Denbury Resources Announces Record Production Levels; First Quarter 2002 Results.Business Editors DALLAS--(BUSINESS WIRE)--May 2, 2002 Denbury Resources Inc. (NYSE NYSE See: New York Stock Exchange :DNR See dynamic noise reduction and domain name resolver. ) ("Denbury" or the "Company") today announced its first quarter 2002 financial and operating results. The Company posted a 33% increase in production as compared to the first quarter of 2001, resulting in its best ever quarterly-average daily production of 35,361 barrels of oil equivalent per day (BOE/d). The Company posted earnings for the quarter of $4.5 million, or $0.09 per common share, despite a 51% drop in its weighted average net revenue 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 between the two respective quarters. This compares to earnings for the comparative prior year quarter of $26.0 million, or $0.56 per common share. 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 (excluding the 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) was $28.5 million, or $0.54 per common share, as compared to cash flow during the first quarter of 2001 of $55.0 million, or $1.19 per common share. Continued Production Increases Denbury's first quarter 2002 average daily production of 35,361 BOE/d was 33% higher than the 26,635 BOE/d for the comparable period in 2001, marking the 11th quarterly increase out of the last 12 quarters. By the Company's estimates, the 33% increase is one of the largest positive changes in production levels for the independent oil and gas sector. First quarter 2002 production was balanced, with 50% oil and 50% natural gas. The increases in daily production are the result of strategic acquisitions and successful development and exploitation Exploitation See also Opportunism. Barnum, P. T. (1810–1891) circus impressario famous for his saying, “Never give a sucker an even break.” [Am. Hist. work on these acquisitions. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 75% of the 8,726 BOE/d production increase between the respective first quarters came from the acquisition of Matrix Oil & Gas in July July: see month. 2001, based on the production rates at the time of acquisition. Production from the Matrix properties averaged approximately 7,526 BOE/d (predominately natural gas) during the first quarter of 2002, the highest quarterly average to date from these properties, approximately 859 BOE/d (13%) higher than their production rates at the time of acquisition. The Matrix acquisition is performing better than expected, with production at or above projections. 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. associated with the Matrix acquisition as of December December: see month. 31, 2001 are up 35% since the acquisition, or up 46% based upon adding back production. In addition to the production increases on the properties acquired from Matrix, the Company also had production increases on its other offshore properties that aggregated approximately 2,076 BOE/d when compared to the first quarter of 2001. The majority of the remaining production increases relate to positive response from the Company's 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 CO2 properties. Production at Little Creek Field (including West Little Creek), during the first quarter of 2002 averaged 3,623 BOE/d, almost triple its 1,350 BOE/d production rate at the time of acquisition in August 1999. Production from Mallalieu Mallalieu is a surname, and may refer to:
This page or section lists people with the surname Mallalieu. Field, purchased in April 2001, began to respond to the injection of CO2 which commenced in November November: see month. of 2001, increasing from approximately 75 Bbls/d at the time of acquisition to a first quarter average of 245 Bbls/d. The response in this field is ahead of expectations and this field is continuing to respond subsequent to quarter end, producing an estimated 625 net Bbls/d during the month of April 2002. The production increases from the Company's offshore properties and its CO2 properties were partially offset by general production declines in its other two core areas, Eastern Mississippi and 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. .First Quarter 2002 Financial Results Even though the Company's weighted average per BOE commodity price decreased more than 50% in the first quarter of 2002 as compared to the first quarter of 2001, Denbury posted a first quarter 2002 profit of $4.5 million, or $0.09 per common share, as a result of the higher production levels. Cash flow from operations (excluding the changes in other assets and liabilities) for the first quarter of 2002 was $28.5 million, or $0.54 per common share. This compares to net income of $26.0 million, or $0.56 per common share, and cash flow of $55.0 million, or $1.19 per common share, for the comparable period in 2001. The Company's realized natural gas prices (excluding hedges) for the first quarter of 2002 averaged $2.43 per thousand cubic feet (Mcf), a 68% decrease from the average of $7.67 per Mcf during the first quarter of 2001, and its realized oil prices (excluding hedges) for the first quarter of 2002 averaged $17.43 per Bbl, a 28% decrease from the $24.18 per Bbl average in the first quarter of 2001. The Company collected $2.6 million on its commodity hedges during the first quarter of 2002, increasing its average realized natural gas price to $2.65 per Mcf and its average realized oil price to $17.72 per Bbl. There were not any cash receipts or payments on the Company's commodity hedges during the first quarter of 2001 because of high prices. Between the respective first quarters, the Company lowered every one of its cash expenses on a per BOE basis. 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 7% on a BOE basis between the respective quarters of 2001 and 2002, primarily due to savings resulting from (i) the Company's purchase of CO2 producing wells, facilities and reserves in February February: see month. 