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2014 ANALYST DAY – Denbury Resources Inc.

Denbury Resources Inc. · Nov 17, 2014 · 61 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. 2014 ANALYST DAY – Denbury Resources Inc. – slide 1
  2. 2014 ANALYST DAY – Denbury Resources Inc. – slide 2
    Overview Phil Rykhoek President & Chief Executive Officer
  3. 2014 ANALYST DAY – Denbury Resources Inc. – slide 3
    ClickPoints Key Click toto Master edit titletitle Adjusting edit style For style Lower Oil Prices Reducing capital spending by 50% in 2015 to 550MM Results in relatively flat production targets for 2015 and likely 2016 Building…
  4. 2014 ANALYST DAY – Denbury Resources Inc. – slide 4
    Click toto Adjusting Click edit to Master titletitle a Lower edit Oil style Price Environment style /Bbl 95 Previous Plan Assumptions Every 10 per Bbl change in WTI WTI NYMEX(1) 90 NYMEX oil prices changes our 90 annual cash flow by…
  5. 2014 ANALYST DAY – Denbury Resources Inc. – slide 5
    Click toto Potential Click edit Master titletitle Responses edit to style Oil Prices Lower style Borrow money to fund capital expenditures & dividends Potential rapid deterioration of financial position Lower oil prices = lower…
  6. 2014 ANALYST DAY – Denbury Resources Inc. – slide 6
    Click toto Growth Click edit & Master Income edit title Funding title style style Priorities Maintain solid financial position Base dividend Additional (priority depends on circumstances) Capital expenditures Dividend increases…
  7. 2014 ANALYST DAY – Denbury Resources Inc. – slide 7
    Click toto Click edit Flexibility in Master titletitle a Lower edit Oil style Price Environment style Producing CO2 EOR projects have relatively low capital intensity Capex can be reduced by 50% with minimal or no decline in production…
  8. 2014 ANALYST DAY – Denbury Resources Inc. – slide 8
    Click Guidance 2015 Click toto edit Master edit titletitle (1) style style Capital Budget: 550 Million(2) Anticipated Dividends: 140 Million Tertiary Floods 320MM Estimated Production 2014E(1) 2015E 2015E Anticipated (BOE/d) (BOE/d)…
  9. 2014 ANALYST DAY – Denbury Resources Inc. – slide 9
    Click toto Benefits Click edit Master ofedit 2015 title Plan title style style Protect balance sheet during low oil prices and heightened uncertainty Provide staff additional time to innovate and improve long-term value Generate free…
  10. 2014 ANALYST DAY – Denbury Resources Inc. – slide 10
    Click Development 2015 Click toto edit Master edit title Plan title style style Area Operational Implications Bell Creek Minimal change to development plan Hastings Slower development pace. Transition to new series approach Heidelberg…
  11. 2014 ANALYST DAY – Denbury Resources Inc. – slide 11
    Click2015 Key Click toto edit Master titletitle Operational edit style Initiatives style Creating innovation and improvement teams with direct line to CEO Develop and rapidly implement high impact ideas Review and adjust future…
  12. 2014 ANALYST DAY – Denbury Resources Inc. – slide 12
    Click M & Ato Click edit Master Strategy: to edit titletitle style and Focused Opportunistic style Any acquisitions likely to be bolt-on properties Should be accretive to per share metrics Increases project inventory Must maintain…
  13. 2014 ANALYST DAY – Denbury Resources Inc. – slide 13
    Click toto edit Attractive Click Master Dividend edit title titleYield style style 4.0% Estimated Annualized 3.6% Dividend Rate Per Share 3.5% 2015 0.40 2014 0.25 3.0% 0.00 0.50 2.5% 2.5% 2.2% 1.9% 2.0% 1.5% 1.0% 0.5% 0.0% 2014(1)…
  14. 2014 ANALYST DAY – Denbury Resources Inc. – slide 14
    Click A toto edit Different Click Master Kind edit title of Oil title style Company style Proven process Long-Term Lower-risk & long-life assets Visibility Tremendous resource potential Fund capex & dividends with cash flow…
  15. 2014 ANALYST DAY – Denbury Resources Inc. – slide 15
    Click is What Click toto edit CO Master title 2 EORtitle edit & How style Oil Does it Recover Much style Secure Transport Inject CO2 Supply via into Pipeline Oilfield Remaining Oil Primary CO2 EOR Delivers 20% Almost as Much…
  16. 2014 ANALYST DAY – Denbury Resources Inc. – slide 16
