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Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc.

Denbury Resources Inc. · Oct 12, 2011 · 41 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. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 1
    2011 Leveraged Finance Conference October 12, 2011 NYSE: DNR
  2. Deutsche Banks 19th Annual Leveraged Finance Conference – 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 Scale Top 10 oil producer(1) ; 7 billion enterprise value 33% compound annual growth rate (CAGR) in EOR…
  3. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 3
    Positioned to Deliver Long-term Sustainable Growth An EOR focused company Targeting a large, attractive market Strengths we are leveraging Sustainable growth 4
  4. Deutsche Banks 19th Annual Leveraged Finance Conference – 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 and Secondary Recovery(1) Tertiary Recovery Remaining (CO2 EOR) Oil…
  5. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 5
    Positioned to Deliver Long-term Sustainable Growth An EOR focused company Targeting a large, attractive market Strengths we are leveraging Sustainable growth 6
  6. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 6
    Our Two EOR Target Areas: Up to 10 Billion Barrels Recoverable with EOR Rockies Estimated 1.3 to 3.2 MT ND Billion Barrels Recoverable Greencore ID Pipeline SD Lost Cabin WY IL IN Grieve Field JV KY MS Delta…
  7. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 7
    Positioned to Deliver Long-term Sustainable Growth An EOR focused company Targeting a large, attractive market Strengths we are leveraging Sustainable growth 8
  8. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 8
    Denbury at a Glance Total 3P Reserves (6/30/11) 1.3 BBbls Proved Reserves % Oil (6/30/11) 85% Market Cap (9/26/11) 5.1B Total Production (2Q11) 63,604 BOE/d Proved PV-10 (6/30/11 at 90.09 Oil Price) 9.3B CO2 3P Reserves…
  9. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 9
    Set to Repeat Gulf Coast EOR Success in Rockies Plus Additional Growth Platform in Bakken Rockies Bakken 3P Inventory 233 Million EOR Barrels ND 350 Million Barrels MT Greencore ID Pipeline SD Lost Cabin WY IL IN…
  10. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 10
    More than a Billion Barrels of Oil Potential 1,400 1,260 567 100% 92% 1,200 Oil Oil 1,000 MMBOE 800 276 85% 600 Oil 400 417 85% Oil 200 0 6/30/11 Proven +Bakken Drilling +EOR Potential =Total Potential…
  11. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 11
    Strength 1. Proven Growth Record Last 11 Years Net Daily Oil Production Tertiary Operations (through 6/30/11) Bbls/d Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 35,000 30,000 25,000 20,000 33% CAGR 15,000 (1999-2010)…
  12. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 12
    Strength 2. Powerful Platform One of the most experienced EOR teams in the industry Unmatched strategic infrastructure Own or control 835 miles of CO2 pipeline Largest CO2 source in Gulf Coast region Long-life EOR assets in two…
  13. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 13
    Strength 3. Compelling Economics(1) EOR Bakken 575,000 BOE / Well Gulf Coast 9.0 Million / Well Model Averages 20% Royalty NYMEX oil price 90.00 90.00 Finding & development cost: Field 9.00 19.50 Infrastructure 4.50 --- Total…
  14. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 14
    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…
  15. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 15
    Strength 4. Secure CO2 Supply to Support Gulf Coast Growth 2,500 Possible 2,000 2 Tcf Probable 1,500 2.8 Tcf MMCFPD CO2 Recycle 3.5 Tcf 1,000 (Proved Only) Anthropogenic Supply Jackson Dome 165 MMCFPD 500 Proved…
  16. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 16
    Strength 4. Riley Ridge Acquisition Provides CO2 Supply for Rocky Mountains Purchased remaining 57.5% working interest in the 9,700+ acre Riley Ridge Unit Purchased 33% working interest in the adjoining 28,000 acre Horseshoe Unit…
  17. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 17
    Strength 5. Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Tinsley 5 Delhi 3 46 MMBbls 38 MMBbls Tinsley Summary Jackson Dome Proved 158 Delhi (2) Probable 334 Free State Pipeline Davis…
  18. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 18
    Strength 5. Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Cedar Creek Anticline 197 MMBbls(1) CO2 Sources MONTANA DGC Beulah Existing Anthropogenic (Man-made) Cedar Creek Anticline Proposed…
  19. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 19
    Strength 6. Third Growth Platform (Bakken Area) Bakken Area 266,000 net acres 350 MMBOE of total potential 73.6 MMBOE Proved as of 6/30/2011 5 operated rig drilling program Anticipate 6th rig late 3Q11 to test Almond area…
  20. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 20
    Strength 7. Strong Financial Position 1.6 billion availability under Debt to Capitalization credit facility on 6/30/11 (6/30/11) 33% Debt Unused Credit 100% Facility 1.6 billion borrowing base + (6/30/11) Cash 122…
  21. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 21
