Denbury Reports Second Quarter 2022 Financial and Operational Results
Denbury Inc. (NYSE: DEN) announced a $100 million increase in its share repurchase program, raising the total to $350 million. In Q2 2022, Denbury reported cash flows from operations of $150 million and free cash flow of $55 million. The company executed a $100 million share buyback, repurchasing 3.2% of shares outstanding. Denbury ended Q2 with zero debt and $738 million in liquidity. The company is increasing its 2022 capital expenditures to $360 million, driven by service cost inflation and EOR development. Production guidance remains at 46,000 to 49,000 BOE/d.
- Increased share repurchase program by $100 million to $350 million.
- Reported Q2 cash flows from operations of $150 million.
- Achieved free cash flow of $55 million in Q2 2022.
- Ended Q2 2022 with zero debt and $738 million in liquidity.
- Strong oil price realization with an average pre-hedge price of $108.81 per barrel.
- Increased lease operating expenses due to service cost inflation.
- Slight decrease in sales volumes compared to Q1 2022.
Board authorizes
HIGHLIGHTS
-
Second quarter 2022 cash flows provided by operating activities totaled
, and adjusted cash flows from operations(1), excluding working capital changes, totaled$150 million .$145 million -
Generated
of free cash flow(1) during the second quarter and$55 million year-to-date.$106 million -
Repurchased
of the Company’s shares ($100 million 3.2% ofMarch 2022 shares outstanding) in June andJuly 2022 at per share, with$61.92 repurchased in the second quarter.$29 million -
Exited the second quarter with zero debt, a reduction of
from the first quarter 2022.$35 million -
Delivered sales volumes of 46,561 barrels of oil equivalent per day (“BOE/d”),
97% crude oil. -
Increased injection of industrial-sourced CO2 used in the Company’s Enhanced Oil Recovery (“EOR”) operations to 1.2 million metric tons for the quarter, up
27% from the first quarter of 2022, with the increase primarily driven by the Company’s Cedar Creek Anticline (“CCA”) EOR development. -
Signed a definitive agreement for a planned CO2 storage site near
Donaldsonville, Louisiana , covering approximately 18,000 acres and located less than five miles from the Company’s Green Pipeline.
(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 54.9 million for both the three and six months ended |
EXECUTIVE COMMENT
“Despite inflation headwinds and the ongoing supply chain issues affecting our industry and businesses globally, our teams have executed well on our 2022 capital program, which we expect will drive increased production in the latter part of this year. The development of our major EOR project at Cedar Creek Anticline is progressing well, and we are excited about the expected production and cash flow benefit to our business beginning next year and for decades to come.
“On the CCUS front, we continue to expand what we believe is the industry’s superior CCUS platform, adding another planned CO2 storage site in the emissions-intensive
SECOND QUARTER FINANCIAL AND OPERATIONAL RESULTS
|
|
2Q 2022 |
|
YTD 2022 |
||||
(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) |
|
93,001 |
|
1.69 |
|
