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Denbury Reports First Quarter 2013 Results

PLANO, Texas, May 2, 2013 (GLOBE NEWSWIRE) -- Denbury Resources Inc. (NYSE:DNR) ("Denbury" or the "Company") today announced adjusted net income (a non-GAAP measure) (1) of $123 million for the first quarter of 2013, or $0.33 per diluted share. This compares to $137 million of adjusted net income, or $0.36 per diluted share for the fourth quarter of 2012 (2), and $161 million of adjusted net income, or $0.41 per diluted share, for the prior year first quarter. First quarter of 2013 net income (the GAAP measure) was $88 million, or $0.23 per diluted share, on quarterly revenues of $580 million. This compares to net income of $115 million, or $0.30 per diluted share, on revenues of $603 million for the fourth quarter of 2012, and net income of $113 million, or $0.29 per diluted share, on revenues of $640 million for the prior year first quarter.

Adjusted cash flow from operations (a non-GAAP measure) (1) for both the first quarter of 2013 and the fourth quarter of 2012 was $316 million ($358 million in the fourth quarter of 2012 if the increase in current income taxes related to the Bakken transaction (3) is excluded) (2) and compares to $352 million for the prior year first quarter. Net cash provided by operating activities (the GAAP measure) was $269 million for the first quarter of 2013, compared to $385 million for the fourth quarter of 2012 and $292 million for the prior year first quarter.

Key accomplishments to date in 2013 include:
  • Increased average quarterly oil production from tertiary operations to a new record level of 39,057 barrels per day ("Bbls/d"), 17% higher than 2012's first quarter level and 4% higher than the fourth quarter of 2012 level.  
  • Acquired assets in the Cedar Creek Anticline that are currently producing approximately 11,000 barrels of oil equivalent per day ("BOE/d") net to the acquired interest, from ConocoPhillips for $989 million cash, after preliminary closing adjustments. This was the latest transaction in a series of tax-efficient property transactions, with a combined aggregate value of over $4 billion, making Denbury more purely focused on enhanced oil recovery with carbon dioxide ("CO 2").  
  • Commenced injection of CO 2 captured from two industrial facilities in the Gulf Coast region. These facilities are expected to provide a combined approximate 70 million cubic feet per day of CO 2 to Denbury's Gulf Coast region tertiary operations and illustrate the Company's unique ability to use and store CO 2 that would otherwise be released into the atmosphere.  
  • Began pressuring up the Greencore pipeline, Denbury's first CO 2 pipeline in the Rocky Mountain region, with CO 2 from the Lost Cabin Gas Plant to prepare for anticipated initial CO 2 injections into the Denbury-operated Bell Creek Field in Montana in the second quarter of 2013, with initial tertiary oil production from the field estimated to occur in the latter part of the third quarter of 2013.  
  • Issued $1.2 billion of 4 5/8% senior subordinated notes due 2023 in conjunction with refinancing approximately $651 million principal amount of senior subordinated notes with interest rates of 9 1/2% and 9 3/4% and reduced outstanding borrowings on our bank credit facility with the additional proceeds.

(1) 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) The GAAP to non-GAAP reconciliations for the fourth quarter of 2012 are part of the Company's fourth quarter 2012 earnings release which is an exhibit to its February 21, 2013 Form 8-K.

(3) Full description of the Bakken transaction is provided in the Company's September 20, 2012 Form 8-K as amended December 26, 2012 and January 18, 2013 on Forms 8-K/A. 

Management Comment

Phil Rykhoek, Denbury's President and CEO, commented, "We are off to a strong start in 2013 as we continue to execute on our proven, unique, and repeatable growth strategy. Quarterly oil production from our core tertiary business exceeded our expectations, reaching a new record level in the first quarter, while our realized oil price premium in the quarter was our highest ever. From a total production standpoint, the first quarter was a transition quarter for us as we sold our Bakken area assets in the fourth quarter of 2012 but did not acquire the replacement assets in the Cedar Creek Anticline until almost the end of the first quarter of 2013. These newly acquired properties are currently producing around 11,000 BOE/d net to our interest, and we expect over 20% of our total daily production to come from the Cedar Creek Anticline for the remainder of 2013. 

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