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Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc.

Denbury Resources Inc. · Dec 6, 2017 · 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. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 1
    Capital One Securities 12th Annual Energy Conference December 6, 2017 www.denbury.com NYSE: DNR NYSE: DNR www.denbury.com 1
  2. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 2
    A Different Kind of Oil Company Core focus: CO2 enhanced oil recovery (CO2 EOR) Rocky Uniquely long-lived & lower-risk assets with extraordinary resource Mountain potential Region OPERATING CO2 supply and infrastructure provides our…
  3. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 3
    CO2 EOR Process CO2 Injection Well CO2 Pipeline Production Well CO2 EOR can produce about as much oil as primary or secondary recovery(1) Recovery of Original Oil in Place Primary 20% Secondary 18% (Waterfloods) (OOIP)…
  4. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 4
    Significant Running Room with CO2 EOR Up to 83 Billion Barrels of Technically Recoverable Oil U.S Lower 48(1)(2) 2.8 to 6.6 MT ND Billion Barrels Rocky Mountain Region(2) 33-83 Billion of Technically WY Recoverable Oil(1,2)…
  5. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 5
    Gulf Coast Region Vast CO2 Supply and Distribution Capacity in Texas, Louisiana & Mississippi Tinsley(3) Reserves Summary(1) Delhi(3) West Yellow Creek(3) 25 MMBbls 5 -10 MMBbls Tertiary Reserves: 30 MMBOEs Proved 132 TX Tinsley…
  6. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 6
    Rocky Mountain Region Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Reserves Summary(1) Tertiary Reserves: Cedar Creek Anticline Area(3) DGC Beulah Proved 36 MT MONTANA 260 - 290 MMBbls Potential…
  7. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 7
    Realigning for Profitability and Sustainability Focus Areas Medium-Term Expectations Expect cost reductions 50 million in 2018 REDUCE COST STRUCTURE Cost reductions combined with unique asset base enhance profitability Continue…
  8. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 8
    2017 Capital Budget & Production Update 2017 Capital Budget 2017 Production Guidance Update PRODUCTION (BOE/D) DEVELOPMENT CAPITAL BUDGET(1) 60,000 - 62,000 (in millions) 60,000 In mid-2017, reduced 55 planned capital spending…
  9. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 9
    Cedar Creek Anticline Mission Canyon High Value Exploitation Opportunity Low-cost horizontal well development unlocks Horizontal wells targeting 7.2 MMBOE resource potential over 9,000 upper portion of Mission acres within existing…
  10. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 10
    Bell Creek Phases 5 & 6 Development Phases 5 & 6 have the best geological properties of the Bell Creek flood Larger EOR target than first four phases combined Increased pattern spacing improves capital efficiency Phase 5 Completed on…
  11. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 11
    Abundant 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. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 12
    CO2 Utilization & Cost Summary 1,000 979 Total Company Injected Volumes 762 800 705 678 634 608 (MMcf/d) 600 545 576 82% 487 459 458 Jackson Dome CO2 400 75% 200 18% Industrial-sourced CO2 25% - 1Q15 2Q15 3Q15…
  13. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 13
    Debt & Quarterly Change in Bank Credit Facility in millions. Balances as of 9/30/17 except where noted Adjusted for Debt Exchange Bank Credit Facility: Borrowing Base 1,050 (Expected to close 12/6/17) Reaffirmed borrowing base of…
  14. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 14
    Summary of Debt Exchange Agreements(1) Reduction Post Exchange Reduction Post Conversion (144) Million (85) Million Transaction Summary: 610 million of existing senior subordinated notes exchanged for 466 million of new notes…
  15. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 15
    Oil Hedge Protection Detail as of December 4, 2017 Oct-17 Nov-17 Dec-17 1H 2018 2H 2018 Fixed Price Swaps Volumes Hedged (Bbls/d) 12,000 12,000 12,000 20,500 20,500 WTI NYMEX Swap Price(1) 49.76 49.76 49.76 51.69 51.69 Volumes…
  16. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 16
    Key Takeaways Reduce cost structure Looking Unlock full value of asset base Ahead Improve balance sheet Long-Term Visibility Low decline, long-lived and low risk assets Tremendous resource potential Our Capital Flexibility…
  17. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 17
    Appendix
  18. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 18
    CO2 EOR is a Proven Process Significant CO2 EOR Operators by Region CO2 EOR Oil Production by Region(1) 300 Gulf Coast Region Gulf Coast/Other Denbury Resources 250 Mid-Continent Permian Basin Region Rocky Mountains 200 Permian…
  19. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 19
    Hastings Redevelopment Project Increased production by 1,700 Bbls/d (gross) on capital spend of 26MM 8,000 Gross Oil Production (Bbls/d) 7,000 PREVIOUS Production 6,000 Well 5,000 Up 1,700 Bbls/d Injection 4,000 Well 5/13May-17…
  20. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 20
    Examples of Significant Development Opportunities Gulf Coast Rocky Mountain Hastings, TX Delhi, LA Heidelberg, MS Bell Creek, MT Hartzog Draw, WY CHSU, ND Remaining development in Two of six test sites Realignment of Christmas Four of…
  21. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 21
    Building Scale in Our Core Operating Areas Rocky Mountain Salt Creek Region Proved reserves: 17 MMBbls Combined Proved + potential reserves: 25-35 MMBbls Acquisition cost: 71.5 million (before closing Proved reserve additions…
  22. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 22
    Senior Secured Bank Credit Facility Info Commitments & borrowing base 1.05 billion Scheduled redeterminations Semiannually May 1st and November 1st Maturity date December 9, 2019 Permitted bond repurchases Up to 225 million of bond…
  23. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 23
    Production by Area Average Daily Production (BOE/d) Field 2014 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 Mature area(1) 11,817 10,830 9,666 9,415 8,653 8,440 9,040 8,111 7,737 7,450 Delhi 4,340 3,688 3,971 3,996 4,262 4,387 4,155…
  24. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 24
    NYMEX Oil Differential Summary Crude Oil Differentials per barrel 2014 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 Tertiary Oil Fields Gulf Coast Region 2.11 0.60 (1.95) (0.98) (0.82) (0.81) (1.35) (1.58) (1.01) (0.10) Rocky…
  25. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 25
    Analysis of Total Operating Costs Total Operating Costs /BOE 2014 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 CO2 Costs 3.79 2.66 1.97 2.13 2.17 2.40 2.16 2.86 2.36 3.22 1) Normalized LOE excludes special or unusual items and Power &…
  26. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 26
    Analysis of Tertiary Operating Costs Tertiary Operating Costs /Bbl 2014 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 CO2 Costs 6.87 4.65 3.38 3.51 3.59 3.89 3.59 4.62 3.84 5.00 Power & Fuel 7.46 6.72 5.98 5.62 6.08 6.15 5.96 6.52 6.61…
  27. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 27
    CO2 Cost & NYMEX Oil Price 0.55 110 0.50 100 0.45 90 0.40 80 NYMEX Crude Oil Price / Bbl (1) 0.35 70 CO2 Costs / Mcf 0.30 60 0.25 50 0.20 40 0.15 30 0.10 20 0.05 10 0.00 (2) 0 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2…
  28. Capital One Securities 12th Annual Energy Conference – Denbury Resources Inc. – slide 28
    Non-GAAP Measures Reconciliation of net income (loss) (GAAP measure) to adjusted cash flows from operations (non-GAAP measure) to cash flows from operations (GAAP measure) 2016 2017 In millions Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Net income…

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