186,123 |
|
3.39 |
Adjusted EBITDAX(1) (non-GAAP) |
|
154,404 |
|
|
|
285,251 |
|
|
Cash flows from operations |
|
149,965 |
|
|
|
240,108 |
|
|
Adjusted cash flows from operations(1) (non-GAAP) |
|
145,190 |
|
|
|
275,770 |
|
|
Oil & gas development capital expenditures |
|
86,290 |
|
|
|
143,896 |
|
|
CCUS capital expenditures - storage sites and related assets |
|
2,951 |
|
|
|
23,900 |
|
|
|
|
|
|
|
|
|
|
|
Average daily sales volumes (BOE/d) |
|
46,561 |
|
|
|
46,742 |
|
|
Blue Oil (% oil volumes using industrial-sourced CO2) |
|
|
|
|
|
|
|
|
Industrial-sourced CO2 injected (thousand metric tons) |
|
1,185 |
|
|
|
2,124 |
|
|
Total revenues and other income in the second quarter of 2022 were
Denbury’s oil and natural gas sales volumes averaged 46,561 BOE/d during the second quarter of 2022, in line with expectations. Oil represented
Lease operating expenses (“LOE”) in the second quarter of 2022 totaled
General and administrative (“G&A”) expenses were
On a pre-hedge basis, per barrel cash operating margins (revenues less LOE, production and ad valorem taxes, transportation and marketing expenses, and G&A and interest costs) expanded
Commodity derivatives expense in the second quarter of 2022 totaled
The Company’s second quarter 2022 effective income tax rate was approximately
CAPITAL EXPENDITURES
Second quarter 2022 capital expenditures, excluding capitalized interest, totaled
Non-CCA oil and gas development capital increased
FINANCIAL POSITION, LIQUIDITY AND SHARE REPURCHASES
Denbury’s Board of Directors recently authorized a
During the second quarter, the Company amended its bank credit agreement, which among other things: (i) increased the borrowing base and lender commitments from
OUTLOOK
Capital expenditures for the CCUS business are planned at
The Company’s full-year 2022 production guidance range is unchanged at between 46,000 and 49,000 BOE/d. For the third quarter, the Company anticipates sales volumes will be roughly flat compared to the second quarter of the year before increasing significantly in the fourth quarter, driven by incremental production from multiple projects in the Company’s 2022 capital program.
Updates to Denbury’s 2022 guidance can be found in the supporting materials on Denbury’s website.
CONFERENCE CALL AND WEBCAST
ABOUT
This press release and updated supporting materials, other than historical information, contains forward-looking statements that involve risks and uncertainties including: expectations as to future oil prices, operating costs, production levels and cash flows; anticipated levels of 2022 capital expenditures, lease operating expenses and general and administrative expenses, along with other financial forecasts; future tax benefits; the expected timing of first tertiary production at CCA; statements or predictions related to the ultimate economics of proposed carbon capture, use and storage arrangements and the CO2 volumes covered by such arrangements; and other 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 comparative three and six-month periods ended
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
||||||||||||||
