Denbury Reports 2021 Fourth Quarter and Full-Year Results
Denbury Inc. (NYSE: DEN) reported its fourth quarter and full-year 2021 results, highlighting a net income of $120.6 million for Q4 and $56 million for the fiscal year. Adjusted net income stood at $41.7 million in Q4 and $137.6 million for the year. Total revenues reached $362 million in Q4, a 5% increase from Q3, primarily due to improved oil prices. Notably, Denbury completed its CO2 pipeline ahead of schedule and under budget, while reducing its total debt by $103 million in 2021. The company also achieved a record low Total Recordable Incident Rate of 0.40.
- Achieved record low Total Recordable Incident Rate of 0.40 for safety.
- Completed 105-mile CO2 pipeline project ahead of schedule and under budget.
- Generated over $55 million in free cash flow.
- Reduced total debt by $103 million, ending 2021 with $532 million in financial liquidity.
- Acquired Big Sand Draw and Beaver Creek EOR fields enhancing resource base.
- Average oil sales volumes declined modestly to 48,882 BOE/d, impacted by unplanned downtime.
- Fourth quarter's average realized oil price was $75.68 per barrel, slightly below NYMEX WTI prices.
- Lease operating expenses increased, driven by higher commodity prices.
|
|
4Q 2021 |
|
|
FY 2021 |
||||
(in thousands, except per-share and volume data) |
|
Total |
|
Per Diluted Share |
|
|
Total |
|
Per Diluted Share |
Net Income |
|
|
|
|
|
|
|
|
|
Adjusted net income(1)(2) (non-GAAP) |
|
41,670 |
|
0.76 |
|
|
137,646 |
|
2.56 |
Adjusted EBITDAX(1) (non-GAAP) |
|
81,466 |
|
|
|
|
316,422 |
|
|
Cash flows from operations |
|
69,601 |
|
|
|
|
317,158 |
|
|
Adjusted cash flows from operations(1) (non-GAAP) |
|
82,824 |
|
|
|
|
312,115 |
|
|
Development capital expenditures |
|
78,350 |
|
|
|
|
252,171 |
|
|
|
|
|
|
|
|
|
|
|
|
Average daily sales volumes (BOE/d) |
|
48,882 |
|
|
|
|
48,770 |
|
|
Blue Oil (% oil volumes using industrial-sourced CO2) |
|
|
|
|
|
|
|
|
|
Industrial-sourced CO2 injected (thousand metric tons) |
|
841 |
|
|
|
|
3,271 |
|
|
FULL YEAR 2021 FINANCIAL AND OPERATING HIGHLIGHTS
- Set a fifth consecutive Company annual record for employee and contractor safety, achieving a Total Recordable Incident Rate of 0.40. Over 600,000 man-hours were completed on the Cedar Creek Anticline (“CCA”) CO2 pipeline and EOR project without a recordable safety incident.
-
Completed the 105-mile CCA CO2 pipeline ahead of schedule and under budget, which made
Denbury the largest operator of CO2 pipelines in theU.S. by mileage. - Received third-party verification of the negative Carbon Intensity (“CI”) of Denbury’s blue oil production at the West Hastings and Bell Creek CO2 floods, resulting in a CI score ranging between -40 to -20 grams of CO2 equivalent emitted per megajoule of energy.
-
Acquired the Big Sand Draw and Beaver Creek EOR fields in
Wyoming , including surface facilities and a 46-mile CO2 transportation pipeline. -
Divested non-producing surface acreage in the
Houston area for , and sold undeveloped deep mineral rights in$15 million Wyoming for .$18 million -
Generated more than
of free cash flow(1) (a non-GAAP measure).$55 million -
Invested
of development capital, at the low end of the Company’s original development capital guidance range.$252 million -
Reduced the Company’s total debt by
over the last year, and exited 2021 with$103 million of financial liquidity (cash on hand and borrowing capacity under the Company’s existing credit facility).$532 million
(1) |
A non-GAAP measure. See accompanying schedules that reconcile GAAP to non-GAAP measures along with a statement indicating why the Company believes the non-GAAP measures provide useful information for investors. |
(2) |
Calculated using weighted average diluted shares outstanding of 55.1 million and 53.8 million for the quarter and year ended |
2021 CCUS HIGHLIGHTS
- Established the Denbury Carbon Solutions team to drive the Company’s CCUS strategy.
-
Executed a term sheet with Mitsubishi Corporation for the transport and storage of CO2 captured from Mitsubishi’s proposed ammonia project along the
U.S. Gulf Coast . The agreement covers a 20-year period, and Mitsubishi’s project is targeted to produce associated CO2 emissions of approximately 1.8 million metric tons per year, beginning in the latter half of the decade. -
Commenced a joint evaluation with
Mitsui E&P USA LLC of potential opportunities across theU.S. Gulf Coast to develop carbon-negative oil assets utilizing industrial-sourced CO2. As part of the evaluation, the parties seek to jointly pursue CO2 offtake opportunities from Mitsui’s potential projects along theGulf Coast . -
Announced joint development of a
Texas Gulf Coast sequestration site withGulf Coast Midstream Partners , with the potential to store up to 400 million metric tons of CO2. The EPA Class VI permitting process has been initiated and sequestration is estimated to be available by early 2025.
