Denbury Resources Announces Record Pre-Tax Annual Earnings and Cash Flow 2001 Daily Production up 46%.Business Editors & Energy Writers DALLAS--(BUSINESS WIRE)--Feb. 27, 2002 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 its fourth quarter and 2001 financial and operating results. The Company posted a 46% increase in production, year-over-year, and its highest pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings, revenues and cash flow in its 11 year history. The Company posted earnings for the year of $56.6 million or $1.15 per common share, and a fourth quarter net loss of $3.5 million, or $0.07 per share, of which $0.33 of the loss relates to a previously announced writedown writedown A reduction in the value of an asset carried on a firm's financial statements. For example, the firm's accountants, believing the inventory is overvalued, may decide to take a writedown by reducing inventory valuation. of Enron Enron A U.S. energy-trading and utilities company that housed one of the biggest accounting frauds in history. Enron's executives employed accounting practices that falsely inflated the company's revenues, which, at the height of the scandal, made the firm become the seventh related assets. 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 year (excluding the change 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) was $186.8 million, a 67% increase over 2000 cash flow, with fourth quarter of 2001 cash flow of $38.0 million, or $0.72 per common share. The Company previously announced record quantities and valuation for its proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. . Continued Production and Reserve Growth Denbury's production averaged 31,185 BOE/d for 2001, a 46% increase over the 21,399 BOE/d for 2000. Fourth quarter production averaged 34,956 BOE/d, a 33% increase over production in the fourth quarter of 2000 and approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. the same as during the third quarter of 2001. Since 1996, Denbury has realized a 31% compound annual growth rate for its daily hydrocarbon hydrocarbon (hī'drōkär`bən), any organic compound composed solely of the elements hydrogen and carbon. The hydrocarbons differ both in the total number of carbon and hydrogen atoms in their molecules and in the proportion of hydrogen output. Fourth quarter production was 52% oil and 48% natural gas, close to its desired 50/50 balance, a ratio it anticipates achieving in 2002. The increases in daily production are the result of successful development and exploitation work on the Company's largest fields, combined with strategic acquisitions. Approximately 36% of the 9,786 BOE/d production increase between 2000 and 2001 came from the acquisition of Matrix Oil & Gas in July July: see month. 2001. Production from the Matrix properties averaged approximately 7,000 BOE/d (predominately natural gas) during the six months they were owned by the Company, contributing 3,524 BOE/d to the annual average. The Matrix acquisition is performing as planned, with production on target and with proved reserves up 35% since June June: see month. 30, 2001 (up 46% adding back production). The majority of the other remaining production increases relate to recent acquisitions and subsequent development work on the acquired properties. These recent acquisitions include Little Creek Field, purchased in August 1999, where the average annual production was up approximately 423 BOE/d in 2001, and the fourth quarter of 2001 production average was 611 BOE/d above the annual average. Production from 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. Field, purchased in October October: see month. 2000, averaged 4,190 BOE/d in the fourth quarter of 2000 but contributed only 1,053 BOE/d to the annual average in 2000. Even though Thornwell Field has a relatively short expected life and thus was expected to rapidly decline, through Denbury's development and exploratory drilling program, the field's This article is about the shopping centre in Denmark. For the Canadian chain of department stores, see Fields (department store). Field's is the biggest shopping centre in Denmark and the second-largest in Scandinavia, surpassed only by Nordstan in production increased in 2001, with an average annual production rate of 4,275 BOE/d and a fourth quarter average of 4,902 BOE/d. 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. , King Bee and Lirette Fields each contributed positive production increases as well. Along with the growth in production, the Company's proved reserves quantities increased 25% from 87.4 MMBOE MMBOE Million Barrels of Oil Equivalent (energy and petroleum industry) as of December December: see month. 