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Credit Suisse Energy Summit – Denbury Resources Inc.

Denbury Resources Inc. · Mar 2, 2020 · 42 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. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 1
    25 th Annual Credit Suisse Energy Summit March 2, 2020
  2. Credit Suisse Energy Summit – 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. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 3
    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…
  4. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 4
    An Industry Leader in Reducing CO2 Emissions Environment The only U.S. public company of scale where injecting CO2 into the ground to produce oil is our primary business 30% of our CO2 is industrial sourced Full Company Net…
  5. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 5
    Sustainably Leveraging the Denbury Difference Social Governance We maintain a long-standing commitment to the highest Strong corporate governance is essential to fulfilling our standards for the safety and development of our employees,…
  6. Credit Suisse Energy Summit – 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. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 7
    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…
  8. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 8
    Industry-Leading Oil Weighting Oil Production 98% Oil 4Q19 NGL Production % Liquids Production Peer Average 69% 68% Liquids 65% 64% 61% 62% 62% 59% Peer Average 56% 51% 54% Oil 47% 49% 37% 37% 33% (1) (1) (1)…
  9. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 9
    Leading Revenue and Operating Margin per BOE Higher Revenue per BOE 40 Higher Operating 4Q19 Operating Margin per BOE(1) 35 Margin per BOE 30 Denburys EOR-focused DNR operations generate the 25 highest revenue per BOE among…
  10. Credit Suisse Energy Summit – 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 FY19 Operating & Capital Spend as % of Oil & Gas Revenue Average of Peers(1) Denburys high…
  11. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 11
    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…
  12. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 12
    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…
  13. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 13
    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…
  14. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 14
    Improved Leverage Metrics Half turn leverage ratio reduction in 2019 Leverage Ratio 12/31/19 12/31/18 Trailing 12 months Trailing 12 months Adjusted EBITDAX(1) (millions) 607 584 Net Debt Principal(2) (millions) 2,271 2,481 Net…
  15. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 15
    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 Fixed Price WTI NYMEX Swap Price(1) 60.59 60.59 60.59 Swaps Volumes Hedged…
  16. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 16
    Gulf Coast Region Reserves Summary(1) (MMBOE) Proved + Tertiary Potential Tertiary Reserves Proved 118 Potential 285 Non-Tertiary Reserves Proved 21 Total MMBOE(2) 424 Proved + Tertiary Potential by Field(3) Mature Area 25…
  17. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 17
    Rocky Mountain Region Reserves Summary(1) (MMBOE) Proved + Tertiary Potential Tertiary Reserves Proved 21 Potential 539 Non-Tertiary Reserves Proved 71 Total MMBOE(2) 631 Proved + Tertiary Potential by Field(3) Bell Creek 20…
  18. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 18
    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…
  19. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 19
    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…
  20. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 20
    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…
  21. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 21
    Successful Brookhaven Case Sand Exploitation Brookhaven Field Brookhaven Case Sand Type Log Brookhaven Case Sand Targeting CaseFirst Sand in Brookhaven Field Pilot Sand Well Location Seismically identified channel within producing…
  22. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 22
    Texas Conventional Oil Fields Farm-Down 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 in Webster,…
  23. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 23
    Appendix NYSE:DNR 24
  24. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 24
    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…
  25. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 25
    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)…
  26. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 26
    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…
  27. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 27
    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)…
  28. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 28
    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 12/31/19: 4.8 Tcf(1) Estimated field size: 750 square miles…
  29. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 29
    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…
  30. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 30
    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…
  31. Credit Suisse Energy Summit – 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. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 32
    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 9 successful wells drilled and completed 2017-2019, average…
  33. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 33
    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…
  34. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 34
    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…
  35. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 35
    Lowest Spend Among Peers as a Percent of Revenue FY19 Operating & Capital Spend as % of Oil & Gas Revenue 105% 108% 95% 96% 97% 98% 10% Spend as % of Revenue 90% 90% 91% 92% 93% 17% 87% 10% 9% 9% 10% 9% 81% 83% 6% 8% 11%…
  36. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 36
    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…
  37. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 37
    Production by Area Average Daily Production (BOE/d) Field 2017 2018 1Q19 2Q19 3Q19 4Q19 2019 Delhi 4,869 4,368 4,474 4,486 4,256 4,085 4,324 Hastings 4,830 5,596 5,539 5,466 5,513 5,097 5,403 Heidelberg 4,851 4,355 3,987 4,082 4,297…
  38. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 38
    NYMEX Oil Differential Summary Crude Oil Differentials per barrel 2017 2018 1Q19 2Q19 3Q19 4Q19 2019 Tertiary Oil Fields Gulf Coast Region 0.06 2.73 4.07 4.66 2.88 0.60 3.07 Rocky Mountain Region (0.96) (1.81) (2.01) (1.36) (2.78)…
  39. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 39
    Analysis of Total Operating Costs Total Operating Costs per BOE 2017 2018 1Q19 2Q19 3Q19 4Q19 2019 CO2 Costs 2.86 3.07 3.90 2.81 2.51 2.98 3.05 Power & Fuel 5.97 6.32 6.70 6.11 6.25 6.32 6.34 Labor & Overhead 6.32 6.61 6.71 6.95…
  40. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 40
    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 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16…
  41. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 41
    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…
  42. Credit Suisse Energy Summit – Denbury Resources Inc. – slide 42
    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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