EXECUTIVE COMMENT
As we enter 2022, we are extremely excited about what lies ahead for
FOURTH QUARTER 2021 FINANCIAL AND OPERATING RESULTS
Denbury’s fourth quarter 2021 total revenues and other income totaled
Oil and natural gas sales volumes averaged 48,882 BOE/d during the fourth quarter of 2021, down modestly from the third quarter of 2021 and lower than expectations primarily as a result of unplanned downtime in December. In addition, lower volumes at CCA were attributed to increased oil prices and profitability resulting in more volumes allocated to the third-party net profits interest in that field. Oil represented
Lease operating expense in the fourth quarter of 2021 was
General and administrative expenses were
Commodity derivatives expense totaled
CAPITAL EXPENDITURES
Fourth quarter 2021 development capital expenditures totaled
2021 PROVED RESERVES
The Company’s total estimated proved oil and natural gas reserves as of
Year-end 2021 estimated proved reserves and the discounted net present value of Denbury’s proved reserves, using a
Denbury’s estimated proved CO2 reserves at year-end 2021 were 5.5 trillion cubic feet (“Tcf”), including 4.5 Tcf at Jackson Dome in
CONFERENCE CALL AND WEBCAST INFORMATION
(1) |
A non-GAAP measure. See accompanying schedules that reconcile GAAP to non-GAAP measures along with a statement indicating why the Company believes the non-GAAP measures provide useful information for investors. |
This press release, other than historical information, contains forward-looking statements that involve risks and uncertainties detailed in the Company’s filings with the
FINANCIAL AND STATISTICAL DATA TABLES AND RECONCILIATION SCHEDULES
References below to “Successor” refer to the new
|
||||||||
The following information is based on GAAP reported earnings. Additional required disclosures will be included in the Company’s Form 10-K: |
||||||||
|
|
Quarter Ended |
||||||
In thousands, except per-share data |
|
|
|
|
||||
Revenues and other income |
|
|
|
|
||||
Oil sales |
|
$ |
329,308 |
|
$ |
177,458 |
|
|
Natural gas sales |
|
|
4,040 |
|
|
1,329 |
|
|
CO2 sales and transportation fees |
|
|
12,576 |
|
|
8,452 |
|
|
Oil marketing revenues |
|
|
12,204 |
|
|
5,225 |
|
|
Other income |
|
|
3,770 |
|
|
4,603 |
|
|
Total revenues and other income |
|
|
361,898 |
|
|
197,067 |
|
|
Expenses |
|
|
|
|
||||
Lease operating expenses |
|
|
115,819 |
|
|
89,750 |
|
|
Transportation and marketing expenses |
|
|
6,513 |
|
|
9,251 |
|
|
CO2 operating and discovery expenses |
|
|
2,191 |
|
|
1,734 |
|
|
Taxes other than income |
|
|
25,891 |
|
|
14,511 |
|
|
Oil marketing purchases |
|
|
11,971 |
|
|
5,179 |
|
|
General and administrative expenses |
|
|
16,437 |
|
|
17,735 |
|
|
Interest, net of amounts capitalized of |
|
|
690 |
|
|
1,481 |
|
|
Depletion, depreciation, and amortization |
|
|
37,118 |
|
|
40,529 |
|
|
Commodity derivatives expense (income) |
|
|
22,832 |
|
|
65,937 |
|
|
Write-down of oil and natural gas properties |
|
|
— |
|
|
1,006 |
|
|
Other expenses |
|
|
903 |
|
|
5,908 |
|
|
Total expenses |
|
|
240,365 |
|
|
253,021 |
|
|
Income (loss) before income taxes |
|
|
121,533 |
|
|
(55,954 |
) |
|
Income tax provision (benefit) |
|
|
|
|
||||
Current income taxes |
|
|
504 |
|
|
24 |
|
|
Deferred income taxes |
|
|
398 |
|
|
(2,562 |
) |
|
Net income (loss) |
|
$ |
120,631 |
|
$ |
(53,416 |
) |
|
|
|
|
|
|
||||
Net income (loss) per common share |
|
|
|
|
||||
Basic |
|
$ |
2.35 |
|
$ |
(1.07 |
) |
|
Diluted |
|
$ |
2.19 |
|
$ |
(1.07 |
) |
|
|
|
|
|
|
||||
Weighted average common shares outstanding |
|
|
|
|
||||
Basic |
|
|
51,247 |
|
|
50,000 |
|
|
Diluted |
|
|
55,114 |
|
|
50,000 |
|
|
|
Year Ended
|
|
Year Ended
|
|
Period from
through
|
|
Period from
through
|
||||||||
|
|
|
|
|
||||||||||||
In thousands, except per-share data |
|
Successor |
|
Combined (Non-GAAP)(1) |
|
Successor |
|
Predecessor |
||||||||
Revenues and other income |
|
|
|
|
|
|
|
|
||||||||
Oil sales |
|
$ |
1,148,022 |
|
$ |
689,020 |
|
|
$ |
199,769 |
|
|
$ |
489,251 |
|
|
Natural gas sales |
|
|
11,933 |
|
|
4,189 |
|
|
|
1,339 |
|
|
|
2,850 |
|
|
CO2 sales and transportation fees |
|
|
44,175 |
|
|
30,468 |
|
|
|
9,419 |
|
|
|
21,049 |
|
|
Oil marketing revenues |
|
|
38,742 |
|
|
13,919 |
|
|
|
5,376 |
|
|
|
8,543 |
|
|
Other income |
|
|
15,288 |
|
|
13,116 |
|
|
|
4,697 |
|
|
|
8,419 |
|
|
Total revenues and other income |
|
|
1,258,160 |
|
|
750,712 |
|
|
|
220,600 |
|
|
|
530,112 |
|
|
Expenses |
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses |
|
|
424,550 |
|
|
351,505 |
|
|
|
101,234 |
|
|
|
250,271 |
|
|
