Denbury Reports 2022 Fourth Quarter and Full-Year Results
Denbury Inc. (NYSE: DEN) announced its fourth quarter and full-year 2022 results, reporting a net income of $75.1 million for Q4 and $480.2 million for the full year. Adjusted net income was $80 million in Q4. The company generated $521 million in cash flow from operations and $136 million of free cash flow in 2022. Denbury repurchased $100 million of stock, totaling 1.6 million shares. As of year-end, the PV-10 value of proven reserves was nearly $4.5 billion, reflecting a 67% increase from 2021. Operational challenges impacted Q4 sales volumes, averaging 46,641 BOE/d. The company remains optimistic about future production from the Cedar Creek Anticline EOR project.
- Generated $521 million in cash flow from operations in 2022.
- Repurchased $100 million of outstanding shares, enhancing shareholder value.
- Achieved nearly $4.5 billion PV-10 value of proved reserves, a 67% increase from 2021.
- Expanded CO2 injection capabilities significantly, increasing industrial-sourced CO2 by over 33%.
- Q4 2022 revenues declined to $381 million primarily due to lower oil prices.
- Average pre-hedge realized oil price fell 11% from Q3 2022.
- Sales volumes decreased due to severe winter storms affecting operations.
|
|
4Q 2022 |
|
|
FY 2022 |
||||
(in thousands, except per-share and volume data) |
|
Total |
|
Per Diluted
|
|
|
Total |
|
Per Diluted
|
Net Income |
|
|
|
|
|
|
|
|
|
Adjusted net income(1)(2) (non-GAAP) |
|
79,960 |
|
1.48 |
|
|
368,302 |
|
6.78 |
Adjusted EBITDAX(1) (non-GAAP) |
|
140,042 |
|
|
|
|
586,429 |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from operations |
|
124,336 |
|
|
|
|
520,745 |
|
|
Adjusted cash flows from operations(1) (non-GAAP) |
|
137,088 |
|
|
|
|
568,682 |
|
|
|
|
|
|
|
|
|
|
|
|
Oil & gas development capital expenditures |
|
120,971 |
|
|
|
|
364,198 |
|
|
CCUS capital expenditures - storage sites and related |
|
32,505 |
|
|
|
|
64,605 |
|
|
|
|
|
|
|
|
|
|
|
|
Average daily sales volumes (BOE/d) |
|
46,641 |
|
|
|
|
46,809 |
|
|
Blue Oil (% oil volumes using industrial-sourced CO2) |
|
|
|
|
|
|
|
|
|
Industrial-sourced CO2 injected (million metric tons) |
|
1.15 |
|
|
|
|
4.35 |
|
|
Industrial-sourced CO2 injected (% of total CO2 used in EOR operations) |
|
|
|
|
|
|
|
|
|
2022 FULL-YEAR HIGHLIGHTS
-
Generated
in cash flow from operations and$521 million of free cash flow(1) (a non-GAAP measure).$136 million -
Repurchased
of the Company’s outstanding shares (1.6 million shares or$100 million 3.2% of shares outstanding) at an average price of per share.$61.92 -
Exited 2022 with
of debt and$29 million of financial liquidity (cash on hand and borrowing capacity under the Company’s existing credit facility).$711 million -
Utilized 4.4 million metric tons of industrial-sourced carbon dioxide (“CO2”) in enhanced oil recovery (“EOR”) operations in 2022, an increase of more than
33% from 2021. -
Commenced CO2 injection at the Cedar Creek Anticline (“CCA”) EOR project in early
February 2022 . The Company had 74 CO2 injection wells online at CCA at the end of 2022 and had injected a cumulative 1.4 million metric tons of CO2 in Phase 1 of the development. -
Estimated proved reserves at the end of 2022 totaled 202 million barrels of oil equivalent, a
5% increase from 2021. The PV-10 value(1)(a non-GAAP measure) of those reserves at that date was nearly , representing a value uplift of$4.5 billion 67% from the end of 2021.
2022 CCUS HIGHLIGHTS
- Executed multiple agreements with customers for future transportation and/or storage of industrial-sourced CO2 covering approximately 18 million metric tons of CO2 per year, including CO2 transport and storage associated with ammonia, biofuels, and hydrogen projects.
-
Invested
into a greenfield blue ammonia project through an investment in Clean Hydrogen Works, the developer of the proposed project near$10 million Donaldsonville, Louisiana . Initial production from this world-scale development is anticipated in 2027. -
Expanded Denbury’s dedicated CO2 storage portfolio to a total of 7 contracted sequestration sites along the
U.S. Gulf Coast representing approximately 2 billion metric tons of potential CO2 storage capacity. -
Submitted the Company’s initial Class VI permit applications (3 wells) for dedicated CO2 storage at the Orion site in
Alabama to theEnvironmental Protection Agency for review and approval.