    ClickLower-48 U.S. Click toto edit Master editCO title 2 EOR title style Potential style Technically Recoverable(1,2) (amounts in billions of barrels) Permian 9-21 East & Central Texas 6-15 Mid-Continent 6-13 California 3-7 South…
  17. 2014 ANALYST DAY – Denbury Resources Inc. – slide 17
    Up to 16 Billion Gross Barrels Recoverable(1) Click toto Click edit Master edit title title style style in Our Two CO2 EOR Target Areas 2.8 to 6.6 MT ND Billion Barrels Estimated Recoverable in Rocky Mountain Region(2) WY…
  18. 2014 ANALYST DAY – Denbury Resources Inc. – slide 18
    Click than More Click toto edit Master a Billion edit title style Barrels title style of Oil Potential MMBOE 1,500 102 1,250 680 ..... 1,250 ..... 90% 100% Oil 54% 1,000 Oil Oil 750 468 500 409 ..... 83% 80% Oil 250 Oil 0 12/31/12…
  19. 2014 ANALYST DAY – Denbury Resources Inc. – slide 19
    Click toto Click edit Leveraging Master edit titletitle Strengths style to Lower Oil Prices &style Adjusting We believe in our assets and strategy but know we can improve our operational efficiency: Innovation teams and other key…
  20. 2014 ANALYST DAY – Denbury Resources Inc. – slide 20
    Operational Overview Brad Kerr SVP Planning, Technology, CO2 Supply & Pipeline
  21. 2014 ANALYST DAY – Denbury Resources Inc. – slide 21
    Click toto Continued Click edit Master Tertiary edit title Oil title style Production style Growth 45,000 40,000 35,000 30,000 Bbls/d 25,000 20,000 15,000 10,000 5,000 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013…
  22. 2014 ANALYST DAY – Denbury Resources Inc. – slide 22
    Click Development 2015 Click toto edit Master edit title Plan title style style Area Operational Implications Bell Creek Minimal change to development plan Hastings Slower development pace. Transition to new series approach Heidelberg…
  23. 2014 ANALYST DAY – Denbury Resources Inc. – slide 23
    Gulf Coast Region
  24. 2014 ANALYST DAY – Denbury Resources Inc. – slide 24
    CO 2 EOR Click to in Gulf edit Coast Master titleRegion: style Click to edit title style Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Tinsley(3) Summary(1) Delhi(3) 46 MMBbls 45 MMBOEs Tinsley…
  25. 2014 ANALYST DAY – Denbury Resources Inc. – slide 25
    ClickCoast Gulf Click toto edit Master titletitle Industrial edit style Partners style MS Power AL PCS Nitrogen Air Products Denbury Owned Fields Current CO2 Floods Denbury Owned Fields Future CO2 Floods Fields Owned by Others CO2 EOR…
  26. 2014 ANALYST DAY – Denbury Resources Inc. – slide 26
    Click CO toto edit 2 Supply Click Master to edit titletitle Support styleCoast Growth Gulf style 1,600 Additional CO2 Potential (not reflected in graph) Probable & Possible Reserves: 2.1 TCF Improved Recovery of Proved Reserves:…
  27. 2014 ANALYST DAY – Denbury Resources Inc. – slide 27
    ClickCoast Gulf Click toto edit COMaster edit titletitle 2 Supply style style Tinsley Capex 35MM Delhi Jackson Jackson Dome (25MM) Dome Heidelberg Drill and complete 1 development and appraisal Mature Area well Sonat MS Pipeline…
  28. 2014 ANALYST DAY – Denbury Resources Inc. – slide 28
    ClickCoast Gulf Click toto edit Master Mature edit title Area title style Fields style Tinsley Jackson Capex 20MM Dome Production: Slight Decline Delhi Free State Pipeline Davis Quitman Heidelberg AL Optimize CO2 usage Martinville…
  29. 2014 ANALYST DAY – Denbury Resources Inc. – slide 29
    Click toto edit Heidelberg Click Master Field edit titletitle style style Capex 45MM Production: Modest Growth East West Minimize production decline 1 compressor and associated equipment Several conformance projects Free State Pipeline…
  30. 2014 ANALYST DAY – Denbury Resources Inc. – slide 30
    Click toto Tinsley Click edit FieldMaster edit titletitle style style Capex 10MM AR Production: Decline Development essentially complete MS Minimize production decline Tinsley 8 LA 7 6 1 Bbls/d Net Daily Tertiary Production 1 9,000 5…
  31. 2014 ANALYST DAY – Denbury Resources Inc. – slide 31
    Click to Delhi Click edit Field to Master edit titletitle style style Capex 30MM Production: Decline Preliminary information indicates payout may MS have been achieved as of October 31, 2014 Under Delhi purchase agreements, seller has…