Transportation and marketing expenses |
|
|
28,817 |
|
|
37,759 |
|
|
|
10,595 |
|
|
|
27,164 |
|
|
CO2 operating and discovery expenses |
|
|
6,678 |
|
|
4,568 |
|
|
|
1,976 |
|
|
|
2,592 |
|
|
Taxes other than income |
|
|
91,390 |
|
|
60,115 |
|
|
|
16,584 |
|
|
|
43,531 |
|
|
Oil marketing purchases |
|
|
37,734 |
|
|
13,717 |
|
|
|
5,318 |
|
|
|
8,399 |
|
|
General and administrative expenses |
|
|
79,258 |
|
|
67,992 |
|
|
|
19,470 |
|
|
|
48,522 |
|
|
Interest, net of amounts capitalized of |
|
|
4,147 |
|
|
50,082 |
|
|
|
1,815 |
|
|
|
48,267 |
|
|
Depletion, depreciation, and amortization |
|
|
150,640 |
|
|
234,405 |
|
|
|
45,812 |
|
|
|
188,593 |
|
|
Commodity derivatives expense (income) |
|
|
352,984 |
|
|
(40,130 |
) |
|
|
61,902 |
|
|
|
(102,032 |
) |
|
Gain on debt extinguishment |
|
|
— |
|
|
(18,994 |
) |
|
|
— |
|
|
|
(18,994 |
) |
|
Write-down of oil and natural gas properties |
|
|
14,377 |
|
|
997,664 |
|
|
|
1,006 |
|
|
|
996,658 |
|
|
Restructuring items, net |
|
|
— |
|
|
849,980 |
|
|
|
— |
|
|
|
849,980 |
|
|
Other expenses |
|
|
10,816 |
|
|
43,940 |
|
|
|
8,072 |
|
|
|
35,868 |
|
|
Total expenses |
|
|
1,201,391 |
|
|
2,652,603 |
|
|
|
273,784 |
|
|
|
2,378,819 |
|
|
Income (loss) before income taxes |
|
|
56,769 |
|
|
(1,901,891 |
) |
|
|
(53,184 |
) |
|
|
(1,848,707 |
) |
|
Income tax provision (benefit) |
|
|
|
|
|
|
|
|
||||||||
Current income taxes |
|
|
403 |
|
|
(7,230 |
) |
|
|
30 |
|
|
|
(7,260 |
) |
|
Deferred income taxes |
|
|
364 |
|
|
(411,425 |
) |
|
|
(2,556 |
) |
|
|
(408,869 |
) |
|
Net income (loss) |
|
$ |
56,002 |
|
$ |
(1,483,236 |
) |
|
$ |
(50,658 |
) |
|
$ |
(1,432,578 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
1.10 |
|
|
|
$ |
(1.01 |
) |
|
$ |
(2.89 |
) |
|||
Diluted |
|
$ |
1.04 |
|
|
|
$ |
(1.01 |
) |
|
$ |
(2.89 |
) |
|||
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
50,918 |
|
|
|
|
50,000 |
|
|
|
495,560 |
|
|||
Diluted |
|
|
53,818 |
|
|
|
|
50,000 |
|
|
|
495,560 |
|
(1) |
Combined results for the year ended |
|
||||||||
|
||||||||
|
|
Quarter Ended |
||||||
In thousands |
|
|
|
|
||||
Cash flows from operating activities |
|
|
|
|
||||
Net income (loss) |
|
$ |
120,631 |
|
|
$ |
(53,416 |
) |
Adjustments to reconcile net income (loss) to cash flows from operating activities |
|
|
|
|
||||
Depletion, depreciation, and amortization |
|
|
37,118 |
|
|
|
40,529 |
|
Write-down of oil and natural gas properties |
|
|
— |
|
|
|
1,006 |
|
Deferred income taxes |
|
|
398 |
|
|
|
(2,562 |
) |
Stock-based compensation |
|
|
2,534 |
|
|
|
8,212 |
|
Commodity derivatives expense |
|
|
22,832 |
|
|
|
65,937 |
|
Receipt (payment) on settlements of commodity derivatives |
|
|
(97,774 |
) |
|
|
14,429 |
|
Debt issuance costs and discounts |
|
|
685 |
|
|
|
685 |
|
Gain from asset sales and other |
|
|
(3,583 |
) |
|
|
(3,546 |
) |
Other, net |
|
|
(17 |
) |
|
|
608 |
|
Changes in assets and liabilities, net of effects from acquisitions |
|
|
|
|
||||
Accrued production receivable |
|
|
1,004 |
|
|
|
(17,126 |
) |
Trade and other receivables |
|
|
1,525 |
|
|
|
14,201 |
|
Other current and long-term assets |
|
|
3,053 |
|
|
|
(2,500 |
) |
Accounts payable and accrued liabilities |
|
|
(18,984 |
) |
|
|
(59,187 |
) |
Oil and natural gas production payable |
|
|
6,183 |
|
|
|
4,152 |
|
Other liabilities |
|
|
(6,004 |
) |
|
|
(4,006 |
) |
Net cash provided by operating activities |
|
|
69,601 |
|
|
|
7,416 |
|
|
|
|
|
|
||||
Cash flows from investing activities |
|
|
|
|
||||
Oil and natural gas capital expenditures |
|
|
(37,870 |
) |
|
|
(15,839 |
) |
Acquisitions of oil and natural gas properties |
|
|
(52 |
) |
|
|
(81 |
) |
Pipeline capital expenditures |
|
|
(50,100 |
) |
|
|
(612 |
) |
Net proceeds from sales of oil and natural gas properties and equipment |
|
|
— |
|
|
|
58 |
|
Other |
|
|
3,331 |
|
|
|
16,150 |
|
Net cash used in investing activities |
|
|
(84,691 |
) |
|
|
(324 |
) |
|
|
|
|
|
||||
Cash flows from financing activities |
|
|
|
|
||||
Bank repayments |
|
|
(236,000 |
) |
|
|
(135,000 |
) |
Bank borrowings |
|
|
271,000 |
|
|
|
120,000 |
|
Costs of debt financing |
|
|
— |
|
|
|
(8 |
) |
Pipeline financing repayments |
|
|
(17,332 |
) |
|
|
(22,884 |
) |
Other |
|
|
(696 |
) |
|
|
1,638 |
|
Net cash provided by (used in) financing activities |
|
|
16,972 |
|
|
|
(36,254 |
) |
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
1,882 |
|
|
|
(29,162 |
) |
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
48,462 |
|
|
|
71,410 |
|
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
50,344 |
|
|
$ |
42,248 |
|
|
|
Year Ended
|
|
Year Ended
|
|
Period from
through
