ |
2.10 |
|
|
$ |
(0.71 |
) |
Gas (per
mcf) |
|
0.06 |
|
|
(0.11 |
) |
|
0.04 |
|
|
0.07 |
|
|
(0.03 |
) |
Rocky
Mountain region |
|
|
|
|
|
|
|
|
|
|
Oil (per
barrel) |
|
$ |
(0.54 |
) |
|
$ |
(0.98 |
) |
|
$ |
(0.84 |
) |
|
$ |
(0.47 |
) |
|
$ |
(1.69 |
) |
Gas (per
mcf) |
|
(1.05 |
) |
|
(1.38 |
) |
|
(1.25 |
) |
|
(1.07 |
) |
|
(1.25 |
) |
Total
company |
|
|
|
|
|
|
|
|
|
|
Oil (per
barrel) |
|
$ |
1.84 |
|
|
$ |
(0.34 |
) |
|
$ |
0.39 |
|
|
$ |
1.16 |
|
|
$ |
(1.04 |
) |
Gas (per
mcf) |
|
(0.51 |
) |
|
(0.72 |
) |
|
(0.62 |
) |
|
(0.51 |
) |
|
(0.67 |
) |
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) |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Tertiary oil production |
|
|
|
|
|
|
|
|
|
|
Gulf Coast region |
|
|
|
|
|
|
|
|
|
|
Delhi |
|
4,383 |
|
|
4,619 |
|
|
4,391 |
|
|
4,315 |
|
|
4,857 |
|
Hastings |
|
5,486 |
|
|
4,867 |
|
|
5,716 |
|
|
5,634 |
|
|
4,520 |
|
Heidelberg |
|
4,376 |
|
|
4,927 |
|
|
4,330 |
|
|
4,384 |
|
|
4,885 |
|
Oyster Bayou |
|
4,578 |
|
|
4,870 |
|
|
4,961 |
|
|
4,863 |
|
|
5,053 |
|
Tinsley |
|
5,294 |
|
|
6,506 |
|
|
5,755 |
|
|
5,698 |
|
|
6,494 |
|
Other |
|
240 |
|
|
19 |
|
|
142 |
|
|
147 |
|
|
15 |
|
Mature properties(1) |
|
6,612 |
|
|
6,893 |
|
|
6,725 |
|
|
6,687 |
|
|
7,186 |
|
Total Gulf Coast region |
|
30,969 |
|
|
32,701 |
|
|
32,020 |
|
|
31,728 |
|
|
33,010 |
|
Rocky Mountain region |
|
|
|
|
|
|
|
|
|
|
Bell Creek |
|
3,970 |
|
|
3,406 |
|
|
4,010 |
|
|
4,010 |
|
|
3,225 |
|
Salt Creek(2) |
|
2,274 |
|
|
2,228 |
|
|
2,049 |
|
|
2,109 |
|
|
759 |
|
Other |
|
6 |
|
|
— |
|
|
— |
|
|
2 |
|
|
— |
|
Total Rocky Mountain region |
|
6,250 |
|
|
5,634 |
|
|
6,059 |
|
|
6,121 |
|
|
3,984 |
|
Total tertiary oil production |
|
37,219 |
|
|
38,335 |
|
|
38,079 |
|
|
37,849 |
|
|
36,994 |
|
Non-tertiary oil and gas production |
|
|
|
|
|
|
|
|
|
|
Gulf Coast region |
|
|
|
|
|
|
|
|
|
|
Mississippi |
|
1,038 |
|
|
867 |
|
|
901 |
|
|
938 |
|
|
1,069 |
|
Texas |
|
4,533 |
|
|
4,024 |
|
|
4,947 |
|
|
4,622 |
|
|
4,452 |
|
Other |
|
421 |
|
|
503 |
|
|
388 |
|
|
415 |
|
|
478 |
|
Total Gulf Coast region |
|
5,992 |
|
|
5,394 |
|
|
6,236 |
|
|
5,975 |
|
|
5,999 |
|
Rocky Mountain region |
|
|
|
|
|
|
|
|
|
|
Cedar Creek Anticline |
|
14,208 |
|
|
14,535 |
|
|
15,742 |
|
|
14,795 |
|
|
14,907 |
|
Other |
|
1,409 |
|
|
1,514 |
|
|
1,490 |
|
|
1,461 |
|
|
1,538 |
|
Total Rocky Mountain region |
|
15,617 |
|
|
16,049 |
|
|
17,232 |
|
|
16,256 |
|
|
16,445 |
|
Total non-tertiary production |
|
21,609 |
|
|
21,443 |
|
|
23,468 |
|
|
22,231 |
|
|
22,444 |
|
Total continuing production |
|
58,828 |
|
|
59,778 |
|
|
61,547 |
|
|
60,080 |
|
|
59,438 |
|
Property sales |
|
|
|
|
|
|
|
|
|
|
Lockhart Crossing(3) |
|
353 |
|
|
550 |
|
|
447 |
|
|
420 |
|
|
575 |
|
Total production |
|
59,181 |
|
|
60,328 |
|
|
61,994 |
|
|
60,500 |
|
|
60,013 |
|
(1) Mature properties include Brookhaven, Cranfield,
Eucutta, Little Creek, Mallalieu, Martinville, McComb and Soso
fields.(2) Includes production related to the acquisition of
a 23% non-operated working interest in Salt Creek Field in Wyoming,
which closed on June 30, 2017.(3) 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, |
|
