Denbury Resources Announces Second Quarter 1999 Results.DALLAS--(BUSINESS WIRE)--Aug. 4, 1999-- 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") is pleased to report its operating and financial results for the second quarter of 1999 with comparatives. 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 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 "). -0-
FINANCIAL HIGHLIGHTS
(Amounts in thousands of U.S. dollars)
Three Months Ended
June 30, Percentage
-------------------
1999 1998 Change
--------- --------- ----------
Revenues:
Oil Sales 12,444 14,655 - 15%
Gas Sales 5,414 7,853 - 31%
Interest and other income 370 375 - 1%
--------- --------- ----------
Total revenues 18,228 22,883 - 20%
Expenses:
Production 6,487 8,109 - 20%
General and administrative 1,669 1,677 --
Interest 3,820 3,978 - 4%
Depletion and depreciation 5,610 16,071 - 65%
Franchise taxes 150 232 - 35%
Writedown of oil and natural gas
properties -- 165,000 --
--------- --------- ----------
Total expenses 17,736 195,067 - 91%
Income (loss) before income taxes 492 (172,184) + 100%
Income tax benefit -- 50,245 --
--------- --------- ----------
NET INCOME (LOSS) 492 (121,939) + 100%
--------- --------- ----------
--------- --------- ----------
Earnings (loss) per common share:
Basic 0.01 (4.57) + 100%
Diluted 0.01 (4.57) + 100%
Average common shares outstanding:
Basic 41,407 26,690 + 55%
Diluted 41,475 27,182 + 53%
Production (daily - net of royalties)
Oil (barrels) 11,541 15,649 - 26%
Gas (mcf) 26,828 37,665 - 29%
BOE (6:1) 16,013 21,927 - 27%
Unit sales price
Oil (per barrel) 11.85 10.29 + 15%
Gas (per mcf) 2.22 2.29 - 3%
Cash flow from operations (1) 6,598 9,052 - 27%
Cash flow per common share: (2)
Basic 0.16 0.34 - 53%
Diluted 0.16 0.33 - 52%
Oil & gas capital investments 12,912 49,843 - 74%
Total debt 142,500 195,000 - 27%
Stockholders' equity 64,781 131,761 - 51%
BOE data (6:1)
Revenue 12.26 11.28 + 9%
Production expenses (4.45) (4.06) + 10%
--------- --------- ----------
Production netback 7.81 7.22 + 8%
General and administrative (1.25) (0.96) + 30%
Interest and other (2.22) (1.72) + 29%
--------- --------- ----------
Cash flow 4.34 4.54 - 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.
Six Months Ended
June 30, Percentage
--------------------
1999 1998 Change
--------- --------- ----------
Revenues:
Oil Sales 20,976 30,828 - 32%
Gas Sales 11,585 16,868 - 31%
Interest and other income 731 742 - 1%
--------- --------- ----------
Total revenues 33,292 48,438 - 31%
--------- --------- ----------
Expenses:
Production 12,342 15,963 - 23%
General and administrative 3,560 3,453 + 3%
Interest 8,678 8,369 + 4%
Depletion and depreciation 10,945 28,458 - 62%
Franchise taxes 304 432 - 30%
Writedown of oil and natural gas
properties -- 165,000 --
--------- --------- ----------
Total expenses 35,829 221,675 - 84%
--------- --------- ----------
Loss before income taxes (2,537) (173,237) + 99%
Income tax benefit -- 50,618 --
--------- --------- ----------
NET LOSS (2,537) (122,619) + 98%
--------- --------- ----------
--------- --------- ----------
Loss per common share:
Basic (0.07) (4.89) + 99%
Diluted (0.07) (4.89) + 99%
Average common shares outstanding:
Basic 34,145 25,066 + 36%
Diluted 34,263 25,636 + 34%
Production (daily - net of royalties)
Oil (barrels) 10,914 15,191 - 28%
Gas (mcf) 28,812 38,963 - 26%
BOE (6:1) 15,716 21,685 - 28%
Unit sales price
Oil (per barrel) 10.62 11.21 - 5%
Gas (per mcf) 2.22 2.39 - 7%
Cash flow from operations (1) 9,095 20,507 - 56%
Cash flow per common share: (2)
Basic 0.27 0.82 - 67%
Diluted 0.27 0.80 - 66%
Oil & gas capital investments 19,390 76,253 - 75%
BOE data (6:1)
Revenue 11.44 12.15 - 6%
Production expenses (4.34) (4.07) + 7%
--------- --------- ----------
Production netback 7.10 8.08 - 12%
General and administrative (1.36) (0.99) + 37%
Interest and other (2.65) (1.87) + 42%
--------- --------- ----------
Cash flow 3.09 5.22 - 46%
--------- --------- ----------
--------- --------- ----------
(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.
