Generates Cash Flow Well Above Plan;
Authorizes Share Repurchase Program
Carbon Solutions Agreements Solidify CCUS
Leadership Position
Denbury Inc. (NYSE: DEN) (“Denbury” or the “Company”) today
provided its first quarter 2022 financial and operating
results.
FIRST QUARTER AND RECENT HIGHLIGHTS
- First quarter 2022 cash flows provided by operating activities
totaled $90 million. Adjusted cash flows from operations(1) of
nearly $131 million represent a 62% increase from the first quarter
of 2021.
- Generated $51 million in free cash flow(1) during the first
quarter of 2022.
- Commenced carbon dioxide (“CO2”) injection at the Cedar Creek
Anticline (“CCA”) enhanced oil recovery (“EOR”) project, with 55
wells currently injecting more than 115 million cubic feet per day
of industrial-sourced CO2.
- Signed a new term sheet for transportation and dedicated
storage of approximately 2 million metric tons per year (“mmtpa”)
of CO2 captured from a chemicals facility to be constructed in
southeast Louisiana. The facility is anticipated to be built in
close proximity to Denbury’s CO2 infrastructure and the arrangement
covers a 12-year period.
- Amended the Company’s senior secured bank credit facility,
increasing the borrowing base and lender commitments to $750
million, extending the maturity to 2027, and relaxing various
covenants.
- Authorized a $250 million share repurchase program.
(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 55.0 million and 51.2 million for the three
months ended March 31, 2022 and 2021, respectively.
EXECUTIVE COMMENT
Chris Kendall, the Company’s President and CEO, commented,
“Denbury made strong progress on our key 2022 objectives during the
first quarter, with CO2 injection ahead of plan at the Cedar Creek
Anticline EOR project and continued advancements in support of our
CCUS business. The CCA EOR development, which will produce
carbon-negative blue oil through 100% utilization of
industrial-sourced CO2, provides the Company with a deep inventory
of resource development opportunities and decades of significant
cash flow.”
“I am extremely excited about our successes in the Carbon
Solutions business so far this year, and I believe we are on track
to substantially exceed our goals for CO2 offtake and storage
agreements established at the beginning of the year. Denbury’s
proven track record in providing highly reliable transportation and
secure underground injection of CO2 emissions from our industrial
partners, combined with our ideally positioned infrastructure, is
unmatched in the industry and positions us well for continued
success and growth in CCUS.”
“I am also pleased that Denbury’s Board of Directors has
authorized a $250 million share repurchase program. At current oil
price levels, we believe that our cash flow generation will be more
than sufficient to meet our anticipated capital needs, providing
the opportunity to return meaningful capital to shareholders in
this manner.”
FIRST QUARTER FINANCIAL AND OPERATIONAL RESULTS
1Q 2022
(in thousands, except per-share and volume
data)
Total
Per Diluted Share
Net loss
$(872)
$(0.02)
Adjusted net income(1)(2) (non-GAAP)
93,122
1.69
Adjusted EBITDAX(1) (non-GAAP)
130,847
Cash flows from operations
90,143
Adjusted cash flows from operations(1)
(non-GAAP)
130,580
Development capital expenditures - Oil
& Gas
57,606
Capital expenditures - CCUS storage sites
and related assets
20,949
Average daily sales volumes (BOE/d)
46,925
Blue Oil (% oil volumes using
industrial-sourced CO2)
25%
Industrial-sourced CO2 injected (thousand
metric tons)
936
Total revenues and other income in the first quarter of 2022
were $412 million, a 64% increase over first quarter 2021 levels,
supported predominantly by higher oil price realizations. Denbury’s
first quarter 2022 average pre-hedge realized oil price was $93.17
per barrel (“Bbl”), which was $1.37 per Bbl below the daily average
NYMEX WTI oil price for the period. The Company’s average oil price
differential in both the Rocky Mountain and Gulf Coast regions has
remained relatively consistent over the last several quarters,
despite the significant increase in NYMEX oil prices.