The following information is based on GAAP reporting earnings (along with additional required disclosures) included or to be included in the Company’s periodic reports: |
||||||||||||||
|
|
Quarter Ended |
|
Six Months Ended |
||||||||||
|
|
|
|
|
||||||||||
In thousands, except per-share data |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||
Revenues and other income |
|
|
|
|
|
|
|
|
||||||
Oil sales |
|
$ |
446,592 |
|
$ |
280,577 |
|
|
$ |
827,834 |
|
$ |
513,621 |
|
Natural gas sales |
|
|
5,378 |
|
|
2,131 |
|
|
|
9,047 |
|
|
4,532 |
|
CO2 sales and transportation fees |
|
|
12,610 |
|
|
10,134 |
|
|
|
26,032 |
|
|
19,362 |
|
Oil marketing revenues |
|
|
16,786 |
|
|
7,819 |
|
|
|
30,062 |
|
|
13,945 |
|
Other income |
|
|
790 |
|
|
707 |
|
|
|
1,040 |
|
|
1,067 |
|
Total revenues and other income |
|
|
482,156 |
|
|
301,368 |
|
|
|
894,015 |
|
|
552,527 |
|
Expenses |
|
|
|
|
|
|
|
|
||||||
Lease operating expenses |
|
|
124,351 |
|
|
110,225 |
|
|
|
242,179 |
|
|
192,195 |
|
Transportation and marketing expenses |
|
|
4,802 |
|
|
8,522 |
|
|
|
9,447 |
|
|
16,319 |
|
CO2 operating and discovery expenses |
|
|
1,681 |
|
|
1,531 |
|
|
|
4,498 |
|
|
2,524 |
|
Taxes other than income |
|
|
36,317 |
|
|
22,382 |
|
|
|
67,698 |
|
|
41,345 |
|
Oil marketing purchases |
|
|
15,027 |
|
|
7,738 |
|
|
|
28,067 |
|
|
13,823 |
|
General and administrative expenses |
|
|
19,235 |
|
|
15,450 |
|
|
|
37,927 |
|
|
47,433 |
|
Interest, net of amounts capitalized of |
|
|
1,526 |
|
|
1,252 |
|
|
|
2,183 |
|
|
2,788 |
|
Depletion, depreciation, and amortization |
|
|
35,400 |
|
|
36,381 |
|
|
|
70,745 |
|
|
75,831 |
|
Commodity derivatives expense |
|
|
56,854 |
|
|
172,664 |
|
|
|
249,573 |
|
|
288,407 |
|
Write-down of oil and natural gas properties |
|
|
— |
|
|
— |
|
|
|
— |
|
|
14,377 |
|
Other expenses |
|
|
6,621 |
|
|
3,214 |
|
|
|
8,733 |
|
|
5,360 |
|
Total expenses |
|
|
301,814 |
|
|
379,359 |
|
|
|
721,050 |
|
|
700,402 |
|
Income (loss) before income taxes |
|
|
180,342 |
|
|
(77,991 |
) |
|
|
172,965 |
|
|
(147,875 |
) |
Income tax provision (benefit) |
|
|
|
|
|
|
|
|
||||||
Current income taxes |
|
|
2,912 |
|
|
(260 |
) |
|
|
2,351 |
|
|
(451 |
) |
Deferred income taxes |
|
|
21,936 |
|
|
(36 |
) |
|
|
15,992 |
|
|
(87 |
) |
Net income (loss) |
|
$ |
155,494 |
|
$ |
(77,695 |
) |
|
$ |
154,622 |
|
$ |
(147,337 |
) |
|
|
|
|
|
|
|
|
|
||||||
Net income (loss) per common share |
|
|
|
|
|
|
|
|
||||||
Basic |
|
$ |
3.00 |
|
$ |
(1.52 |
) |
|
$ |
2.99 |
|
$ |
(2.91 |
) |
Diluted |
|
$ |
2.83 |
|
$ |
(1.52 |
) |
|
$ |
2.81 |
|
$ |
(2.91 |
) |
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
||||||
Basic |
|
|
51,757 |
|
|
50,999 |
|
|
|
51,680 |
|
|
50,661 |
|
Diluted |
|
|
54,886 |
|
|
50,999 |
|
|
|
54,931 |
|
|
50,661 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||||||||||||||
|
|
Quarter Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
In thousands |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
|
$ |
155,494 |
|
|
$ |
(77,695 |
) |
|
$ |
154,622 |
|
|
$ |
(147,337 |
) |
Adjustments to reconcile net income (loss) to cash flows from operating activities |
|
|
|
|
|
|
|
|
||||||||
Depletion, depreciation, and amortization |
|
|
35,400 |
|
|
|
36,381 |
|
|
|
70,745 |
|
|
|
75,831 |
|