Product prices improved significantly during the second quarter 1999, with NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). oil prices averaging approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $17.65 per Bbl. More recently, the NYMEX oil price has improved to in excess of $20.00 per Bbl which is substantially higher than the second quarter average. As a result of these improved product prices, Denbury's operating results improved from the last quarter of 1999 levels with increases in production, 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 and net income. Denbury recognized a profit in the second quarter of 1999 of $492,000 or $0.01 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This compares to a loss of $3.0 million for the first quarter of 1999 and a loss for the second quarter of 1998 of $121.9 million (which included a $165 million 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 oil and gas properties due to the low oil prices). Cash flow from operations (excluding the change in non-cash items) for the second quarter of 1999 was $6.6 million, an increase of 164% from the first quarter of 1999. The average daily production for the second quarter of 1999 was 16,013 BOE/d, an increase from the first quarter average of 15,417, but a decline from the Company's peak during the second quarter of 1998 of 21,927 BOE/d before spending was curtailed due to the low oil prices. This production increase during the recently completed second quarter was accomplished with relatively low spending and resulted primarily from the increase in production from the Company's east waterflood Wa´ter`flood` n. 1. A flood of water; an inundation. unit at 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. Production on this unit was approximately 250 Bbls/d a year ago, but had increased to approximately 1,675 Bbls/d for the month of June June: see month. 1999. Development and exploration expenditures for the second quarter were approximately $8.0 million, with an additional $4.9 million incurred for an acquisition of oil properties 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 which added approximately 650 Bbls/d to the Company's current production levels. This compares to total spending of approximately $49.8 million during the second quarter of 1998. The Company's current budget for development and exploration for 1999 remains at $35 million, although the Company may increase the spending level slightly during the fourth quarter as a result of the improved oil prices. Any acquisitions made by the Company would be in addition to this base capital budget and would be funded by the Company's available bank credit line. The Company's net oil price increased 15% from the first quarter levels to a net realized average price of $11.85 per Bbl for the second quarter of 1999. This net oil price includes a loss on oil hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. , which lowered the net realized price by approximately $0.51 per Bbl. 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 by approximately $632,000 over the first quarter of 1999 levels along with an increase in general operating activity, but were approximately $1.6 million less than the comparable quarter in 1998. General and administrative expenses of $1.7 million were slightly less than those for the comparable quarter in 1998 and were down from the first quarter of 1999 level of $1.9 million. Interest expense decreased significantly from the first quarter of 1999 as a result of the $100 million capital infusion Capital infusion Often refers to the cross-subsidization of divisions within a firm. When one division is not doing well, it might benefit from an infusion of new funds from the more successful divisions. by the Texas Pacific Group and the corresponding reduction in debt. The deprecation dep·re·cate tr.v. de·pre·cat·ed, de·pre·cat·ing, de·pre·cates 1. To express disapproval of; deplore. 2. To belittle; depreciate. 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 rate per BOE for the second quarter of 1999 was the same as the 1999 first quarter rate of $3.85. Denbury is an independent oil and gas company with its primary operations in the states of Mississippi and Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. . The Company is
continuing to follow its previously stated objectives and is
aggressively pursuing acquisitions with funds made available under its
bank credit line as a result of the capital infusion from the Texas
Pacific Group. It is also continuing to develop its existing properties
although it has intentionally in·ten·tion·al adj. 1. Done deliberately; intended: an intentional slight. See Synonyms at voluntary. 2. Having to do with intention. limited its development budget in order to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. the use of its bank credit line for acquisitions. The majority of the planned 1999 development expenditures relate to facilities and workovers with a substantial portion of the funds relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the waterflood units at Heidelberg Field. Currently, drilling activities make up approximately 20% of the 1999 development budget. This press release, other than historical financial information, contains forward looking statements that involve risks and uncertainties including budgeted capital expenditures and expected production results and other risks and uncertainties detailed in the Company's SEC reports, including the reports on Form 10-Q Form 10-Q See 10-Q. . Actual results may vary materially. The New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. and the SEC have neither approved nor disapproved the information contained herein. |
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