Denbury’s oil and natural gas sales volumes averaged 46,925
barrels of oil equivalent per day (“BOE/d”) during the first
quarter of 2022, generally in line with expectations. Oil
represented 97% of the Company’s first quarter 2022 volumes, and
approximately 25% of the Company’s oil was attributable to the
injection of industrial-sourced CO2 in its EOR operations,
resulting in carbon-negative or blue oil. As compared to the fourth
quarter of 2021, sales volumes were lower as a result of natural
production declines due to lower levels of capital spending in
prior years and severe winter weather impacts. In addition, the
conversion of wells from water injection to CO2 injection as part
of the CCA tertiary EOR project impacted first quarter 2022
volumes.
Lease operating expenses (“LOE”) in the first quarter of 2022
totaled $118 million, or $27.90 per BOE, within the Company’s
annual guidance range. LOE per BOE increased slightly from the
fourth quarter of 2021 as service costs and crude oil and natural
gas prices have increased, which have raised power and fuel, CO2,
and workover costs. The increase in LOE from the first quarter 2021
was more significant as first quarter 2021 LOE included a $15
million benefit resulting from a favorable adjustment for reduced
power usage during winter storm Uri.
Transportation and marketing expenses totaled $5 million, and
General and administrative expenses were $19 million in the first
quarter of 2022, both in line with expectations. Depletion,
depreciation, and amortization was $35 million, or $8.37 per BOE
for the quarter.
Commodity derivatives expense totaled $193 million in the first
quarter of the year, driven by the significant increase in the
crude oil price outlook from the end of 2021 to March 31, 2022.
Cash payments on hedges that settled in the first quarter of 2022
totaled $93 million.
The Company’s first quarter 2022 income tax benefit of $7
million is primarily related to the release of a valuation
allowance on certain state tax benefits that the Company now
expects to realize based on the outlook for higher commodity
prices. As a result of the unique nature of the first quarter
valuation allowance release, the Company has adjusted out of
earnings the first quarter 2022 valuation allowance reversal in its
net loss (GAAP) to adjusted net income (non-GAAP)
reconciliation.
INVESTING ACTIVITIES
First quarter 2022 oil & gas development capital
expenditures totaled $58 million. Approximately 35% of the first
quarter total was incurred on the CCA EOR project, including field
work to convert water wells to CO2 injection and pre-production
tertiary injection costs. First tertiary production response at CCA
is expected during the second half of 2023. Non-CCA oil & gas
development capital during the first quarter included tertiary
projects at the Beaver Creek and Soso fields, among others. During
the first quarter, the Company also incurred $21 million in capital
expenditures related to its CCUS business, primarily consisting of
lease acquisition costs and other storage-related expenditures.
FINANCIAL POSITION AND LIQUIDITY
Denbury’s total debt at the end of the first quarter 2022 was
$35 million, consistent with year-end 2021. The Company had $529
million of financial liquidity (cash on hand and borrowing capacity
under the Company’s credit facility) at the end of the period.
Denbury’s leverage ratio is less than 0.1X.
On May 4, 2022, the Company amended its bank credit agreement,
which among other things: (i) increased the borrowing base and
lender commitments from $575 million to $750 million, (ii) extended
the maturity date from January 30, 2024, to May 4, 2027, and (iii)
relaxed certain covenants, such as permitting the Company to pay
dividends on its common stock and make other unlimited restricted
payments and investments so long as certain leverage and
availability requirements are met. Financial liquidity, including
the Company’s increased credit facility capacity, would have been
$704 million at the end of the first quarter 2022.
As separately announced today, Denbury’s Board of Directors has
authorized a share repurchase program under which the Company may
repurchase up to $250 million of its outstanding shares of common
stock (which represent more than 7% of Denbury’s current market
capitalization). The timing and amount of any share repurchases
will be determined by Denbury’s management at its discretion based
on ongoing assessments of the capital needs of the business, the
market price of Denbury’s common stock and general market
conditions.
RECENT CCUS HIGHLIGHTS
Inclusive of the new term sheet announced today, Denbury has now
executed various agreements or term sheets in 2022 for CO2
transportation, storage and/or utilization covering a total of
approximately 5 mmtpa. Cumulative CO2 volumes under transportation,
storage and utilization agreements now total approximately 7 mmtpa
(2022 goal - cumulative 10 mmtpa). In addition, the Company has
previously announced the acquisition of multiple potential CO2
sequestration sites along the U.S. Gulf Coast in Texas, Louisiana,
and Alabama. Cumulative potential CO2 sequestration capacity is
more than 1.4 billion metric tons (2022 goal - in excess of 1.2
billion metric tons). The Company has commenced the Class VI
permitting process on all of its operated potential CO2
sequestration sites.