EXECUTIVE COMMENT
“Our teams did an excellent job of executing on all fronts in 2022 with strong momentum I believe will carry into 2023. We are excitedly looking forward to the first production from the CCA CO2 flood in the second half of 2023. CCA represents the Company’s largest potential EOR resource, which we expect will significantly strengthen our production and cash flow for decades into the future with
FOURTH QUARTER 2022 FINANCIAL AND OPERATING RESULTS
Denbury’s fourth quarter 2022 total revenues and other income totaled
The Company’s sales volumes averaged 46,641 barrels of oil equivalent per day (“BOE/d”) during the fourth quarter of 2022, down modestly from third quarter 2022 levels primarily due to severe winter storm impacts. Fourth quarter volumes were impacted on average approximately 1,150 BOE/d due to production downtime associated with late
CO2 sales and transportation fee revenue in the fourth quarter of 2022 was higher than historical periods; however, lower than the third quarter of the year, due primarily to a short-term agreement that expired during the fourth quarter 2022.
Lease operating expense in the fourth quarter of 2022 was
General and administrative expenses were
Commodity derivatives expense totaled
The Company’s fourth quarter 2022 effective income tax rate was approximately
CAPITAL EXPENDITURES
Fourth quarter 2022 capital expenditures, excluding capitalized interest, totaled
CCUS capital expenditures for the fourth quarter of 2022 were
2022 PROVED RESERVES
The Company’s total estimated proved oil and natural gas reserves as of
Year-end 2022 estimated proved reserves, the standardized measure of future net cash flows, and the pre-tax discounted net present value of Denbury’s proved reserves, using a
Denbury’s estimated proved CO2 reserves at year-end 2022 were 4.8 trillion cubic feet (“Tcf”), including 3.8 Tcf at Jackson Dome in
(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 53.9 million and 54.4 million for the quarter and year ended |
WEBCAST INFORMATION
ABOUT
# # #
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
The following tables include selected unaudited financial and operational information for the three month and annual periods ended
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) 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 |
|
$ |
341,734 |
|
|
$ |
329,308 |
Natural gas sales |
|
|
4,844 |
|
|
|
4,040 |
CO2 sales and transportation fees |
|
|
15,952 |
|
|
|
12,576 |
Oil marketing revenues |
|
|
17,368 |
|
|
|
12,204 |
Other income |
|
|
1,259 |
|
|
|
3,770 |
Total revenues and other income |
|
|
381,157 |
|
|
|
361,898 |
Expenses |
|
|
|
|
|||
Lease operating expenses |
|
|
125,766 |
|
|
|
115,819 |
Transportation and marketing expenses |
|
|
5,474 |
|
|
|
6,513 |
CO2 operating and discovery expenses |
|
|
1,910 |
|
|
|
2,191 |
Taxes other than income |
|
|
30,015 |
|
|
|
25,891 |
Oil marketing purchases |
|
|
17,335 |
|
|
|
11,971 |
General and administrative expenses |
|
|
23,182 |
|
|
|
16,437 |
Interest, net of amounts capitalized of |
|
|
933 |
|
|
|
690 |
Depletion, depreciation, and amortization |
|
|
43,003 |
|
|
|
37,118 |
Commodity derivatives expense |
|
|
38,419 |
|
|
|
22,832 |
Other expenses |
|
|
4,825 |
|
|
|
903 |
Total expenses |
|
|
290,862 |
|
|
|
240,365 |
Income before income taxes |
|
|
90,295 |
|
|
|
121,533 |
Income tax provision (benefit) |
|
|
|
|
|||
Current income taxes |
|
|
(1,000 |
) |
|
|
504 |
Deferred income taxes |