Write-down of oil and natural gas properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14,377 |
|
Deferred income taxes |
|
|
21,936 |
|
|
|
(36 |
) |
|
|
15,992 |
|
|
|
(87 |
) |
Stock-based compensation |
|
|
4,104 |
|
|
|
2,552 |
|
|
|
7,075 |
|
|
|
20,232 |
|
Commodity derivatives expense |
|
|
56,854 |
|
|
|
172,664 |
|
|
|
249,573 |
|
|
|
288,407 |
|
Payment on settlements of commodity derivatives |
|
|
(127,959 |
) |
|
|
(63,343 |
) |
|
|
(221,016 |
) |
|
|
(101,796 |
) |
Debt issuance costs |
|
|
1,249 |
|
|
|
685 |
|
|
|
1,934 |
|
|
|
1,370 |
|
Other, net |
|
|
(1,888 |
) |
|
|
17 |
|
|
|
(3,155 |
) |
|
|
744 |
|
Changes in assets and liabilities, net of effects from acquisitions |
|
|
|
|
|
|
|
|
||||||||
Accrued production receivable |
|
|
(12,991 |
) |
|
|
(12,131 |
) |
|
|
(85,786 |
) |
|
|
(48,881 |
) |
Trade and other receivables |
|
|
(13,427 |
) |
|
|
(6,443 |
) |
|
|
(11,783 |
) |
|
|
(5,578 |
) |
Other current and long-term assets |
|
|
(12,364 |
) |
|
|
3,836 |
|
|
|
(12,175 |
) |
|
|
1,294 |
|
Accounts payable and accrued liabilities |
|
|
40,600 |
|
|
|
28,694 |
|
|
|
52,010 |
|
|
|
27,292 |
|
Oil and natural gas production payable |
|
|
9,981 |
|
|
|
7,429 |
|
|
|
33,329 |
|
|
|
20,224 |
|
Asset retirement obligations and other liabilities |
|
|
(7,024 |
) |
|
|
(1,728 |
) |
|
|
(11,257 |
) |
|
|
(2,554 |
) |
Net cash provided by operating activities |
|
|
149,965 |
|
|
|
90,882 |
|
|
|
240,108 |
|
|
|
143,538 |
|
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from investing activities |
|
|
|
|
|
|
|
|
||||||||
Oil and natural gas capital expenditures |
|
|
(80,815 |
) |
|
|
(33,784 |
) |
|
|
(139,522 |
) |
|
|
(53,411 |
) |
CCUS storage sites and related capital expenditures |
|
|
(2,858 |
) |
|
|
— |
|
|
|
(17,758 |
) |
|
|
— |
|
Acquisitions of oil and natural gas properties |
|
|
(374 |
) |
|
|
(146 |
) |
|
|
(374 |
) |
|
|
(10,811 |
) |
Pipelines and plants capital expenditures |
|
|
(5,060 |
) |
|
|
(4,393 |
) |
|
|
(20,264 |
) |
|
|
(4,851 |
) |
Net proceeds from sales of oil and natural gas properties and equipment |
|
|
137 |
|
|
|
18,453 |
|
|
|
237 |
|
|
|
18,456 |
|
Other |
|
|
(4,127 |
) |
|
|
(1,243 |
) |
|
|
(5,623 |
) |
|
|
(4,159 |
) |
Net cash used in investing activities |
|
|
(93,097 |
) |
|
|
(21,113 |
) |
|
|
(183,304 |
) |
|
|
(54,776 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from financing activities |
|
|
|
|
|
|
|
|
||||||||
Bank repayments |
|
|
(250,000 |
) |
|
|
(283,000 |
) |
|
|
(524,000 |
) |
|
|
(485,000 |
) |
Bank borrowings |
|
|
215,000 |
|
|
|
243,000 |
|
|
|
489,000 |
|
|
|
450,000 |
|
Pipeline financing repayments |
|
|
— |
|
|
|
(17,001 |
) |
|
|
— |
|
|
|
(33,510 |
) |
Common stock repurchase program |
|
|
(23,374 |
) |
|
|
— |
|
|
|
(23,374 |
) |
|
|
— |
|
Other |
|
|
1,680 |
|
|
|
278 |
|
|
|
(1,388 |
) |
|
|
(2,735 |
) |
Net cash used in financing activities |
|
|
(56,694 |
) |
|
|
(56,723 |
) |
|
|
(59,762 |
) |
|
|
(71,245 |
) |
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
174 |
|
|
|
13,046 |
|
|
|
(2,958 |
) |
|
|
17,517 |
|
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
47,212 |
|
|
|
46,719 |
|
|
|
50,344 |
|
|
|
42,248 |
|
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
