Denbury Resources Inc. Announces Second Quarter 1998 Results.DALLAS--(BUSINESS WIRE)--August 5, 1998--Denbury Resources Inc. ("Denbury" or the "Company")(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.) is pleased to report its operating and financial results for the second quarter of 1998 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,
------------------------
1998 1997 % Change
------ ------ --------
Revenues:
Oil sales 14,655 11,474 + 28%
Gas sales 7,853 7,288 + 8%
Interest and other income 375 253 + 48%
------ ------ ----------
Total revenues 22,883 19,015 + 20%
------ ------ ----------
Expenses:
Production 8,109 5,259 + 54%
General and administrative 1,677 1,599 + 5%
Interest 3,978 73 + /a
Depletion and depreciation 16,071 8,473 + 90%
Franchise taxes 232 108 + 115%
Writedown of oil and natural
gas properties 165,000 - + /a
------- ------ ----------
Total expenses 195,067 15,512 + /a
------- ------ ----------
Income (loss) before income taxes (172,184) 3,503 - /a
Provision for income taxes 50,245 (1,296) - /a
------- ------ ----------
NET INCOME (LOSS) (121,939) 2,207 - /a
======= ====== ==========
Earnings (loss) per common share:
Basic (4.57) 0.11 - /a
Fully diluted (4.57) 0.11 - /a
Average common shares outstanding 26,690 20,156 + 32%
Production (daily - net of royalties)
Oil (barrels) 15,649 7,543 + 107%
Gas (mcf) 37,665 35,166 + 7%
BOE (6:1) 21,927 13,405 + 64%
Unit sales price
Oil (per barrel) 10.29 16.71 - 38%
Gas (per mcf) 2.29 2.28 + 0%
Three Months Ended
June 30,
-----------------------
1998 1997 % Change
----- ----- --------
Cash flow from operations /b 9,052 12,001 - 25%
Cash flow per common share:
Basic /c 0.33 0.60 - 45%
Fully diluted /d 0.32 0.55 - 42%
Oil & gas capital investments 49,843 21,014 + 137%
BOE data (6:1)
Revenue 11.28 15.38 - 27%
Production expenses (4.06) (4.31) - 6%
------ ------ ----------
Production netback 7.22 11.07 - 35%
General and administrative (0.96) (1.40) - 31%
Interest (1.72) 0.17 + /a
------ ------ ----------
Cash flow /c 4.54 9.84 - 54%
====== ====== ==========
/a Greater than 1000%.
/b Exclusive of the net change in non-cash working capital balances.
/c Cash flow from operations excluding change in working capital
balances divided by average common shares outstanding.
/d Assumes conversion or exercise of all securities as of beginning
of period and investment of any pro forma proceeds.
Six Months Ended
June 30,
------------------------
1998 1997 % Change
---- ---- -------
Revenues:
Oil sales 30,828 24,351 + 27%
Gas sales 16,868 15,552 + 8%
Interest and other income 742 765 - 3%
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Total revenues 48,438 40,668 + 19%
------- ------- -----------
Expenses:
Production 15,963 10,312 + 55%
General and administrative 3,453 3,120 + 11%
Interest 8,369 152 + /a
Depletion and depreciation 28,458 15,098 + 88%
Franchise taxes 432 205 + 111%
Writedown of oil and natural
gas properties 165,000 -- + /a
------- ------- -----------
Total expenses 221,675 28,887 + /a
------- ------- -----------
Income (loss) before income taxes (173,237) 11,781 - /a
Provision for income taxes 50,618 (4,359) - /a
-------- ------- -----------
NET INCOME (LOSS) (122,619) 7,422 - /a
======== ======= ===========
Earnings (loss) per common share:
Basic (4.89) 0.37 - /a
Fully diluted (4.89) 0.35 - /a
Six Months Ended
June 30,
-----------------------
1998 1997 % Change
----- ---- --------
Average common shares outstanding 25,066 20,125 + 25%
Production (daily -- net of
royalties)
Oil (barrels) 15,191 7,345 + 107%
Gas (mcf) 38,963 32,933 + 18%
BOE (6:1) 21,685 12,833 + 69%
Unit sales price
Oil (per barrel) 11.21 18.32 - 39%
Gas (per mcf) 2.39 2.61 - 8%
Cash flow from operations /b 20,507 26,923 - 24%
Cash flow per common share:
Basic /c 0.82 1.34 - 39%
Fully diluted /d 0.78 1.23 - 37%
Oil & gas capital investments 76,253 36,156 + 111%
BOE data (6:1)
Revenue 12.15 17.18 - 29%
Production expenses (4.07) (4.44) - 8%
----- ----- -----------
Production netback 8.08 12.74 - 37%
General and administrative (0.99) (1.43) - 31%
Interest (1.87) 0.28 + 768%
----- ----- -----------
Cash flow /b 5.22 11.59 - 55%
===== ===== ===========
/a Greater than 1000%.