|
|
Period from
through
|
||||||||
In thousands |
|
Successor |
|
Combined (Non-GAAP)(1) |
|
Successor |
|
Predecessor |
||||||||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
|
$ |
56,002 |
|
|
$ |
(1,483,236 |
) |
|
$ |
(50,658 |
) |
|
$ |
(1,432,578 |
) |
Adjustments to reconcile net income (loss) to cash flows from operating activities |
|
|
|
|
|
|
|
|
||||||||
Noncash reorganization items, net |
|
|
— |
|
|
|
810,909 |
|
|
|
— |
|
|
|
810,909 |
|
Depletion, depreciation, and amortization |
|
|
150,640 |
|
|
|
234,405 |
|
|
|
45,812 |
|
|
|
188,593 |
|
Write-down of oil and natural gas properties |
|
|
14,377 |
|
|
|
997,664 |
|
|
|
1,006 |
|
|
|
996,658 |
|
Deferred income taxes |
|
|
364 |
|
|
|
(411,425 |
) |
|
|
(2,556 |
) |
|
|
(408,869 |
) |
Stock-based compensation |
|
|
25,322 |
|
|
|
12,323 |
|
|
|
8,212 |
|
|
|
4,111 |
|
Commodity derivatives expense (income) |
|
|
352,984 |
|
|
|
(40,130 |
) |
|
|
61,902 |
|
|
|
(102,032 |
) |
Receipt (payment) on settlements of commodity derivatives |
|
|
(277,240 |
) |
|
|
102,485 |
|
|
|
21,089 |
|
|
|
81,396 |
|
Gain on debt extinguishment |
|
|
— |
|
|
|
(18,994 |
) |
|
|
— |
|
|
|
(18,994 |
) |
Debt issuance costs and discounts |
|
|
2,740 |
|
|
|
12,370 |
|
|
|
799 |
|
|
|
11,571 |
|
Gain from asset sales and other |
|
|
(10,609 |
) |
|
|
(10,269 |
) |
|
|
(3,546 |
) |
|
|
(6,723 |
) |
Other, net |
|
|
(2,465 |
) |
|
|
8,359 |
|
|
|
1,197 |
|
|
|
7,162 |
|
Changes in assets and liabilities, net of effects from acquisitions |
|
|
|
|
|
|
|
|
||||||||
Accrued production receivable |
|
|
(51,944 |
) |
|
|
47,986 |
|
|
|
21,411 |
|
|
|
26,575 |
|
Trade and other receivables |
|
|
(284 |
) |
|
|
(6,776 |
) |
|
|
15,567 |
|
|
|
(22,343 |
) |
Other current and long-term assets |
|
|
10,390 |
|
|
|
(1,052 |
) |
|
|
(1,795 |
) |
|
|
743 |
|
Accounts payable and accrued liabilities(2) |
|
|
28,500 |
|
|
|
(83,269 |
) |
|
|
(67,167 |
) |
|
|
(16,102 |
) |
Oil and natural gas production payable |
|
|
29,351 |
|
|
|
(13,704 |
) |
|
|
(6,912 |
) |
|
|
(6,792 |
) |
Other liabilities |
|
|
(10,970 |
) |
|
|
(3,912 |
) |
|
|
(4,035 |
) |
|
|
123 |
|
Net cash provided by operating activities |
|
|
317,158 |
|
|
|
153,734 |
|
|
|
40,326 |
|
|
|
113,408 |
|
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from investing activities |
|
|
|
|
|
|
|
|
||||||||
Oil and natural gas capital expenditures |
|
|
(150,911 |
) |
|
|
(117,546 |
) |
|
|
(17,964 |
) |
|
|
(99,582 |
) |
Acquisitions of oil and natural gas properties |
|
|
(10,979 |
) |
|
|
(82 |
) |
|
|
(82 |
) |
|
|
— |
|
Pipeline capital expenditures |
|
|
(69,223 |
) |
|
|
(12,219 |
) |
|
|
(618 |
) |
|
|
(11,601 |
) |
Net proceeds from sales of oil and natural gas properties and equipment |
|
|
19,053 |
|
|
|
42,260 |
|
|
|
938 |
|
|
|
41,322 |
|
Other |
|
|
9,128 |
|
|
|
28,589 |
|
|
|
15,842 |
|
|
|
12,747 |
|
Net cash used in investing activities |
|
|
(202,932 |
) |
|
|
(58,998 |
) |
|
|
(1,884 |
) |
|
|
(57,114 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from financing activities |
|
|
|
|
|
|
|
|
||||||||
Bank repayments |
|
|
(933,000 |
) |
|
|
(741,000 |
) |
|
|
(190,000 |
) |
|
|
(551,000 |
) |
Bank borrowings |
|
|
898,000 |
|
|
|
811,000 |
|
|
|
120,000 |
|
|
|
691,000 |
|
Interest payments treated as a reduction of debt |
|
|
— |
|
|
|
(46,417 |
) |
|
|
— |
|
|
|
(46,417 |
) |
Cash paid in conjunction with debt repurchases |
|
|
— |
|
|
|
(14,171 |
) |
|
|
— |
|
|
|
(14,171 |
) |
Costs of debt financing |
|
|
— |
|
|
|
(12,490 |
) |
|
|
(8 |
) |
|
|
(12,482 |
) |
Pipeline financing repayments |
|
|
(68,008 |
) |
|
|
(74,730 |
) |
|
|
(22,938 |
) |
|
|
(51,792 |
) |
Other |
|
|
(3,122 |
) |
|
|
(7,725 |
) |
|
|
1,638 |
|
|
|
(9,363 |
) |
Net cash provided by (used in) financing activities |
|
|
(106,130 |
) |
|
|
(85,533 |
) |
|
|
(91,308 |
) |
|
|
5,775 |
|
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
8,096 |
|
|
|
9,203 |
|
|
|
(52,866 |
) |
|
|
62,069 |
|
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
42,248 |
|
|
|
33,045 |
|
|
|
95,114 |
|
|
|
33,045 |
|
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
50,344 |
|
|
$ |
42,248 |
|
|
$ |
42,248 |
|
|
$ |
95,114 |
|
(1) |
Combined results for the year ended |
(2) |
Working capital changes during the Successor period from |
|
||||||||
In thousands, except par value and share data |
|
|
|
|
||||
Assets |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
3,671 |
|
|
$ |
518 |
|
Restricted cash |
|
|
— |
|
|
|
1,000 |
|
Accrued production receivable |
|
|
143,365 |
|
|
|
91,421 |
|
Trade and other receivables, net |
|
|
19,270 |
|
|
|
19,682 |
|