OUTLOOK
As a result of the increased outlook for commodity prices and
recent inflationary pressures (in comparison to the Company’s
originally-provided guidance at $70 per barrel WTI), Denbury
anticipates full-year 2022 oil & gas capital expenditures,
lease operating expense, and G&A to be in the upper half to
upper end of their respective annual ranges for the year. The
Company’s full-year 2022 production guidance range is
unchanged.
For the second quarter, the Company anticipates sales volumes to
be slightly lower than the first quarter of 2022 as a result of the
timing of workover and development activities, with production
volumes anticipated to grow through the second half of 2022. LOE
per BOE is anticipated to increase in the second quarter primarily
as a result of higher commodity prices and increased seasonal
workover operations. Oil & gas development capital expenditures
are anticipated to increase in the second quarter over the first
quarter, driven by continued activity at CCA, including purchase of
equipment for the EOR recycle facilities, as well as additional
drilling and development activities across the Company’s Rocky
Mountain and Gulf Coast regions.
The Company has determined that it expects to fully utilize all
of its federal and certain of its state tax benefits and therefore
a valuation allowance against these tax benefits is no longer
necessary. Approximately $6 million of the valuation allowance was
reversed in the first quarter of 2022 and the remaining portion of
the valuation allowance reversal will occur over the remaining
quarters in 2022, resulting in an estimated effective tax rate for
the second through fourth quarters of approximately 15% based on
the Company’s currently anticipated 2022 level of pre-tax income.
Future increases or decreases in the Company’s anticipated income
level will likely increase or decrease the Company’s effective tax
rate for the year. In addition, with the anticipated higher levels
of income, the Company now expects approximately 30% of its total
taxes will be current, or cash taxes.
Further details on the Company’s 2022 guidance can be found in
the supporting materials on Denbury’s website.
CONFERENCE CALL AND WEBCAST
Denbury management will host a conference call to review and
discuss first quarter 2022 financial and operating results and its
outlook for future periods, today, Thursday, May 5, at 11:00 a.m.
Central Time (12:00 p.m. Eastern Time). Additionally, Denbury will
post supporting materials on its website before market open today.
The presentation webcast will be available, both live and for
replay, on the Investor Relations page of the Company’s website at
www.denbury.com. Individuals who would like to participate in the
conference call should dial the following numbers shortly before
the scheduled start time: 844.200.6205 or 929.526.1599 with access
code 328081.
ABOUT DENBURY
Denbury is an independent energy company with operations and
assets focused on Carbon Capture, Use and Storage (CCUS) and
Enhanced Oil Recovery (EOR) in the Gulf Coast and Rocky Mountain
regions. For over two decades, the Company has maintained a unique
strategic focus on utilizing CO2 in its EOR operations and since
2012 has also been active in CCUS through the injection of captured
industrial-sourced CO2. The Company currently injects over four
million tons of captured industrial-sourced CO2 annually, with an
objective to fully offset its Scope 1, 2, and 3 CO2 emissions by
2030, primarily through increasing the amount of captured
industrial-sourced CO2 used in its operations. For more information
about Denbury, visit www.denbury.com.
This press release, 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 and tax rates; 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 Securities and Exchange Commission, including Denbury’s
most recent report on Form 10-K. These risks and uncertainties are
incorporated by this reference as though fully set forth herein.
These statements are based on oil pricing, financial and market,
engineering, geological and operating assumptions that management
believes are reasonable based on currently available information;
however, management’s assumptions and the Company’s future
performance are both subject to a wide range of risks, and there is
no assurance that these goals and projections can or will be met.
Actual results may vary materially, especially in light of the
Russian war against Ukraine and rising levels of economic
uncertainty due to inflation and the continuing impact of COVID-19.
In addition, any forward-looking statements represent the Company’s
estimates only as of today and should not be relied upon as
representing its estimates as of any future date. Denbury assumes
no obligation to update its forward-looking statements.
