Denbury Resources Announces Record Quarterly and Annual Earnings; Daily Production Sets a Company Record, Growing at 28% Annual Rate.Business Editors DALLAS--(BUSINESS WIRE)--Feb. 23, 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 fourth quarter and 2000 financial and operating results. The Company posted a 28% increase in production, year-over-year, and its highest quarterly earnings, revenues and cash flow in its ten-year history. 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 Since 1996, Denbury has realized a 27% 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. Further, daily production increased for the seventh consecutive quarter, averaging 26,296 BOE/d in the fourth quarter of 2000, a 42% increase from the fourth quarter of 1999 and a 28% increase from the third quarter of 2000. The Company moved closer to its desired 50/50 balance of oil and natural gas production, with natural gas representing 38% of the Company's fourth quarter production 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, as compared to approximately 25% in the prior quarter. On an annual basis, production averaged 21,399 BOE/d for 2000, a 28% increase over the 1999 average of 16,748 BOE/d. 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 60% or 2,800 of the 4,651 BOE/d increase between 1999 and 2000 came from internal development, primarily at three of the Company's largest fields, 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. , Lirette and Little Creek. The Company's acquisitions of 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. , Porte Barre Barre (bă`rē), city (1990 pop. 9,482), Washington co., central Vt., SE of Montpelier; settled late 18th cent., inc. 1894. Granite quarrying, which began in the region in the early 19th cent., is still important. and Iberia Iberia (ībĭr`ēə), ancient country of Transcaucasia, roughly the eastern part of present-day Georgia. It was inhabited in earliest times by various tribes, collectively called Iberians by ancient historians, although Herodotus called Fields in the fourth quarter of 2000 and the acquisition of Little Creek and King Bee Fields in 1999 contributed the balance of the increase, approximately 1,850 BOE/d. Production from Heidelberg 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, increased for the twelfth consecutive quarter, averaging 7,978 BOE/d in the fourth quarter of 2000, a 23% increase from the fourth quarter of 1999 and a 4% increase from the third quarter of 2000. The daily production increase is attributable to the Company's active 2000 drilling program and expected response from ongoing production enhancement activities. Production increases at Lirette Field primarily came from the Company's discovery well, the Leon Leon Medieval kingdom, northwestern Spain. Leon proper included the cities of León, Salamanca, and Zamora—the adjacent areas of Vallodolid and Palencia being disputed with Castile, originally its eastern frontier. Hebert Heirs No. 1 (formerly the Fina Fee No. 1). Production commenced in late September September: see month. 2000. Denbury has a 67% working interest and a 50% net revenue interest in this well, which is currently producing approximately 7.0 MMcf/d and 125 Bbls/d, net to its account. Along with the growth in production, the Company's proved reserves quantities increased 45% from 60.2 MMBOE MMBOE Million Barrels of Oil Equivalent (energy and petroleum industry) as of December December: see month. 31, 1999 to 87.4 MMBOE as of December 31, 2000, with an even larger increase in PV10 value of the Company's reserves due to the higher commodity prices. During 2000, the Company added 34.9 MMBOEs of estimated reserves from drilling, extensions, acquisitions and upward revisions and another 0.73 MMBOE due solely to year-to-year commodity prices increases. This equates to a finding cost for the year of $3.75 per BOE ($0.625 per Mcfe), the second year in a row that the Company has been below $4.00 per BOE. Excluding our accretive 2000 acquisitions, the Company's exploration and development activities added about 29.9 MMBOE of new reserves at $2.36 per BOE ($0.39 per Mcfe). Record 2000 Financial Results As a result of high commodity prices and strong production growth, Denbury posted a fourth quarter profit of $98.1 million, or $2.14 per common share, and an annual profit of $142.2 million, or $3.10 per common share. The annual per-share-figure is more than four times bigger than the Company's previous annual record of $0.74 per common share in 1997. Included in the fourth quarter and 2000 results is a $67.9 million deferred income tax benefit ($1.48 per share) resulting from 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 valuation allowance on the Company's deferred tax asset balances that were fully impaired. Excluding this tax adjustment, the Company's net income was $30.2 million ($0.66 per share) for