Denbury Sells Enron Claim for $9.2 Million.Business Editors & Energy Writers DALLAS--(BUSINESS WIRE)--Feb. 18, 2002 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 that on Feb. 15, 2002 it sold its claim in bankruptcy claim in bankruptcy n. the written claim filed by persons or businesses owed money (creditors) by a party who files for bankruptcy (debtor) to benefit from the distribution if money becomes available. against Enron Corporation Enron Corporation, U.S. company that in 2001 became the largest bankruptcy and stock collapse in U.S. history up to that time. The company was formed in 1985 when InterNorth purchased Houston Natural Gas to create the country's longest natural-gas pipeline network. and its subsidiaries (NYSE:ENE) for net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $9.2 million. The claim relates primarily to the natural gas hedges Denbury purchased from Enron for 2002 and 2003 natural gas production relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the July 2001 Matrix Oil & Gas acquisition. Overall, the Company paid approximately $18.0 million for all of the hedges relating to the Matrix acquisition. For this, the Company received a total of $21.9 million back in net cash receipts, including the $9.2 million from this most recent transaction. The Company assigned its bankruptcy claims against Enron relating to its derivative hedge assets and certain unpaid natural gas sale receivables for approximately $9.2 million. As part of the transfer, the Company made certain representations and warranties typical for this type of transaction. Although the Company does not anticipate any issues relating to these representations, under certain conditions it could result in a refund of certain amounts. The Company does not anticipate that these refunds will be material, if any. Assuming that there will be no further adjustments in the future to the claim value, the effect on the Company's earnings will be as previously announced. To account for its losses relating to these hedge assets and the subsequent sale of its bankruptcy claim, the Company anticipates recording (i) a pre-tax write down of its derivative hedge assets and other receivables relating to Enron of approximately $25.2 million in the fourth quarter of 2001, (ii) pre-tax income during 2002 of approximately $13.3 million, and (iii) pre-tax income during 2003 of approximately $5.1 million. The three year total net loss after tax relating to these transactions with Enron is approximately $4.3 million or approximately $0.08 per common share based on the current 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 and holds key operating acreage in the onshore Louisiana and 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 Mexico Golfo 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 practices. This press release, other than historical financial information, contains forward-looking statements that involve risks and uncertainties relating to the claim against Enron, including the Company's computed mark-to-market value and other representations and warranties regarding the value and validity of the bankruptcy claim. These statements are based on assumptions that management believes are reasonable based on currently available information; however, management's assumptions are subject to a wide range of business risks, including the uncertainty of the decisions of the bankruptcy court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. or claims that others may make in the court regarding the Company's claims against Enron. Thus there is no assurance that these goals and projections can or will be met. Actual results may vary materially. |
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