Denbury Resources Inc. Announces Third Quarter Earnings Turnaround.DALLAS--(BUSINESS WIRE)--Nov. 3, 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 third quarter of 1999 with comparatives. -0-
FINANCIAL HIGHLIGHTS
(Amounts in thousands of U.S. dollars)
Three Months Ended
September 30,
----------------------- Percentage
1999 1998 Change
---------- ---------- -----------
Revenues:
Oil sales 15,673 10,921 + 44%
Gas sales 6,367 8,342 - 24%
Interest and other income 338 336 + 1%
---------- ---------- -----------
Total revenues 22,378 19,599 + 14%
---------- ---------- -----------
Expenses:
Production taxes 1,139 739 + 54%
Lease operating 6,742 6,080 + 11%
General and administrative 1,773 1,543 + 15%
Interest 3,492 4,419 - 21%
Depletion and depreciation 6,704 9,070 - 26%
Franchise taxes 124 171 - 27%
---------- ---------- -----------
Total expenses 19,974 22,022 - 9%
---------- ---------- -----------
Income (loss) before
income taxes 2,404 (2,423) + 199%
Provision for income taxes -- -- --
---------- ---------- -----------
NET INCOME (LOSS) 2,404 (2,423) + 199%
---------- ---------- -----------
---------- ---------- -----------
Income (loss) per common share
Basic 0.05 (0.09) + 156%
Diluted 0.05 (0.09) + 156%
Average common shares
outstanding
Basic 45,587 26,743 + 70%
Diluted 45,589 26,895 + 70%
Daily Production
(net of royalties)
Oil (barrels) 12,500 12,764 - 2%
Gas (mcf) 27,204 39,829 - 32%
BOE (6:1) 14 2.28 + 11%
Cash flow from operations (1) 9,547 6,817 + 40%
Cash flow per common share (2)
Basic 0.21 0.25 - 16%
Diluted 0.21 (1.21) (0.96) + 26%
Interest (1.73) (2.19) - 21%
---------- ---------- -----------
change in working capital
balances divide----------------- Percentage
12%
Gas sales 17,952 25,211 - 29%
Interest and other income 1,069 1,078 - 1%
---------- ---------- -----------
Total revenues 55,670 68,037 - 18%
---------- ---------- -----------
Expenses:
Production taxes 2,568 3,350 - 23%
Lease operating 17,655 19,432 - 9%
General and administrative 5,333 4,996 + 7%
Interest 12,170 12,788 - 5%
Depletion and depreciation 17,649 37,528 - 53%
Franchise taxes 428 603 - 29%
Writedown of oil and natural
gas properties -- 165,000 - 100%
---------- ---------- -----------
Total expenses 55,803 243,697 - 77%
---------- ---------- -----------
Loss before income taxes (133) (175,660) - 100%
Provision for income taxes -- 50,618 - 100%
---------- ---------- -----------
NET LOSS (133) (125,042) - 100%
---------- ---------- -----------
---------- ---------- -----------
Loss per common share
Basic (0.00) (4.88) - 100%
Diluted (0.00) (4.88) - 100%
Nine Months Ended
September 30,
----------------------- Percentage
1999 1998 Change
---------- ---------- -----------
Average common shares
outstanding
Basic 38,001 25,631 + 48%
Diluted 38,085 26,037 + 46%
Daily Production
(net of royalties)
Oil (barrels) 11,449 14,373 - 20%
Gas (mcf) 28,270 39,255 - 28%
BOE (6:1) 16,160 20,916 - 23%
Unit sales price
Oil (per barrel) 11.73 10.64 + 10%
Gas (per mcf) 2.33 2.35 - 1%
Cash flow from operations (1) 18,642 27,324 - 32%
Cash flow per common share (2)
Basic 0.49 1.07 - 54%
Diluted 0.49 1.05 - 53%
Oil & gas capital investments 41,276 93,682 - 56%
Per BOE data (6:1)
Revenue 12.38 11.73 + 6%
Production taxes (0.58) (0.59) - 2%
Lease operating expenses (4.00) (3.40) + 18%
---------- ---------- -----------
Production netback 7.80 7.74 + 1%
General and administrative (1.31) (0.98) + 34%
Interest (2.26) (1.97) + 15%
---------- ---------- -----------
Cash flow 4.23 4.79 - 12%
---------- ---------- -----------
---------- ---------- -----------
(1) Exclusive of the net change in working capital items.
