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2Q 2019 Earnings Presentation – Denbury Resources Inc.

Denbury Resources Inc. · Aug 7, 2019 · 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. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 1
    2Q19 Earnings Presentation August 7, 2019
  2. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 2
    Agenda Introduction John Mayer, Director of Investor Relations Overview and Operational Update Chris Kendall, President & Chief Executive Officer Financial Review Mark Allen, Executive Vice President & Chief Financial Officer…
  3. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 3
    Overview & Operational Update Chris Kendall NYSE:DNR 4
  4. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 4
    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 2Q19…
  5. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 5
    The Denbury Difference CO2 EOR Reduces Carbon Footprint 25-30% of our CO2 is industrially sourced We Operate Responsibly and Safely We Minimize Environmental Impact Consistently Improving Safety Revitalizing Legacy Oil Fields…
  6. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 6
    Strong Progress Toward 2019 Goals Operational Financial Operate Safely and Responsibly Improve on record-levels of health, safety and environmental performance Generate Significant Free Cash Drive Organic EOR Growth Free cash…
  7. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 7
    Generating Significant Free Cash Flow in 2019 2019E Free Cash Flow Range, Including Hedges(1)(3) 2019E Sources & Uses 55 oil(1) In millions, unless otherwise noted 2019E In millions 200 Adjusted cash flow from operations(2) 490 520…
  8. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 8
    Sustained Strong Operating Margin 54% Operating Margin in 2Q19 66.57 Revenue per BOE(1) 60.80 55.27 38.95 Operating Margin per BOE(2) 32.70 25.59 Transportation, Marketing and Taxes per BOE 6.40 6.15 6.28 Lifting Cost per…
  9. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 9
    Full Year Capital Spend Guidance Unchanged 2019E Development Capital(1) Significant 2019 Capital Projects In Millions Tertiary Timing 1H19 138 Million FY 2019E Bell Creek Field Phase 6 Development 1Q-3Q 240 - 260 Million 37 55…
  10. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 10
    Tightening Full Year Guidance Range and Increasing Midpoint Average Daily Production by Area (BOE/d) Updated 2019E Guidance (BOE/d) Field 2Q19 1Q19 2Q18 1H19 Delhi 4,486 4,474 4,391 4,480 Increasing Production Guidance Hastings 5,466…
  11. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 11
    Bell Creek 50% Production Growth Over Last Two Years Continuing Field Development Total Bell Creek Production Phase 5 (Net Bbl/d) Initial phase response in 2018 Capital spend 28MM with 2Q19 incremental production of 2,500 net…
  12. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 12
    2Q19 Operating Costs Reduced 8% from 1Q19 Full-year 2019 expected to average in lower half of 22-24/BOE original guidance range Total Operating Costs 2Q19 1Q19 2Q18 1H19 (MM) (/BOE) (MM) (/BOE) (MM) (/BOE) (MM) (/BOE) CO2 Costs 15…
  13. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 13
    Unlocking Additional Potential at Conroe Promising Initial Well Results Target is 2A Sand in Conroe Field Low-Perm Sand Horizontal Well Concept 3-5 MMBOE resource potential 20-60% oil cuts in current vertical producers Lower quality…
  14. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 14
    Tinsley Cotton Valley Exploitation Positive Initial Well Results Cotton Valley First test well reached target depth in 1Q19 Prospective Area Gas condensate discovery in Cotton Valley Peak test rate 2.5 Mmcf/d, 100 Bbl/d oil High…
  15. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 15
    CCA Exploitation Program Continued Mission Canyon & Charles B Success Mission Canyon Drilled 7 successful wells 2017-2018, average IP30 800 Bbl/d Cedar Creek Anticline Strong program economics 50 oil 50% ROR to date Mission Canyon…
  16. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 16
    Financial Review Mark Allen NYSE:DNR 17
  17. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 17
    Adjusted Net Income 31% Higher than 1Q19 Reconciliation of Net Income (Loss) (GAAP Measure) to Adjusted Net Income (non-GAAP Measure)(1) 2Q19 1Q19 1H19 Per Diluted Per Diluted Per Diluted In millions, except per-share data Amount…
  18. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 18
    Generating Significant Free Cash Flow In millions 2Q19 1Q19 1H19 Reconciliation of Cash Flows from Operations (GAAP Measure) to Adjusted Cash Flows from Operations (Non-GAAP Measure)(1) Cash flows from operations (GAAP measure) 149 64…
  19. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 19
    Largest Positive Oil Differential Since 2Q13 NYMEX Oil Differentials per barrel 2Q19 1Q19 4Q18 3Q18 2Q18 Tertiary oil fields 3.39 2.96 3.45 2.37 0.54 Gulf Coast region 4.66 4.07 5.20 3.01 0.85 Rocky Mountain region (1.36) (2.01)…
  20. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 20
    Selected Expense Line Items 2Q19 1Q19 1H19 In millions, unless otherwise noted () (/BOE) () (/BOE) () (/BOE) Lease operating expenses(1) 118 21.70 125 23.53 243 22.61 General and administrative expenses 18 3.22 19 3.55 36 3.38…
  21. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 21
    Hedge Positions as of August 6, 2019 Downside Protection with Significant Upside Potential 2019 2020 2H 1H 2H FY20 WTI Volumes Hedged (Bbls/d) 2,000 2,000 2,000 Fixed Price NYMEX Swap Price(1) 60.59 60.59 60.59 Swaps…
  22. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 22
    Improving Debt Maturity Profile Debt Profile at 6/30/19 (In millions) Recent Debt Exchange - Impact to Denbury 799 746 Maturity 80 246 Reduced subordinated notes principal by 120 million and extended 348 million of 551…
  23. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 23
    Improving Debt Metrics Leverage Ratio 6/30/19 Leverage Ratio 6/30/18 Leverage Ratio Trailing 12 months Trailing 12 months Trailing 12 months Trailing 12 months (incl. hedges) (excl. hedges) (incl. hedges) (excl. hedges) Adjusted…
  24. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 24
    Q&A NYSE:DNR 25
  25. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 25
    Appendix NYSE:DNR 26
  26. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 26
    Non-GAAP Measures Reconciliation of net income (loss) (GAAP measure) to adjusted EBITDAX (non-GAAP measure) 2018 2019 In millions Q1 Q2 Q3 Q4 FY Q1 Q2 TTM Net income (loss) (GAAP measure) 40 30 78 174 323 (26) 147 373 Adjustments to…
  27. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 27
    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) 2018 2019 In millions Q1 Q2 Q3 Q4 FY Q1 Q2 TTM Net…
  28. 2Q 2019 Earnings Presentation – Denbury Resources Inc. – slide 28
    Non-GAAP Measures (Cont.) Reconciliation of the 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 2017 2018 Standardized…

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