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Credit Suisse 2012 Energy Summit – Denbury Resources Inc.

Denbury Resources Inc. · Feb 8, 2012 · 36 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 1
    Corporate Presentation February 2012 NYSE: DNR
  2. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 2
    A Different Kind of Oil Company Leading CO2 Enhanced Oil Recovery (EOR) Company in the U.S. with a Unique Profile 10 billion enterprise value Scale 67,385 BOE/d production (4Q11) Highest crude oil exposure in peer group(1) 30%…
  3. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 3
    Denbury at a Glance Total 3P Reserves (12/31/11) 1.3 BBOE % Oil Production (4Q11) 94% Market Cap (1/31/12) 7.5 billion Total Net Debt (12/31/11) 2.7 billion Total Production (4Q11) 67,385 BOE/d Proved PV-10 (12/31/11) 96.19…
  4. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 4
    What is CO2 EOR & How Much Does It Recover Secure CO2 Supply Transport via Pipeline Inject into Oilfield EOR Delivers Almost as Much Production as Primary or Secondary Recovery(1) Tertiary Recovery Remaining (CO2 EOR) Oil…
  5. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 5
    Our Two EOR Target Areas: Up to 10 Billion Barrels Recoverable with EOR Denbury Rockies Region 233 Million 3P EOR Barrels Estimated 1.3 to 3.2 MT ND Billion Barrels Recoverable Greencore ID Pipeline SD Lost Cabin WY IL…
  6. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 6
    More than a Billion Barrels of Oil Potential 1,400 572 46 ...... 1,285 1,200 100% ...... 100% 86% Natural Oil Oil 1,000 Gas MMBOE 800 205 85% ...... 600 462 ...... Oil 400 77% Oil 200 0 12/31/11 +Bakken +EOR…
  7. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 7
    Oiliest Assets in the Peer Group % Crude Oil Revenue 100% 97% 93% 88% 90% 79% 80% 76% 69% 66% 70% Peer Median, 66% 60% 56% 53% 53% 50% 40% 32% 30% 19% 20% 10% 0% DNR WLL CLR SD* CXO NFX* NBL PXD SM XEC FST RRC…
  8. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 8
    Gulf Coast Region: Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Summary(1) Tinsley Proved 148 5 Delhi 3 46 MMBbls (2) 36 MMBbls Tinsley Probable 339 Jackson Dome Produced-to-Date 58 Delhi…
  9. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 9
    Rockies Region: Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage CO2 Sources Cedar Creek Anticline 197 MMBbls(1) Existing Anthropogenic (Man-made) Proposed Coal to Gas or Liquids MONTANA DGC Beulah…
  10. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 10
    Proven Track Record Net Daily Oil Production Tertiary Operations (through 12/31/11) Bbls/d Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 8 32,000 28,000 24,000 20,000 30% CAGR 16,000 (1999-2011) 12,000 8,000…
  11. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 11
    Compelling Economics(1) EOR Bakken 575,000 BOE / Well Gulf Coast 9.6 Million / Well Model Averages 20% Royalty NYMEX oil price 90.00 90.00 Finding & development cost: Field 9.00 21.00 Infrastructure 4.50 --- Total capital per…
  12. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 12
    Complementary Production Profiles Projected Production Profile with Same Capital Spending Capital Spending per Year Based on EOR Spending Pattern 12,000 Year MM Gulf Coast EOR Field 1 83 2 83 Bakken 3 60 10,000 4 60 5 68 6 52…
  13. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 13
    Secure CO2 Supply to Support Gulf Coast Growth 2,500 Possible 2,000 2 Tcf Probable 1,500 2.5 Tcf MMCFPD CO2 Recycle 1,000 3.3 Tcf (Proved Only) Jackson Dome Anthropogenic Supply 500 Proved 6.7 Tcf 165 MMCFPD (as…
  14. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 14
    Secure CO2 Supply to Support Rocky Mountain Growth LaBarge Field Estimated Field Size: 750 Square Miles Estimated 100 TCF of CO2 Recoverable Riley Ridge Denbury Operated 100% WI in 9,700 acre Riley Ridge Federal Unit 33% WI in…
  15. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 15
    Third Growth Platform (Bakken Area) Bakken Area 200,000 net acres Nesson 300 MMBOE of total potential Anticline 93.9 MMBOE Proved as of 12/31/2011 4Q11E Production 11,892 BOE/d 2011E Production 8,826 BOE/d 2012E Production…
  16. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 16
    Strong Financial Position 1.2 billion availability under Debt to Capitalization credit facility on 12/31/11 (12/31/11E) 37% Debt Unused Credit 100% Facility 1.6 billion borrowing base + (12/31/11) Cash 19 million Estimated…
  17. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 17
    2012 Summary Guidance 2012 Capital Budget 1.35 Billion(1) 2012 Production Estimate All Other 110MM Tertiary Floods 2011E 2012E 2012E 365MM Operating area (BOEPD) (BOEPD) growth Bakken 33,000- Tertiary Oil Fields 30,946 7-16%…
  18. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 18
    Sources & Uses 2012E Sources of Cash (MM) Estimated Cash flow from operations 90-95 NYMEX oil 1,200 - 1,400 Estimated Asset sales(1) 150 - 300 Total Estimated Sources 1,350 - 1,700 2012E Uses of Cash (MM) Capital budget 1,350…