Derivative assets |
|
|
— |
|
|
|
187 |
|
Prepaids |
|
|
9,099 |
|
|
|
14,038 |
|
Total current assets |
|
|
175,405 |
|
|
|
126,846 |
|
Property and equipment |
|
|
|
|
||||
Oil and natural gas properties (using full cost accounting) |
|
|
|
|
||||
Proved properties |
|
|
1,109,011 |
|
|
|
851,208 |
|
Unevaluated properties |
|
|
112,169 |
|
|
|
85,304 |
|
CO2 properties |
|
|
183,369 |
|
|
|
188,288 |
|
Pipelines |
|
|
224,394 |
|
|
|
133,485 |
|
Other property and equipment |
|
|
93,950 |
|
|
|
86,610 |
|
Less accumulated depletion, depreciation, amortization and impairment |
|
|
(181,393 |
) |
|
|
(41,095 |
) |
Net property and equipment |
|
|
1,541,500 |
|
|
|
1,303,800 |
|
Operating lease right-of-use assets |
|
|
19,502 |
|
|
|
20,342 |
|
Intangible assets, net |
|
|
88,248 |
|
|
|
97,362 |
|
Other assets |
|
|
78,298 |
|
|
|
86,408 |
|
Total assets |
|
$ |
1,902,953 |
|
|
$ |
1,634,758 |
|
Liabilities and Stockholders’ Equity |
|
|
||||||
Current liabilities |
|
|
|
|
||||
Accounts payable and accrued liabilities |
|
$ |
191,598 |
|
|
$ |
112,671 |
|
Oil and gas production payable |
|
|
75,899 |
|
|
|
49,165 |
|
Derivative liabilities |
|
|
134,509 |
|
|
|
53,865 |
|
Current maturities of long-term debt |
|
|
— |
|
|
|
68,008 |
|
Operating lease liabilities |
|
|
4,677 |
|
|
|
1,350 |
|
Total current liabilities |
|
|
406,683 |
|
|
|
285,059 |
|
Long-term liabilities |
|
|
|
|
||||
Long-term debt, net of current portion |
|
|
35,000 |
|
|
|
70,000 |
|
Asset retirement obligations |
|
|
284,238 |
|
|
|
179,338 |
|
Derivative liabilities |
|
|
— |
|
|
|
5,087 |
|
Deferred tax liabilities, net |
|
|
1,638 |
|
|
|
1,274 |
|
Operating lease liabilities |
|
|
17,094 |
|
|
|
19,460 |
|
Other liabilities |
|
|
22,910 |
|
|
|
20,872 |
|
Total long-term liabilities |
|
|
360,880 |
|
|
|
296,031 |
|
Commitments and contingencies |
|
|
|
|
||||
Stockholders’ equity |
|
|
|
|
||||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
50 |
|
|
|
50 |
|
Paid-in capital in excess of par |
|
|
1,129,996 |
|
|
|
1,104,276 |
|
Retained earnings (accumulated deficit) |
|
|
5,344 |
|
|
|
(50,658 |
) |
Total stockholders’ equity |
|
|
1,135,390 |
|
|
|
1,053,668 |
|
Total liabilities and stockholders’ equity |
|
$ |
1,902,953 |
|
|
$ |
1,634,758 |
|
|
||||||||||||
All sales volumes and dollars are expressed on a net revenue interest basis with gas volumes converted to equivalent barrels at 6:1. |
||||||||||||
|
|
Quarter Ended |
|
Year Ended |
||||||||
|
|
|
|
|
||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
Average daily sales (BOE/d) |
|
|
|
|
|
|
|
|
||||
Tertiary |
|
|
|
|
|
|
|
|
||||
|
|
|
23,933 |
|
|
25,794 |
|
|
24,306 |
|
|
26,675 |
|
|
|
8,882 |
|
|
7,086 |
|
|
8,475 |
|
|
7,460 |
Total tertiary sales |
|
|
32,815 |
|
|
32,880 |
|
|
32,781 |
|
|
34,135 |
|
|
|
|
|
|
|
|
|
||||
Non-tertiary |
|
|
|
|
|
|
|
|
||||
|
|
|
3,929 |
|
|
3,523 |
|
|
3,683 |
|
|
4,001 |
|
|
|
12,138 |
|
|
12,402 |
|
|
12,306 |
|
|
13,015 |
Total non-tertiary sales |
|
|
16,067 |
|
|
15,925 |
|
|
15,989 |
|
|
17,016 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (Bbls/d) |
|
|
47,298 |
|
|
47,471 |
|
|
47,281 |
|
|
49,828 |
Natural gas (Mcf/d) |
|
|
9,508 |
|
|
8,002 |
|
|
8,933 |
|
|
7,938 |
BOE/d (6:1) |
|
|
48,882 |
|
|
48,805 |
|
|
48,770 |
|
|
51,151 |
|
|
|
|
|
|
|
|
|
||||
Unit sales price (excluding derivative settlements) |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (per Bbl) |
|
$ |
75.48 |
|
$ |
40.81 |
|
$ |
66.48 |
|
$ |
38.44 |
Natural gas (per mcf) |
|
|
5.01 |
|
|
2.37 |
|
|
3.97 |
|
|
1.98 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (per Bbl) |
|
$ |
75.95 |
|
$ |
40.36 |
|
$ |
66.58 |
|
$ |
36.79 |
Natural gas (per mcf) |
|
|
4.34 |
|
|
1.07 |
|
|
3.44 |
|
|
0.77 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (per Bbl)(1) |
|
$ |
75.68 |
|
$ |
40.63 |
|
$ |
66.52 |
|
$ |
37.78 |
Natural gas (per mcf) |
|
|
4.62 |
|
|
1.81 |
|
|
3.66 |
|
|
1.44 |
BOE (6:1) |
|
|
74.12 |
|
|
39.82 |
|
|
65.16 |
|
|
37.03 |
(1) |
Total company realized oil prices including derivative settlements were |
|
||||||||||||||||
Reconciliation of net income (loss) (GAAP measure) to adjusted net income (non-GAAP measure) |
||||||||||||||||