|
|
16,180 |
|
|
|
398 |
Net income |
|
$ |
75,115 |
|
|
$ |
120,631 |
|
|
|
|
|
|||
Net income per common share |
|
|
|
|
|||
Basic |
|
$ |
1.47 |
|
|
$ |
2.35 |
Diluted |
|
$ |
1.39 |
|
|
$ |
2.19 |
|
|
|
|
|
|||
Weighted average common shares outstanding |
|
|
|
|
|||
Basic |
|
|
51,173 |
|
|
|
51,247 |
Diluted |
|
|
53,851 |
|
|
|
55,114 |
|
Year Ended
|
|
Year Ended
|
||||
In thousands, except per-share data |
|
|
|||||
Revenues and other income |
|
|
|
|
|||
Oil sales |
|
$ |
1,559,111 |
|
$ |
1,148,022 |
|
Natural gas sales |
|
|
19,571 |
|
|
11,933 |
|
CO2 sales and transportation fees |
|
|
60,570 |
|
|
44,175 |
|
Oil marketing revenues |
|
|
65,093 |
|
|
38,742 |
|
Other income |
|
|
10,314 |
|
|
15,288 |
|
Total revenues and other income |
|
|
1,714,659 |
|
|
1,258,160 |
|
Expenses |
|
|
|
|
|||
Lease operating expenses |
|
|
502,409 |
|
|
424,550 |
|
Transportation and marketing expenses |
|
|
20,112 |
|
|
28,817 |
|
CO2 operating and discovery expenses |
|
|
8,474 |
|
|
6,678 |
|
Taxes other than income |
|
|
131,502 |
|
|
91,390 |
|
Oil marketing purchases |
|
|
64,497 |
|
|
37,734 |
|
General and administrative expenses |
|
|
82,180 |
|
|
79,258 |
|
Interest, net of amounts capitalized of |
|
|
4,025 |
|
|
4,147 |
|
Depletion, depreciation, and amortization |
|
|
151,428 |
|
|
150,640 |
|
Commodity derivatives expense |
|
|
178,744 |
|
|
352,984 |
|
Write-down of oil and natural gas properties |
|
|
— |
|
|
14,377 |
|
Other expenses |
|
|
16,284 |
|
|
10,816 |
|
Total expenses |
|
|
1,159,655 |
|
|
1,201,391 |
|
Income before income taxes |
|
|
555,004 |
|
|
56,769 |
|
Income tax provision |
|
|
|
|
|||
Current income taxes |
|
|
5,363 |
|
|
403 |
|
Deferred income taxes |
|
|
69,481 |
|
|
364 |
|
Net income |
|
$ |
480,160 |
|
$ |
56,002 |
|
|
|
|
|
|
|||
Net income per common share |
|
|
|
|
|||
Basic |
|
$ |
9.34 |
|
$ |
1.10 |
|
Diluted |
|
$ |
8.83 |
|
$ |
1.04 |
|
|
|
|
|
|
|||
Weighted average common shares outstanding |
|
|
|
|
|||
Basic |
|
|
51,427 |
|
|
50,918 |
|
Diluted |
|
|
54,355 |
|
|
53,818 |
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
|
|
Quarter Ended |
||||||
In thousands |
|
|
|
|
||||
Cash flows from operating activities |
|
|
|
|
||||
Net income |
|
$ |
75,115 |
|
|
$ |
120,631 |
|
Adjustments to reconcile net income to cash flows from operating activities |
|
|
|
|
||||
Depletion, depreciation, and amortization |
|
|
43,003 |
|
|
|
37,118 |
|
Deferred income taxes |
|
|
16,180 |
|
|
|
398 |
|
Stock-based compensation |
|
|
4,564 |
|
|
|
2,534 |
|
Commodity derivatives expense |
|
|
38,419 |
|
|
|
22,832 |
|
Payment on settlements of commodity derivatives |
|
|
(38,956 |
) |
|
|
(97,774 |
) |
Debt issuance costs and discounts |
|
|
531 |
|
|
|
685 |
|
Gain from asset sales and other |
|
|
(113 |
) |
|
|
(3,583 |
) |
Other, net |
|
|
(1,655 |
) |
|
|
(17 |
) |
Changes in assets and liabilities, net of effects from acquisitions |
|
|
|
|
||||
Accrued production receivable |
|
|
31,973 |
|
|
|
1,004 |
|
Trade and other receivables |
|
|
(8,307 |
) |
|
|
1,525 |
|
Other current and long-term assets |
|
|
12,070 |
|
|
|
3,053 |
|
Accounts payable and accrued liabilities |
|
|
(27,395 |
) |
|
|
(18,984 |
) |
Oil and natural gas production payable |
|
|
(8,943 |
) |
|
|
6,183 |
|
Asset retirement obligation settlements |
|
|
(12,106 |
) |
|
|
(4,152 |
) |
Other liabilities |
|
|
(44 |
) |
|
|
(1,852 |
) |
Net cash provided by operating activities |
|
|
124,336 |
|
|
|
69,601 |
|