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Oil and natural gas revenues |
|
$ |
69.73 |
|
|
$ |
46.67 |
|
|
$ |
66.57 |
|
|
$ |
66.31 |
|
|
$ |
47.37 |
|
Receipt (payment) on settlements of commodity derivatives |
|
(11.32 |
) |
|
0.02 |
|
|
(9.71 |
) |
|
(9.07 |
) |
|
(2.36 |
) |
Lease operating expenses |
|
(22.50 |
) |
|
(21.22 |
) |
|
(21.34 |
) |
|
(21.87 |
) |
|
(20.93 |
) |
Production and ad valorem taxes |
|
(4.66 |
) |
|
(3.32 |
) |
|
(4.50 |
) |
|
(4.59 |
) |
|
(3.51 |
) |
Marketing expenses, net of third-party purchases, and plant
operating expenses |
|
(1.81 |
) |
|
(1.75 |
) |
|
(1.69 |
) |
|
(1.75 |
) |
|
(1.82 |
) |
Production netback |
|
29.44 |
|
|
20.40 |
|
|
29.33 |
|
|
29.03 |
|
|
18.75 |
|
CO2 sales, net of operating and exploration expenses |
|
1.37 |
|
|
0.95 |
|
|
1.10 |
|
|
1.26 |
|
|
0.98 |
|
General and administrative expenses |
|
(3.96 |
) |
|
(4.91 |
) |
|
(3.44 |
) |
|
(3.71 |
) |
|
(4.96 |
) |
Interest expense, net |
|
(3.40 |
) |
|
(4.42 |
) |
|
(2.87 |
) |
|
(3.15 |
) |
|
(4.63 |
) |
Other |
|
1.26 |
|
|
0.27 |
|
|
(0.33 |
) |
|
0.44 |
|
|
1.78 |
|
Changes in assets and liabilities relating to operations |
|
2.46 |
|
|
(0.46 |
) |
|
3.51 |
|
|
(0.04 |
) |
|
(3.20 |
) |
Cash flows from operations |
|
27.17 |
|
|
11.83 |
|
|
27.30 |
|
|
23.83 |
|
|
8.72 |
|
DD&A |
|
(9.43 |
) |
|
(9.39 |
) |
|
(9.38 |
) |
|
(9.49 |
) |
|
(9.43 |
) |
Deferred income taxes |
|
(3.21 |
) |
|
2.76 |
|
|
(1.81 |
) |
|
(2.59 |
) |
|
(2.19 |
) |
Noncash fair value adjustments on commodity derivatives |
|
3.13 |
|
|
(4.57 |
) |
|
(7.34 |
) |
|
(2.41 |
) |
|
2.95 |
|
Other noncash items |
|
(3.26 |
) |
|
(0.55 |
) |
|
(3.41 |
) |
|
(0.37 |
) |
|
2.17 |
|
Net income |
|
$ |
14.40 |
|
|
$ |
0.08 |
|
|
$ |
5.36 |
|
|
$ |
8.97 |
|
|
$ |
2.22 |
|
CAPITAL EXPENDITURE SUMMARY
(UNAUDITED)(1)
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
In thousands |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Capital expenditures by project |
|
|
|
|
|
|
|
|
|
|
Tertiary oil fields |
|
$ |
43,047 |
|
|
$ |
34,029 |
|
|
$ |
45,813 |
|
|
$ |
107,133 |
|
|
$ |
98,797 |
|
Non-tertiary fields |
|
18,975 |
|
|
8,251 |
|
|
17,817 |
|
|
51,714 |
|
|
41,023 |
|
Capitalized internal costs(2) |
|
11,280 |
|
|
11,015 |
|
|
8,662 |
|
|
34,027 |
|
|
37,732 |
|
Oil and natural gas capital expenditures |
|
73,302 |
|
|
53,295 |
|
|
72,292 |
|
|
192,874 |
|
|
177,552 |
|
CO2 pipelines, sources and other |
|
12,697 |
|
|
2,718 |
|
|
9,301 |
|
|
22,345 |
|
|
3,246 |
|
Capital expenditures, before acquisitions
and capitalized interest |
|
85,999 |
|
|
56,013 |
|
|
81,593 |
|
|
215,219 |
|
|
180,798 |
|
Acquisitions of oil and natural gas properties |
|
129 |
|
|
1,916 |
|
|
(14 |
) |
|
150 |
|
|
91,015 |
|
Capital expenditures, before capitalized
interest |
|
86,128 |
|
|
57,929 |
|
|
81,579 |
|
|
215,369 |
|
|
271,813 |
|
Capitalized interest |
|
9,514 |
|
|
9,416 |
|
|
8,851 |
|
|
26,817 |
|
|
22,217 |
|
Capital expenditures, total |
|
$ |
95,642 |
|
|
$ |
67,345 |
|
|
$ |
90,430 |
|
|
$ |
242,186 |
|
|
$ |
294,030 |
|
(1) Capital expenditure amounts include accrued
capital.(2) Includes capitalized internal acquisition,
exploration and development costs and pre-production tertiary
startup costs.
