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December 2019 Corporate Presentation – Denbury Resources Inc.

Denbury Resources Inc. · Dec 13, 2019 · 41 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. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 1
    Corporate Presentation December 2019
  2. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 2
    Uncommon Company, Extraordinary Potential Strategically Advantaged Significant Organic Operations Growth Potential Vertically integrated EOR infrastructure CO2 EOR: 400 MMBbl EOR potential at CCA Cost structure independent from…
  3. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 3
    Denbury What We Are 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 3Q19 Production…
  4. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 4
    ESG Capturing CO2 for Enhanced Oil Recovery Environment We are a different kind of oil company Denbury is the only U.S. public company of scale where injecting CO2 into the ground to produce oil is our primary business 30% of our…
  5. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 5
    ESG Sustainably Leveraging the Denbury Difference Social Governance We maintain a long-standing commitment to the highest standards for the Strong corporate governance is essential to fulfilling our obligations to our safety and…
  6. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 6
    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…
  7. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 7
    On Track to Accomplish all Key 2019 Goals Operational Financial Operate Safely and Responsibly Generate Significant Free Cash Flow Improve on record-levels of health, safety Free cash estimate of 140-150 million for and…
  8. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 8
    Industry-Leading Oil Weighting Oil Production 98% Oil 3Q19 NGL Production % Liquids Production 76% Peer Average 71% 70% Liquids 65% 65% 61% 63% 62% 62% 57% 59% 60% Peer Average 51% 55% Oil 44% 38% 37% 34% 35% (1)…
  9. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 9
    Leading Revenue and Operating Margin per BOE Higher Revenue per BOE 40 Higher Operating 35 3Q19 Operating Margin per BOE(1) Margin per BOE 30 Denburys EOR-focused DNR operations generate the 25 highest revenue per BOE among…
  10. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 10
    Lowest Spend Among Peers as a Percent of Revenue Denburys differentiated, EOR-driven model drives the lowest spend as % of revenue across peers YTD19 Operating & Capital Spend as % of Oil & Gas Revenue Average of Peers(1) Denburys…
  11. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 11
    FY19 Production On Track to Midpoint of Guidance 2019E Development Capital Budget (1) Significant 2019 Capital Projects 2019E Production Guidance (BOE/d) Tertiary Timing 3Q19 below 2Q19 primarily due to CO2 2019E Bell Creek Field…
  12. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 12
    Continuing to Improve Debt Profile Debt Principal - Pro Forma(1) 9/30/19 Maturity Window - Pro Forma(1) 9/30/19 (In millions) (In millions) 3,571 1.2B debt reduction 395 since 2014 510 million of Bank Line Availability at 9/30/19…
  13. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 13
    Debt Metrics Improving Leverage 9/30/19 Leverage Ratio (incl. hedges) Trailing 12 months Trailing 12 months Pro Forma(2) Adjusted EBITDAX(1) (millions) 593 593 Net Debt Principal (millions) 2,436 2,336 Net Debt/Adjusted EBITDAX(1)…
  14. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 14
    Hedge Positions as of December 6, 2019 Downside Protection with Significant Upside Potential 2019 2020 4Q 1H 2H FY Volumes Hedged (Bbls/d) 2,000 2,000 2,000 2,000 WTI NYMEX Fixed Price Swap Price(1) 60.60 60.59 60.59 60.59…
  15. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 15
    Generating Significant Free Cash Flow in 2019 2019E Free Cash Flow Range, Including Hedges(1) 2019E Sources & Uses 55 oil(3) In millions, unless otherwise noted 2019E 190 In millions 180 Adjusted cash flow from operations(4) 490…
  16. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 16
    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…
  17. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 17
    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…
  18. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 18
    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…
  19. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 19
    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…
  20. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 20
    Bell Creek Update Continuing Field Development Total Bell Creek Production Recent (Net Bbl/d) Phase 5 production level post Initial phase response in 2018 3Q19 planned Capital spend 28 million with 2019 average maintenance Phase…
  21. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 21
    CCA Exploitation Program Continued Mission Canyon & Charles B Success Mission Canyon Cedar Creek Anticline Drilled 12 wells to date with total program economics 90% ROR 7 successful wells drilled 2017-2018, average IP30 800 Bbl/d…
  22. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 22
    Heidelberg Christmas Horizon Redevelopment Redevelopment Overview Targets Yellow and Brown Christmas sands Dedicated injector-producer patterns Repeating proven Heidelberg down-dip injection/up-dip production configuration 3 MMBbl…
  23. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 23
    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…
  24. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 24
    Meaningful Progress on Houston Surface Acreage Land Sales Highlights Conroe 52 million closed or under contract as of October 2019 3,400 surface acres 6 million closed in 2018 consisting of 7 parcels for 14 million closed to date…
  25. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 25
    Appendix NYSE:DNR 26
  26. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 26
    Slide Notes Slide 17 Gulf Coast Region Slide 18 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…
  27. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 27
    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)…
  28. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 28
    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…
  29. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 29
    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)…
  30. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 30
    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…
  31. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 31
    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…
  32. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 32
    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…
  33. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 33
    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…
  34. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 34
    Lowest Spend Among Peers as a Percent of Revenue YTD19 Operating & Capital Spend as % of Oil & Gas Revenue 116% 117% 105% 109% 10% 100% 103% 18% 94% 96% 97% 98% 10% 10% 9% 92% 93% Spend as % of Revenue 91% 93% 9% 87% 6% 9%…
  35. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 35
    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…
  36. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 36
    Production by Area Average Daily Production (BOE/d) Field 2017 1Q18 2Q18 3Q18 4Q18 2018 1Q19 2Q19 3Q19 Delhi 4,869 4,169 4,391 4,383 4,526 4,368 4,474 4,486 4,256 Hastings 4,830 5,704 5,716 5,486 5,480 5,596 5,539 5,466 5,513…
  37. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 37
    NYMEX Oil Differential Summary Positive oil differential for eight consecutive quarters Crude Oil Differentials per barrel 2017 1Q18 2Q18 3Q18 4Q18 2018 1Q19 2Q19 3Q19 Tertiary Oil Fields Gulf Coast Region 0.06 1.87 0.85 3.01 5.20…
  38. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 38
    Analysis of Total Operating Costs Total Operating Costs per BOE 2017 1Q18 2Q18 3Q18 4Q18 2018 1Q19 2Q19 3Q19 CO2 Costs 2.86 3.09 2.92 2.63 3.62 3.07 3.90 2.81 2.51 Power & Fuel 5.97 6.68 6.19 6.31 6.08 6.32 6.70 6.11 6.25 Labor &…
  39. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 39
    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…
  40. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 40
    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 Q3 TTM Net income (loss) (GAAP measure) 40 30 78 174 323 (26) 147 73 368…
  41. December 2019 Corporate Presentation – Denbury Resources Inc. – slide 41
    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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