31, 2000 to 109.5 MMBOE as of December 31, 2001, even after a 8.3 MMBOE decrease due to lower commodity prices. During 2001, the Company added 41.8 MMBOEs of estimated reserves from drilling, extensions, acquisitions and upward revisions. This gives the Company a three year finding cost of $5.21 per 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 , even after inclusion of its recent acquisitions of Thornwell Field and Matrix Oil & Gas, the acquisition cost of which were above $2.00 per Mcfe. Record 2001 Financial Results As a result of the strong production growth and relatively strong commodity prices, Denbury posted a 2001 profit of $56.6 million, or $1.15 per common share. Pre-tax income of $81.4 million was the highest in the Company's history, even after inclusion of a $25.2 million pre-tax charge to earnings relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc losses on Enron related assets. Due primarily to the $25.2 million Enron charge, the fourth quarter results showed a loss of $3.5 million or $0.07 per share. Correspondingly, the Company's cash flow from operations (excluding the change in other assets and liabilities) increased 67% year over year, reaching $186.8 million or $3.79 per common share, for 2001, up from $111.6 million, or $2.43 per common share, for 2000. Even though fourth quarter 2001 NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). oil prices were 36% lower than prices in the fourth quarter of 2000 and natural gas NYMEX prices were 54% lower, the Company's cash flow from operations decreased only 12%. Cash flow for the fourth quarter of 2001 was $38.0 million, as compared to $43.2 million for the fourth quarter of 2000. On a BOE basis, net to the Company before any effect of hedging, product prices were 12% lower in 2001 than 2000. The overall decrease in annual prices was more than offset by the Company's hedging program in 2001, with $18.7 million of cash receipts from hedging in 2001, an average cash receipt of $1.64 per BOE, as compared to total payments of $25.3 million in 2000, an average cost of $3.23 per BOE. Oil and natural gas capital expenditures (excluding acquisitions) for the fourth quarter of 2001 totaled $56.5 million and for the year totaled $170.1 million, which were funded out of $186.8 million of cash flow generated from operations. The excess cash flow from operations, the issuance of equity as part of the Matrix acquisition and subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". and bank debt were used to fund oil and natural gas acquisitions, which totaled $157.1 million, and $45.6 million spent on CO2 related assets, primarily relating to the $41.7 million acquisition in February February: see month. of 2001. The net increase in total debt during the year was $141.9 million. Lease 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. decreased 2% on a BOE basis between 2000 and 2001, primarily due to savings resulting from (i) the Company's purchase of CO2 producing wells, facilities and reserves in February 2001, which lowered the Company's cost per thousand cubic feet from $0.25 to approximately $0.11 for the most recent quarter, and (ii) the Company's purchase of Matrix Oil & Gas in July 2001, which increased the Company's natural gas production so that its ratio of oil and natural gas production became a ratio of approximately 50/50, with natural gas having a generally lower overall operating cost per BOE. These savings were partially offset by overall higher service and equipment costs in the industry during 2001. General and administrative expenses decreased 18% on a per BOE basis between 2000 and 2001 as production growth outpaced the overall increase in costs and the Company was able to allocate To reserve a resource such as memory or disk. See memory allocation. more costs to operations as a result of the increase in the number of operated wells and overall higher level of activity. For the fourth quarter of 2001, general and administrative expenses were $0.73 per BOE, one of the lowest quarterly amounts of cost per BOE in the Company's history. Net cash interest expense increased 13% on a per BOE basis in 2001 as a result of the higher debt levels relating to the acquisitions made during the year. Depreciation and depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able also increased 36% on a BOE basis as a result of the acquisitions made during 2001 at a higher than company-average cost per BOE. 2002 Outlook Denbury's 2002 development and exploration budget is $95 million, plus approximately $6 million of uncompleted 2001 projects. Any acquisitions made by the Company will increase these capital budget amounts. Denbury's current total debt is approximately $341 million, with $79 million undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely on its bank credit line. The Company anticipates that its overall debt level will not change substantially during 2002 as it plans to spend its cash flow from operations on its development and exploration program and does not expect to borrow Borrow To obtain or receive money on loan with the promise or understanding that it will be repaid. any significant amount unless it makes an acquisition. At the Company's anticipated 2002 capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. level, management expects that the Company's organic production growth will be approximately 13% above average 2001 levels, an anticipated average of 35,250 BOE/d. Even though 15% to 20% of the Company's capital expenditures are allocated to new 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. that are not expected to respond until late 2002, the Company believes that the balance of its capital expenditures of $75 million to $80 million is still sufficient to generate modest production growth throughout 2002. Gareth Roberts Gareth Roberts may refer to:
The part of a network that handles the major traffic. It employs the highest-speed transmission paths in the network and may also run the longest distances. , coupled with several excellent development and exploration projects in our other areas, we expect 2002 to be a year of solid growth. In the current commodity price environment, our production growth rate will slow relative to previous years and our focus will be on adding low cost reserves in our carbon dioxide carbon dioxide, chemical compound, CO2, a colorless, odorless, tasteless gas that is about one and one-half times as dense as air under ordinary conditions of temperature and pressure. tertiary floods and elsewhere. We also expect to be able to make some attractive acquisitions while prices remain low. We have protected ourselves from further deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in commodity prices as we have covered approximately 62% of our anticipated oil production with a price floor of $21.00 and covered approximately 75% of our anticipated natural gas production with a price floor of $2.50 for 2002. These hedges are with five different financial institutions." Conference Call The public is invited to listen to the Company's conference call set for today, February 27, 2001, at 10:00 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 and will also be available for playback Playback could mean:
Annual Meeting The Company today announced its 2002 Annual Meeting of Shareholders will be held on Wednesday Wednesday: see week. , May 22nd at 3:00 P.M., local time, at the offices of the Company located at 5100 Tennyson Parkway, Plano, Texas Plano (IPA: /ˈpleɪnoʊ/) is a wealthy suburb of Dallas, Texas, located to the north, mainly within Collin County, but also extending into Denton County. According to the 2000 U.S. . The record date for determination of shareholders entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to vote at the annual meeting will be the close of business on April 8, 2002. Financial and Statistical Data Tables Following are financial highlights for the comparative fourth quarter and annual periods ended December 31, 2001 and December 31, 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.
FINANCIAL HIGHLIGHTS
(Amounts in thousands of U.S. dollars)
Three Months Ended
December 31, Percentage
----------------------
2001 2000 Change
---------- ---------- ----------
Revenues:
Oil sales 28,021 41,688 - 33%
Gas sales 23,385 31,329 - 25%
CO2 sales 1,472 -- N/A
Gain (loss) on settlements of
derivative contracts 10,819 (10,085) + 207%
Interest and other income 509 653 - 22%
---------- ---------- ----------
Total revenues 64,206 63,585 + 1%
---------- ---------- ----------
Expenses:
Lease operating costs 15,490 10,803 + 43%
Production taxes and marketing
expense 2,532 2,681 - 6%
CO2 operating costs 183 -- N/A
General and administrative 2,373 2,220 + 7%
Interest 6,760 4,492 + 50%
Depletion and depreciation 23,658 12,656 + 87%
Loss on Enron related assets 25,164 -- N/A
Amortization of derivative
contracts and other non-cash
hedging adjustments 1,983 -- N/A
Franchise taxes (28) 78 - 136%
---------- ---------- ----------
Total expenses 78,115 32,930 + 137%
---------- ---------- ----------
Income (loss) before income
taxes (13,909) 30,655 - 145%
Income tax provision (benefit)
Current income taxes (260) 437 - 159%
Deferred income taxes (10,171) (67,852) - 85%
---------- ---------- ----------
NET INCOME (LOSS) (3,478) 98,070 - 104%
========== ========== ==========
Net income (loss) per common share:
Basic (0.07) 2.14 - 103%
Diluted (0.07) 2.09 - 103%
Weighted average common shares:
Basic 52,882 45,916 + 15%
Diluted 53,664 46,869 + 14%
Production (daily - net of royalties)
Oil (barrels) 18,292 16,267 + 12%
Gas (mcf) 99,985 60,173 + 66%
BOE (6:1) 34,956 26,296 + 33%
Three Months Ended
December 31, Percentage
----------------------
2001 2000 Change
---------- ---------- ----------
Unit sales price (including hedges)
Oil (per barrel) 17.79 25.31 - 30%
Gas (per mcf) 3.51 4.52 - 22%
Unit sales price (excluding hedges)
Oil (per barrel) 16.65 27.85 - 40%
Gas (per mcf) 2.54 5.66 - 55%
Cash flow from operations (1) 37,955 43,151 - 12%
Cash flow per common share: (2)
Basic 0.72 0.94 - 23%
Diluted 0.71 0.92 - 23%
Oil & gas capital investments 58,570 71,589 - 18%
CO2 capital investments 563 -- N/A
BOE data (6:1)
Revenue 15.99 30.18 - 47%
Gain (loss) on settlements of
derivative contracts 3.36 (4.17) + 181%
Lease operating costs (4.82) (4.46) + 8%
Production taxes and marketing
expense (0.79) (1.11) - 29%
---------- ---------- ----------
Production netback 13.74 20.44 - 33%
CO2 operating cash flow 0.40 -- N/A
General and administrative (0.73) (0.95) - 23%
Net cash interest expense (1.70) (1.48) + 15%
Current income taxes and other 0.09 (0.17) - 153%
---------- ---------- ----------
Cash flow (1) 11.80 17.84 - 34%
========== ========== ==========
(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.