47,386 |
|
|
$ |
59,765 |
|
|
$ |
47,386 |
|
|
$ |
59,765 |
|
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||||||
In thousands, except par value and share data |
|
|
|
|
||||
Assets |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
517 |
|
|
$ |
3,671 |
|
Accrued production receivable |
|
|
229,151 |
|
|
|
143,365 |
|
Trade and other receivables, net |
|
|
30,918 |
|
|
|
19,270 |
|
Derivative assets |
|
|
2,829 |
|
|
|
— |
|
Prepaids |
|
|
18,686 |
|
|
|
9,099 |
|
Total current assets |
|
|
282,101 |
|
|
|
175,405 |
|
Property and equipment |
|
|
|
|
||||
Oil and natural gas properties (using full cost accounting) |
|
|
|
|
||||
Proved properties |
|
|
1,217,778 |
|
|
|
1,109,011 |
|
Unevaluated properties |
|
|
155,901 |
|
|
|
112,169 |
|
CO2 properties |
|
|
184,861 |
|
|
|
183,369 |
|
Pipelines |
|
|
226,318 |
|
|
|
224,394 |
|
CCUS storage sites and related assets |
|
|
24,026 |
|
|
|
— |
|
Other property and equipment |
|
|
98,777 |
|
|
|
93,950 |
|
Less accumulated depletion, depreciation, amortization and impairment |
|
|
(240,133 |
) |
|
|
(181,393 |
) |
Net property and equipment |
|
|
1,667,528 |
|
|
|
1,541,500 |
|
Operating lease right-of-use assets |
|
|
18,118 |
|
|
|
19,502 |
|
Derivative assets |
|
|
2,071 |
|
|
|
— |
|
Intangible assets, net |
|
|
83,688 |
|
|
|
88,248 |
|
Restricted cash for future asset retirement obligations |
|
|
46,869 |
|
|
|
46,673 |
|
Other assets |
|
|
38,305 |
|
|
|
31,625 |
|
Total assets |
|
$ |
2,138,680 |
|
|
$ |
1,902,953 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
||||
Current liabilities |
|
|
|
|
||||
Accounts payable and accrued liabilities |
|
$ |
262,752 |
|
|
$ |
191,598 |
|
Oil and gas production payable |
|
|
109,228 |
|
|
|
75,899 |
|
Derivative liabilities |
|
|
162,551 |
|
|
|
134,509 |
|
Operating lease liabilities |
|
|
4,670 |
|
|
|
4,677 |
|
Total current liabilities |
|
|
539,201 |
|
|
|
406,683 |
|
Long-term liabilities |
|
|
|
|
||||
Long-term debt, net of current portion |
|
|
— |
|
|
|
35,000 |
|
Asset retirement obligations |
|
|
273,852 |
|
|
|
284,238 |
|
Derivative liabilities |
|
|
5,415 |
|
|
|
— |
|
Deferred tax liabilities, net |
|
|
17,630 |
|
|
|
1,638 |
|
Operating lease liabilities |
|
|
15,571 |
|
|
|
17,094 |
|
Other liabilities |
|
|
18,170 |
|
|
|
22,910 |
|
Total long-term liabilities |
|
|
330,638 |
|
|
|
360,880 |
|
Commitments and contingencies |
|
|
|
|
||||
Stockholders’ equity |
|
|
|
|
||||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
51 |
|
|
|
50 |
|
Paid-in capital in excess of par |
|
|
1,137,575 |
|
|
|
1,129,996 |
|
Retained earnings |
|
|
159,966 |
|
|
|
5,344 |
|
|
|
|
(28,751 |
) |
|
|
— |
|
Total stockholders’ equity |
|
|
1,268,841 |
|
|
|
1,135,390 |
|
Total liabilities and stockholders’ equity |
|
$ |
2,138,680 |
|
|
$ |
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 |
|
Six Months Ended |
||||||||
|
|
|
|
|
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
Average daily sales (BOE/d) |
|
|
|
|
|
|
|
|
||||
Tertiary |
|
|
|
|
|
|
|
|
||||
|
|
|
22,205 |
|
|
24,680 |
|
|
22,608 |
|
|
24,481 |
|
|
|
9,186 |
|
|
8,772 |
|
|
9,203 |
|
|
7,984 |
Total tertiary sales |
|
|
31,391 |
|
|
