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August 2018 Enercom Conference – Denbury Resources Inc.

Denbury Resources Inc. · Aug 21, 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. August 2018 Enercom Conference – Denbury Resources Inc. – slide 1
    EnerComs The Oil and Gas Conference August 21, 2018 NYSE:DNR w w w. d e n b u r y. c o m
  2. August 2018 Enercom 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 2Q18…
  3. August 2018 Enercom Conference – Denbury Resources Inc. – slide 3
    Leading Oil Weighting Among Oil Peers 100% 2Q18 % Liquids Production Oil Production 97% 97% NGL Production 90% 80% Peer Average (% Liquids) 70% Peer Average (% Oil) 60% 50% 40% 30% 20% 10% 0% DNR(1) Peer A Peer B…
  4. August 2018 Enercom Conference – Denbury Resources Inc. – slide 4
    Top Tier Operating Margin 2Q18 Peer Operating Margins (/BOE) 40 35 Peer Average 30 25 20 15 10 5 - Peer A Peer B DNR Peer C Peer D Peer E Peer F Peer G Peer H Peer I Peer J Peer K Peer L Peer M Peer N Peer O Peer P…
  5. August 2018 Enercom 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. August 2018 Enercom 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. August 2018 Enercom 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. August 2018 Enercom Conference – Denbury Resources Inc. – slide 8
    2018E Capital Plan & Production Guidance 2018 Development Capital Budget (1) 2018 Production Guidance (BOE/d) In Millions 60,000 - 64,000 300 - 325 Million 45 60,298 20 155 Tertiary 241 MM (2) 300-325 MM 95 CapEx 2 CapEx…
  9. August 2018 Enercom Conference – Denbury Resources Inc. – slide 9
    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)…
  10. August 2018 Enercom Conference – Denbury Resources Inc. – slide 10
    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…
  11. August 2018 Enercom Conference – Denbury Resources Inc. – slide 11
    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…
  12. August 2018 Enercom Conference – Denbury Resources Inc. – slide 12
    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…
  13. August 2018 Enercom Conference – Denbury Resources Inc. – slide 13
    Accelerating Development Pace in Mission Canyon Mission Canyon Exploitation First 3 wells exceeded expectations, combined gross 30-day IP rate 3,000 BOPD; 100% oil Total initial target of 24 locations across CCA, potential to…
  14. August 2018 Enercom Conference – Denbury Resources Inc. – slide 14
    Tinsley Perry Sand Overview Recovery Factor Proven light tight oil accumulation with low historical North Fault Block vertical well recovery; below current producing horizon Well 1 (2Q18) Successful first well with strong…
  15. August 2018 Enercom Conference – Denbury Resources Inc. – slide 15
    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…
  16. August 2018 Enercom Conference – Denbury Resources Inc. – slide 16
    Recent Debt Transactions Further Improve Leverage Profile Net Debt Principal Reduction Since 12/31/14 6/30/18 Pro Forma(1) Debt Maturity Profile (In millions) RECENT TRANSACTIONS(1) (In millions) Over 1 Billion Net Debt Reduction 1.…
  17. August 2018 Enercom Conference – Denbury Resources Inc. – slide 17
    Significantly Improving Leverage Metrics TTM Leverage Ratio 2Q18 Annualized Leverage Ratio Trailing 12 months Trailing 12 months 2Q18 2Q18 in millions (incl. hedges) (excl. hedges) (incl. hedges) (excl. hedges) Adjusted EBITDAX(1)…
  18. August 2018 Enercom Conference – Denbury Resources Inc. – slide 18
    Hedge Positions as of August 17, 2018 2018 2019 Detail as of August 17, 2018 2H 1H 2H Volumes Hedged (Bbls/d) 15,500 Fixed Price Swaps WTI Swap Price(1) 50.13 NYMEX Volumes Hedged (Bbls/d) 5,000 3,500 Swap Price(1) 56.54…
  19. August 2018 Enercom Conference – Denbury Resources Inc. – slide 19
    Uncommon Company, Extraordinary Potential Peer-leading oil weighting and top tier operating margin Long-lived asset base and significant organic growth potential Rapidly improving balance sheet, strong liquidity, and no near- term…
  20. August 2018 Enercom Conference – Denbury Resources Inc. – slide 20
    Appendix NYSE:DNR 21 w w w. d e n b u r y. c o m
  21. August 2018 Enercom 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. August 2018 Enercom 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. August 2018 Enercom 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. August 2018 Enercom 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. August 2018 Enercom 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. August 2018 Enercom Conference – Denbury Resources Inc. – slide 26
    Pro Forma Debt & Change in Bank Credit Facility in millions. Pro Forma for Bank Credit Facility Amendment Balances as of 6/30/18, except where noted. and Sr. Secured Second Lien Note Offering: 615 Borrowing base of 615 million Ample…
  27. August 2018 Enercom Conference – Denbury Resources Inc. – slide 27
    Updated Senior Secured Bank Credit Facility Info Borrowing Base / Commitment level: 615 million Commitments & borrowing base Lender group comprised of 14 banks with an average commitment level of approximately 43.9 million per bank…
  28. August 2018 Enercom 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. August 2018 Enercom Conference – Denbury Resources Inc. – slide 29
    Production by Area Average Daily Production (BOE/d) Field 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 2Q18 Delhi 4,155 4,991 4,965 4,619 4,906 4,869 4,169 4,391 Hastings 4,829 4,288 4,400 4,867 5,747 4,830 5,704 5,716 Heidelberg 5,128 4,730…
  30. August 2018 Enercom Conference – Denbury Resources Inc. – slide 30
    NYMEX Oil Differential Summary Another quarter of company-wide positive differential to NYMEX Crude Oil Differentials per barrel 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 2Q18 Tertiary Oil Fields Gulf Coast Region (1.35) (1.58) (1.01)…
  31. August 2018 Enercom Conference – Denbury Resources Inc. – slide 31
    Analysis of Total Operating Costs Total Operating Costs per BOE 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 2Q18 CO2 Costs 2.16 2.86 2.36 3.22 3.02 2.86 3.16 2.92 Power & Fuel 5.29 5.93 6.04 6.18 5.72 5.97 6.95 6.19 1) Normalized LOE excludes…
  32. August 2018 Enercom 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 4Q15…
  33. August 2018 Enercom 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. August 2018 Enercom 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 Q3 Q4 FY Q1 Q2 TTM Net income (GAAP measure) 0 127 163 40 30 197 Adjustments to reconcile to Adjusted…
  35. August 2018 Enercom Conference – Denbury Resources Inc. – slide 35
    Non-GAAP Measures (Cont.) Reconciliation of net income (GAAP measure) to adjusted cash flows from operations (non-GAAP measure) to cash flows from operations (GAAP measure) 2017 2018 In millions Q1 Q2 Q3 Q4 FY Q1 Q2 Net income (GAAP…

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