/b Exclusive of the net change in non-cash working capital balances
/c Cash flow from operations excluding change in working capital
balances less the imputed preferred dividend, divided by average
common shares outstanding.
/d Assumes conversion or exercise of all securities as of
beginning of period and investment of any pro forma proceeds.
Denbury's operating results for the second quarter of 1998 remained strong with its twenty-first consecutive quarterly increase in production, continued low operating costs operating costs npl → gastos mpl operacionales per BOE and one of its lowest ever administrative expense per BOE ($0.96 per BOE). Production for the second quarter of 1998 averaged 21,927 BOE/d, an increase of 64% from the second quarter of 1997, and production for the first half of 1998 averaged 21,685 BOE/d, an increase of 69% over the comparable period in 1997. However, the financial results were significantly impacted by the 29% drop in oil and gas product prices (on a BOE basis) between the two six month periods consisting of a $7.11 per Bbl drop in oil prices (39%) and a $0.22 per Mcf drop in gas prices (8%). As a result of the decline in oil prices since December December: see month. 31, 1997 and based on internal estimates, the estimated 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. decreased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 7.2 million barrels as of June June: see month. 30, 1998 as oil wells reached the end of their economic life sooner and certain proved undeveloped locations became uneconomical. This decline in reserve quantities caused depreciation and amortization on a BOE basis to increase to $7.25 per BOE for the first six months of 1998 as compared to a rate of $6.50 per BOE for the comparable period in 1997. Futhermore, due to (i) the additional decline in oil price during the second quarter, (ii) a widening of the margin between the NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). oil price and the net realized field price and (iii) the effect of these low prices on the horizontal drilling a drilling machine having a horizontal drill spindle. See also: Horizontal program, the application of the full cost ceiling test required the Company to take 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 its oil and natural gas properties. Of this total, $134 million related to the recently acquired 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 which was first included in the ceiling test calculation as of June 30, 1998. As required by U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , this ceiling test was computed using June 30, 1998 prices which were equivalent to a NYMEX oil price of $14.00 per Bbl and an average net realized oil price of $8.90 per Bbl. Although the Company believes that this oil price is well below the price that it expects to receive over the life of the reserves, this reduction of the book value provides a solid base for subsequent earnings growth if the Company is able to produce its reserves at higher prices in the future. At Heidelberg Field, the Company spent approximately $11 million on acquisitions and $14 million on development and facilities during the first six months of 1998 drilling 8 horizontal horizontal /hor·i·zon·tal/ (hor?i-zon´t'l) 1. parallel to the plane of the horizon. 2. occupying or confined to a single level in a hierarchy. horizontal parallel to the plane of the horizon. wells and 3 horizontal injection wells. The Company plans to spend about $14 million at this field during the remainder of 1998 on facilities, injection wells and 9 vertical wells. The Company also plans to conduct a 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. recovery pilot project during 1998 to test the feasibility fea·si·ble adj. 1. Capable of being accomplished or brought about; possible: a feasible plan. See Synonyms at possible. 2. of CO2 injection into the Christmas Christmas [Christ's Mass], in the Christian calendar, feast of the nativity of Jesus, celebrated in Roman Catholic and Protestant Churches on Dec. 25. In liturgical importance it ranks after Easter, Pentecost, and Epiphany (Jan. 6). sands. An additional 14 horizontal wells that were originally scheduled have been postponed pending higher oil prices. Gareth Roberts Gareth Roberts may refer to:
n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. results to date at Heidelberg Field are meeting or exceeding expectations. Obviously we are disappointed with the oil prices, but as they recover we have no doubt that Heidelberg Field will prove to be a tremendous asset." During the first half of 1998, the Company spent a total of approximately $63 million on development and exploration and $13 million on acquisitions with a current development and exploration budget for 1998 of approximately $100 million. Although the spending level is almost the same as the original budget, the focus has changed from horizontal drilling on 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 oil properties to expenditures on leasehold An estate, interest, in real property held under a rental agreement by which the owner gives another the right to occupy or use land for a period of time. leasehold n. , seismic, injection wells and other facility work in both 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. and projected increased drilling expenditures
during the last half of 1998 in Louisiana. A substantial portion of
these expenditures are directed to long term projects and are expected
to provide benefit to the Company in 1999 and beyond.Denbury is a natural resource company with 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. , Mississippi and Texas. 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. CONTACT: Denbury Resources Inc. Gareth Roberts, 972/673-2000 or Phil PHIL Philosophy Phil Philippine PHIL Philippians PHIL Philadelphia, PA, USA PHIL Public Health Image Library (US CDC) Rykhoek, 972/673-2000 www.denbury.com |
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