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JP Morgan energy conference – Denbury Resources Inc.

Denbury Resources Inc. · Jun 19, 2018 · 35 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. JP Morgan energy conference – Denbury Resources Inc. – slide 1
    J.P. Morgan 2018 Energy Conference June 18-19, 2018 NYSE:DNR w w w. d e n b u r y. c o m
  2. JP Morgan energy conference – Denbury Resources Inc. – slide 2
    Denbury What We Are A Unique Energy Business Rocky 60% of production via CO2 enhanced oil recovery (EOR) Mountain Vertically integrated CO2 supply and distribution Region Cost structure largely independent from industry 1Q18…
  3. JP Morgan energy conference – Denbury Resources Inc. – slide 3
    Leading Oil Weighting Among Oil Peers 100% 1Q18 % Liquids Production Oil Production 90% 97% NGL Production 80% Peer Average (% Liquids) 70% Peer Average (% Oil) 60% 50% 40% 30% 20% 10% 0% (1) (1) (1) DNR Peer A…
  4. JP Morgan energy conference – Denbury Resources Inc. – slide 4
    Top Tier Operating Margin 1Q18 Peer Operating Margins (/BOE) 40 35 Peer Average 30 25 20 15 10 5 - Peer A Peer B Peer C Peer D Peer E Peer F DNR Peer G Peer H Peer I Peer J Peer K Peer L Peer M Peer N Peer O Peer P…
  5. JP Morgan energy conference – Denbury Resources Inc. – slide 5
    Gulf Coast Region Reserves Summary(1) (MMBOE) Proved + Tertiary Potential Tertiary Reserves Proved 127 Potential 308 Non-Tertiary Reserves Proved 21 Total MMBOE(2) 456 Tertiary Potential by Field(3) Mature Area 30…
  6. JP Morgan energy conference – Denbury Resources Inc. – slide 6
    Rocky Mountain Region Reserves Summary(1) (MMBOE) Proved + Tertiary Potential Tertiary Reserves Proved 26 Potential 534 Non-Tertiary Reserves Proved 86 Total MMBOE(2) 646 Tertiary Potential by Field(3) Bell Creek 20 40…
  7. JP Morgan energy conference – Denbury Resources Inc. – slide 7
    2018 Watch List 1H18 2H18 Development Oyster Bayou Facility Expansion Bell Creek Phase 5 Response West Yellow Creek Response CCA EOR Investment Decision Grieve Field Startup Delhi Tuscaloosa Infill Exploitation Cedar Creek…
  8. JP Morgan energy conference – Denbury Resources Inc. – slide 8
    2018 Capital Plan 2018 Development Capital Budget (1) Significant Capital Projects Tertiary Bell Creek Field Phase 6 development In Millions Delhi Field Tuscaloosa infill development 300 - 325 Million 45 Heidelberg Field Facility…
  9. JP Morgan energy conference – Denbury Resources Inc. – slide 9
    2018E Production up 3% at Guidance Midpoint 2018 Production Guidance (BOE/d) 2018 Production Growth Drivers Phase 1-4 performance + Phase 5 Bell Creek response Mission Canyon exploitation drilling 60,000 - 64,000 Cedar Creek…
  10. JP Morgan energy conference – Denbury Resources Inc. – slide 10
    Sanctioning CO2 EOR Development at CCA Cedar Creek Anticline Overview EOR Formation Details Red River Initial Formations Targeted Interlake Stony Mountain 1930s (Discovery) Field Discovery Timeframe (Oil) 1950s (Development)…
  11. JP Morgan energy conference – Denbury Resources Inc. – slide 11
    EOR Potential 400 MMBBL at Cedar Creek Anticline Planned Development Summary Phase 1 Red River formation development at East Lookout Butte and Cedar Hills South 175,000 net acres Targets 30 MMBbls of recoverable oil; first tertiary…
  12. JP Morgan energy conference – Denbury Resources Inc. – slide 12
    CCA: Decades of Sustainable Production and Free Cash Flow Est. Incremental EOR Production CCA Project Highlights Phase 1 and 2 estimated incremental tertiary production 7,500 - 12,500 net Bbls/d for Phase 1 of 7,500 12,500 Bbls/d…
  13. JP Morgan energy conference – Denbury Resources Inc. – slide 13
    Exploitation A New Dimension for Growth Size of circles = Cost to test Costs per test range from 0.5MM 8MM - Testing in 2018 Large Short-Cycle Opportunity Set 20 30 Numerous exploitation targets across 18 28 Denburys 600,000…
  14. JP Morgan energy conference – Denbury Resources Inc. – slide 14
    Mission Canyon - Building on Initial Success Mission Canyon (MC) Exploitation 1st well completed December 2017; 2 additional wells completed March/April 2018 MC 22-19NH 4,600 lateral; MC 22-19SH 2,400 lateral Performance from all…
  15. JP Morgan energy conference – Denbury Resources Inc. – slide 15
    Tinsley Perry Sand Overview Recovery Factor North Fault Proven light tight oil accumulation with low historical Well 1 (April 18) Block vertical well recovery; plan to develop with horizontal wells Up to 6,000 prospective acres…
  16. JP Morgan energy conference – Denbury Resources Inc. – slide 16
    Powder River Basin Stacked Pay In Hartzog Draw Unit Hartzog Draw Exploitation North Dakota 20,700 gross / 12,900 net acres in Campbell & Shannon: 449 BOED IP Johnson Counties, WY Montana Rate, 94% Oil Wyoming…
  17. JP Morgan energy conference – Denbury Resources Inc. – slide 17
    Significantly Improving Leverage Profile Debt Principal Reduction Since 12/31/14 3/31/18 Pro Forma Debt Maturity Profile (In millions) (In millions) Over 1 Billion Debt Reduction 500 million of bank line availability at 3/31/18…
