Denbury Resources Announces Record Daily Production 71% Higher Than Prior Year Third Quarter Results.Business Editors DALLAS--(BUSINESS WIRE)--Nov. 1, 2001 Denbury Resources Inc. (NYSE NYSE See: New York Stock Exchange :DNR See dynamic noise reduction and domain name resolver. ) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :DNR.) ("Denbury" or the "Company") today announced record production levels and reduced expenses, resulting in another quarter of strong financial and operating results. The Company's 71% increase in quarterly year-over-year production, coupled with lower operating and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. on a BOE BOE Based on Experience BOE Board of Education BOE Boletín Oficial del Estado (Spanish) BOE Bank of England BOE Board of Equalization BOE Board of Elections BOE Barrel of Oil Equivalent BOE Bind on Equip basis, resulted in $13.9 million of net income and $48.7 million of cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the quarter. The strong results were obtained despite a 26% drop in commodity prices (on a BOE basis and excluding any impact of hedges) from prices in the third quarter of 2000. Key third quarter 2001 figures as compared to the third quarter of 2000: revenues of $67.1 million, up 50%; cash flow of $48.7 million, up 77%; pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income of $22.1 million, up 16%; and net income of $13.9 million, down 27%. Continued Production Growth Daily production volume increased for the tenth Tenth can mean: In mathematics:
adj. 1. Almost exact or correct: the approximate time of the accident. 2. 25% in the third quarter of 2000. Production increased 7,210 BOE/d from the second quarter of 2001 to the third quarter of 2001. Approximately 6,700 BOE/d is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the acquisition of Matrix Oil and Gas, Inc., acquired in early July July: see month. , with the balance of approximately 510 BOE/d of the increase a result of successful development and exploitation work. The Company's internal production growth occurred primarily at the Thornwell Thornwell Orphanage opened in Clinton, South Carolina on October 1, 1875, to ten children orphaned by the American Civil War. It was founded by Reverend William Plumer Jacobs and named for noted theologian James Henley Thornwell. Dr. and West Cameron Cam·er·on , Mount A peak, 4,342.6 m (14,238 ft) high, in the Rocky Mountains of central Colorado. 648 fields, plus an increase in production on the Matrix properties since the date of acquisition. Production at Thornwell Field, acquired in the fourth quarter of 2000, reached a Company record 4,380 BOE/d in the third quarter as a result of successful development and exploration drilling in that field, which is a 14% increase over the prior quarter's production. Production at the West Cameron 638, 639 and 648 blocks increased approximately 500 BOE/d from the Company's development program there, with production expected to further increase late in the fourth quarter when two additional wells are put on production. The Matrix properties averaged roughly 44 MMcf/d during the third quarter of 2001, approximately 10% higher than their average during the first half of 2001. Little Creek Field continued to respond to the fourth phase of tertiary tertiary (tûr`shēârē), in the Roman Catholic Church, member of a third order. The third orders are chiefly supplements of the friars—Franciscans (the most numerous), Dominicans, and Carmelites. recovery operations Operations conducted to search for, locate, identify, rescue, and return personnel, sensitive equipment, or items critical to national security. , averaging 2,317 BOE/d, a 17% increase over production in the third quarter of 2000 and a slight increase over production in the prior quarter of 2001. Third quarter 2001 production from Heidelberg Heidelberg (hī`dəlbĕrkh), city (1994 pop. 139,430), Baden-Württemberg, SW Germany, picturesquely situated on the Neckar River. Manufactures include machinery, precision instruments, leather goods, and tobacco and wood products. Field in Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by , the Company's largest field, showed little change from the average production during the second quarter of 2001, averaging 7,876 BOE/d, a 3% increase from the third quarter of 2000. Quarterly Financial Results Even though commodity prices on a BOE basis have declined from the record levels that existed early in 2001, the increased production levels and overall reductions in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. on a per BOE basis partially offset the effects of lower oil and natural gas prices. Denbury posted a third quarter 2001 pre-tax profit of $22.1 million, a 16% increase over the $19.1 million reported for the third quarter of 2000. Due to the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of the income tax valuation allowance on the Company's deferred tax asset recorded in the fourth quarter of 2000, the Company booked a 37% tax provision in the third quarter of 2001, resulting in net income of $13.9 million, or $0.27 per common share. This was 27% lower than the prior year's third quarter profit of $19.0 million or $0.42 per common share, which had a tax provision of less than 0.1% of pre-tax income. Correspondingly, the Company's cash flow from operations, before net changes in other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. and liabilities, increased 77% quarter-over-quarter, to $48.7 million, or $0.93 per common share, for the third quarter of 2001, up from $27.5 million, or $0.60 per common share, for the third quarter of 2000. Natural gas product prices dropped from the first half of 2001 and comparable quarter of 2000. Excluding the effect of hedges, Denbury's average net realized natural gas price was $3.09 per Mcf for the third quarter of 2001, down 33% from the comparable quarter of 2000 and down 37% from the second quarter of 2001. Excluding the effect of hedges, Denbury's average net oil price declined approximately 18% between the respective third quarters and was down 3% from the prior quarter of 2001. The Company's operating expenses were lower on a per BOE basis in the third quarter of 2001 than in the comparable quarter of 2000. Lease operating expenses declined to $4.70 per BOE, a 9% decline from the level of those expenses in the third quarter of 2000 and a 5% decline when compared to expenses in the second quarter of 2001. The single biggest factor in the reduction in expenses, other than general increases in production levels, was the addition of the Matrix natural gas properties in July 2001, which had a third quarter 2001 average operating cost per BOE of approximately $3.50. The Company also realized approximately $900,000 of savings resulting from the Company's ownership of CO2 purchased in February February: see month. 