Adjusted net income is a non-GAAP measure provided as a supplement to present an alternative net income (loss) measure which excludes expense and income items (and their related tax effects) not directly related to the Company’s ongoing operations. Management believes that adjusted net income may be helpful to investors by eliminating the impact of noncash and/or special items not indicative of the Company’s performance from period to period, and is widely used by the investment community, while also being used by management, in evaluating the comparability of the Company’s ongoing operational results and trends. Adjusted net income should not be considered in isolation, as a substitute for, or more meaningful than, net income (loss) or any other measure reported in accordance with GAAP, but rather to provide additional information useful in evaluating the Company’s operational trends and performance. |
||||||||||||||||
|
|
Quarter Ended
|
|
Quarter Ended
|
||||||||||||
|
|
Successor |
|
Successor |
||||||||||||
In thousands, except per-share data |
|
Amount |
|
Per Diluted Share |
|
Amount |
|
Per Diluted Share |
||||||||
Net income (loss) (GAAP measure) |
|
$ |
120,631 |
|
|
$ |
2.19 |
|
|
$ |
(53,416 |
) |
|
$ |
(1.07 |
) |
Adjustments to reconcile to adjusted net income (non-GAAP measure) |
|
|
|
|
|
|
|
|
||||||||
Noncash fair value losses (gains) on commodity derivatives(2) |
|
|
(74,942 |
) |
|
|
(1.36 |
) |
|
|
80,366 |
|
|
|
1.61 |
|
Write-down of oil and natural gas properties(4) |
|
|
— |
|
|
|
— |
|
|
|
1,006 |
|
|
|
0.02 |
|
Expense associated with restructuring(8) |
|
|
— |
|
|
|
— |
|
|
|
4,061 |
|
|
|
0.08 |
|
Insurance reimbursements(9) |
|
|
(2,399 |
) |
|
|
(0.04 |
) |
|
|
— |
|
|
|
— |
|
Noncash fair value adjustment - contingent consideration(10) |
|
|
270 |
|
|
|
0.00 |
|
|
|
— |
|
|
|
— |
|
Other(11) |
|
|
(1,890 |
) |
|
|
(0.03 |
) |
|
|
(2,896 |
) |
|
|
(0.06 |
) |
Estimated income taxes on above adjustments to net income (loss) and other discrete tax items(12) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted net income (non-GAAP measure) |
|
$ |
41,670 |
|
|
$ |
0.76 |
|
|
$ |
29,121 |
|
|
$ |
0.58 |
|
|
|
Year Ended
|
|
Year Ended
|
||||||||
|
|
Successor |
|
Combined (Non-GAAP)(1) |
||||||||
In thousands, except per-share data |
|
Amount |
|
Per Diluted Share |
|
Amount |
||||||
Net income (loss) (GAAP measure) |
|
$ |
56,002 |
|
|
$ |
1.04 |
|
|
$ |
(1,483,236 |
) |
Adjustments to reconcile to adjusted net income (non-GAAP measure) |
|
|
|
|
|
|
||||||
Noncash fair value losses on commodity derivatives(2) |
|
|
75,744 |
|
|
|
1.41 |
|
|
|
62,355 |
|
Reorganization items, net(3) |
|
|
— |
|
|
|
— |
|
|
|
849,980 |
|
Write-down of oil and natural gas properties(4) |
|
|
14,377 |
|
|
|
0.27 |
|
|
|
997,664 |
|
Accelerated depreciation charge(5) |
|
|
— |
|
|
|
— |
|
|
|
39,159 |
|
Gain on debt extinguishment(6) |
|
|
— |
|
|
|
— |
|
|
|
(18,994 |
) |
Severance-related expense included in general and administrative expenses(7) |
|
|
— |
|
|
|
— |
|
|
|
2,361 |
|
Expense associated with restructuring(8) |
|
|
— |
|
|
|
— |
|
|
|
28,168 |
|
Insurance reimbursements(9) |
|
|
(2,399 |
) |
|
|
(0.04 |
) |
|
|
(15,402 |
) |
Noncash fair value adjustment - contingent consideration(10) |
|
|
2,346 |
|
|
|
0.04 |
|
|
|
— |
|
Other(11) |
|
|
(8,424 |
) |
|
|
(0.16 |
) |
|
|
727 |
|
Estimated income taxes on above adjustments to net income (loss) and other discrete tax items(12) |
|
|
— |
|
|
|
— |
|
|
|
(418,655 |
) |
Adjusted net income (non-GAAP measure) |
|
$ |
137,646 |
|
|
$ |
2.56 |
|
|
$ |
44,127 |
|
(1) |
Combined results for the year ended |
(2) |
The net change between periods of the fair market values of open commodity derivative positions, excluding the impact of settlements on commodity derivatives during the period. |
(3) |
Reorganization items, net represent (a) expenses incurred subsequent to the filing petition for Chapter 11 as a direct result of the prepackaged joint plan of reorganization, (b) gains or losses from liabilities settled, and (c) fresh start accounting adjustments. |
(4) |
Full cost pool ceiling test write-downs related to the Company’s oil and natural gas properties. |
(5) |
Accelerated depreciation for an asset impairment as well as impaired unevaluated properties during the year ended |
(6) |
Gain on debt extinguishment related to the open market repurchases during 2020. |
(7) |
Severance-related expense associated with the Company’s May-2020 involuntary workforce reduction. |
(8) |
Expenses incurred before the petition date and after the Emergence Date related to advisor and professional fees associated with review of strategic alternatives and comprehensive restructuring of the Company’s indebtedness. |
(9) |
Insurance reimbursements during 2021 and 2020 associated with the 2020 Delta-Tinsley CO2 pipeline repair and 2013 incident at Delhi Field, respectively. |
(10) |
Expense related to the change in fair value of the contingent consideration payments related to our |
(11) |