|
|
|
|
|
||||
Cash flows from investing activities |
|
|
|
|
||||
Oil and natural gas capital expenditures |
|
|
(99,260 |
) |
|
|
(37,870 |
) |
CCUS storage sites and related capital expenditures |
|
|
(32,362 |
) |
|
|
— |
|
Acquisitions of oil and natural gas properties |
|
|
(102 |
) |
|
|
(52 |
) |
Pipeline capital expenditures |
|
|
(1,219 |
) |
|
|
(50,100 |
) |
Net proceeds from sales of oil and natural gas properties and equipment |
|
|
— |
|
|
|
— |
|
Equity investment |
|
|
(218 |
) |
|
|
— |
|
Other |
|
|
(6,775 |
) |
|
|
3,331 |
|
Net cash used in investing activities |
|
|
(139,936 |
) |
|
|
(84,691 |
) |
|
|
|
|
|
||||
Cash flows from financing activities |
|
|
|
|
||||
Bank repayments |
|
|
(207,000 |
) |
|
|
(236,000 |
) |
Bank borrowings |
|
|
221,000 |
|
|
|
271,000 |
|
Pipeline financing repayments |
|
|
— |
|
|
|
(17,332 |
) |
Other |
|
|
1,328 |
|
|
|
(696 |
) |
Net cash provided by financing activities |
|
|
15,328 |
|
|
|
16,972 |
|
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
(272 |
) |
|
|
1,882 |
|
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
48,152 |
|
|
|
48,462 |
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
47,880 |
$ |
50,344 |
In thousands |
|
Year Ended
|
|
Year Ended
|
||||
Cash flows from operating activities |
|
|
|
|
||||
Net income |
|
$ |
480,160 |
|
|
$ |
56,002 |
|
Adjustments to reconcile net income to cash flows from operating activities |
|
|
|
|
||||
Noncash reorganization items, net |
|
|
— |
|
|
|
— |
|
Depletion, depreciation, and amortization |
|
|
151,428 |
|
|
|
150,640 |
|
Write-down of oil and natural gas properties |
|
|
— |
|
|
|
14,377 |
|
Deferred income taxes |
|
|
69,481 |
|
|
|
364 |
|
Stock-based compensation |
|
|
16,055 |
|
|
|
25,322 |
|
Commodity derivatives expense |
|
|
178,744 |
|
|
|
352,984 |
|
Payment on settlements of commodity derivatives |
|
|
(315,752 |
) |
|
|
(277,240 |
) |
Gain on debt extinguishment |
|
|
— |
|
|
|
— |
|
Debt issuance costs and discounts |
|
|
2,996 |
|
|
|
2,740 |
|
Gain from asset sales and other |
|
|
(1,232 |
) |
|
|
(10,609 |
) |
Other, net |
|
|
(13,198 |
) |
|
|
(2,465 |
) |
Changes in assets and liabilities, net of effects from acquisitions |
|
|
|
|
||||
Accrued production receivable |
|
|
(911 |
) |
|
|
(51,944 |
) |
Trade and other receivables |
|
|
(8,241 |
) |
|
|
(284 |
) |
Other current and long-term assets |
|
|
(9,659 |
) |
|
|
10,390 |
|
Accounts payable and accrued liabilities |
|
|
964 |
|
|
|
28,500 |
|
Oil and natural gas production payable |
|
|
4,469 |
|
|
|
29,351 |
|
Asset retirement obligation settlements |
|
|
(34,260 |
) |
|
|
(10,185 |
) |
Other liabilities |
|
|
(299 |
) |
|
|
(785 |
) |
Net cash provided by operating activities |
|
|
520,745 |
|
|
|
317,158 |
|
|
|
|
|
|
||||
Cash flows from investing activities |
|
|
|
|
||||
Oil and natural gas capital expenditures |
|
|
(317,094 |
) |
|
|
(150,911 |
) |
CCUS storage sites and related capital expenditures |
|
|
(59,880 |
) |
|
|
— |
|
Acquisitions of oil and natural gas properties |
|
|
(976 |
) |
|
|
(10,979 |
) |
Pipeline capital expenditures |
|
|
(23,478 |
) |
|
|
(69,223 |
) |
Net proceeds from sales of oil and natural gas properties and equipment |
|
|
237 |
|
|
|
19,053 |
|
Equity investment |
|
|
(10,218 |
) |
|
|
— |
|
Other |
|
|
(16,521 |
) |
|
|
9,128 |
|
Net cash used in investing activities |
|
|
(427,930 |
) |
|
|
(202,932 |
) |
|
|
|
|
|
||||
Cash flows from financing activities |
|
|
|
|
||||
Bank repayments |
|
|
(1,015,000 |
) |
|
|
(933,000 |
) |
Bank borrowings |
|
|
1,009,000 |
|
|
|
898,000 |
|
Common stock repurchase program |
|
|
(100,028 |
) |
|
|
— |
|
Pipeline financing repayments |
|
|
— |
|
|
|
(68,008 |
) |
Other |
|
|
10,749 |
|
|
|
(3,122 |
) |
Net cash used in financing activities |
|
|
(95,279 |
) |
|
|
(106,130 |
) |
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
(2,464 |
) |
|
|
8,096 |
|
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
50,344 |
|
|
|
42,248 |
|
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
47,880 |
|
|
$ |
50,344 |
|
CONSOLIDATED BALANCE SHEETS |
||||||||
In thousands, except par value and share data |
|
|
|
|
||||
Assets |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
521 |
|
|
$ |
3,671 |
|
Accrued production receivable |
|
|
144,277 |
|
|
|
143,365 |
|
Trade and other receivables, net |
|
|
27,343 |
|
|
|
19,270 |
|
Derivative assets |
|
|
15,517 |
|
|
|
— |
|
Prepaids |
|
|
18,572 |
|
|
|
9,099 |
|
Total current assets |
|
|
206,230 |
|
|
|
175,405 |
|
Property and equipment |
|
|
|
|
||||
Oil and natural gas properties (using full cost accounting) |
|
|
|
|
||||
Proved properties |
|
|
1,414,779 |
|
|
|
1,109,011 |
|
Unevaluated properties |
|
|
240,435 |
|
|
|
112,169 |
|
CO2 properties |
|
|
190,985 |
|
|
|
183,369 |
|
Pipelines |
|
|
220,125 |
|
|
|
224,394 |
|
CCUS storage sites and related assets |
|
|
64,971 |
|
|
|
— |
|
Other property and equipment |
|
|
107,133 |
|
|
|
93,950 |
|
Less accumulated depletion, depreciation, amortization and impairment |
|
|
(306,743 |
) |
|
|
(181,393 |
) |
Net property and equipment |
|
|
1,931,685 |
|
|
|
1,541,500 |
|
Operating lease right-of-use assets |
|
|
18,017 |
|
|
|
19,502 |
|
Intangible assets, net |
|
|
79,128 |
|
|
|
88,248 |
|
Restricted cash for future asset retirement obligations |
|
|
47,359 |
|
|
|
46,673 |
|
Other assets |
|
|
45,080 |
|
|
|
31,625 |
|
Total assets |
|
$ |
2,327,499 |
|
|
$ |
1,902,953 |
|
Liabilities and Stockholders’ Equity |
|
|
||||||
Current liabilities |
|
|
|
|
||||
Accounts payable and accrued liabilities |
|
$ |
248,800 |
|
|
$ |
191,598 |
|
Oil and gas production payable |
|
|
80,368 |
|
|
|
75,899 |
|
Derivative liabilities |
|
|
13,018 |
|
|
|
134,509 |
|
Operating lease liabilities |
|
|
4,676 |
|
|
|
4,677 |
|
Total current liabilities |
|
|
346,862 |
|
|
|
406,683 |
|
Long-term liabilities |
|
|
|
|
||||
Long-term debt, net of current portion |
|
|
29,000 |
|
|
|
35,000 |
|
Asset retirement obligations |
|
|
315,942 |
|
|
|
284,238 |
|
Deferred tax liabilities, net |
|
|
71,120 |
|
|
|
1,638 |
|
Operating lease liabilities |
|
|
15,431 |
|
|
|
17,094 |
|
Other liabilities |
|
|
16,527 |
|
|
|
22,910 |
|
Total long-term liabilities |
|
|
448,020 |
|
|
|
360,880 |
|
Commitments and contingencies |
|
|
|
|
||||
Stockholders’ equity |
|
|
|
|
||||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
50 |
|
|
|
50 |
|
Paid-in capital in excess of par |
|
|
1,047,063 |
|
|
|
1,129,996 |
|
Retained earnings |
|
|
485,504 |
|
|
|
5,344 |
|
Total stockholders’ equity |
|
|
1,532,617 |
|
|
|
1,135,390 |
|
Total liabilities and stockholders’ equity |
|
$ |
2,327,499 |
|
|
$ |
1,902,953 |
|
OPERATING HIGHLIGHTS (UNAUDITED) 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 |
||||||||
|
|
|
|
|
||||||||
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Average daily sales (BOE/d) |
|
|
|
|
|
|
|
|
||||
Tertiary |
|
|
|
|
|
|
|
|
||||
|
|
|
21,713 |
|
|
23,933 |
|
|
22,356 |
|
|
24,306 |
|
|
|
10,317 |
|
|
8,882 |
|
|
9,648 |
|
|
8,475 |
Total tertiary sales |
|
|
32,030 |
|
|
32,815 |
|
|
32,004 |
|
|
32,781 |
|
|
|
|
|
|
|
|
|
||||
Non-tertiary |
|
|
|
|
|
|
|
|
||||
|
|
|
3,666 |
|
|
3,929 |
|
|
3,647 |
|
|
3,683 |
|
|
|
10,945 |
|
|
12,138 |
|
|
11,158 |
|
|
12,306 |
Total non-tertiary sales |
|
|
14,611 |
|
|
16,067 |
|
|
14,805 |
|
|
15,989 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (Bbls/d) |
|
|
45,001 |
|
|
47,298 |
|
|
45,302 |
|
|
47,281 |
Natural gas (Mcf/d) |
|
|
9,835 |
|
|
9,508 |
|
|
9,038 |
|
|
8,933 |
BOE/d (6:1) |
|
|
46,641 |
|
|
48,882 |
|
|
46,809 |
|
|
48,770 |
|
|
|
|
|
|
|
|
|
||||
Unit sales price (excluding derivative settlements) |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (per Bbl) |
|
$ |
82.11 |
|
$ |
75.48 |
|
$ |
94.20 |
|
$ |
66.48 |
Natural gas (per mcf) |
|
|
5.53 |
|
|
5.01 |
|
|
6.44 |
|
|
3.97 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (per Bbl) |
|
$ |
83.07 |
|
$ |
75.95 |
|
$ |
94.41 |
|
$ |
66.58 |
Natural gas (per mcf) |
|
|
5.26 |
|
|
4.34 |
|
|
5.65 |
|
|
3.44 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (per Bbl)(1) |
|
$ |
82.54 |
|
$ |
75.68 |
|
$ |
94.29 |
|
$ |
66.52 |
Natural gas (per mcf) |
|
|
5.35 |
|
|
4.62 |
|
|
5.93 |
|
|
3.66 |
BOE (6:1) |
|
|
80.77 |
|
|
74.12 |
|
|
92.40 |
|
|
65.16 |
(1) |
|
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED)
Reconciliation of net income (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 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 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
|
||||||||||||
In thousands, except per-share data |
|
Amount |
|
Per Diluted
|
|
Amount |
|
Per Diluted
|
||||||||
Net income (GAAP measure) |
|
$ |
75,115 |
|
|
$ |
1.39 |
|
|
$ |
120,631 |
|
|
$ |
2.19 |
|
Adjustments to reconcile to adjusted net income (non-GAAP measure) |
|
|
|
|
|
|
|
|
||||||||
Noncash fair value gains on commodity derivatives(2) |
|
|
(537 |
) |
|
|
(0.01 |
) |
|
|
(74,942 |
) |
|
|
(1.36 |
) |
Litigation expense |
|
|
572 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
Accelerated depreciation charge |
|
|
3,391 |
|
|
|
0.06 |
|
|
|
— |
|
|
|
— |
|
Insurance reimbursements(7) |
|
|
— |
|
|
|
— |
|
|
|
(2,399 |
) |
|
|
(0.04 |
) |
Noncash fair value adjustment - contingent consideration(8) |
|
|
102 |
|
|
|
0.00 |
|
|
|
270 |
|
|
|
0.00 |
|
Other(9) |
|
|
2,295 |
|
|
|
0.04 |
|
|
|
(1,890 |
) |
|
|
(0.03 |
) |
Estimated income taxes on above adjustments to net income and other discrete tax items(10) |
|
|
(978 |
) |
|
|
(0.01 |
) |
|
|
— |
|
|
|
— |
|
Adjusted net income (non-GAAP measure) |
|
$ |
79,960 |
|
|
$ |
1.48 |
|
|
$ |
41,670 |
|
|
$ |
0.76 |
|
|
Year Ended
|
|
Year Ended
|
|||||||||||||
In thousands, except per-share data |
|
Amount |
|
Per Diluted
|
|
Amount |
|
Per Diluted
|
||||||||
Net income (GAAP measure) |
|
$ |
480,160 |
|
|
$ |
8.83 |
|
|
$ |
56,002 |
|
|
$ |
1.04 |
|
Adjustments to reconcile to adjusted net income (non-GAAP measure) |
|
|
|
|
|
|
|
|
||||||||
Noncash fair value losses (gains) on commodity derivatives(2) |
|
|
(137,008 |
) |
|
|
(2.52 |
) |
|
|
75,744 |
|
|
|
1.41 |
|
Delta pipeline incident costs (included in other expenses)(3) |
|
|
3,867 |
|
|
|
0.07 |
|
|
|
— |
|
|
|
— |
|
Contract contingency reversal(4) |
|
|
(7,763 |
) |
|
|
(0.14 |
) |
|
|
— |
|
|
|
— |
|
Litigation expense(5) |
|
|
2,016 |
|
|
|
0.04 |
|
|
|
— |
|
|
|
— |
|
Write-down of oil and natural gas properties(6) |
|
|
— |
|
|
|
— |
|
|
|
14,377 |
|
|
|
0.27 |
|
Accelerated depreciation charge |
|
|
3,391 |
|
|
|
0.06 |
|
|
|
— |
|
|
|
— |
|
Insurance reimbursements(7) |
|
|
(6,692 |
) |
|
|
(0.12 |
) |
|
|
(2,399 |
) |
|
|
(0.04 |
) |
Noncash fair value adjustment - contingent consideration(8) |
|
|
334 |
|
|
|
0.01 |
|
|
|
2,346 |
|
|
|
0.04 |
|
Other(9) |
|
|
2,295 |
|
|
|
0.04 |
|
|
|
(8,424 |
) |
|
|
(0.16 |
) |
Estimated income taxes on above adjustments to net income and other discrete tax items(10) |
|
|
27,702 |
|
|
|
0.51 |
|
|
|
— |
|
|
|
— |
|
Adjusted net income (non-GAAP measure) |
|
$ |
368,302 |
|
|
$ |
6.78 |
|
|
$ |
137,646 |
|
|
$ |
2.56 |
|
(1) |
Includes the impact of potentially dilutive securities including nonvested restricted stock, restricted stock units, performance stock units, shares to be issued under the employee stock purchase plan and warrants. |
|
(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) |
Represents an accrual for a preliminarily assessed civil penalty proposed in |
|
(4) |
Represents the reversal of a contract contingency primarily established in fresh start accounting which is no longer considered necessary. |
|
(5) |
Represents litigation expense, including |
|
(6) |
Full cost pool ceiling test write-downs related to the Company’s oil and natural gas properties. |
|
(7) |
Insurance reimbursements during 2022 and 2021 associated with a 2013 insurance claim related to property damage at Delhi Field and the 2020 Delta-Tinsley pipeline repair, respectively. |
|
(8) |
Expense related to the change in fair value of the contingent consideration payments related to our |
|
(9) |
Other adjustments during 2022 represent the write-off of costs associated with a potential CO2 storage site. Other adjustments during the three months ended |
|
(10) |
Represents the estimated income tax impacts on pre-tax adjustments to net income which rate incorporates discrete tax adjustments primarily related to the release of the valuation allowance on certain of the Company’s federal and state deferred tax assets. The valuation allowance release was |
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED)
Reconciliation of net income (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.
In thousands |
|
Quarter Ended
|
|
Quarter Ended
|
|
Year Ended
|
|
Year Ended
|
||||||||
Net income (GAAP measure) |
|
$ |
75,115 |
|
|
$ |
120,631 |
|
|
$ |
480,160 |
|
|
$ |
56,002 |
|
Adjustments to reconcile to Adjusted EBITDAX |
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
|
933 |
|
|
|
690 |
|
|
|
4,025 |
|
|
|
4,147 |
|
Income tax expense (benefit) |
|
|
15,180 |
|
|
|
902 |
|
|
|
74,844 |
|
|
|
767 |
|
Depletion, depreciation, and amortization |
|
|
43,003 |
|
|
|
37,118 |
|
|
|
151,428 |
|
|
|
150,640 |
|
Noncash fair value losses (gains) on commodity derivatives |
|
|
(537 |
) |
|
|
(74,942 |
) |
|
|
(137,008 |
) |
|
|
75,744 |
|
Stock-based compensation |
|
|
4,564 |
|
|
|
2,534 |
|
|
|
16,055 |
|
|
|
25,322 |
|
Write-down of oil and natural gas properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14,377 |
|
Severance-related expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
476 |
|
Noncash, non-recurring and other |
|
|
1,784 |
|
|
|
(5,467 |
) |
|
|
(3,075 |
) |
|
|
(11,053 |
) |
Adjusted EBITDAX (non-GAAP measure) |
|
$ |
140,042 |
|
|
$ |
81,466 |
|
|
$ |
586,429 |
|
|
$ |
316,422 |
|
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED)
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.
In thousands |
|
Quarter Ended
|
|
Quarter Ended
|
|
Year Ended
|
|
Year Ended
|
||||||||
Cash flows from operations (GAAP measure) |
|
$ |
124,336 |
|
|
$ |
69,601 |
|
|
$ |
520,745 |
|
|
$ |
317,158 |
|
Net change in assets and liabilities relating to operations |
|
|
12,752 |
|
|
|
13,223 |
|
|
|
47,937 |
|
|
|
(5,043 |
) |
Adjusted cash flows from operations (non-GAAP measure) |
|
|
137,088 |
|
|
|
82,824 |
|
|
|
568,682 |
|
|
|
312,115 |
|
Development capital expenditures |
|
|
(120,971 |
) |
|
|
(78,350 |
) |
|
|
(364,198 |
) |
|
|
(252,171 |
) |
CCUS storage sites and related capital expenditures |
|
|
(32,505 |
) |
|
|
— |
|
|
|
(64,605 |
) |
|
|
— |
|
Capitalized interest |
|
|
(1,060 |
) |
|
|
(1,085 |
) |
|
|
(4,237 |
) |
|
|
(4,585 |
) |
Free cash flow (non-GAAP measure) |
|
$ |
(17,448 |
) |
|
$ |
3,389 |
|
|
$ |
135,642 |
|
|
$ |
55,359 |
|
CAPITAL EXPENDITURE SUMMARY (UNAUDITED)
|
|
Quarter Ended |
|
Year Ended |
||||||||
|
|
|
|
|
||||||||
In thousands |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Capital expenditure summary (1) |
|
|
|
|
|
|
|
|
||||
CCA EOR field expenditures (2) |
|
$ |
50,432 |
|
$ |
16,664 |
|
$ |
124,257 |
|
$ |
35,754 |
CCA CO2 pipelines |
|
|
792 |
|
|
28,142 |
|
|
2,520 |
|
|
87,688 |
CCA tertiary development |
|
|
51,224 |
|
|
44,806 |
|
|
126,777 |
|
|
123,442 |
Non-CCA tertiary and non-tertiary fields |
|
|
57,991 |
|
|
25,578 |
|
|
196,901 |
|
|
97,085 |
CO2 sources and other CO2 pipelines |
|
|
2,850 |
|
|
618 |
|
|
8,974 |
|
|
1,657 |
Capitalized internal costs(3) |
|
|
8,906 |
|
|
7,348 |
|
|
31,546 |
|
|
29,987 |
Oil & gas development capital expenditures |
|
|
120,971 |
|
|
78,350 |
|
|
364,198 |
|
|
252,171 |
CCUS storage sites and related capital expenditures |
|
|
32,505 |
|
|
— |
|
|
64,605 |
|
|
— |
Oil and gas and CCUS development capital expenditures |
|
|
153,476 |
|
|
78,350 |
|
|
428,803 |
|
|
252,171 |
Capitalized interest |
|
|
1,060 |
|
|
1,085 |
|
|
4,237 |
|
|
4,585 |
Acquisitions of oil and natural gas properties(4) |
|
|
102 |
|
|
52 |
|
|
976 |
|
|
10,979 |
Investment in Clean Hydrogen Works |
|
|
218 |
|
|
— |
|
|
10,218 |
|
|
— |
Total capital expenditures |
|
$ |
154,856 |
|
$ |
79,487 |
|
$ |
444,234 |
|
$ |
267,735 |
(1) |
Capital expenditures in this summary are presented on an as-incurred basis (including accruals), and are |
|
(2) |
Includes pre-production CO2 costs associated with the CCA EOR development project totaling |
|
(3) |
Includes capitalized internal acquisition, exploration and development costs and pre-production tertiary startup costs. |
|
(4) |
Primarily consists of working interest positions in the |
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURE (UNAUDITED)
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 2022 and 2021 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) |
|
$ |
3,490,923 |
|
$ |
2,187,051 |
Discounted estimated future income tax |
|
|
966,133 |
|
|
486,771 |
PV-10 Value (non-GAAP measure) |
|
$ |
4,457,056 |
|
$ |
2,673,822 |
ESTIMATED QUANTITIES OF PROVED RESERVES ROLLFORWARD
|
|
Oil (MBbl) |
|
Gas (MMcf) |
|
Total (MBOE) |
|||
Balance at |
|
188,938 |
|
|
16,506 |
|
|
191,689 |
|
Revisions of previous estimates(1) |
|
24,863 |
|
|
16,378 |
|
|
27,593 |
|
Production |
|
(16,535 |
) |
|
(3,299 |
) |
|
(17,085 |
) |
Balance at |
|
197,266 |
|
|
29,585 |
|
|
202,197 |
|
|
|
|
|
|
|
|
|||
Proved Developed Reserves – end of year |
|
193,343 |
|
|
29,585 |
|
|
198,274 |
|
Proved Undeveloped Reserves – end of year |
|
3,923 |
|
|
— |
|
|
3,923 |
|
(1) |
Reflects changes in commodity prices resulting in upward revisions of 23.1 MMBOE. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230223005308/en/
DENBURY IR CONTACTS
Source:
FAQ
What were Denbury's fourth quarter 2022 financial results?
How much cash flow did Denbury generate in 2022?
What is the PV-10 value of Denbury's proved reserves?
How did winter storms impact Denbury's Q4 2022 sales volumes?