2001. In addition to the operating cost savings, the Company recognized $1.1 million in other net cash flow from its CO2 sales to third party industrial users. General and administrative expenses declined to $0.88 per BOE, a 19% drop from third quarter 2000 levels and approximately the same as in the second quarter of 2001. These savings were largely due to increased overhead recovery as a result of the Company's active drilling and workover program. Interest expense increased to $1.82 per BOE in the third quarter of 2001 as a result of funds borrowed for the Matrix acquisition, resulting in a rate per BOE approximately 32% higher than in the comparable quarter of 2000 and 14% higher than in the second quarter of 2001. Due to the acquisition of Matrix Oil & Gas, depreciation and amortization expense averaged $7.03 per BOE in the third quarter of 2001, a 41% increase from the second quarter's 2001 average of $4.98 per BOE. In the third quarter of 2001, the Company received $7.2 million in cash payments from its price floors. In addition, the Company expensed approximately $2.0 million of costs associated with the price floors in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Financial Accounting Standard No. 133 and its interpretations. The net effect of these items was a net gain of $5.2 million on its derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. contracts during the third quarter of 2001. Conversely con·verse 1 intr.v. con·versed, con·vers·ing, con·vers·es 1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak. 2. , during the third quarter of 2000 the Company paid-out $7.5 million on hedges recorded as a reduction in oil and gas revenues. Since December December: see month. 31, 2000, the Company has not had any hedges in place which require any type of cash payment (after the initial purchase price) as its current hedges are solely price floors or puts which protect the downside Downside The dollar amount by which the market or a stock has the potential to fall. Notes: You might hear someone say that the downside on stock XYZ is $10. What that means is that the stock could fall by this amount if things got bad. but do not reduce the Company's price upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside in any manner. Balance Sheet Remains Strong During Lower Prices Capital expenditures ("Capex (CAPital EXpenditures) Refers to the cost of developing a product or system. OPEX (operating expenditures) are the ongoing costs for running it. For example, the purchase of a printer is the CAPEX, and the annual paper and ink cost is the OPEX. "), excluding acquisitions, for the third quarter of 2001 totaled $43.7 million and were funded out of cash flow generated from operations. In addition, the Company acquired Matrix Oil & Gas, Inc. for aggregate consideration of $159 million, consisting of 6.6 million shares of Denbury common stock and approximately $100 million of cash, primarily funded by incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. bank debt. During the second quarter of 2001, the Company purchased price floors for the Matrix acquisition at a total cost of $18.0 million. These price floors cover approximately 95% of the forecasted proven natural gas production from the Matrix properties through the end of 2003, and assure the Company of approximately $143 million of revenue from this acquisition, assuming production at the forecasted levels. Approximately 80% to 85% of the Company's anticipated production on a BOE basis for the remainder of 2001 is covered by price floors, in addition to coverage of approximately 50% of the anticipated production for 2002. In addition, the Company has a price floor covering 33,000 MMBtu/d at $3.75 per MMBtu for 2003. As of November November: see month. 1, 2001, the Company had $330.9 million of total debt outstanding, of which $130.9 million was bank debt. Even with the decline in commodity prices, Denbury's debt-to-cash-flow ratio for the third quarter of 2001 was 1.7 to 1 on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis, higher than the prior quarter in 2001, but less than the 2000 average ratio of 1.8 to 1. Outlook Gareth Roberts Gareth Roberts may refer to:
Cash flow that is available after the funding of all positive net present value (NPV) capital investment projects; it is available for paying cash dividends, repurchasing common stock, retiring debt, and so on. for 2002 on an annual basis. We intend to reserve our current bank line availability of $89 million for possible acquisitions, although there may be temporary borrowings and repayments throughout the year as needed as needed prn. See prn order. for our day-to-day day-to-day adj. 1. Occurring on a routine or daily basis: the day-to-day movements of the stock market. 2. needs." Conference Call As announced previously, investors and interested parties are invited to listen to the Company's conference call set for today, November 1, 2001, at 9:00 A.M. (CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT ). The call will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the 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. The audio portion of the call will also be available for playback Playback could mean:
Following is a table of financial highlights for the respective three and nine month periods ended September September: see month. 30, 2001 and September 30, 2000. 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 ("BOE").