Other adjustments include (a) |
(12) |
The estimated income tax impacts on adjustments to net income (loss) for the Predecessor period is generally computed based upon a statutory rate of |
|
||||||||||||||||
Reconciliation of net income (loss) (GAAP measure) to Adjusted EBITDAX (non-GAAP measure) |
||||||||||||||||
Adjusted EBITDAX is a non-GAAP financial measure which management uses and is calculated based upon (but not identical to) a financial covenant related to “Consolidated EBITDAX” in the Company’s senior secured bank credit facility, which excludes certain items that are included in net income (loss), the most directly comparable GAAP financial measure. Items excluded include interest, income taxes, depletion, depreciation, and amortization, and items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring. Management believes Adjusted EBITDAX may be helpful to investors in order to assess the Company’s operating performance as compared to that of other companies in its industry, without regard to financing methods, capital structure or historical costs basis. It is also commonly used by third parties to assess leverage and the Company’s ability to incur and service debt and fund capital expenditures. Adjusted EBITDAX should not be considered in isolation, as a substitute for, or more meaningful than, net income (loss), cash flows from operations, or any other measure reported in accordance with GAAP. The Company’s Adjusted EBITDAX may not be comparable to similarly titled measures of another company because all companies may not calculate Adjusted EBITDAX, EBITDAX, or EBITDA in the same manner. The following table presents a reconciliation of net income (loss) to Adjusted EBITDA. |
||||||||||||||||
|
|
Quarter Ended
|
|
Quarter Ended
|
|
Year Ended
|
|
Year Ended
|
||||||||
In thousands |
|
Successor |
|
Successor |
|
Successor |
|
Combined (Non-GAAP)(1) |
||||||||
Net income (loss) (GAAP measure) |
|
$ |
120,631 |
|
|
$ |
(53,416 |
) |
|
$ |
56,002 |
|
|
$ |
(1,483,236 |
) |
Adjustments to reconcile to Adjusted EBITDAX |
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
|
690 |
|
|
|
1,481 |
|
|
|
4,147 |
|
|
|
50,082 |
|
Income tax expense (benefit) |
|
|
902 |
|
|
|
(2,538 |
) |
|
|
767 |
|
|
|
(418,655 |
) |
Depletion, depreciation, and amortization |
|
|
37,118 |
|
|
|
40,529 |
|
|
|
150,640 |
|
|
|
234,405 |
|
Noncash fair value losses (gains) on commodity derivatives |
|
|
(74,942 |
) |
|
|
80,366 |
|
|
|
75,744 |
|
|
|
62,355 |
|
Stock-based compensation |
|
|
2,534 |
|
|
|
8,212 |
|
|
|
25,322 |
|
|
|
12,323 |
|
Gain on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(18,994 |
) |
Write-down of oil and natural gas properties |
|
|
— |
|
|
|
1,006 |
|
|
|
14,377 |
|
|
|
997,664 |
|
Reorganization items, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
849,980 |
|
Severance-related expense |
|
|
— |
|
|
|
— |
|
|
|
476 |
|
|
|
3,315 |
|
Noncash, non-recurring and other |
|
|
(5,467 |
) |
|
|
1,551 |
|
|
|
(11,053 |
) |
|
|
36,565 |
|
Adjusted EBITDAX (non-GAAP measure) |
|
$ |
81,466 |
|
|
$ |
77,191 |
|
|
$ |
316,422 |
|
|
$ |
325,804 |
|
(1) |
Combined results for the year ended |
|
||||||||||||||||
Reconciliation of cash flows from operations (GAAP measure) to adjusted cash flows from operations (non-GAAP measure) and free cash flow (non-GAAP measure) |
||||||||||||||||
Adjusted cash flows from operations is a non-GAAP measure that represents cash flows provided by operations before changes in assets and liabilities, as summarized from the Company’s Consolidated Statements of Cash Flows. Adjusted cash flows from operations measures the cash flows earned or incurred from operating activities without regard to the collection or payment of associated receivables or payables. Free cash flow is a non-GAAP measure that represents adjusted cash flows from operations less reorganization items settled in cash, interest treated as debt reduction, development capital expenditures and capitalized interest, but before acquisitions. Management believes that it is important to consider these additional measures, along with cash flows from operations, as it believes the non-GAAP measures can often be a better way to discuss changes in operating trends in its business caused by changes in sales volumes, prices, operating costs and related factors, without regard to whether the earned or incurred item was collected or paid during that period. Adjusted cash flows from operations and free cash flow are not measures of financial performance under GAAP and should not be considered as alternatives to cash flows from operations, investing, or financing activities, nor as a liquidity measure or indicator of cash flows. |