the fourth quarter of 2000 and $74.4 million ($1.62 per share) for the year, still more than double the Company's previous annual high. Correspondingly, the Company's 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 increased 233% quarter over quarter, reaching $43.2 million or $0.94 per common share, for the fourth quarter of 2000, up from $13.0 million, or $0.28 per common share, for the fourth quarter of 1999. Full-year 2000 cash flow was $111.6 million, or $2.43 per common share, an increase of 253% compared to the $31.6 million, or $0.79 per common share, posted in 1999. Excluding the $25.3 million of losses that the Company incurred on its hedges in 2000, cash flow would have been almost $3.00 per share for 2000 and $1.16 per share for the fourth quarter, the highest in the Company's history. For 2001 and beyond, the Company does not have any hedges that could 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 as its hedging program consists solely of "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 limit the upside. Product prices were significantly higher in 2000 than in 1999. Excluding the impact of realized hedging positions, Denbury's average net realized oil price of $25.89 per Bbl for 2000 was 72% higher than its 1999 average of $15.03 per Bbl. Denbury's average net realized unhedged natural gas price of $4.45 per Mcf for 2000 was 84% higher than the 1999 average of $2.42. Balance Sheet Strengthens as Capital Program Creates Excess Cash Flow 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. ") for the fourth quarter of 2000 totaled $14.6 million and for the year totaled $73.7 million, which were funded out of $111.6 million of cash flow generated from operations. The excess cash flow from operations was used to partially fund acquisitions which totaled $60.3 million, resulting in a net increase to bank debt during the year of $46.5 million. Denbury's debt-to-cash-flow ratio for the fourth quarter of 2000 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 was 1.15 to 1, a significant improvement when compared to the 2.9 to 1 ratio based on the annualized fourth quarter of 1999. 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. increased 57% (23% on a BOE basis) between 1999 and 2000 primarily due to an increase in production taxes related to higher product prices, the addition of Little Creek Field during the third quarter of 1999 (which has higher operating costs operating costs npl → gastos mpl operacionales per barrel due to 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. ), and overall increases in the number of wells and the cost of equipment and services. General and administrative expenses increased 15% on a gross basis between 1999 and 2000, but declined 10% on a BOE basis as a result of the increases in production. 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 11% on a BOE basis as a result of the acquisitions made during 2000 at a higher than company-average cost per BOE. 2001 Outlook Denbury's 2001 development and exploration budget is $150 million for 2001 and includes $10 million of uncompleted 2000 projects. Any acquisitions made by the Company will be in addition to these capital budget figures. Denbury's current total debt is $220 million and $55 million is available on its bank line. The Company anticipates that it will be able to reduce its debt during 2001 as it continues to generate more cash flow from operations than it is spending in its Capex program. Management expects that the Company's organic production growth will continue during 2001, particularly for natural gas. The targeted average daily production for 2001 of 28,625 BOE/d (17.2 MBbls/d and 68.7 MMcf/d) is a 34% increase over 2000 rates. The Company anticipates a 24% increase in its base production with the balance coming from its fourth quarter 2000 acquisitions. The targeted average production for 2001 by quarter is 26,500; 28,000; 29,500; and 30,500 BOE/d; for the first through fourth quarters, respectively. Approximately 40% of 2001's projected production should be natural gas, as compared to approximately 29% of 2000's production. Gareth Roberts Gareth Roberts may refer to:
verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. the same time-tested business strategy that was put in place at our inception. By any measure, we experienced strong growth in 2000 and expect to continue this growth into 2001 with a production growth rate that is in the top tier of our peer group. Furthermore, we expect to achieve this growth at a reasonable cost. We plan to continue our fiscal discipline by limiting our development and exploration spending to our cash flow from operations, and we will continue to monitor our debt levels so that we do not overextend o·ver·ex·tend tr.v. o·ver·ex·tend·ed, o·ver·ex·tend·ing, o·ver·ex·tends 1. To expand or disperse beyond a safe or reasonable limit: overextended their defenses. 2. ourselves. We anticipate that any excess cash flow in 2001 will be used to reduce our bank debt. We expect an even better year for 2001." Conference Call The public is invited to listen to the Company's conference call set for today, February February: see month. 23, 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 2001 Annual Meeting of Shareholders will be held on Wednesday Wednesday: see week. , May 23rd 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 2, 2001. Financial and Statistical Data Tables Following are financial highlights for the respective fourth quarter and annual periods ended December 31, 2000 and December 31, 1999. 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
------------------- -------
2000 1999 Change
------ ------ -------
Revenues
Oil sales 37,882 21,064 + 80%
Gas sales 25,050 5,910 + 324%
Interest and other income 653 346 + 89%
------ ------ -------
Total revenues 63,585 27,320 + 133%
------ ------ -------
Expenses
Lease operating costs 10,803 8,374 + 29%
Production taxes 2,681 1,094 + 145%
General and administrative 2,220 1,697 + 31%
Interest 4,492 3,625 + 24%
Depletion and depreciation 12,656 7,866 + 61%
Franchise taxes 78 (82) N/A
------ ------ -------
Total expenses 32,930 22,574 + 46%
------ ------ -------
Income before income taxes 30,655 4,746 + 546%
Income tax benefit 67,415 - N/A
------ ------ -------
NET INCOME 98,070 4,746 + 1,966%
====== ====== =======
Income per common share
Basic 2.14 0.10 + 2,040%
Diluted 2.09 0.10 + 1,990%
Weighted average common shares
outstanding
Basic 45,916 45,648 + 1%
Diluted 46,869 45,666 + 3%
Production (daily - net of royalties)
Oil (Bbls) 16,267 13,993 + 16%
Gas (Mcf) 60,173 26,991 + 123%
BOE (6:1) 26,296 18,491 + 42%
Unit sales price
Oil (per Bbl) 25.31 16.36 + 55%
Gas (per Mcf) 4.52 2.38 + 90%
Cash flow from operations (1) 43,151 12,977 + 233%
Cash flow per common share (2)
Basic 0.94 0.28 + 236%
Diluted 0.92 0.28 + 229%
Oil & gas capital investments 71,589 13,691 + 423%
Per BOE data (6:1)
Revenue 26.01 15.85 + 64%
Lease operating costs (4.46) (4.92) - 9%
Production taxes (1.11) (0.64) + 73%
------ ------- ------
Production netback 20.44 10.29 + 99%
General and administrative (0.95) (0.95) 0%
Net cash interest expense (1.48) (1.78) - 17%
Other (0.17) 0.07 N/A
------ ------- ------
Cash flow from operations (1) 17.84 7.63 + 134%
====== ======= ======
(1) Exclusive of the net change in non-cash working capital items.
(2) Cash flow from operations excluding the net change in working
capital balances divided by weighted average common shares
outstanding.
Year Ended
December 31, Percentage
----------------- ---------
2000 1999 Change
-------- -------- ---------
Revenues
Oil sales 130,898 57,713 + 127%
Gas sales 48,474 23,862 + 103%
Interest and other income 2,279 1,415 + 61%
-------- -------- --------
Total revenues 181,651 82,990 + 119%
-------- -------- --------
Expenses
Lease operating costs 38,676 26,029 + 49%
Production taxes 8,051 3,662 + 120%
General and administrative 8,055 7,029 + 15%
Interest 15,255 15,795 - 3%
Depletion and depreciation 36,214 25,515 + 42%
Franchise taxes 467 346 + 35%
-------- -------- --------
Total expenses 106,718 78,376 + 36%
-------- -------- --------
Income before income taxes 74,933 4,614 + 1,524%
Income tax benefit 67,294 -- N/A
-------- -------- --------
NET INCOME 142,227 4,614 + 2,983%
======== ======== ========
Income per common share
Basic 3.10 0.12 + 2,483%
Diluted 3.07 0.12 + 2,458%
Weighted average common shares
outstanding
Basic 45,823 39,928 + 15%
Diluted 46,352 39,987 + 16%
Production (daily -
net of royalties)
Oil (Bbls) 15,219 12,090 + 26%
Gas (Mcf) 37,078 27,948 + 33%
BOE (6:1) 21,399 16,748 + 28%
Unit sales price
Oil (per Bbl) 23.50 13.08 + 80%
Gas (per Mcf) 3.57 2.34 + 53%
Cash flow from operations (1) 111,555 31,619 + 253%
Cash flow per common share (2)
Basic 2.43 0.79 + 208%
Diluted 2.41 0.79 + 205%
Oil & gas capital investments 134,021 54,967 + 144%
Total assets 457,379 252,566 + 81%
Total long-term debt 199,000 152,500 + 30%
Total stockholders' equity 216,165 72,428 + 198%
Per BOE data (6:1)
Revenue 22.90 13.34 + 72%
Lease operating costs (4.94) (4.25) + 16%
Production taxes (1.02) (0.60) + 70%
-------- -------- --------
Production netback 16.94 8.49 + 100%
General and administrative (1.09) (1.21) - 10%
Net cash interest (1.54) (2.22) - 31%
Other (0.07) 0.11 N/A
-------- -------- --------
Cash flow from operations (1) 14.24 5.17 + 175%
======== ======== ========
(1) Exclusive of the net change in non-cash working capital
balances.
(2) Cash flow from operations excluding the net change in working
capital balances divided by weighted 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 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, 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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