FINANCIAL HIGHLIGHTS
(Amounts in thousands of U.S. dollars)
Three Months Ended
September 30,
---------------------- Percentage
2001 2000 Change
---------- ---------- ----------
Revenues:
Oil sales 34,442 34,827 - 1%
Gas sales 31,112 9,226 + 237%
CO2 sales 1,455 -- N/A
Interest and other income 92 696 - 87%
---------- ---------- ----------
Total revenues 67,101 44,749 + 50%
---------- ---------- ----------
Expenses:
Lease operating costs 15,191 9,737 + 56%
Production taxes 2,772 2,059 + 35%
CO2 operating costs 373 -- N/A
General and administrative 2,519 1,960 + 29%
Interest 6,330 3,545 + 79%
Depletion and depreciation 22,694 8,228 + 176%
Hedging (5,248) -- N/A
Franchise taxes 330 100 + 230%
---------- ---------- ----------
Total expenses 44,961 25,629 + 75%
---------- ---------- ----------
Income before income taxes 22,140 19,120 + 16%
Income tax provision (benefit)
Current income taxes (1,500) 81 N/A
Deferred income taxes 9,692 -- N/A
---------- ---------- ----------
NET INCOME 13,948 19,039 - 27%
========== ========== ==========
Net income per common share:
Basic 0.27 0.42 - 36%
Diluted 0.26 0.41 - 37%
Weighted average common shares:
Basic 52,169 45,856 + 14%
Diluted 53,154 46,505 + 14%
Production (daily - net of
royalties)
Oil (barrels) 16,877 15,405 + 10%
Gas (mcf) 109,406 30,885 + 254%
BOE (6:1) 35,112 20,553 + 71%
Three Months Ended
September 30,
---------------------- Percentage
2001 2000 Change
---------- ---------- ----------
Unit sales price
Oil (per barrel) 22.18 24.57 (3) - 10%
Gas (per mcf) 3.09 3.25 (3) - 5%
Cash flow from operations (1) 48,670 27,502 + 77%
Cash flow per common share: (2)
Basic 0.93 0.60 + 55%
Diluted 0.92 0.59 + 56%
Oil & gas capital investments 198,393 24,328 + 715%
CO2 capital investments 2,982 -- N/A
Total debt 314,522 146,000 + 115%
Stockholders' equity 355,441 117,581 + 202%
BOE data (6:1)
Revenue 20.29 23.30 - 13%
Lease operating costs (4.70) (5.15) - 9%
Production taxes (0.86) (1.09) - 21%
---------- ---------- ----------
Production netback 14.73 17.06 - 14%
CO2 operating cash flow 0.34 -- N/A
General and administrative (0.88) (1.09) - 19%
Net cash interest expense (1.82) (1.38) + 32%
Hedging cash receipts 2.23 -- N/A
Current income taxes and
other 0.47 (0.04) N/A
---------- ---------- ----------
Cash flow (1) 15.07 14.55 + 4%
========== ========== ==========
(1) Exclusive of the net change in non-cash working capital balances
(2) Cash flow from operations excluding change in working capital
balances divided by average common shares outstanding.
(3) Includes the impact of hedges. Excluding the impact of hedges the
unit prices were $27.20 per barrel and $4.59 per Mcf for the three
months ended September 30, 2000.
