Denbury Sets New Company Record for Proved Reserve Valuation; Proved Reserve Quantities Increase 45%.Business & Energy Editors DALLAS--(BUSINESS WIRE)--Jan. 17, 2001 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) today announced its December 31, 2000 estimates of 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. . The DeGolyer and MacNaughton, an independent reservoir engineering Reservoir engineering is a branch of petroleum engineering, typically concerned with maximizing the economic recovery of hydrocarbons from the subsurface. Of particular interest to reservoir engineers is generating accurate reserves estimates for use in financial reporting firm, prepared Denbury's year-end reserve report. Proved Reserve Analysis In accordance with SEC requirements, Denbury's proved reserves at December 31, 2000 were computed using unescalated year-end 2000 commodity prices of $26.80 per barrel of oil and $9.78 per MMBtu of natural gas. Using these prices, the Company's total proved reserves were 70.7 million barrels of oil and 100.6 Bcf of natural gas, or 87.4 MMBOE MMBOE Million Barrels of Oil Equivalent (energy and petroleum industry) (on a 6:1 basis), a 45% increase from the prior year. Approximately 75% of the 2000 year-end proved reserves were categorized cat·e·go·rize tr.v. cat·e·go·rized, cat·e·go·riz·ing, cat·e·go·riz·es To put into a category or categories; classify. cat as proved developed. The discounted present value of the proved reserves before taxes at December 31, 2000 using a 10% discount rate ("PV-10") is $1.16 billion, a 150% increase from the PV-10 value for the prior year. The prior year reserves were computed using unescalated commodity prices of $25.60 per barrel of oil and $2.12 per MMBtu of natural gas. Following is a preliminary reconciliation of the proved reserve quantities between December 31, 1999 and 2000:
Oil Gas
(MMBbl) (Bcf) MMBOE
------- ------- -------
Balance at 12/31/1999 51.8 50.4 60.2
Revisions due to price changes 0.4 4.5 1.2
Acquisitions 1.0 22.6 4.8
Extensions, discoveries and
other revisions 23.2 37.1 29.3
Estimated 2000 production (5.6) (13.1) (7.8)
Property sales (0.1) (0.9) (0.3)
------- ------- -------
Balance at 12/31/2000 70.7 100.6 87.4
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Management Comments Gareth Roberts Gareth Roberts may refer to:
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 ($0.75 per Mcfe) based on preliminary expenditure totals. This is only a modest increase from last year's finding cost of $3.90 per BOE ($0.65 per Mcfe), also computed without the effect of price revisions. Excluding our accretive 2000 acquisitions, preliminary analysis of our finding cost indicates that our exploration and development activities added about 29.3 MMBOE of new reserves at less than $3.00 per BOE ($0.50 per Mcfe). Consistent with our goal of achieving a 50/50 balance of oil and natural gas, we were able to double our proved natural gas reserves during 2000. A majority of these natural gas reserve additions came from our drilling activities at Heidelberg Field in Mississippi, Lirette Field in Louisiana and offshore. With these natural gas reserve additions, natural gas currently makes up approximately 40% of our production on a BOE basis. We are excited about our recent exploration and drilling success, especially in the 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 , and expect much from our prospects in the coming year." 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 on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. Louisiana and offshore Gulf of Mexico areas. The Company increases the value of acquired properties in its core areas through a combination of exploitation drilling and proven engineering extraction practices. The Company expects to release its 2000 financial results on February 23rd. This press release, other than historical financial information, contains forward looking statements that involve risks and uncertainties including expected reserve quantities, production levels, exploration and exploitation results, commodity prices, financial results and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission, including Denbury's 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. , and 10-Q. These reports are incorporated by this reference as though fully set forth herein. These statements are based on engineering, geological and operating assumptions that management believes are reasonable based on currently available information; however, management's assumptions and the Company's future performance are both subject to a wide range of business risks, and there is no assurance that these goals and projections can or will be met. Actual results may vary materially. |
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