    Capital Structure Pro Forma(1) (MM) 3/31/11 3/31/11 6/30/11 Cash 128 73 122 Bank credit facility --- --- --- 7.500% Sr. Sub Notes due 2013 55 --- --- 7.500% Sr. Sub Notes due 2015 --- --- --- 9.500% Sr. Sub Notes due 2016 239 239…
  22. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 22
    2011 Capital Budget 2011 Capital Budget 1.35 Billion(1) All Other 75MM Tertiary Floods 475MM Bakken 400MM CO2 Sources CO2 Pipelines 200MM 200MM (1) Excludes capitalized interest and capitalized EOR startup costs, estimated…
  23. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 23
    Hedges Protect Against Downside in Near-Term(1) Crude Oil 2011 2012 2nd Half 1st Quarter 2nd Quarter 2nd Half Approximate production hedged (2) 80% 80% 80% 80% Principal price support 70 70 70 80 Principal price ceilings 100…
  24. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 24
    Positioned to Deliver Long-term Sustainable Growth An EOR focused company Targeting a large, attractive market Strengths we are leveraging Sustainable growth 25
  25. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 25
    Strong, Sustainable EOR Growth through 2020 120,000 100,000 Oyster Bayou Hastings Bell Creek 29,062 Conroe Cedar Creek Anticline Citronelle 26
  26. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 26
    Estimated Peak Production Rates Expected Peak Production Rate (Net BOE/d) Area Expected Peak Year < 5,000 5-10,000 10-15,000 15-20,000 20,000 Oyster Bayou 2012 2013 Tinsley 2012 2013 Heidelberg 2014 2016 Delhi 2015 2017 Bell…
  27. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 27
    IN SUMMARY: Investment Highlights A Different Kind of Oil Company Leading CO2 Enhanced Oil Recovery (EOR) Company in the U.S. with a Unique Profile Scale Top 10 oil producer(1) ; 7 billion enterprise value 33% compound annual…
  28. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 28
    Corporate Information Corporate Headquarters Denbury Resources Inc. 5320 Legacy Drive Plano, Texas 75024 Ph: (972) 673-2000 Fax: (972) 673-2150 denbury.com Contact Information Phil Rykhoek Chief Executive Officer (972)…
  29. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 29
    Appendix
  30. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 30
    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…
  31. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 31
    CO2 EOR Generalized Type Curve (Log Scale) 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 32
  32. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 32
    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…
  33. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 33
    Production by Area (BOE/d) Pro forma Pro forma Operating area 2Q10 3Q10 4Q10 1Q11 2Q11 2011E 1Q10(1) 2010(1) Tertiary Oil Fields 27,023 28,507 29,531 31,139 29,062 30,825 30,771 31,000 Mississippi Non-CO2 Floods 7,829 8,967 7,965…
  34. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 34
    Analysis of Tertiary Operating Costs Correlation 1Q10 2Q10 3Q10 4Q10 2010 1Q11 2Q11 w/Oil /BOE /BOE /BOE /BOE /BOE /BOE /BOE CO2 Costs Direct 4.89 5.05 4.64 5.55 5.05 5.58 5.63 Power & Fuel Partially 6.12 5.82 6.04 5.76 5.93 6.12…
  35. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 35
    Potential Carbon Gasification Projects Denbury purchase contracts (contingent on plants being completed) Initial production expected +/- 4 years after construction begins (not before 2014) Gulf Coast Sources (0.29 to 0.44/Mcf 60 Oil)…
  36. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 36
    Rockies Anthropogenic CO2 Rocky Mountain Purchase Contracts MMCFD COP Lost Cabin (Central Wyoming) +/- 50 XOM LaBarge (SW Wyoming) (1) +/- 50 DKRW Medicine Bow (SE Wyoming) (2) +/- 200 Rocky Mountain CO2 Ownership MMCFD Riley…
  37. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 37
    2011 Operated Bakken Well Activity 30-Day 60-Day 90-Day Avg.(2) Avg.(2) Avg.(2) Unit Frac IP Completed 2011 Area Formation IP (1) Acres Stages W. I. Date (BOE/d) (BOE/d) (BOE/d) Murphy Franchuk 34-19SWH Bakken 2,006 541 471 411…
  38. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 38
    2011 Operated Bakken Well Activity 30-Day 60-Day 90-Day Avg.(2) Avg.(2) Avg.(2) Unit Frac IP Completed 2011 Area Formation IP (1) (BOE/d) (BOE/d) (BOE/d) Acres Stages W. I. Date Camp/ Lindvig 14-10 NEH Bakken 626(3) 290 223 N/A 1,280…
  39. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 39
    2011 Operated Bakken Well Activity 30-Day 60-Day 90-Day Avg.(2) Avg.(2) Avg.(2) Unit Frac IP Completed 2011 Area Formation IP (1) (BOE/d) (BOE/d) (BOE/d) Acres Stages W. I. Date Loomer 34-4 NWH Cherry Bakken 2,574 N/A N/A N/A 640 16…
  40. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 40
    Most Recent Operated Bakken Well Activity Frac Unit Frac Completing Area Formation Date 30-Day Avg. Acreage Stages W. I. Wolff 13-24 NEH Cherry Bakken Aug 2011 N/A 1,280 24-30 63% Sorenson 34-32 NWH Cherry Bakken Aug 2011 N/A 1,280…
  41. Deutsche Banks 19th Annual Leveraged Finance Conference – Denbury Resources Inc. – slide 41
    Bakken Area Production Zones Approx. Net Productive Zone Estimated Acreage Area MB Sanish 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 Almond 3…

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