  19. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 19
    Hedges Protect Against Downside in Near-Term(1) Crude Oil 2012 2013 1st 2nd 1st 2nd 3rd 2nd Half Quarter Quarter Quarter Quarter Quarter Approximate production hedged (2) 85% 85% 85% 85% 80% 65% Principal price support 70 70 80…
  20. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 20
    Sustainable EOR Growth through 2020 (1) 140,000 1,400 Expected Peak EOR Cap-Ex Estimated EOR Production (Bbls/d) Estimated EOR Capital Budget (MM) 120,000 120,000 1,200 100,000 1,000 100,000 EOR 2012E Cap-Ex 80,000…
  21. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 21
    Estimated EOR Peak Production Rates (as of 12/31/11) Estimated Peak Production Rate Produced Proved 2P&3P First (Net MBOE/d) Expected Operating Area to date (1) Remaining Remaining(2) Production Peak…
  22. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 22
    IN SUMMARY: A Different Kind of Oil Company Leading CO2 Enhanced Oil Recovery (EOR) Company in the U.S. with a Unique Profile Significant strategic advantage in CO2 EOR Large additional crude oil growth platform in the Bakken CO2…
  23. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 23
    Corporate Information Corporate Headquarters Denbury Resources Inc. 5320 Legacy Drive Plano, Texas 75024 Ph: (972) 673-2000 denbury.com Contact Information Phil Rykhoek Chief Executive Officer (972) 673-2000 Mark Allen…
  24. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 24
    Appendix
  25. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 25
    CO2 Operations: Oil Recovery Process CO2 PIPELINE - from Jackson Dome INJECTION WELL - Injects CO2 in dense phase PRODUCTION WELLS Produce oil, water and CO2 Oil Formation (CO2 is recycled) CO2 moves through formation…
  26. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 26
    CO2 EOR Generalized Type Curve Plateau Production Rate Incline (Yrs) Plateau (Yrs) Decline (Yrs) Large Fields 6 6.5 30 Average Fields 4.5 5.5 25 Small Fields 4 5 20 27
  27. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 27
    Encore Acquisition was Highly Profitable Purchase price: (Billions) Equity 2.8 Debt assumed 1.0 (1) Total value 3.8 Value: (Estimated values at 79.43/Bbl 12/31/10 SEC Pricing) Proved reserves at 12/31/10 2.0 (2) Proceeds…
  28. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 28
    Production by Area (BOE/d) Pro forma Operating area 1Q11 2Q11 3Q11 4Q11E 2011E(2) 2012E(2) 2010(1) Tertiary Oil Fields 29,062 30,825 30,771 31,091 31,092 30,946 33,000 - 36,000 Mississippi Non-CO2 Floods 8,012 7,586 7,333 7,193…
  29. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 29
    Analysis of Tertiary Operating Costs Correlation 1Q10 2Q10 3Q10 4Q10 2010 1Q11 2Q11 3Q11 w/Oil /BOE /BOE /BOE /BOE /BOE /BOE /BOE /BOE CO2 Costs Direct 4.89 5.05 4.64 5.55 5.05 5.58 5.63 5.03 Power & Fuel Partially 6.12 5.82 6.04 5.76…
  30. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 30
    Potential Carbon Gasification Projects Denbury purchase contracts (contingent on plants being completed) Initial production expected +/- 4 years after construction begins (not before 2015) Gulf Coast Sources (0.29 to 0.44/Mcf 60 Oil)…
  31. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 31
    Rockies Anthropogenic CO2 Rocky Mountain Purchase Contracts MMCFD COP Lost Cabin (Central Wyoming) (Q1 2013) Currently Under +/- 50 Construction XOM LaBarge (SW Wyoming) (1) (Q3 2012) +/- 50 DKRW Medicine Bow (SE Wyoming) (2) (+/-…
  32. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 32
    Most Recent Operated Bakken Well Activity 30-Day 60-Day 90-Day Avg.(2) Avg.(2) Avg.(2) Unit Frac IP Completed Well Area Formation IP (1) Acres Stages W. I. Date (BOE/d) (BOE/d) (BOE/d) Loomer 34-4 NWH Cherry Bakken 2,574 674 467 508…
  33. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 33
    Most Recent Operated Bakken Well Activity 30-Day 60-Day 90-Day Avg.(2) Avg.(2) Avg.(2) Unit Frac IP Completed Well Area Formation IP (1) Acres Stages W. I. Date (BOE/d) (BOE/d) (BOE/d) Loomer 21-4 SWH Cherry Bakken 1,689 549 547 N/A…
  34. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 34
    Most Recent Operated Bakken Well Activity Frac Unit Frac Completing Area Formation Date 30-Day Avg. Acreage Stages W. I. Erickson 41-25 NWH Cherry Bakken Feb 2012 N/A 1,280 26 46% Erickson 41-25 SWH Cherry Bakken Feb 2012 N/A 1,280 26…
  35. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 35
    Bakken Area Production Zones Approx. Net Productive Zone Estimated Acreage Area MB TFS Wells/DSU (1,000s) Charlson 6 15 Murphy Creek 6 18 Bear Creek 6 10 Cherry 6 66 Lone Butte 6 9 Camp/Indian Hills 6 16 NE Foothills 3…
  36. Credit Suisse 2012 Energy Summit – Denbury Resources Inc. – slide 36
    Capital Structure (MM) 9/30/11 Cash 24 Bank credit facility 110 9.500% Sr. Sub Notes due 2016 238 9.750% Sr. Sub Notes due 2016 407 8.250% Sr. Sub Notes due 2020 996 6.375% Sr. Sub Notes due 2021 400 Other Encore Sr. Sub Notes 4…

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