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PLANO, Texas, Aug. 6, 2014 (GLOBE NEWSWIRE) -- Denbury Resources Inc. (NYSE:DNR) ("Denbury" or the "Company") today announced adjusted net income (a non-GAAP measure)
(1) of $93 million for the second quarter of 2014, or $0.26
(1)(2) per diluted share. On a GAAP basis, for the quarter the Company recorded a net loss of $55 million, or ($0.16) per diluted share. Adjusted net income
(1) for the second quarter of 2014 differs from the GAAP net loss due to a pre-tax loss of $125 million ($77 million after tax) for noncash fair value adjustments on commodity derivatives (a non-GAAP measure)
(1) and a pre-tax loss of $114 million ($71 million after tax) on early extinguishment of debt related to the redemption of the Company's 8¼% senior subordinated notes due 2020 (the "8¼% Notes"), which were refinanced during the quarter with the issuance of 5½% senior subordinated notes due 2022 (the "5½% Notes").
Second Quarter of 2014 Highlights:
Increased adjusted cash flow from operations (a non-GAAP measure) (1)(3) by 9% sequentially;
Increased tertiary production by 3% and total production by 2% sequentially;
Lowered lease operating expense per barrel of oil equivalent ("BOE") by 7% sequentially; and
Year-to-date, generated an excess of $62 million of adjusted cash flow from operations (1)(3) after capital expenditures of $498 million and dividend payments of $43 million.
Sequential and year-over-year quarterly comparisons of selected financial items are shown in the following table:
(in millions, except per share amounts)
June 30, 2014
March 31, 2014
June 30, 2013
Net income (loss)
Adjusted net income (1) (non-GAAP measure)
Net income (loss) per diluted share
Adjusted net income per diluted share (1)(2) (non-GAAP measure)
Cash flow from operations
Adjusted cash flow from operations (1)(3) (non-GAAP measure)
(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) For the three months ended June 30, 2014, calculated using average diluted shares outstanding of 350.2 million.
(3) Adjusted cash flow from operations reflects cash flow from operations before working capital changes but is not adjusted for nonrecurring items.
Sequentially, adjusted net income
(1) for the second quarter of 2014 increased by $4 million and adjusted cash flow from operations
(1)(3) increased $25 million from the first quarter of 2014 levels, primarily due to 2% higher production volumes and lower lease operating expenses.
Compared to the prior-year second quarter, 2014 second quarter adjusted net income
(1) decreased by $58 million primarily due to $50 million of payments on settlement of commodity derivative contracts during the current quarter, compared to no such payments in the prior-year period. These comparative second quarter results were also impacted by higher interest expense due to less capitalized interest in the current quarter and higher current depletion, depreciation and amortization ("DD&A") due to higher production volumes and a higher depletion rate per BOE. These higher expenses were partially offset by 2% higher production volumes and slightly higher realized prices (excluding the impact of derivative settlements) in the most recent quarter.
Phil Rykhoek, Denbury's President and CEO, commented, "Our organization remains highly focused on increasing shareholder value by executing on our growth and income strategy. Our second quarter results demonstrate that we are starting to see the benefits of our focus on reducing costs, with our lease operating expenses coming down nearly $2 per BOE from the prior quarter. In addition, we are seeing reductions in our capital costs, and based on our spend rate thus far, we believe that we could see spending on our planned 2014 capital projects come in below our budget of $1.1 billion. Although we still have some ground to cover, we are encouraged by the efforts and accomplishments we have seen thus far and feel confident that we can continue to find efficiencies and additional reductions in our cost structure.
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