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Q4 2019 and Full Year 2019 – Denbury Resources Inc.

Denbury Resources Inc. · Feb 25, 2020 · 34 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. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 1
    4th Quarter & Full Year 2019 Results and 2020 Guidance February 25, 2020
  2. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 2
    Agenda Introduction John Mayer, Director of Investor Relations Overview Chris Kendall, President & Chief Executive Officer Operational Update David Sheppard, Senior Vice President Operations Financial Review Mark Allen,…
  3. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 3
    Overview Chris Kendall, President & Chief Executive Officer NYSE:DNR 4
  4. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 4
    Denbury What We Are A Unique Energy Business Rocky 65% of production via CO2 enhanced oil recovery (EOR) Mountain Vertically integrated CO2 supply and distribution Region Cost structure largely independent from industry 4Q19…
  5. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 5
    Strong Results In All Key 2019 Objectives Operations and Development Business Performance Operate Safely and Responsibly Generate Significant Free Cash Flow Achieved record levels of safety performance for Generated free cash flow of…
  6. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 6
    Sustained Strong Operating Margin 50% Operating Margin in 4Q19 4Q19 3Q19 4Q18 59.44 Revenue per BOE(1) 55.53 56.46 Operating Margin per BOE(2) 27.78 27.93 30.11 Transportation, Marketing and Taxes per BOE 5.82 5.83 6.01…
  7. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 7
    Exceeded FY19 Production Guidance Midpoint Average Daily Production by Area (BOE/d) 2019 Production (BOE/d) Field 4Q19 3Q19 4Q18 FY 2019 FY 2018 Delhi 4,085 4,256 4,526 4,324 4,368 2019 production within top half of original guidance…
  8. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 8
    2020 Base Capital Budget 25% lower than 2019 Development Capital Budget(1) Significant 2020 Capital Projects In millions Tertiary 2019 Actual Oyster Bayou A2 Development Expansion 1Q-3Q 237 Million 2020 145 (25%) Base Budget…
  9. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 9
    2020 Guidance Development Capital Budget(1) Production (BOE/d) Cash Flow 50 oil(5) In millions 25% reduction in 2020 capital spend results in minor 2020 production decline Anticipate upwards of 100 145 Base Budget million of free…
  10. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 10
    2020 Outlook & Objectives Operations and Development Business Performance Operate Safely and Responsibly Strengthen Balance Sheet Continue to build on improvements in health, Address near-term maturities safety and environmental…
  11. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 11
    An Industry Leader in Reducing CO2 Emissions 30% of our CO2 is industrial sourced Denburys 2018 Scope 1 and Scope 2 CO2 Emissions Balance Combined Scope 1 & 2 Emissions Captured Industrial Sourced CO2 Net Negative CO2 Emissions…
  12. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 12
    Operational Update David Sheppard, Senior Vice President Operations NYSE:DNR 13
  13. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 13
    Exceeded FY19 Production Guidance Midpoint Average Daily Production by Area (BOE/d) 2019 Production (BOE/d) Field 4Q19 3Q19 4Q18 FY 2019 FY 2018 Delhi 4,085 4,256 4,526 4,324 4,368 2019 production within top half of original guidance…
  14. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 14
    2019 Operating Cost at Low End of Guidance 2020 LOE Guidance 22 - 24/BOE Total Operating Costs 4Q19 3Q19 4Q18 FY 2019 (MM) (/BOE) (MM) (/BOE) (MM) (/BOE) (MM) (/BOE) CO2 Costs 16 2.98 13 2.51 20 3.62 65 3.05 Power & Fuel 33 6.32 32…
  15. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 15
    CCA EOR A Carbon Negative Development Project Update Est. Incremental EOR Production Prepare to complete CO2 pipeline installation in 7,500 - 12,500 net Bbls/d for Phase 1 2020, subject to 2Q20 contingent funding approval Planned…
  16. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 16
    Bell Creek Update Continuing Field Development Phase 5 Bell Creek Production (Net Bbl/d) 3Q19 CO2 Initial phase response in 2018 source 2019 average production of 2,300 net Bbl/d maintenance turnaround Phase 6 Phase 5 Commenced…