(2) Cash flow from operations excluding change in working capital
balances divided by average common shares outstanding.
Product prices continued to improve during the third quarter of 1999, with NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). oil prices averaging $21.68 per Bbl. As a result of these improved product prices and further increases in production, Denbury's operating results improved from the second quarter of 1999 levels with increases in both 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 third quarter of 1999 of $2.4 million or $0.05 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 income of $492,000 for the second quarter of 1999 and a loss for the third quarter of 1998 of $2.4 million. Cash flow from operations, excluding the change in working capital items, for the third quarter of 1999 was $9.5 million, an increase of 45% from the second quarter of 1999 and an increase of 40% from the third quarter of 1998. The average daily production for the third quarter of 1999 was 17,034 BOE/d, a 6% increase from the second quarter average of 16,013, 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. The Company realized approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 900 BOE/d of additional production as compared to the second quarter of 1999 from its recent acquisitions at KingBee and Little Creek Fields 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 and had further production increases at its 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, primarily from the two waterflood Wa´ter`flood` n. 1. A flood of water; an inundation. units. Production at Heidelberg averaged 6,140 BOE/d for the third quarter of 1999 as compared to 5,626 BOE/d for the prior quarter and 4,200 BOE/d for the third quarter of 1998. Development and exploration expenditures for the third quarter were approximately $9.8 million, with an additional $12.1 million incurred during the period for an acquisition of oil properties in Mississippi. This compares to total spending of approximately $17.4 million during the third quarter of 1998. The Company's current budget for development and exploration for 1999 has been increased slightly to $38.5 million as a result of the improved oil prices and the addition of several development wells at Heidelberg scheduled for the fourth quarter. 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 second quarter levels to a net realized average price of $13.63 per Bbl for the third quarter of 1999. This oil price includes a $3.4 million 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 equates to approximately $2.95 per Bbl. The majority of this loss relates to a 3,000 Bbls/d swap at $14.24 per Bbl which ends in December December: see month. 1999. The Company also realized a $370,000 loss on its gas hedge and retired four MMBtu/d of its 30 MMBtu/d gas hedge for the period of November November: see month. 1999 through March 2000 during the third quarter at a total cost of approximately $312,000. The combined result of these two items lowered the net realized natural gas price by approximately $0.27 per Mcf. 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. , including production taxes, increased by approximately $1.4 million ($0.58 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 ) over the second quarter of 1999 levels. The increase was the result of several wells being returned to production as a result of the improved oil prices, an increase of $0.12 per BOE in production taxes which also related to the higher oil prices and the addition of Little Creek Field during the third quarter of 1999 which has higher operating cost per Bbl because of the 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. . Interest expense decreased slightly from the second 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 in April 1999. The 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 rate per BOE for the third quarter of 1999 increased slightly from the prior quarter rate of $3.85 per BOE to a year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. average of $4.00 per BOE. As additional funds are incurred, the Company expects this rate to gradually grad·u·al adj. Advancing or progressing by regular or continuous degrees: gradual erosion; a gradual slope. n. Roman Catholic Church 1. increase as most projects are expected to have a finding and development cost in excess of $3.85 per BOE. 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 minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. the use of its bank credit line for anything other than acquisitions. The majority of the planned 1999 and preliminary 2000 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 25% of the 1999 development budget and about 33% of the preliminary 2000 budget of $60 million. 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 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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