33,452 |
|
|
31,811 |
|
|
32,465 |
|
|
|
|
|
|
|
|
|
||||
Non-tertiary |
|
|
|
|
|
|
|
|
||||
|
|
|
3,566 |
|
|
3,415 |
|
|
3,598 |
|
|
3,518 |
|
|
|
11,604 |
|
|
12,266 |
|
|
11,333 |
|
|
12,267 |
Total non-tertiary sales |
|
|
15,170 |
|
|
15,681 |
|
|
14,931 |
|
|
15,785 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (Bbls/d) |
|
|
45,104 |
|
|
47,653 |
|
|
45,284 |
|
|
46,834 |
Natural gas (Mcf/d) |
|
|
8,741 |
|
|
8,882 |
|
|
8,747 |
|
|
8,494 |
BOE/d (6:1) |
|
|
46,561 |
|
|
49,133 |
|
|
46,742 |
|
|
48,250 |
|
|
|
|
|
|
|
|
|
||||
Unit sales price (excluding derivative settlements) |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (per Bbl) |
|
$ |
108.87 |
|
$ |
64.90 |
|
$ |
100.94 |
|
$ |
60.72 |
Natural gas (per mcf) |
|
|
7.49 |
|
|
2.86 |
|
|
6.03 |
|
|
3.15 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (per Bbl) |
|
$ |
108.72 |
|
$ |
64.44 |
|
$ |
101.07 |
|
$ |
60.40 |
Natural gas (per mcf) |
|
|
6.36 |
|
|
2.50 |
|
|
5.53 |
|
|
2.80 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Oil (per Bbl)(1) |
|
$ |
108.81 |
|
$ |
64.70 |
|
$ |
101.00 |
|
$ |
60.59 |
Natural gas (per mcf) |
|
|
6.76 |
|
|
2.64 |
|
|
5.71 |
|
|
2.95 |
BOE (6:1) |
|
|
106.67 |
|
|
63.23 |
|
|
98.92 |
|
|
59.33 |
(1) |
Total company realized oil prices including derivative settlements were |
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
||||||||||||||||
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 |
||||||||||||
|
|
|
|
|
||||||||||||
In thousands, except per-share data |
|
Amount |
|
Per Diluted Share |
|
Amount |
|
Per Diluted Share |
||||||||
Net income (loss) (GAAP measure)(1) |
|
$ |
155,494 |
|
|
$ |
2.83 |
|
|
$ |
(77,695 |
) |
|
$ |
(1.52 |
) |
Adjustments to reconcile to adjusted net income (non-GAAP measure) |
|
|
|
|
|
|
|
|
||||||||
Noncash fair value losses (gains) on commodity derivatives(2) |
|
|
(71,105 |
) |
|
|
(1.30 |
) |
|
|
109,321 |
|
|
|
2.01 |
|
Delhi Field insurance reimbursements(3) |
|
|
(6,692 |
) |
|
|
(0.12 |
) |
|
|
— |
|
|
|
— |
|
Delta pipeline incident costs (included in other expenses)(4) |
|
|
3,867 |
|
|
|
0.07 |
|
|
|
— |
|
|
|
— |
|
Accrued litigation expense(5) |
|
|
1,444 |
|
|
|
0.03 |
|
|
|
— |
|
|
|
— |
|
Noncash fair value adjustment - contingent consideration(7) |
|
|
(12 |
) |
|
|
0.00 |
|
|
|
1,640 |
|
|
|
0.03 |
|
Adjustments to reconcile effect of dilutive securities(9) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.09 |
|
Estimated income taxes on above adjustments to net income (loss) and other discrete tax items(10) |
|
|
10,005 |
|
|
|
0.18 |
|
|
|
— |
|
|
|
— |
|
Adjusted net income (non-GAAP measure) |
|
$ |
93,001 |
|
|
$ |
1.69 |
|
|
$ |
33,266 |
|
|
$ |
0.61 |
|
|
|
Six Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
In thousands, except per-share data |
|
Amount |
|
Per Diluted Share |
|
Amount |
|
Per Diluted Share |
||||||||
Net income (loss) (GAAP measure)(1) |
|
|
154,622 |
|
|
$ |
2.81 |
|
|
|
(147,337 |
) |
|
$ |
(2.91 |
) |
Adjustments to reconcile to adjusted net income (non-GAAP measure) |
|
|
|
|
|
|
|
|
||||||||
Noncash fair value losses on commodity derivatives(2) |
|
|
28,557 |
|
|
|
0.52 |
|
|
|
186,611 |
|
|
|
3.54 |
|
Delhi Field insurance reimbursements(3) |