  17. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 17
    Successful Brookhaven Case Sand Exploitation Brookhaven Field Brookhaven Case Sand Type Log Brookhaven Case Sand Targeting CaseFirst Sand in Brookhaven Field Well Location Pilot Sand Seismically identified channel within…
  18. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 18
    Texas Conventional Oil Fields Working Interests Sale Transaction Details Transaction Benefits Overview Accelerates conventional exploitation with a capital carry on first 10 wells Contracted to sell half of our 100% working interest…
  19. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 19
    Houston Surface Acreage Land Sale Update Highlights Conroe 52 million closed or under contract as of February 2020 3,400 surface acres 6 million closed in 2018 consisting of 7 parcels for 14 million closed in 2019 commercial and…
  20. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 20
    2019 Proved Reserves Oil Gas Total PV-10 Value(2) SEC Oil (MMBbl) (Bcf) (MMBOE) (Billion) Pricing(1) Proved reserves(1) at December 31, 2018 255 43 262 4.0 65.56 2019 production (21) (3) (21) (0.6) Revisions due to price changes…
  21. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 21
    Financial Review Mark Allen, Executive Vice President & Chief Financial Officer NYSE:DNR 22
  22. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 22
    Adjusted Net Income Reconciliation Reconciliation of Net Income (GAAP Measure) to Adjusted Net Income (non-GAAP Measure)(1) 4Q19 3Q19 FY 2019 Per Diluted Per Diluted Per Diluted In millions, except per-share data Amount Amount Amount…
  23. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 23
    Generating Significant Free Cash Flow Cash Flow Reconciliation In millions 4Q19 3Q19 FY 2019 Reconciliation of Cash Flows from Operations (GAAP Measure) to Adjusted Cash Flows from Operations (Non-GAAP Measure)(1) Cash flows from…
  24. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 24
    Oil Differentials NYMEX Oil Differentials per barrel 4Q19 3Q19 2Q19 1Q19 4Q18 Tertiary oil fields (0.17) 1.81 3.39 2.96 3.45 Gulf Coast region 0.60 2.88 4.66 4.07 5.20 Rocky Mountain region (3.05) (2.78) (1.36) (2.01) (4.88)…
  25. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 25
    Selected Expense Line Items 4Q19 3Q19 FY 2019 In millions, unless otherwise noted () (/BOE) () (/BOE) () (/BOE) Lease operating expenses(1) 116 21.93 118 22.70 477 22.46 General and administrative expenses 28 5.35 18 3.52 83 3.91…
  26. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 26
    Hedge Positions as of February 24, 2020 Downside Protection with Significant Upside Potential 2020 1H 2H FY Volumes Hedged (Bbls/d) 2,000 2,000 2,000 WTI NYMEX Fixed Price Swap Price(1) 60.59 60.59 60.59 Swaps Volumes Hedged…
  27. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 27
    Continuing to Improve Debt Profile Debt Principal 12/31/19 Maturity Window 12/31/19 (In millions) (In millions) 3,571 1.3B debt reduction since 2014 395 528 million of Bank Line Availability at 250MM debt reduction 12/31/19 after 87…
  28. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 28
    Improving Leverage Metrics Improving Leverage 12/31/19 Leverage Ratio 12/31/18 Leverage Ratio Trailing 12 months Trailing 12 months Adjusted EBITDAX(1) (millions) 607 584 Net Debt Principal(2) (millions) 2,271 2,481 Net…
  29. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 29
    Q&A NYSE:DNR 30
  30. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 30
    Appendix NYSE:DNR 31
  31. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 31
    Slide Notes Slide 21 2019 Proved Reserves 1) Estimated proved reserves and PV-10 Value for year-end 2019 were computed using first-day-of-the-month 12-month average prices of 55.69 per Bbl for oil (based on NYMEX prices) and 2.58 per…
  32. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 32
    Non-GAAP Measures 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 Q3 Q4 FY Net income…
  33. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 33
    Non-GAAP Measures (Cont.) 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 Q4 FY Net income (loss) (GAAP measure) 40 30 78 174 323 (26) 147 73 23…
  34. Q4 2019 and Full Year 2019 – Denbury Resources Inc. – slide 34
    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 2018 2019 Standardized…

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