  32. 2014 ANALYST DAY – Denbury Resources Inc. – slide 32
    Click toto Conroe Click edit & Master titletitle Thompson edit style Fields style Capex 10MM Production: Flat Conroe Continue recompletions Thompson BOE/d Thompson Net Daily Production BOE/d Conroe Net Daily Production 2,000 3,500…
  33. 2014 ANALYST DAY – Denbury Resources Inc. – slide 33
    Click toto Hastings Click edit Master Field edit titletitle style style Capex 25MM Production: Growth West CO2 EOR Continue CO2 EOR development Develop new pattern in Fault Block A Develop Fault Block B/C with series flood East Expand…
  34. 2014 ANALYST DAY – Denbury Resources Inc. – slide 34
    Click toto edit Innovation Click &Master titletitle Improvement edit style style Team Process Create ideas that will significantly increase value of assets Completed pilot for Hastings & Frio Expand to all major fields by…
  35. 2014 ANALYST DAY – Denbury Resources Inc. – slide 35
    Click toBayou Oyster Click edit to Master edit titletitle Field style style Capex 10MM Production: Modest Growth Completed A-2 development in 2014 Expect peak production in 2015 Minor facility and conformance work Oyster Bayou 3.4…
  36. 2014 ANALYST DAY – Denbury Resources Inc. – slide 36
    Click toto Webster Click edit Master Field edit titletitle style style Capex 55MM Production: Modest Decline Expect to complete pipeline around YE2014 Prepare for CO2 injection in 2016 Plan to implement series flood Webster BOE/d Net…
  37. 2014 ANALYST DAY – Denbury Resources Inc. – slide 37
    Rocky Mountain Region
  38. 2014 ANALYST DAY – Denbury Resources Inc. – slide 38
    CO 2 EOR Click to in Rocky edit MasterMountain title styleRegion: Click to edit title style Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage CO2 Sources Summary(1) Existing or Proposed CO2 Source Cedar…
  39. 2014 ANALYST DAY – Denbury Resources Inc. – slide 39
    Click Ridge Riley Click toto edit Master edit titletitle style style Capex 25MM Lost Cabin Well and facilities work (15MM) Continued debottlenecking Well site infrastructure Riley Ridge Engineering studies Production expected to resume…
  40. 2014 ANALYST DAY – Denbury Resources Inc. – slide 40
    ClickCreek Bell Click toto edit Master Field edit titletitle style style Capex 55MM Production: Growth CCA Continue Phase 3 and start Phase 4 CO2 EOR development Growth rate dependent on CO2 supply Bell Creek Bell Creek 7 Development…
  41. 2014 ANALYST DAY – Denbury Resources Inc. – slide 41
    Click to Cedar Click edit Creek to Master titletitle Anticline edit style style Capex 50MM Production: Modest Decline Cedar Hills South Unit Waterflood expansion 5 new wells in 2015 100 well potential multi-year program EIS for CO2…
  42. 2014 ANALYST DAY – Denbury Resources Inc. – slide 42
    Click toto Hartzog Click edit Draw Master edit titletitle Field style style Capex 15MM Production: Modest Decline 2014 Activity: Drilled and completed 6 wells Varied results Hartzog Draw Overall performing in-line with expectations…
  43. 2014 ANALYST DAY – Denbury Resources Inc. – slide 43
    Financial Overview Mark Allen Senior Vice President & Chief Financial Officer
  44. 2014 ANALYST DAY – Denbury Resources Inc. – slide 44
    ClickFinancial Key Click toto edit Master edit titletitle Objectives style style Cash flow funds capex and dividends Maintain solid financial position and reasonable debt metrics Bank credit facility provides additional liquidity…
  45. 2014 ANALYST DAY – Denbury Resources Inc. – slide 45
    Click Guidance 2015 Click toto edit Master edit titletitle (1) style style Capital Budget - 550 Million(2) Anticipated Dividends - 140 Million Tertiary Floods Estimated Sources & Uses 320MM 2015E Sources of Cash (MM) Est. Cash flow…
  46. 2014 ANALYST DAY – Denbury Resources Inc. – slide 46
    Click toto Click edit Production Master by edit titletitle Area style (BOE/d) style Operating area 2011 2012 2013 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 2014E 2015E(1) Tertiary Oil Fields 30,959 35,206 38,477 39,057 38,752 37,513 38,603…
  47. 2014 ANALYST DAY – Denbury Resources Inc. – slide 47