Nine Months Ended
September 30,
---------------------- Percentage
2001 2000 Change
---------- ---------- ----------
Revenues:
Oil sales 104,198 93,016 + 12%
Gas sales 104,794 23,424 + 347%
CO2 sales 3,738 -- N/A
Interest and other income 340 1,626 - 79%
---------- ---------- ----------
Total revenues 213,070 118,066 + 80%
---------- ---------- ----------
Expenses:
Lease operating costs 40,244 27,873 + 44%
Production taxes 7,746 5,370 + 44%
CO2 operating costs 708 -- N/A
General and administrative 6,924 5,835 + 19%
Interest 15,575 10,763 + 45%
Depletion and depreciation 47,687 23,558 + 102%
Hedging (2,002) -- N/A
Franchise taxes 905 389 + 133%
---------- ---------- ----------
Total expenses 117,787 73,788 + 60%
---------- ---------- ----------
Income before income taxes 95,283 44,278 + 115%
Income tax provision
Current income taxes 900 121 + 644%
Deferred income taxes 34,355 -- N/A
---------- ---------- ----------
NET INCOME 60,028 44,157 + 36%
========== ========== ==========
Net income per common share:
Basic 1.25 0.96 + 30%
Diluted 1.22 0.96 + 27%
Weighted average common
shares:
Basic 48,127 45,792 + 5%
Diluted 49,244 46,127 + 7%
Production (daily - net of
royalties)
Oil (barrels) 16,536 14,867 + 11%
Gas (mcf) 80,268 29,324 + 174%
BOE (6:1) 29,914 19,754 + 51%
Unit sales price
Oil (per barrel) 23.08 22.83 (3) + 1%
Gas (per mcf) 4.78 2.92 (3) + 64%
Cash flow from operations (1) 148,846 68,404 + 118%
Nine Months Ended
September 30,
---------------------- Percentage
2001 2000 Change
---------- ---------- ----------
Cash flow per common
share: (2)
Basic 3.09 1.49 + 107%
Diluted 3.02 1.48 + 104%
Oil & gas capital investments 270,609 62,432 + 333%
CO2 capital investments 44,991 -- N/A
BOE data (6:1)
Revenue 25.59 21.51 + 19%
Lease operating costs (4.93) (5.15) - 4%
Production taxes (0.95) (0.99) - 4%
---------- ---------- ----------
Production netback 19.71 15.37 + 28%
CO2 operating cash flow 0.37 -- N/A
General and administrative (0.96) (1.15) - 17%
Net cash interest expense (1.75) (1.56) + 12%
Hedging cash receipts 0.96 -- N/A
Current income taxes and
other (0.11) (0.02) + 450%
---------- ---------- ----------
Cash flow (1) 18.22 12.64 + 44%
========== ========== ==========
(1) Exclusive of the net change in non-cash working capital balances
(2) Cash flow from operations excluding change in working capital
balances divided by average common shares outstanding.
(3) Includes the impact of hedges. Excluding the impact of hedges the
unit prices were $25.17 per barrel and $3.62 per Mcf for the nine
months ended September 30, 2000.
Denbury Resources Inc. is a growing independent oil and natural gas company engaged in acquisition, development and exploration activities in the U.S. Gulf Coast region. The Company holds significant reserves and production in Mississippi, where it is the largest producer of oil and natural gas, onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. in Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. and in the offshore Gulf of
Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of MexicoGolfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east . The Company increases the value of acquired properties in its core areas through a combination of exploitation drilling and proven engineering extraction extraction /ex·trac·tion/ (eks-trak´shun) 1. the process or act of pulling or drawing out. 2. the preparation of an extract. practices. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , consisting of opinions, forecasts, projections, guidance and other statements, other than historical financial information, regarding budgeted capital expenditures, expected production and financial results, among others. These statements are based on assumptions that are subject to change and to risks and uncertainties, especially volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in oil and gas prices, geological ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. risks, drilling results and production costs, and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission, including the Company's reports on Forms 10-K and 10-Q. Although management believes the expectations reflected in such forward-looking statements are reasonable based on currently available information, 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. Estimates of future financial or operating performance provided by the Company are based on existing market conditions and engineering and geologic ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. information available at this time. Actual financial and operating performance may vary from these estimates. Future performance is dependent upon oil and gas prices, exploratory and development drilling results, engineering and geologic information and risks and changes in market conditions. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion