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Credit Suisse Energy Summit – Denbury Resources Inc.

Denbury Resources Inc. · Feb 15, 2017 · 32 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 Energy Summit – Denbury Resources Inc. – slide 1
    22nd Annual Credit Suisse Energy Summit February 15-16, 2017 NYSE:DNR NYSE:DNR
  2. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 2
    A Different Kind of Oil Company 6.5 Tcf Gross proved CO2 reserves Over 1,100 As of 12/31/2016 miles of CO2 pipelines Preliminary 4Q16 Tertiary Production YE 2016 Proved Reserves 37,346 254 MMBOE Bbls/d 97% oil Preliminary…
  3. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 3
    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 Remaining…
  4. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 4
    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…
  5. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 5
    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)…
  6. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 6
    Responding to Oil Price Volatility Down-Cycle Reduce costs Focus Optimize business Reduce debt Preserve cash and liquidity Looking Ahead Stabilize production and resume growth as oil prices improve Continue to improve balance…
  7. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 7
    2017 Capital Budget & Production Guidance 2017 Development Capital Budget(1) Primarily focused on expanding existing CO2 DEVELOPMENT CAPITAL BUDGET floods and other infill opportunities (in MM) Tertiary Projects 55 Phase development…
  8. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 8
    2016 Reserves Update(1) Oil Gas Total PV-10 SEC Oil (MMBbl) (Bcf) MMBOE Value(2) Pricing(1) Proved reserves at December 31, 2015 282 38 289 2.3 Billion 50.28 Revisions of previous estimates (9) 16 (7) 2016 production (22) (6) (23)…
  9. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 9
    Gulf Coast Region Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Summary(1) Delhi(3) Tinsley(3) 30 MMBOEs 25 MMBbls Tertiary Reserves: Tinsley Proved 130 Jackson Dome Potential 313 Delhi Free State…
  10. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 10
    Rocky Mountain Region Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Summary(1) Cedar Creek Anticline Area(3) DGC Beulah MONTANA 260 - 290 MMBbls Tertiary Reserves: Proved 19 Potential 336 NORTH…
  11. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 11
    Ample CO2 Supply & No Significant Capital Required for Several Years Gulf Coast CO2 Supply Rocky Mountain CO2 Supply Jackson Dome LaBarge Area Estimated field size: 750 square miles Proved CO2 reserves as of 12/31/16: 5.3 Tcf(1)…
  12. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 12
    Sustained Improvement in CO2 Efficiency 1,200 Total Company Injected Volumes (MMcf/d) 1,000 979 53% 35% REDUCTION SINCE 1Q15 REDUCTION YTD 762 800 678 705 634 600 82% Jackson Dome CO2 459 458 400 78% 200 18%…
  13. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 13
    Continued Improvement of Cash Operating Costs 24% 10% REDUCTION REDUCTION YTD 2016 vs. YTD 2014 YTD 2016 vs. YTD 2015 44.03 CORPORATE 36.84 CASH COSTS 33.31 FIELD LEVEL CASH COSTS /BOE YTD 9/30/14 YTD 9/30/15 YTD 9/30/16…
  14. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 14
    Competitive Operating Margin 3Q16 Peer Operating Margins (/BOE) 25 20 Peer Average 15 10 5 - Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer Peer DNR A B C D E F G H I J K L M N O Operating Margin…
  15. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 15
    Ample Liquidity & Significant Debt Reductions Ample Liquidity & No Near-Term Maturities(1) Bank Credit Facility: Borrowing Base In millions 1,050 715 million in liquidity Undrawn & Available 773 as of 9/30/16 615 622 Basket for 1…
  16. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 16
    Oil Hedge Protection Detail as of February 13, 2017 1Q17 2Q17 3Q17 4Q17 WTI NYMEX Volumes Hedged (Bbls/d) 22,000 22,000 Fixed-Price Swap Price(1) 42.67 43.99 Swaps Swaps Argus LLS Volumes Hedged (Bbls/d) 10,000 7,000…
  17. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 17