DENBURY RESOURCES
INC.INTEREST AND FINANCING EXPENSES
(UNAUDITED)
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
In thousands |
|
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
Cash interest(1) |
|
$ |
46,515 |
|
|
$ |
45,110 |
|
|
$ |
45,542 |
|
|
$ |
138,660 |
|
|
$ |
130,962 |
|
Interest on Senior Secured Notes and Convertible Senior Notes not
reflected as interest for financial reporting purposes(1) |
|
(21,186 |
) |
|
(12,604 |
) |
|
(21,614 |
) |
|
(64,849 |
) |
|
(37,761 |
) |
Noncash interest expense |
|
2,712 |
|
|
1,456 |
|
|
1,131 |
|
|
4,980 |
|
|
4,801 |
|
Less: capitalized interest |
|
(9,514 |
) |
|
(9,416 |
) |
|
(8,851 |
) |
|
(26,817 |
) |
|
(22,217 |
) |
Interest expense, net |
|
$ |
18,527 |
|
|
$ |
24,546 |
|
|
$ |
16,208 |
|
|
$ |
51,974 |
|
|
$ |
75,785 |
|
(1) Cash interest is presented on an accrual basis and
includes interest which is paid semiannually on the Company’s 9%
Senior Secured Second Lien Notes due 2021, 9¼% Senior Secured
Second Lien Notes due 2022, 5% Convertible Senior Notes due 2023,
and 3½% Convertible Senior Notes due 2024, most of which is
accounted for as debt and therefore not reflected as interest for
financial reporting purposes.
SELECTED BALANCE SHEET AND CASH FLOW
DATA (UNAUDITED)
|
|
September 30, |
|
December 31, |
In thousands |
|
2018 |
|
2017 |
Cash and cash equivalents |
|
$ |
66,711 |
|
|
$ |
58 |
|
Total assets |
|
4,644,017 |
|
|
4,471,299 |
|
|
|
|
|
|
Borrowings under senior secured bank credit facility |
|
$ |
— |
|
|
$ |
475,000 |
|
Borrowings under senior secured second lien notes (principal
only)(1) |
|
1,520,587 |
|
|
996,487 |
|
Borrowings under convertible senior notes (principal
only)(1)(2) |
|
— |
|
|
84,650 |
|
Borrowings under senior subordinated notes (principal only) |
|
826,185 |
|
|
1,000,527 |
|
Financing and capital leases |
|
194,718 |
|
|
218,727 |
|
Total debt (principal only) |
|
$ |
2,541,490 |
|
|
$ |
2,775,391 |
|
|
|
|
|
|
Total stockholders’ equity |
|
$ |
963,184 |
|
|
$ |
648,165 |
|
(1) Excludes $293 million and $317 million of future
interest payable on the notes as of September 30, 2018 and December
31, 2017, respectively, accounted for as debt for financial
reporting purposes.(2) During the second quarter of 2018, all
$85 million principal balance outstanding of the Company’s 3½%
Convertible Senior Notes due 2024 and $59 million principal balance
outstanding of the Company’s 5% Convertible Senior Notes due 2023
were converted into approximately 55 million shares of the
Company’s common stock.
|
|
Nine Months Ended |
|
|
September 30, |
In thousands |
|
2018 |
|
2017 |
Cash provided by (used in) |
|
|
|
|
Operating activities |
|
$ |
393,530 |
|
|
$ |
142,859 |
|
Investing activities |
|
(216,732 |
) |
|
(293,811 |
) |
Financing activities |
|
(109,807 |
) |
|
149,600 |
|
DENBURY CONTACTS:
Mark C. Allen, Executive Vice President and Chief Financial Officer, 972.673.2000
John Mayer, Director of Investor Relations, 972.673.2383
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