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Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc.

Denbury Resources Inc. · Dec 6, 2011 · 39 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. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 1
    Capital One Southcoast Energy Conference December 6, 2011 NYSE: DNR
  2. Capital One Southcoast 6th Annual Energy Conference 2011 – 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 U.S. oil producer(1) ; 9 billion enterprise value 33% compound annual growth rate (CAGR) in EOR…
  3. Capital One Southcoast 6th Annual Energy Conference 2011 – 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. Capital One Southcoast 6th Annual Energy Conference 2011 – 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. Capital One Southcoast 6th Annual Energy Conference 2011 – 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. Capital One Southcoast 6th Annual Energy Conference 2011 – 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 KY Existing CO2 Pipelines MS…
  7. Capital One Southcoast 6th Annual Energy Conference 2011 – 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. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 8
    Denbury at a Glance Total 3P Reserves (9/30/11) 1.3 BBbls Proved Reserves % Oil (9/30/11) 78% Market Cap (10/31/11) 6B Total Production (3Q11) 66,830 BOE/d Proved PV-10 (9/30/11 at 94.50 Oil Price) 10.3B CO2 3P Reserves…
  9. Capital One Southcoast 6th Annual Energy Conference 2011 – 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 300 Million Barrels MT (excluding Almond) Greencore ID Pipeline SD Lost Cabin…
  10. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 10
    More than a Billion Barrels of Oil Potential 1,400 567 73 ...... 1,318 1,200 ...... 100% 84% 100% Oil Oil Natural 1,000 Gas MMBOE 800 215 ...... 600 85% 463 ...... Oil 400 78% Oil 200 0 9/30/11 +Bakken +EOR…
  11. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 11
    Strength 1. Proven Growth Record Last 11 Years Net Daily Oil Production Tertiary Operations (through 9/30/11) Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Bbls/d 35,000 30,000 25,000 20,000 33% CAGR (1999-2010) 15,000…
  12. Capital One Southcoast 6th Annual Energy Conference 2011 – 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. Capital One Southcoast 6th Annual Energy Conference 2011 – 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. Capital One Southcoast 6th Annual Energy Conference 2011 – 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. Capital One Southcoast 6th Annual Energy Conference 2011 – 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 1,000 3.5 Tcf (Proved Only) Jackson Dome Anthropogenic Supply 500 Proved 6.8 Tcf 165…
  16. Capital One Southcoast 6th Annual Energy Conference 2011 – 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. Capital One Southcoast 6th Annual Energy Conference 2011 – 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 156 Delhi (2) Probable 334 Free State Pipeline Davis…
  18. Capital One Southcoast 6th Annual Energy Conference 2011 – 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 Proposed Coal to Gas or…
  19. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 19
    Strength 6. Third Growth Platform (Bakken Area) Bakken Area 200,000 net acres (excl. Almond) 300 MMBOE of total potential (excl. Almond) 84.4 MMBOE Proved as of 9/30/2011 3Q11 Production 9,976 BOE/d 2011E Production 8,400…
  20. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 20
    Strength 7. Strong Financial Position 1.5 billion availability under Debt to Capitalization credit facility on 9/30/11 (9/30/11) 33% Debt Unused Credit 100% Facility 1.6 billion borrowing base + (9/30/11) Cash 24 million…
  21. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 21
    2012 Summary Guidance 2012 Capital Budget 1.35 Billion(1) 2012 Production Estimate All Other 140MM Tertiary Floods 2011E 2012E 2012E 365MM Operating area (BOEPD) (BOEPD) growth Bakken 33,000- Tertiary Oil Fields 31,000 6-16%…
  22. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 22
    Sources & Uses 2012E Sources of Cash (MM) Estimated Cash flow from operations 90-95 NYMEX oil 1,200 - 1,400 Estimated Asset sales 150 - 300 Total Estimated Sources 1,350 - 1,700 2012E Uses of Cash (MM) Capital budget 1,350…
  23. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 23
    Hedges Protect Against Downside in Near-Term(1) Crude Oil 2011 2012 2013 4th Quarter 1st Quarter 2nd Quarter 2nd Half 1st Quarter Approximate production hedged (2) 85% 80% 80% 80% 80% Principal price support 70 70 70 80 70…
  24. Capital One Southcoast 6th Annual Energy Conference 2011 – 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. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 25
    Strong, Sustainable EOR Growth through 2020 140,000 Estimated EOR Production (Bbls/d) 120,000 120,000 100,000 100,000 80,000 60,000 40,000 Oyster Bayou Hastings 29,062 Bell Creek 20,000 Conroe Cedar Creek…
  26. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 26
    Estimated EOR Peak Production Rates (as of 9/30/11) Estimated Peak Production Rate Produced Proved 2P&3P First (Net MBOE/d) Expected Operating Area to date (1) Remaining Remaining(2) Production Peak…
  27. Capital One Southcoast 6th Annual Energy Conference 2011 – 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 U.S. oil producer(1) ; 9 billion enterprise value 33% compound…
  28. Capital One Southcoast 6th Annual Energy Conference 2011 – 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. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 29
    Appendix
  30. Capital One Southcoast 6th Annual Energy Conference 2011 – 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. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 31
    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 32
  32. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 32
    Production by Area (BOE/d) Pro forma Expected Operating area 1Q11 2Q11 3Q11 2011E 2012E 2010(1) Growth Tertiary Oil Fields 29,062 30,825 30,771 31,091 31,000 33,000 - 36,000 6-16% Mississippi Non-CO2 Floods 8,012 7,586 7,333 7,193…
  33. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 33
    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…
  34. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 34
    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)…
  35. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 35
    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) (+/-…
  36. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 36
    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…
  37. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 37
    Most Recent Bakken Well Activity Frac Unit Frac Completing Area Formation Date 30-Day Avg. Acreage Stages W. I. Sorenson 31-28SWH Cherry Bakken 10/2011 N/A 1,280 26 68% Satter 31-1 SWH Cherry TFS 11/2011 N/A 1,280 26 84% Bergem 44-28…
  38. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 38
    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 x x 0…
  39. Capital One Southcoast 6th Annual Energy Conference 2011 – Denbury Resources Inc. – slide 39
    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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