    Delhi NGL Plant Plant in service late December 2016 Key benefits: Extracts NGLs from our gas stream to be sold separately Improves the Delhi flood with a purer CO2 recycle stream Self-generates power using extracted methane…
  18. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 18
    Key Takeaways Looking Ahead Stabilize production and resume growth as oil prices improve Continue to improve balance sheet Maintain and enhance efficiencies gained through the down-cycle Pursue acquisition opportunities Long-Term…
  19. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 19
    Appendix
  20. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 20
    CO2 EOR is a Proven Process Significant CO2 EOR Operators by Region Significant CO2 Supply by Region Gulf Coast Region Gulf Coast Region Denbury Resources Jackson Dome, MS (Denbury Resources) Permian Basin Region Port Arthur, TX…
  21. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 21
    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…
  22. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 22
    Actual Curves Denbury Mature Fields Range of Recovery 11%-20+% NYSE:DNR 23
  23. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 23
    Debt Structure Total Debt Principal Reduction YTD 562 million Open-Market Open-Market Debt Debt Debt Debt ( in millions) 12/31/2015 Purchases Other Exchanges(1) 6/30/2016 Purchases Other 9/30/2016 Senior Secured Bank Credit…
  24. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 24
    YTD 2016 Change in Bank Credit Facility (In millions) 350 Adjusted Cash Flow(1) 211 300 CapEx(2) (176) 275 - 300 250 Total 35 (32) 260 200 (67) 150 175 35 (77) 56 100 50 0 YE2015 Adjusted Proceeds Note Changes in…
  25. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 25
    Senior Secured Bank Credit Facility Info Commitments & borrowing base 1.05 billion Redetermination Semi-annually May 1st and November 1st Maturity date December 9, 2019 Permitted bond repurchases Up to 225 million of bond repurchases…
  26. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 26
    Preliminary Production by Area Average Daily Production (BOE/d) Field 2014 1Q15 2Q15 4Q15 3Q15 2015 1Q16 2Q16 3Q16 4Q16 2016 Mature area(1) 11,817 10,801 11,170 10,403 10,946 10,830 9,666 8,653 9,415 8,440 9,040 Delhi(2) 4,340…
  27. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 27
    NYMEX Oil Differential Summary Crude Oil Differentials per barrel 2013 2014 1Q15 2Q15 3Q15 4Q15 2015 1Q16 2Q16 3Q16 Tertiary Oil Fields Gulf Coast Region 7.86 2.11 (0.22) 2.04 0.98 (0.97) 0.60 (1.95) (0.98) (0.82) Rocky Mountain…
  28. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 28
    Analysis of Total Operating Costs Total Operating Costs /BOE 2013 2014 1Q15 2Q15 3Q15 4Q15 2015 1Q16 2Q16 3Q16 CO2 Costs 3.73 3.79 3.03 2.71 2.17 2.70(1) 2.66 1.97 2.13 2.17 Power & Fuel 5.36 5.93 5.88 5.28 5.77 5.43 5.59 5.26 5.02…
  29. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 29
    Analysis of Tertiary Operating Costs Tertiary Operating Costs /Bbl 2013 2014 1Q15 2Q15 3Q15 4Q15 2015 1Q16 2Q16 3Q16 CO2 Costs 6.82 6.87 5.39 4.69 3.79 4.72(1) 4.65 3.38 3.51 3.59 Power & Fuel 6.64 7.46 7.30 6.27 6.81 6.53 6.72 5.98…
  30. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 30
    CO2 Cost & NYMEX Oil Price OPEX Purchases Tax NYMEX Crude Oil Price 0.55 110 0.50 100 0.45 90 NYMEX Crude Oil Price / Bbl 0.40 80 (1) CO2 Costs / Mcf 0.35 70 0.30 60 0.25 50 0.20 40 0.15 30 0.10 20 0.05 10…
  31. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 31
    Non-GAAP Measures Reconciliation of net loss (GAAP measure) to adjusted cash flows from operations (non-GAAP measure) to cash flows from operations (GAAP measure) 2015 2016 In millions Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net loss (GAAP measure)…
  32. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 32
    Non-GAAP Measures (Cont.) Reconciliation of the preliminary standardized measure of discounted estimated future net cash flows after income taxes (GAAP measure) to PV-10 Value (non-GAAP measure) December 31, In millions 2015 2016…

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