    Click toto Dividend Click edit Master titletitle Philosophy edit style style Designed to attract both income and growth investors Goal is to have sustainable dividend that can grow with cash flow over time Fund both capital…
  48. 2014 ANALYST DAY – Denbury Resources Inc. – slide 48
    Click toto Dividend Click edit Master Yield edit titletitle Analysis style style Independent Dividend-Paying E&P C-Corps(2) 4.0% 3.6% 3.6% 3.5% 3.3% 3.0% 2.7% 2.6% 2.5% 2.3% 2.2% 2.0% 1.9% 1.5% 1.5% 1.5% 1.4% 1.3% 1.2% 1.0% 0.5%…
  49. 2014 ANALYST DAY – Denbury Resources Inc. – slide 49
    Click Maturity Debt Click toto edit Master edit titletitle Schedule style (1) style No Significant Near-Term Debt Maturities 12/31/13 9/30/14 Total Debt (MM) 3,297 3,595 TTM EBITDA(2) (MM) 1,403 1,355 Total Debt to TTM EBITDA(2) 2.3x…
  50. 2014 ANALYST DAY – Denbury Resources Inc. – slide 50
    Click toto Click edit Disciplined Master Share edit title style Program Repurchase title style Rationale and Objectives Repurchase shares at meaningful discount to net asset value Improve per share metrics 15% (60 MM shares)…
  51. 2014 ANALYST DAY – Denbury Resources Inc. – slide 51
    Click Operating High Click toto edit Master edit titletitle Margin (1)style style /BOE 3-Months ended 9/30/2014 70 96% Oil Production Drives Higher Margins 60 50 40 30 20 10 - Peer A DNR Peer B Peer C Peer D Peer E 5 Peer F 2 (1) Data…
  52. 2014 ANALYST DAY – Denbury Resources Inc. – slide 52
    Click toto NYMEX Click edit Master Differential edit titletitle style Summary style Crude Oil Differentials 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Tertiary Oil Fields Gulf Coast Region 9.80 13.60 10.61 15.57 15.82 11.23…
  53. 2014 ANALYST DAY – Denbury Resources Inc. – slide 53
    Click toto Click Commodityedit Master edit Hedge title title style style Summary as of October 31, 2014(1) 2014 2015 2016 4Q 1Q 2Q 3Q 4Q 1Q 2Q Crude Oil (WTI NYMEX Equivalent)(2)(3) Average Downside Hedge Price 92.52 85.50 84.46 84.80…
  54. 2014 ANALYST DAY – Denbury Resources Inc. – slide 54
    Click Oil toto Hedge Click edit Master Detail edit title as of title style 31, 2014 October style 2014 2015 2016 4Q 1Q 2Q 3Q 4Q 1Q 2Q WTI NYMEX Swaps Volumes Hedged (Bbls/d) 58,000 14,000 8,000 10,000 12,000 12,000 2,000 Average Swap…
  55. 2014 ANALYST DAY – Denbury Resources Inc. – slide 55
    Click LOE Total Click toto edit Master Trending edit title titleLower style style(1) /BOE Total LOE excluding Delhi remediation Riley Ridge Workover 30 25 20 15 10 5 - (2) (2) 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 (1) Excludes 70MM, 28MM,…
  56. 2014 ANALYST DAY – Denbury Resources Inc. – slide 56
    Click toto Analysis Click edit Master ofedit Total title Company title style style Operating Costs Correlation 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 w/Oil /BOE /BOE /BOE /BOE /BOE /BOE /BOE /BOE /BOE /BOE /BOE CO2…
  57. 2014 ANALYST DAY – Denbury Resources Inc. – slide 57
    Click toto Analysis Click edit Master ofedit titletitle Tertiary Only style Operating Costs style Correlation 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 w/Oil /Bbl /Bbl /Bbl /Bbl /Bbl /Bbl /Bbl /Bbl /Bbl /Bbl /Bbl CO2 Costs…
  58. 2014 ANALYST DAY – Denbury Resources Inc. – slide 58
    Click CO toto 2 Cost Click edit (1) &Master edit titletitle NYMEX Oilstyle Price style 0.45 110 0.40 100 0.35 90 NYMEX Crude Oil Price 0.30 80 CO2 Costs/Mcf 0.25 0.20 70 0.15 60 0.10 50 0.05 0.00 40 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1…
  59. 2014 ANALYST DAY – Denbury Resources Inc. – slide 59
    Click toto Financial Click edit DataMaster editper title BOE title style style (6:1 Basis) 2011 2012 2013 1Q14 2Q14 3Q14 Weighted Average NYMEX Variance per BOE(1) 4.92 2.88 2.41 (0.87) (2.92) (2.53) Oil and natural gas revenues 94.68…
  60. 2014 ANALYST DAY – Denbury Resources Inc. – slide 60
    Closing Remarks Phil Rykhoek President & Chief Executive Officer
  61. 2014 ANALYST DAY – Denbury Resources Inc. – slide 61
    Click toto Click edit Leveraging Master edit titletitle Strengths style to Lower Oil Prices &style Adjusting We believe in our assets and strategy but know we can improve our operational efficiency: Innovation teams and other key…

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