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Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc.

Denbury Resources Inc. · Feb 23, 2016 · 28 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 21st Annual Energy Summit – Denbury Resources Inc. – slide 1
    21st Annual Credit Suisse Energy Summit February 23, 2016 NYSE:DNR NYSE:DNR
  2. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 2
    A Different Kind of Oil Company 6.7 Tcf Gross proved Over CO2 reserves 1,100 As of 12/31/2015 miles of CO2 pipelines Operating Areas 2015 Tertiary Production Produced over Denburys Profile: 41,602 135 Million CO2 enhanced oil…
  3. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 3
    Responding to Oil Price Volatility Focus for 2016 Reduce costs and optimize business Preserve cash and liquidity Reduce leverage over time Specific Actions Eight consecutive quarterly reductions in recurring LOE and reductions in…
  4. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 4
    Continued Focus on Cost Reductions Normalized Lease Operating Expenses(1) /BOE 26% decrease since 4Q13 25.68 16% decrease FY14 to FY15 23.26 23.17 22.64 21.08 19.70 LOE under 20/BOE for 19.43 19.31 three consecutive quarters…
  5. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 5
    2016 Capital Budget & Production Guidance 2016 Capital Budget:200 Million 2016 Production Guidance Capitalized 74,432 72,861 64,000 - 68,000 Items(1) 55 MM 145 MM Development Capital 2014 2015 2016E Development Capital 145…
  6. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 6
    2015 Reserves Update Reserves Oil Gas Total (MMBbl) (MMcf) MMBOE(1) Proved reserves at December 31, 2014 362 452 438 Revision due to price changes (61) (389) (126) 2015 production (25) (8) (27) Other revisions 6 (17) 4 Proved…
  7. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 7
    CO2 EOR Process CO2 EOR delivers almost as much production as primary or secondary recovery(1) Recovery of Original Oil in Place (OOIP) Primary 20% Secondary 18% (Waterfloods) CO2 EOR 17% (Tertiary) CO2 Oil Bank…
  8. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 8
    U.S. Lower-48 CO2 EOR Potential Up to 83 Billion Barrels of Technically Recoverable Oil(1)(2) 33-83 Billion of Technically Recoverable Oil(1,2) (amounts in billions of barrels) Permian 9-21 East & Central Texas 6-15 Mid-Continent…
  9. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 9
    Up to 16 Billion Gross Barrels Recoverable(1) in Our Two CO2 EOR Target Areas MT ND 2.8 to 6.6 Billion Barrels WY Estimated Recoverable in Rocky Mountain Region(2) Denbury-operated fields represent 10% of total potential(3)…
  10. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 10
    CO2 EOR in Gulf Coast Region Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Delhi(3) Tinsley(3) 45 MMBOEs 46 MMBbls Summary(1) Tinsley Jackson Dome Proved 144 Potential 396 Delhi Free State…
  11. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 11
    CO2 EOR in Rocky Mountain Region Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Cedar Creek Anticline Area(3) Summary(1) DGC Beulah MONTANA 260 - 290 MMBbls Proved 21 Potential 329 NORTH DAKOTA…
  12. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 12
    Significant CO2 Resources Gulf Coast CO2 Supply Rocky Mountain CO2 Supply Jackson Dome LaBarge Area Proved CO2 reserves as of 12/31/15: 5.5 Tcf(1) Estimated Field Size: 750 square miles Additional probable and possible CO2 reserves…
  13. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 13
    CO2 Efficiencies = Significant Savings 942 Benefits of Lower Total Company CO2 Volumes 705 Injected CO2 Volumes 25% MMcf/d Extends the life of our Decline valuable CO2 sources Reduces capital 4Q14 4Q15 required to develop and…
  14. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 14
    Unique Asset Structure Relative to Other Independents Reserve life index(1) 1st year of decline rate by basin(2) DNR Selected Companies(3) EOR Assets Non-EOR Assets 20x 90% 18x 80% Inclining production 70% for several 16x years…
  15. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 15
    Oil Hedge Detail as of February 17, 2016 1Q16 2Q16 3Q16 4Q16 1Q17 WTI NYMEX Volumes Hedged (Bbls/d) 11,500 12,500 23,000 2,000 Fixed-Price New Swaps Swap Price (1) 61.84 37.77 37.97 41.30 WTI NYMEX Volumes Hedged (Bbls/d) 12,000…
  16. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 16
    Oil Price Sensitivity on Hedging Settlements The following chart details the expected cash flow impacts of settlements of oil derivative contracts, outlined on slide 16, at various NYMEX oil prices. Quarterly Hedging Settlements (in…
  17. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 17
    Liquidity and Debt Maturity Schedule Ample Revolver Liquidity No Near-Term Maturities(1) Credit Facility Elected Commitments 1.6 billion as of 12/31/15 Sr. Subordinated Notes 5.50% 1.5 billion current 4.625% Undrawn & Available…
  18. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 18
    Credit Facility Amendment Post-Amendment vs. Previous Amendment Post-Amendment Previous Interest coverage 1.25x EBITDAX through December 31, 2017 2.25x EBITDAX covenant Senior Secured 3.0x EBITDAX through December 31, 2017 2.5x…
  19. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 19
    Key Takeaways Near-Term Focus Reduce costs and optimize our business Preserve cash and liquidity Reduce leverage over time Our Advantages Long-Term Visibility CO2 EOR is a proven process Long-lived and lower-risk assets Tremendous…
  20. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 20
    Appendix NYSE:DNR NYSE:DNR
  21. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 21
    CO2 EOR is a Proven Process Significant CO2 EOR Operators by Region Significant CO2 Suppliers by Region Gulf Coast Region Gulf Coast Region Denbury Resources Jackson Dome, MS (Denbury Resources) Permian Basin Region Permian Basin…
  22. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 22
    Actual Industry Recovery Curves Range of Recovery 10%-18% An auditors view, Mike Stell, Ryder Scott, Permian Basin Study Group, April 4, 2011 Reserve booking guidelines, Mike Stell, Ryder Scott, CO2 Conference, Midland…
  23. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 23
    Actual Curves Denbury Mature Fields Range of Recovery 11%-20+% NYSE:DNR 24
  24. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 24
    Production by Area Average Daily Production (BOE/d) Field 2013 2014 1Q15 2Q15 3Q15 4Q15 2015 Mature area(1) 13,803 11,817 10,801 11,170 10,946 10,403 10,830 Delhi(2) 5,149 4,340 3,551 3,623 3,676 3,898 3,688 Hastings 3,984 4,777…
  25. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 25
    NYMEX Oil Differential Summary Crude Oil Differentials per barrel 2013 2014 1Q15 2Q15 3Q15 4Q15 2015 Tertiary Oil Fields Gulf Coast Region 7.86 2.11 (0.22) 2.04 0.98 (0.97) 0.60 Rocky Mountain Region (14.24) (11.10) (2.09) (2.81)…
  26. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 26
    Analysis of Total Operating Costs Total Operating Costs /BOE Correlation 2013 2014 1Q15 2Q15 3Q15 4Q15 2015 with Oil CO2 Costs Direct 3.73 3.79 3.03 2.71 2.17 2.70 2.66 Power & Fuel Partially 5.36 5.93 5.88 5.28 5.77 5.43 5.59 Labor…
  27. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 27
    Analysis of Tertiary Operating Costs Total Operating Costs /BOE Correlation 2013 2014 1Q15 2Q15 3Q15 4Q15 2015 with Oil CO2 Costs Direct 6.82 6.87 5.39 4.69 3.79 4.72 4.65 Power & Fuel Partially 6.64 7.46 7.30 6.27 6.81 6.53 6.72…
  28. Credit Suisse 21st Annual Energy Summit – Denbury Resources Inc. – slide 28
    CO2 Cost & NYMEX Oil Price 0.50 0.45 100 0.40 NYMEX Crude Oil Price / Bbl 80 0.35 CO2 Costs(1) / Mcf 0.30 60 0.25 0.20 40 0.15 0.10 20 0.05 0.00 0 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15…

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