||||||||||||||||
|
|
Quarter Ended
|
|
Quarter Ended
|
|
Year Ended
|
|
Year Ended
|
||||||||
In thousands |
|
Successor |
|
Successor |
|
Successor |
|
Combined (Non-GAAP)(1) |
||||||||
Cash flows from operations (GAAP measure) |
|
$ |
69,601 |
|
|
$ |
7,416 |
|
|
$ |
317,158 |
|
|
$ |
153,734 |
|
Net change in assets and liabilities relating to operations(2) |
|
|
13,223 |
|
|
|
64,466 |
|
|
|
(5,043 |
) |
|
|
60,727 |
|
Adjusted cash flows from operations (non-GAAP measure) |
|
|
82,824 |
|
|
|
71,882 |
|
|
|
312,115 |
|
|
|
214,461 |
|
Reorganization items settled in cash(3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
39,071 |
|
Interest on notes treated as debt reduction |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(46,417 |
) |
Development capital expenditures |
|
|
(78,350 |
) |
|
|
(17,602 |
) |
|
|
(252,171 |
) |
|
|
(95,168 |
) |
Capitalized interest |
|
|
(1,085 |
) |
|
|
(1,078 |
) |
|
|
(4,585 |
) |
|
|
(24,146 |
) |
Free cash flow (non-GAAP measure) |
|
$ |
3,389 |
|
|
$ |
53,202 |
|
|
$ |
55,359 |
|
|
$ |
87,801 |
|
(1) |
Combined results for the year ended |
(2) |
Working capital changes during the quarter and combined year ended |
(3) |
Includes costs associated with the Company’s restructuring incurred during the period from |
|
||||||||||||
|
|
Quarter Ended |
|
Year Ended |
||||||||
|
|
|
|
|
||||||||
In thousands |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
Capital expenditures |
|
|
|
|
|
|
|
|
||||
CCA EOR field expenditures |
|
$ |
16,664 |
|
$ |
— |
|
$ |
35,754 |
|
$ |
810 |
CCA CO2 pipelines |
|
|
28,142 |
|
|
783 |
|
|
87,688 |
|
|
10,942 |
CCA tertiary development |
|
|
44,806 |
|
|
783 |
|
|
123,442 |
|
|
11,752 |
Non-CCA tertiary and non-tertiary fields |
|
|
25,578 |
|
|
10,271 |
|
|
97,085 |
|
|
49,800 |
CO2 sources and other CO2 pipelines |
|
|
618 |
|
|
287 |
|
|
1,657 |
|
|
660 |
Development excluding CCA tertiary |
|
|
26,196 |
|
|
10,558 |
|
|
98,742 |
|
|
50,460 |
Capitalized internal costs(2) |
|
|
7,348 |
|
|
6,261 |
|
|
29,987 |
|
|
32,956 |
Development capital expenditures |
|
|
78,350 |
|
|
17,602 |
|
|
252,171 |
|
|
95,168 |
Acquisitions of oil and natural gas properties(3) |
|
|
52 |
|
|
81 |
|
|
10,979 |
|
|
176 |
Capital expenditures, before capitalized interest |
|
|
78,402 |
|
|
17,683 |
|
|
263,150 |
|
|
95,344 |
Capitalized interest |
|
|
1,085 |
|
|
1,078 |
|
|
4,585 |
|
|
24,146 |
Capital expenditures, total |
|
$ |
79,487 |
|
$ |
18,761 |
|
$ |
267,735 |
|
$ |
119,490 |
(1) |
Capital expenditure amounts include accrued capital. |
(2) |
Includes capitalized internal acquisition, exploration and development costs and pre-production tertiary startup costs. |
(3) |
Primarily consists of working interest positions in the |
|
||||||
Reconciliation of the standardized measure of discounted estimated future net cash flows after income taxes (GAAP measure) to PV-10 Value (non-GAAP measure) |
||||||
PV-10 Value is a non-GAAP measure and is different from the Standardized Measure in that PV-10 Value is a pre-tax number and the Standardized Measure is an after-tax number. Denbury’s 2021 and 2020 year-end estimated proved oil and natural gas reserves and proved CO2 reserves quantities were prepared by the independent reservoir engineering firm of |
||||||
In thousands |
|
|
|
|
||
Standardized Measure (GAAP measure) |
|
$ |
2,187,051 |
|
$ |
654,734 |
Discounted estimated future income tax |
|
|
486,771 |
|
|
48,346 |
PV-10 Value (non-GAAP measure) |
|
$ |
2,673,822 |
|
$ |
703,080 |
ESTIMATED QUANTITIES OF PROVED RESERVES ROLLFORWARD |
|||||||||
|
|
Oil (MBbl) |
|
Gas (MMcf) |
|
Total (MBOE) |
|||
Balance at |
|
140,499 |
|
|
15,604 |
|
|
143,100 |
|
Revisions of previous estimates(1) |
|
55,998 |
|
|
(615 |
) |
|
55,895 |
|
Production |
|
(17,258 |
) |
|
(3,261 |
) |
|
(17,801 |
) |
Acquisition of minerals in place |
|
9,765 |
|
|
5,764 |
|
|
10,725 |
|
Sales of minerals in place |
|
(66 |
) |
|
(986 |
) |
|
(230 |
) |
Balance at |
|
188,938 |
|
|
16,506 |
|
|
191,689 |
|
|
|
|
|
|
|
|
|||
Proved Developed Reserves – end of year |
|
179,147 |
|
|
16,506 |
|
|
181,898 |
|
Proved Undeveloped Reserves – end of year |
|
9,791 |
|
|
— |
|
|
9,791 |
|
(1) |
Reflects changes in commodity prices resulting in upward revisions of 50.1 MMBOE. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220224005149/en/
DENBURY IR CONTACTS:
Source:
FAQ
What were Denbury's fourth quarter 2021 financial results?
How did Denbury perform in the full year 2021?
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