|
|
(6,692 |
) |
|
|
(0.12 |
) |
|
|
— |
|
|
|
— |
|
Delta pipeline incident costs (included in other expenses)(4) |
|
|
3,867 |
|
|
|
0.07 |
|
|
|
— |
|
|
|
— |
|
Accrued litigation expense(5) |
|
|
1,444 |
|
|
|
0.03 |
|
|
|
— |
|
|
|
— |
|
Write-down of oil and natural gas properties(6) |
|
|
— |
|
|
|
— |
|
|
|
14,377 |
|
|
|
0.27 |
|
Noncash fair value adjustment - contingent consideration(7) |
|
|
173 |
|
|
|
0.00 |
|
|
|
1,640 |
|
|
|
0.03 |
|
Other(8) |
|
|
— |
|
|
|
— |
|
|
|
325 |
|
|
|
0.01 |
|
Adjustments to reconcile effect of dilutive securities(9) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.11 |
|
Estimated income taxes on above adjustments to net income (loss) and other discrete tax items(10) |
|
|
4,152 |
|
|
|
0.08 |
|
|
|
— |
|
|
|
— |
|
Adjusted net income (non-GAAP measure) |
|
$ |
186,123 |
|
|
$ |
3.39 |
|
|
$ |
55,616 |
|
|
$ |
1.05 |
|
(1) |
|
Diluted net income (loss) per common share includes the impact of potentially dilutive securities including nonvested restricted stock, restricted stock units, performance stock units 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) |
|
Insurance reimbursements associated with a 2013 insurance claim related to property damage at Delhi Field. |
(4) |
|
Represents an accrual for a preliminarily assessed civil penalty proposed in |
(5) |
|
Represents accrued litigation expense, including |
(6) |
|
Full cost pool ceiling test write-downs related to the Company’s oil and natural gas properties. |
(7) |
|
Expense related to the change in fair value of the contingent consideration payments related to our |
(8) |
|
Other adjustments primarily include < |
(9) |
|
Represents the impact to the per-share calculation using weighted average dilutive shares of 54.3 million and 52.7 million during the three and six months ended |
(10) |
|
The estimated income tax impacts on adjustments to net income for the three months ended |
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
|||||||||||||||
Reconciliation of net income (loss) (GAAP measure) to Adjusted EBITDAX (non-GAAP measure) |
|||||||||||||||
Adjusted EBITDAX is a non-GAAP measure which management uses and 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 nonrecurring. 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 the 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 flow 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 the Company’s net income (loss) to Adjusted EBITDAX. |
|||||||||||||||
In thousands |
|
Quarter Ended |
|
Six Months Ended |
|||||||||||
|
|
|
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net income (loss) (GAAP measure) |
|
$ |
155,494 |
|
|
$ |
(77,695 |
) |
|
$ |
154,622 |
|
$ |
(147,337 |
) |
Adjustments to reconcile to Adjusted EBITDAX |
|
|
|
|
|
|
|
|
|||||||
Interest expense |
|
|
1,526 |
|
|
|
1,252 |
|
|
|
2,183 |
|
|
2,788 |
|
Income tax expense (benefit) |
|
|
24,848 |
|
|
|
(296 |
) |
|
|
18,343 |
|
|
(538 |
) |
Depletion, depreciation, and amortization |
|
|
35,400 |
|
|
|
36,381 |
|
|
|
70,745 |
|
|
75,831 |
|
Noncash fair value losses (gains) on commodity derivatives |
|
|
(71,105 |
) |
|
|
109,321 |
|
|
|
28,557 |
|
|
186,611 |
|
Stock-based compensation |