2001, which lowered the Company's cost per Mcf from $0.25 to approximately $0.10, 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 to natural gas production became approximately 50/50, with natural gas having a lower overall operating cost per BOE. General and administrative expenses decreased 9% on a per BOE basis between the respective quarters, 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 an increase in the number of operated wells, primarily from the Matrix acquisition. Net cash interest expense decreased 4% on a per BOE basis in 2002 as the increase in debt levels, which primarily resulted from the Matrix acquisition, was more than offset by the higher production levels. Non-cash 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 increased 40% 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 currently set at $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 $346 million, with $74 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 recently reaffirmed bank borrowing base of $220 million. The Company anticipates that its overall debt level will not change substantially during 2002 as it plans to fund its development and exploration program with cash flow from operations 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 this time, the Company is leaving its targeted 2002 production levels unchanged at 35,250 BOE/d, even though it appears that production is responding faster than anticipated from the Company's CO2 properties. Based on this anticipated forecasted average for the year, the Company's organic production growth would average approximately 13% above average 2001 levels. Gareth Roberts Gareth Roberts may refer to:
conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. fund, or partially fund, any potential acquisitions. We will continue to pursue acquisitions that are near our CO2 pipeline in Western Mississippi and Northeastern north·east n. 1. Abbr. NE The direction or point on the mariner's compass halfway between due north and due east, or 45° east of due north. 2. An area or region lying in the northeast. 3. Louisiana, with plans to ultimately flood flood, in hydrology flood, inundation of land by the rise and overflow of a body of water. Floods occur most commonly when water from heavy rainfall, from melting ice and snow, or from a combination of these exceeds the carrying capacity of the river them with CO2 as we have at Little Creek and Mallalieu Fields. These acquisitions are typically inexpensive. In addition, we will continue to look for other acquisitions in our other core areas. We have a robust drilling inventory of quality projects in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. and expect 2002 to be a solid year, even though our production growth rate may slow relative to previous years as a significant portion of our focus will be on further development of 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 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. floods By Chronology Note:This is in reverse chronological order. 2000s
Conference Call The public is invited to listen to the Company's conference call set for today, May 2, 2002, 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:
Financial and Statistical Data Tables
Following are financial highlights for the comparative first
quarters ended March 31, 2002 and 2001. All dollar amounts are in U.S.
dollars and production volumes and dollars are expressed on a net
revenue interest basis with gas volumes converted to equivalent
barrels at 6:1.
FINANCIAL HIGHLIGHTS
(Amounts in thousands of U.S. dollars)
Three Months Ended
March 31,
------------------- Percentage
2002 2001 Change
---- ---- ----------
Revenues:
Oil sales 27,833 35,402 - 21%
Gas sales 23,077 42,913 - 46%
CO2 sales 1,490 859 + 73%
Gain on settlements of
derivative contracts 2,636 - N/A
Interest and other
income 411 6 + 6750%
------ ------ --------
Total revenues 55,447 79,180 - 30%
------ ------ --------
Expenses:
Lease operating costs 15,428 12,470 + 24%
Production taxes and
marketing expense 2,614 2,608 -
CO2 operating costs 167 58 + 188%
General and
administrative 2,849 2,401 + 19%
Interest 6,654 4,663 + 43%
Depletion and
depreciation 22,926 12,345 + 86%
Amortization of derivative
contracts and other
non-cash hedging
adjustments (1,081) 3,140 - 134%
Franchise taxes 367 275 + 33%
------- ------ --------
Total expenses 49,924 37,960 + 32%
------- ------ --------
Income before income taxes 5,523 41,220 - 87%
Income tax provision
(benefit)
Current income taxes (481) 2,000 - 124%
Deferred income taxes 1,458 13,251 - 89%
------- ------ --------
NET INCOME 4,546 25,969 - 82%
======= ====== ========
Net income per common share:
Basic 0.09 0.56 - 84%
Diluted 0.08 0.55 - 85%
Weighted average common
shares:
Basic 52,994 46,012 + 15%
Diluted 53,724 47,261 + 14%
Production (daily - net of
royalties)
Oil (barrels) 17,740 16,269 + 9%
Gas (mcf) 105,726 62,195 + 70%
BOE (6:1) 35,361 26,635 + 33%
Three Months Ended
March 31,
---------------------------- Percentage
2002 2001 Change
---- ---- ----------
Unit sales price
(including hedges)
Oil (per barrel) 17.72 24.18 - 27%
Gas (per mcf) 2.65 7.67 - 65%
Unit sales price
(excluding hedges)
Oil (per barrel) 17.43 24.18 - 28%
Gas (per mcf) 2.43 7.67 - 68%
Cash flow from
operations (1) 28,524 54,982 - 48%
Cash flow per
common share: (2)
Basic 0.54 1.19 - 55%
Diluted 0.53 1.16 - 54%
Oil & gas capital
investments 26,276 28,173 - 7%
CO2 capital
investments 335 41,835 - 99%
Total assets 763,897 505,996 + 51%
Total long-term debt
(excluding discount) 346,000 206,870 + 67%
Total stockholders'
equity 336,399 243,192 + 38%
BOE data (6:1)
Revenue 15.99 32.67 - 51%
Gain on settlements of
derivative contracts 0.83 - N/A
Lease operating costs (4.85) (5.20) - 7%
Production taxes and
marketing expense (0.82) (1.09) - 25%
-------- -------- ---------------
Production netback 11.15 26.38 - 58%
CO2 operating cash
flow 0.42 0.33 + 27%
General and
administrative (1.01) (1.11) - 9%
Net cash interest
expense (1.76) (1.83) - 4%
Current income
taxes and other 0.16 (0.83) - 119%
-------- -------- ---------------
Cash flow (1) 8.96 22.94 - 61%
======== ======== ===============
(1) Excluding the changes in other assets and liabilities
(2) Cash flow from operations excluding the changes in other assets
and liabilities 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, holds key operating acreage onshore Louisiana 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 Mexico Golfo 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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