Denbury Resources Inc. Announces 1999 Earnings Turnaround.Business Editors DALLAS--(BUSINESS WIRE)--Feb. 24, 2000 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 reported its operating and financial results for the quarter and year ended December December: see month. 31, 1999 with comparatives.
FINANCIAL HIGHLIGHTS
Quarter Ended December 31,
--------------------------
(Amounts in thousands Percentage
of U.S. dollars) 1999 1998 Change
---------- ---------- --------
Revenues:
Oil sales $ 21,064 $ 9,332 + 126%
Gas sales 5,910 5,592 + 6%
Interest and other income 346 545 - 37%
---------- ---------- --------
Total revenues 27,320 15,469 + 77%
---------- ---------- --------
Expenses:
Production taxes 1,094 699 + 57%
Lease operating 8,374 5,681 + 47%
General and administrative 1,697 1,560 + 9%
Interest 3,625 4,746 - 24%
Depletion and depreciation 7,866 14,706 - 47%
Franchise taxes (82) 182 - 145%
Writedown of oil and natural
gas properties -- 115,000 - 100%
---------- ---------- --------
Total expenses 22,574 142,574 - 84%
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Income (loss) before income taxes 4,746 (127,105) + 104%
Income tax provision -- (34,998) - 100%
---------- ---------- --------
NET INCOME (LOSS) $ 4,746 $(162,103) + 103%
---------- ---------- --------
---------- ---------- --------
Net income (loss) per common share
Basic $ 0.10 $ (6.05) + 102%
Diluted 0.10 (6.05) + 102%
Average common shares outstanding
Basic 45,648 26,802 + 70%
Diluted 45,666 26,802 + 70%
Production (daily - net of royalties)
Oil (barrels) 13,993 11,318 + 24%
Gas (mcf) 26,991 28,741 - 6%
BOE (6:1) 18,491 16,108 + 15%
Unit sales price
Oil (per barrel) 16.36 8.96 + 83%
Gas (per mcf) 2.38 2.11 + 13%
Quarter Ended December 31,
--------------------------
(Amounts in thousands Percentage
of U.S. dollars) 1999 1998 Change
---------- ---------- --------
Cash flow from operations (1) 12,977 2,772 + 368%
Cash flow per common share (2)
Basic 0.28 0.10 + 180%
Diluted 0.28 0.10 + 180%
Oil & gas capital investments 13,691 8,970 + 53%
BOE data (6:1)
Revenue 15.85 10.07 + 57%
Production taxes (0.64) (0.47) + 36%
Lease operating expenses (4.92) (3.83) + 28%
---------- ---------- --------
Production netback 10.29 5.77 + 78%
General and administrative (0.95) (1.18) - 19%
Interest (1.78) (2.72) - 35%
Other 0.07 -- + 100%
---------- ---------- --------
Cash flow 7.63 1.87 + 308%
---------- ---------- --------
---------- ---------- --------
(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,
-----------------------
(Amounts in thousands Percentage
of U.S. dollars) 1999 1998 Change
---------- ---------- --------
Revenues:
Oil sales $ 57,713 $ 51,080 + 13%
Gas sales 23,862 30,803 - 23%
Interest and other income 1,415 1,623 - 13%
---------- ---------- --------
Total revenues 82,990 83,506 - 1%
---------- ---------- --------
Expenses:
Production taxes 3,662 4,049 - 10%
Lease operating 26,029 25,113 + 4%
General and administrative 7,029 6,556 + 7%
Interest 15,795 17,534 - 10%
Depletion and depreciation 25,515 52,234 - 51%
Franchise taxes 346 785 - 56%
Writedown of oil and natural
gas properties -- 280,000 - 100%
---------- ---------- --------
Total expenses 78,376 386,271 - 80%
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Income (loss) before income taxes 4,614 (302,765) + 102%
Income tax benefit -- 15,620 - 100%
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NET INCOME (LOSS) $ 4,614 $(287,145) + 102%
---------- ---------- --------
---------- ---------- --------
Net income (loss) per common share
Basic $ 0.12 $ (11.08) + 101%
Diluted 0.12 (11.08) + 101%
Year Ended December 31,
-----------------------
(Amounts in thousands Percentage
of U.S. dollars) 1999 1998 Change
---------- ---------- --------
Average common shares outstanding
Basic 39,928 25,926 + 54%
Diluted 39,987 25,926 + 54%
Production (daily - net of royalties)
Oil (barrels) 12,090 13,603 - 11%
Gas (mcf) 27,948 36,605 - 24%
BOE (6:1) 16,748 19,704 - 15%
Unit sales price
Oil (per barrel) 13.08 10.29 + 27%
Gas (per mcf) 2.34 2.31 + 1%
Cash flow from operations (1) 31,619 30,096 + 5%
Cash flow per common share (2)
Basic 0.79 1.16 - 32%
Diluted 0.79 1.12 - 29%
Oil & gas capital investments 54,967 102,652 - 46%
Total assets 252,566 212,859 + 19%
Total long-term debt 152,500 225,000 - 32%
Stockholders' equity (deficit) 72,428 (32,265) + 324%
BOE data (6:1)
Revenue 13.34 11.38 + 17%
Production taxes (0.60) (0.56) + 7%
Lease operating expenses (4.25) (3.49) + 22%
---------- ---------- --------
Production netback 8.49 7.33 + 16%
General and administrative (1.21) (1.02) + 19%
Interest (2.22) (2.13) + 4%
Other 0.11 -- + 100%
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Cash flow 5.17 4.18 + 24%
---------- ---------- --------
---------- ---------- --------
(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.
