Denbury Resources will be presenting at EnerCom’s The Oil & Gas Conference® in Denver, on Tuesday, August 16, 2016.
Denbury Resources is an upstream oil and gas operator primarily focused on carbon dioxide enhanced oil recovery methods. The company’s portfolio of assets is split between the Rocky Mountain region and the Gulf Coast region. Denbury operates mature fields by utilizing tertiary recovery, which limits field production declines relative to other operators.
Denbury’s focus has been on improving balance sheet strength while maintaining neutral free cash flow. However, the company expects one more asset write down on their balance sheet for 2Q16 since the 2Q15 oil prices were higher than current market conditions. The company has a net debt to EBITDA of 4.1 times according to the EnerCom Analytics database. Denbury’s focus has been on enhancing liquidity and reducing debt.
During the first quarter of 2016, Denbury reduced net debt by $488 million through repurchases ($152 million of senior subordinated notes in open-market transactions in 1Q16) and exchanges ($923 million of their senior subordinated notes for $531 million in second lien notes in addition to 36.9 million shares of Denbury common stock). The company anticipates a savings of approximately $6 million dollars from the reduction of cash interest payments.
The spring 2016 borrowing base redetermination set Denbury’s commitments and borrowing base at $1.05 billion, giving the company about $700 million in liquidity. In addition to balance sheet improvements, Denbury has recently reduced its workforce by 20% and its lease operating costs down to $16.23/bbl, representing a 16% decrease sequentially and a six year low in LOE per barrel (however, the lease operating costs are expected to increase proportionally with higher workover volumes in 2Q16).
Denbury’s most significant project coming down the pipe is their Delhi NGL plant. This plant will extract NGL’s from the gas stream to sell separately, provide a more pure carbon dioxide stream, and generate power to offset electricity purchases. So far, the plant is on schedule and on budget and should come online by year end.
EnerCom’s The Oil & Gas Conference® Denver – August 14-18, 2016
Denbury Resources (ticker: DNR) will be presenting at EnerCom’s The Oil & Gas Conference® 21 in Denver on Tuesday, August 16, 2016 at 11:20am EDT. Conference information and registration for this year’s EnerCom conference may be accessed here.
