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September 2019 Corporate Presentation – Denbury Resources Inc.

Denbury Resources Inc. · Sep 24, 2019 · 39 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. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 1
    Corporate Presentation September 2019
  2. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 2
    Uncommon Company, Extraordinary Potential Strategically Advantaged Extreme Oil Gearing Operations Industry leading oil weighting Vertically integrated EOR infrastructure Top quartile operating margins Cost structure independent…
  3. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 3
    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…
  4. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 4
    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…
  5. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 5
    Differentiated Oil Quality & Market Access Premium Quality Geographically Advantaged Mid-30s API Gravity Outside Constrained Basins Low Sulfur Content (< 0.5%) 60% of Production Receives Gulf Coast Premium Pricing Ideal for…
  6. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 6
    Meaningful Progress Toward 2019 Goals Operational Financial Operate Safely and Responsibly Generate Significant Free Cash Improve on record-levels of health, safety Free cash target of 120-150 million at 55 and environmental…
  7. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 7
    Industry-Leading Oil Weighting Oil Production 97% Oil 2Q19 % Liquids Production NGL Production 78% Peer Average (% Liquids) 71% 72% 68% Peer Average (% Oil) 57% 65% 63% 62% 62% 61% 61% 60% 58% 50% 46% 44% 39% 37%…
  8. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 8
    Leading Revenue and Operating Margin per BOE Higher Revenue per BOE 40 Higher Operating 2Q19 Operating Margin per BOE(1) DNR Margin per BOE 35 Denburys EOR-focused operations generate the 30 highest revenue per BOE among…
  9. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 9
    Lowest Spend Among Peers as a Percent of Revenue Denburys differentiated, EOR-driven model drives the lowest spend as % of revenue across peers 1H19 Operating & Capital Spend as % of Oil & Gas Revenue Denburys high oil weighting &…
  10. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 10
    2019 Capital Plan Unchanged; Production Guidance Increased 2019E Development Capital Budget (1) Significant 2019 Capital Projects 2019E Production Guidance (BOE/d) Tertiary Timing Tightened Production Guidance 2019E Bell Creek Field…
  11. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 11
    Improving Debt Maturity Profile Debt Profile at 6/30/19 (In millions) 1.1B debt reduction Recent Debt Exchange - Impact to Denbury 3,571 395 since 2014 Reduced subordinated notes principal by 120 million and extended 348 324 2,532…
  12. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 12
    Debt Metrics Improving Leverage 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 EBITDAX(1)…
  13. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 13
    Hedge Positions as of September 20, 2019 Downside Protection with Significant Upside Potential 2019 2020 3Q 4Q 1H 2H FY20 WTI Volumes Hedged (Bbls/d) 2,000 2,000 2,000 2,000 Fixed Price NYMEX Swap Price(1) 60.60 60.59 60.59…
  14. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 14
    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…
  15. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 15
    Gulf Coast Region Reserves Summary(1) (MMBOE) Proved + Tertiary Potential Tertiary Reserves Proved 127 Potential 276 Non-Tertiary Reserves Proved 22 Total MMBOE(2) 425 Proved + Tertiary Potential by Field(3) Mature Area 25…
  16. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 16
    Rocky Mountain Region Reserves Summary(1) (MMBOE) Proved + Tertiary Potential Tertiary Reserves Proved 24 Potential 536 Non-Tertiary Reserves Proved 88 Total MMBOE(2) 648 Proved + Tertiary Potential by Field(3) Bell Creek 20…
  17. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 17
    EOR Potential 400 MMBbl at Cedar Creek Anticline Development Summary 175,000 net acres Phase 1 Red River formation development at East Lookout Butte and Cedar Hills South Est. 5 Billion Bbls OOIP Targeting 30 MMBbls of recoverable…
  18. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 18
    CCA Decades of Sustainable Production and Free Cash Flow CCA Project Highlights Est. Incremental EOR Production 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…
  19. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 19
    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…
  20. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 20
    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…
  21. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 21
    Exploitation Gulf Coast Unswept Low-Perm Oil Potential Gulf Coast Exploitation Opportunity Targeting horizontal well opportunities Low perm portions of reservoir with low aquifer sweep High remaining oil saturation Proven concept…
  22. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 22
    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…
  23. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 23
    Meaningful Progress on Houston Surface Acreage Land Sales Highlights Conroe 52 million closed or under contract as of August 6, 2019 5 million closed in 2018 3,400 surface acres consisting of 7 parcels for 15 million expected to…
  24. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 24
    Appendix NYSE:DNR 25
  25. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 25
    Slide Notes Slide 16 Gulf Coast Region Slide 17 Rocky Mountain Region 1) Proved tertiary and non-tertiary oil and natural gas reserves based upon year-end 1) Proved tertiary and non-tertiary oil and natural gas reserves based upon…
  26. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 26
    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)…
  27. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 27
    CO2 EOR is a Proven Process Significant CO2 EOR Operators by Region CO2 EOR Oil Production by Region(1) Gulf Coast Region 300 Gulf Coast/Other Mid-Continent Denbury Resources Hilcorp 250 Rocky Mountains Permian Basin Region Permian…
  28. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 28
    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)…
  29. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 29
    Abundant CO2 Supply & No Significant Capital Required for Several Years Gulf Coast CO2 Supply Rocky Mountain CO2 Supply Jackson Dome LaBarge Area Proved CO2 reserves as of 12/31/18: 5.0 Tcf(1) Estimated field size: 750 square miles…
  30. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 30
    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) Formation Type…
  31. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 31
    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…
  32. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 32
    Lowest Spend as a % of Revenue 1H19 Selected Operating & Capital Costs as a % of Oil and Gas Revenue 117% 120% 111% 113% 107% 109% 102% 103% 104% % of Oil & Gas Revenue 93% 93% 95% 96% 91% 83% 78% Peer DNR Peer A Peer B…
  33. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 33
    Senior Secured Bank Credit Facility Info Borrowing Base / Commitment level: 615 million Commitments & borrowing base Lender group comprised of 14 banks with largest individual commitment representing 11% of the total Scheduled…
  34. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 34
    Production by Area Average Daily Production (BOE/d) Field 2016 2017 1Q18 2Q18 3Q18 4Q18 2018 1Q19 2Q19 Delhi 4,155 4,869 4,169 4,391 4,383 4,526 4,368 4,474 4,486 Hastings 4,829 4,830 5,704 5,716 5,486 5,480 5,596 5,539 5,466…
  35. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 35
    NYMEX Oil Differential Summary 2Q19 Largest Positive Oil Differential Since 2Q13 Crude Oil Differentials per barrel 2016 2017 1Q18 2Q18 3Q18 4Q18 2018 1Q19 2Q19 Tertiary Oil Fields Gulf Coast Region (1.35) 0.06 1.87 0.85 3.01 5.20…
  36. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 36
    Analysis of Total Operating Costs Total Operating Costs per BOE 2016 2017 1Q18 2Q18 3Q18 4Q18 2018 1Q19 2Q19 CO2 Costs 2.16 2.86 3.09 2.92 2.63 3.62 3.07 3.90 2.81 Power & Fuel 5.29 5.97 6.68 6.19 6.31 6.08 6.32 6.70 6.11 Labor &…
  37. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 37
    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 (2) (2) (2) 0 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15…
  38. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 38
    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…
  39. September 2019 Corporate Presentation – Denbury Resources Inc. – slide 39
    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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