The Company posted net income of $4.6 million ($.12 per common share) in 1999, a significant turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. from the $287.1 million loss in 1998 caused primarily by the oil price collapse. During 1999, the Company made significant improvements to its balance sheet and reported improved operational results. The Company's overall production levels increased each quarter during the year even though spending was down 46% from the 1998 level. Production averaged 16,748 BOE/d for 1999 and 18,491 BOE/d for the fourth quarter of 1999, an increase of 20% from the first quarter average of 15,417 BOE/d. This increase in production throughout the year was accomplished through an increase in the Company's base production, even though development and exploratory spending was only slightly higher than cash flow for the year, plus $20.5 million of acquisitions. Oil prices improved throughout 1999 with an increase of 27% ($2.79 per Bbl) in the average net price received by the Company from 1998 to 1999 while natural gas prices were virtually unchanged. The quarterly production increases coupled with the improved product prices caused cash flow to increase from $2.5 million during the first quarter of 1999 to $13.0 million for the fourth quarter, an increase of 420%. Cash flow and net income for 1999 were both reduced by $9.4 million, the Company's net payments during 1999 on its commodity hedges. A majority of these payments ($5.8 million) related to an oil hedge put in place in early 1999, a hedge of 3,000 Bbls/d at $14.24 per Bbl, which expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. as of December 31, 1999. Excluding this hedge, the cash flow in the fourth quarter would have been $15.8 million, an increase of 533% from the first quarter level. The net effect of the commodity hedges was a reduction in the Company's average net oil price for 1999 of $1.95 per barrel barrel: see English units of measurement. and a reduction of the Company's average net natural gas price of $0.08 per Mcf. Previously the Company announced that its December 31, 1999 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. , as estimated by Netherland, Sewell Sew·ell , Anna 1820-1878. British writer of the children's classic Black Beauty (1877). and Associates, were 51.8 million barrels of oil and 50.4 Bcf of natural gas, or 60.2 million BOEs, as compared to a total of 36.4 million BOEs as of December 31, 1998. The discounted present value of proved reserves at December 31, 1999 using a 10% discount rate ("PV10 Value") was $462.9 as compared to a discounted present value for the prior year of $115.0. The year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1999 reserves were computed based on a NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). oil price of $25.60 as compared to a NYMEX oil price at December 31, 1998 of $12.00. Following is a reconciliation of the changes in the proven reserves between 1998 and 1999:
Oil Gas PV10 Value
(MBbl) (MMcf) MBOE (millions)
--------- --------- -------- --------
BALANCE DECEMBER 31, 1998 28,250 48,803 36,384 $ 115.0
Revisions of previous estimates 83 418 152 6.5
Revisions due to price changes 15,884 75 15,896 253.3
Extensions, discoveries and
other additions 4,383 8,910 5,868 48.9
Production (4,413) (10,201) (6,113) (51.9)
Acquisitions 7,722 2,693 8,171 71.6
Property sales (77) (260) (120) (0.4)
Accretion of discount -- -- -- 11.5
Previously estimated
development costs incurred -- -- -- 8.4
--------- --------- -------- --------
Balance December 31, 1999 51,832 50,438 60,238 $ 462.9
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--------- --------- -------- --------
The increase in the reserve quantities, coupled with the full cost pool writedowns in 1998 which reduced the Company's cost basis by $280 million, lowered the Company's depreciation, 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 and amortization rate from $7.26 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 in 1998 to $4.17 per BOE in 1999. The Company also announced that its 2000 Annual Meeting of Shareholders will be held on Wednesday Wednesday: see week. , May 24, 2000 at 3:00 P.M., local time, at the offices of the Company located at 5100 Tennyson Parkway, Dallas, Texas “Dallas” redirects here. For other uses, see Dallas (disambiguation). The City of Dallas (pronounced [ˈdæl.əs] or [ˈdæl. . 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 3, 2000. Denbury is an independent oil and gas company with its primary operations in the states of Louisiana CODE, OF LOUISIANA. In 1822, Peter Derbigny, Edward Livingston, and Moreau Lislet, were selected by the legislature to revise and amend the civil code, and to add to it such laws still in force as were not included therein. and 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 . All dollar amounts in this press release are in U.S. dollars and production volumes and dollars are expressed on a net revenue basis with gas volumes converted to equivalent barrels at 6:1 ("BOE"). This press release, other than historical financial information, contains forward looking statements that involve risks and uncertainties as detailed in the Company's SEC reports, including the 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. . 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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