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Denbury Reports 2013 Fourth Quarter And Annual Results

PLANO, Texas, Feb. 20, 2014 (GLOBE NEWSWIRE) -- Denbury Resources Inc. (NYSE:DNR) ("Denbury" or the "Company") today announced adjusted net income (a non-GAAP measure) (1) of $100 million for the fourth quarter of 2013, or $0.27 per diluted share. Fourth quarter of 2013 net income (the GAAP measure) was $90 million, or $0.25 per diluted share, on quarterly revenues of $596 million. Adjusted net income decreased by $37 million from the same measure for the prior year fourth quarter primarily due to a 5% decrease in realized oil prices and increases in both lease operating expenses and depletion, depreciation and amortization, partially offset by a 2% increase in production volumes.

Sequential and year-over-year comparisons of selected quarterly financial items are shown in the following table:
  Quarter Ended
(in millions, except per share amounts) Dec. 31, 2013 Sep. 30, 2013 (3) Dec. 31, 2012
Revenues $596 $674 $603
Net income (GAAP measure) 90 102 115
Adjusted net income (1) 100 165 137
Net income per diluted share (GAAP measure) 0.25 0.28 0.30
Adjusted net income per diluted share (1) 0.27 0.45 0.36
Cash flow from operations (GAAP measure) 349 305 385
Adjusted cash flow from operations (1)(2) 295 352 316

Denbury's full-year 2013 adjusted net income (a non-GAAP measure) (1) was $539 million, or $1.46 per diluted share and full-year 2013 net income (the GAAP measure) was $410 million, or $1.11 per diluted share, on annual revenues of $2.5 billion. Adjusted net income for the full-year 2013 differs from GAAP net income for the year due primarily to a pre-tax expense of $114 million for costs associated with the Company's Delhi Field remediation, $45 million of pre-tax costs associated with the early extinguishment of debt, and $52 million of net pre-tax expenses for noncash fair value adjustments on commodity derivatives and other minor adjustments. Adjusted net income for full-year 2013 decreased by $24 million from the same measure in 2012 primarily due to higher lease operating costs in 2013, offset in part by higher realized oil prices. However, adjusted net income per diluted share increased slightly between the periods, largely due to a 5% reduction in the average diluted common shares outstanding in the 2013 period.

(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) Adjusted cash flow from operations reflects cash flow from operations before working capital changes but is not adjusted for nonrecurring items, such as the Delhi Field remediation expenses.

(3) The GAAP to non-GAAP reconciliations for the third quarter of 2013 are part of the Company's third quarter 2013 earnings release which is an exhibit to its November 5, 2013 Form 8-K.

Year-over-year comparisons of selected annual financial items are shown in the following table: 
  Year Ended
(in millions, except per share amounts) Dec. 31, 2013 Dec. 31, 2012
Revenues $2,494 $2,436
Net income (GAAP measure) 410 525
Adjusted net income (1) 539 563
Net income per diluted share 1.11 1.35
Adjusted net income per diluted share (1) 1.46 1.45
Cash flow from operations (GAAP measure) 1,361 1,411
Adjusted cash flow from operations (1)(2) 1,272 1,380

(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) Adjusted cash flow from operations reflects cash flow from operations before working capital changes but is not adjusted for nonrecurring items, such as the Delhi Field remediation expenses.

Management Comment

Phil Rykhoek, Denbury's President and CEO, commented, "Our quarterly production came in slightly ahead of our estimates, in spite of some weather issues and a delay in the completion of our Greencore Pipeline interconnect. However, lower oil prices and higher operating costs combined to lower our bottom line results on a sequential-quarter basis. This quarter we recorded an incremental provision for the Delhi Field remediation, primarily reflecting fourth quarter charges on the final remediation work and other previously unanticipated costs. These estimates could still change in the future, as it is possible that other costs could arise that are not currently known or estimable.

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