|
|
4,104 |
|
|
|
2,552 |
|
|
|
7,075 |
|
|
20,232 |
|
Write-down of oil and natural gas properties |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
14,377 |
|
Severance-related expense |
|
|
— |
|
|
|
476 |
|
|
|
— |
|
|
476 |
|
Noncash, non-recurring and other |
|
|
4,137 |
|
|
|
462 |
|
|
|
3,726 |
|
|
1,929 |
|
Adjusted EBITDAX (non-GAAP measure) |
|
$ |
154,404 |
|
|
$ |
72,453 |
|
|
$ |
285,251 |
|
$ |
154,369 |
|
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 Unaudited Condensed 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 oil and gas development expenditures, CCUS asset capital 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 |
|
Six Months Ended |
||||||||||||
|
|
|
|
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
Cash flows from operations (GAAP measure) |
|
$ |
149,965 |
|
|
$ |
90,882 |
|
|
$ |
240,108 |
|
|
$ |
143,538 |
|
Net change in assets and liabilities relating to operations |
|
|
(4,775 |
) |
|
|
(19,657 |
) |
|
|
35,662 |
|
|
|
8,203 |
|
Adjusted cash flows from operations (non-GAAP measure) |
|
|
145,190 |
|
|
|
71,225 |
|
|
|
275,770 |
|
|
|
151,741 |
|
Oil & gas development expenditures |
|
|
(86,290 |
) |
|
|
(54,102 |
) |
|
|
(143,896 |
) |
|
|
(74,181 |
) |
CCUS storage sites and related capital expenditures |
|
|
(2,951 |
) |
|
|
— |
|
|
|
(23,900 |
) |
|
|
— |
|
Capitalized interest |
|
|
(975 |
) |
|
|
(1,168 |
) |
|
|
(2,133 |
) |
|
|
(2,251 |
) |
Free cash flow (non-GAAP measure) |
|
$ |
54,974 |
|
|
$ |
15,955 |
|
|
$ |
105,841 |
|
|
$ |
75,309 |
|
CAPITAL EXPENDITURE SUMMARY (UNAUDITED)(1) |
|||||||||||||
|
|
Quarter Ended |
|
Six Months Ended |
|||||||||
|
|
|
|
|
|||||||||
In thousands |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||
Capital expenditure summary |
|
|
|
|
|
|
|
|
|||||
CCA EOR field expenditures(2) |
|
$ |
21,483 |
|
|
$ |
9,091 |
|
$ |
39,205 |
|
$ |
9,100 |
CCA CO2 pipelines |
|
|
(950 |
) |
|
|
9,951 |
|
|
1,241 |
|
|
9,999 |
CCA tertiary development |
|
|
20,533 |
|
|
|
19,042 |
|
|
40,446 |
|
|
19,099 |
Non-CCA tertiary and non-tertiary fields |
|
|
57,074 |
|
|
|
27,875 |
|
|
86,437 |
|
|
40,297 |
CO2 sources and other CO2 pipelines |
|
|
1,380 |
|
|
|
— |
|
|
2,110 |
|
|
— |
Capitalized internal costs(3) |
|
|
7,303 |
|
|
|
7,185 |
|
|
14,903 |
|
|
14,785 |
Oil & gas development capital expenditures |
|
|
86,290 |
|
|
|
54,102 |
|
|
143,896 |
|
|
74,181 |
CCUS storage sites and related capital expenditures |
|
|
2,951 |
|
|
|
— |
|
|
23,900 |
|
|
— |
Acquisitions of oil and gas properties(4) |
|
|
3 |
|
|
|
146 |
|
|
374 |
|
|
10,811 |
Capitalized interest |
|
|
975 |
|
|
|
1,168 |
|
|
2,133 |
|
|
2,251 |
Total capital expenditures |
|
$ |
90,219 |
|
|
$ |
55,416 |
|
$ |
170,303 |
|
$ |
87,243 |
(1) |
Capital expenditure amounts incurred during the period, including accrued capital costs. |
|
(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 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005151/en/
DENBURY IR CONTACTS:
Source:
FAQ
What financial results did Denbury report for Q2 2022?
How much has Denbury increased its share repurchase program?
What is Denbury's current debt status?
What are Denbury's production guidance numbers for 2022?