Year Ended
December 31, Percentage
----------------------
2001 2000 Change
---------- ---------- ----------
Revenues:
Oil sales 132,219 144,230 - 8%
Gas sales 128,179 60,406 + 112%
CO2 sales 5,210 -- N/A
Gain (loss) on settlements of
derivative contracts 18,654 (25,264) + 174%
Interest and other income 849 2,279 - 63%
---------- ---------- ----------
Total revenues 285,111 181,651 + 57%
---------- ---------- ----------
Expenses:
Lease operating costs 55,049 38,676 + 42%
Production taxes and marketing
expenses 10,963 8,051 + 36%
CO2 operating costs 891 -- N/A
General and administrative 9,297 8,055 + 15%
Interest 22,335 15,255 + 46%
Depletion and depreciation 71,345 36,214 + 97%
Loss on Enron related assets 25,164 -- N/A
Amortization of derivative
contracts and other non-cash
hedging adjustments 7,816 -- N/A
Franchise taxes 877 467 + 88%
---------- ---------- ----------
Total expenses 203,737 106,718 + 91%
---------- ---------- ----------
Income before income taxes 81,374 74,933 + 9%
Income tax provision (benefit)
Current income taxes 640 558 + 15%
Deferred income taxes 24,184 (67,852) + 136%
---------- ---------- ----------
NET INCOME 56,550 142,227 - 60%
========== ========== ==========
Net income per common share:
Basic 1.15 3.10 - 63%
Diluted 1.12 3.07 - 64%
Weighted average common shares:
Basic 49,325 45,823 + 8%
Diluted 50,361 46,352 + 9%
Production (daily - net of royalties)
Oil (barrels) 16,978 15,219 + 12%
Gas (mcf) 85,238 37,078 + 130%
BOE (6:1) 31,185 21,399 + 46%
Unit sales price (including hedges)
Oil (per barrel) 21.65 23.50 - 8%
Gas (per mcf) 4.66 3.57 + 31%
Year Ended
December 31, Percentage
----------------------
2001 2000 Change
---------- ---------- ----------
Unit sales price (excluding hedges)
Oil (per barrel) 21.34 25.89 - 18%
Gas (per mcf) 4.12 4.45 - 7%
Cash flow from operations (1) 186,801 111,555 + 67%
Cash flow per common share: (2)
Basic 3.79 2.43 + 56%
Diluted 3.71 2.41 + 54%
Oil & gas capital investments 327,177 134,021 + 144%
CO2 capital investments 45,555 -- N/A
Total assets 789,988 457,379 + 73%
Total long-term debt
(excluding discount) 340,870 199,000 + 71%
Total stockholders' equity 349,168 216,165 + 62%
BOE data (6:1)
Revenue 22.88 26.13 - 12%
Gain (loss) on settlements of
derivative contracts 1.64 (3.23) + 151%
Lease operating costs (4.84) (4.94) - 2%
Production taxes and marketing
expense (0.96) (1.02) - 6%
---------- ---------- ----------
Production netback 18.72 16.94 + 11%
CO2 operating cash flow 0.38 -- N/A
General and administrative (0.89) (1.09) - 18%
Net cash interest expense (1.74) (1.54) + 13%
Current income taxes and other (0.06) (0.07) - 14%
---------- ---------- ----------
Cash flow (1) 16.41 14.24 + 15%
========== ========== ==========
(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.
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 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 , holds key operating acreage 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. Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. and has a growing presence 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 areas. 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, 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 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 , 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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. |
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