  18. JP Morgan energy conference – Denbury Resources Inc. – slide 18
    Significantly Improving Leverage Metrics Trailing Trailing 12 months 1Q18 in millions 12 months (excl. hedges) 1Q18 (excl. hedges) Adjusted EBITDAX(1) 487 541 142 175 1Q18 Annualized 568 700 3/31/18 Pro Forma Debt Principal(2)…
  19. JP Morgan energy conference – Denbury Resources Inc. – slide 19
    Hedge Positions as of June 15, 2018 2018 2019 Detail as of June 15, 2018 1H 2H 1H 2H Volumes Hedged (Bbls/d) 15,500 15,500 Fixed Price Swaps (1) WTI Swap Price 50.13 50.13 NYMEX Volumes Hedged (Bbls/d) 5,000 5,000 3,500…
  20. JP Morgan energy conference – Denbury Resources Inc. – slide 20
    Appendix NYSE:DNR 21 w w w. d e n b u r y. c o m
  21. JP Morgan energy conference – Denbury Resources Inc. – slide 21
    Slide Notes Slide 6 Gulf Coast Region Slide 7 Rocky Mountain Region 1) Proved tertiary and non-tertiary oil and natural gas reserves based upon 1) Proved tertiary and non-tertiary oil and natural gas reserves based upon year-end…
  22. JP Morgan energy conference – Denbury Resources Inc. – slide 22
    CO2 EOR Process CO2 Injection Well Production Well CO2 EOR can produce about as much oil as CO2 Pipeline primary or secondary recovery(1) Recovery of Original Oil in Place Primary 20% Secondary 18% (Waterfloods) (OOIP)…
  23. JP Morgan energy conference – Denbury Resources Inc. – slide 23
    CO2 EOR is a Proven Process CO2 EOR Oil Production by Region(1) Significant CO2 EOR Operators by Region 300 Gulf Coast/Other Gulf Coast Region Mid-Continent 250 Denbury Resources Hilcorp Rocky Mountains Permian Basin Region 200…
  24. JP Morgan energy conference – Denbury Resources Inc. – slide 24
    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 Billion Barrels ND Rocky Mountain Region(2) 33-83 Billion of Technically WY Recoverable Oil(1,2)…
  25. JP Morgan energy conference – Denbury Resources Inc. – slide 25
    Abundant CO2 Supply & No Significant Capital Required for Several Years Gulf Coast CO2 Supply Rocky Mountain CO2 Supply Jackson Dome LaBarge Area o Proved CO2 reserves as of 12/31/17: 5.2 Tcf(1) o Estimated field size: 750 square…
  26. JP Morgan energy conference – Denbury Resources Inc. – slide 26
    Debt & Quarterly Change in Bank Credit Facility in millions. Balances as of 3/31/18 except where noted. Adjusted for Conversion of Borrowing Base 3% Notes due 2024 (April 2018) and 1,050 5% Notes due 2023 (May 2018) Undrawn Bank…
  27. JP Morgan energy conference – Denbury Resources Inc. – slide 27
    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…
  28. JP Morgan energy conference – Denbury Resources Inc. – slide 28
    2018E CapEx Within Budgeted Cash Flow 55 Oil In millions, unless otherwise noted Est. Cash Flow Range 55/Bbl 2018E Budgeted Sources & Uses 400 (Including Hedges)(1) In millions 2018E(1) Capital Budget Adjusted cash flow from…
  29. JP Morgan energy conference – Denbury Resources Inc. – slide 29
    Production by Area Average Daily Production (BOE/d) Field 2015 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 Delhi 3,688 4,155 4,991 4,965 4,619 4,906 4,869 4,169 Hastings 5,061 4,829 4,288 4,400 4,867 5,747 4,830 5,704 Heidelberg 5,785 5,128…
  30. JP Morgan energy conference – Denbury Resources Inc. – slide 30
    NYMEX Oil Differential Summary 1Q18 was the strongest Rocky Mountain differential the Company has ever realized Crude Oil Differentials per barrel 2015 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 Tertiary Oil Fields Gulf Coast Region 0.60…
  31. JP Morgan energy conference – Denbury Resources Inc. – slide 31
    Analysis of Total Operating Costs Total Operating Costs per BOE 2015 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 CO2 Costs 2.66 2.16 2.86 2.36 3.22 3.02 2.86 3.16 Power & Fuel 5.59 5.29 5.93 6.04 6.18 5.72 5.97 6.95 1) Normalized LOE…
  32. JP Morgan energy conference – Denbury Resources Inc. – slide 32
    CO2 Cost & NYMEX Oil Price 0.50 110 0.45 100 0.40 90 NYMEX Crude Oil Price / Bbl 80 0.35 CO2 Costs / Mcf (1) 70 0.30 60 0.25 50 0.20 40 0.15 30 0.10 20 0.05 10 0.00 0 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15…
  33. JP Morgan energy conference – Denbury Resources Inc. – slide 33
    Houston Area Land Sales Conroe Webster o 3,400 surface acres consisting of 7 parcels for o 800 surface acres consisting of 11 commercial commercial and residential development parcels o Multiple parcels along I-45 frontage road…
  34. JP Morgan energy conference – Denbury Resources Inc. – slide 34
    Non-GAAP Measures Reconciliation of net income (GAAP measure) to adjusted EBITDAX (non-GAAP measure) 2017 2018 In millions Q1 Q2 Q3 Q4 FY Q1 TTM Net income (GAAP measure) 22 14 0 127 163 40 181 Adjustments to reconcile to Adjusted…
  35. JP Morgan energy conference – Denbury Resources Inc. – slide 35
    Non-GAAP Measures (Cont.) 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 2018 In millions Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4…

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