FINANCIAL AND STATISTICAL DATA TABLES AND RECONCILIATION
SCHEDULES
The following tables include selected unaudited financial and
operational information for the comparative three-month periods
ended March 31, 2022 and 2021. All sales volumes and dollars are
expressed on a net revenue interest basis with gas volumes
converted to equivalent barrels at 6:1.
DENBURY INC.
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
March 31,
In thousands, except per-share data
2022
2021
Revenues and other income
Oil sales
$
381,242
$
233,044
Natural gas sales
3,669
2,401
CO2 sales and transportation fees
13,422
9,228
Oil marketing revenues
13,276
6,126
Other income
250
360
Total revenues and other income
411,859
251,159
Expenses
Lease operating expenses
117,828
81,970
Transportation and marketing expenses
4,645
7,797
CO2 operating and discovery expenses
2,817
993
Taxes other than income
31,381
18,963
Oil marketing purchases
13,040
6,085
General and administrative expenses
18,692
31,983
Interest, net of amounts capitalized of
$1,158 and $1,083, respectively
657
1,536
Depletion, depreciation, and
amortization
35,345
39,450
Commodity derivatives expense
192,719
115,743
Write-down of oil and natural gas
properties
—
14,377
Other expenses
2,112
2,146
Total expenses
419,236
321,043
Loss before income taxes
(7,377
)
(69,884
)
Income tax benefit
Current income taxes
(561
)
(191
)
Deferred income taxes
(5,944
)
(51
)
Net loss
$
(872
)
$
(69,642
)
Net loss per common share
Basic
$
(0.02
)
$
(1.38
)
Diluted
$
(0.02
)
$
(1.38
)
Weighted average common shares
outstanding
Basic
51,602
50,319
Diluted
51,602
50,319
DENBURY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Quarter Ended
March 31,
In thousands
2022
2021
Cash flows from operating
activities
Net loss
$
(872
)
$
(69,642
)
Adjustments to reconcile net loss to cash
flows from operating activities
Depletion, depreciation, and
amortization
35,345
39,450
Write-down of oil and natural gas
properties
—
14,377
Deferred income taxes
(5,944
)
(51
)
Stock-based compensation
2,971
17,680
Commodity derivatives expense
192,719
115,743
Payment on settlements of commodity
derivatives
(93,057
)
(38,453
)
Debt issuance costs
685
685
Other, net
(1,267
)
727
Changes in assets and liabilities, net of
effects from acquisitions
Accrued production receivable
(72,795
)
(36,750
)
Trade and other receivables
1,644
865
Other current and long-term assets
189
(2,542
)
Accounts payable and accrued
liabilities
11,410
(1,402
)
Oil and natural gas production payable
23,348
12,795
Other liabilities
(4,233
)
(826
)
Net cash provided by operating
activities
90,143
52,656
Cash flows from investing
activities
Oil and natural gas capital
expenditures
(58,707
)
(19,627
)
CCUS storage sites and related capital
expenditures
(14,900
)
—
Acquisitions of oil and natural gas
properties
—
(10,665
)
Pipelines and plants capital
expenditures
(15,204
)
(458
)
Other
(1,396
)
(2,913
)
Net cash used in investing
activities
(90,207
)
(33,663
)
Cash flows from financing
activities
Bank repayments
(274,000
)
(202,000
)
Bank borrowings
274,000
207,000
Pipeline financing repayments
—
(16,509
)
Other
(3,068
)
(3,013
)
Net cash used in financing
activities
(3,068
)
(14,522
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(3,132
)
4,471
Cash, cash equivalents, and restricted
cash at beginning of period
50,344
42,248
Cash, cash equivalents, and restricted
cash at end of period
$
47,212
$
46,719
DENBURY INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
In thousands, except par value and share
data
March 31, 2022
Dec. 31, 2021
Assets
Current assets
Cash and cash equivalents
$
517
$
3,671
Accrued production receivable
216,161
143,365
Trade and other receivables, net
17,571
19,270
Prepaids
10,175
9,099
Total current assets
244,424
175,405
Property and equipment
Oil and natural gas properties (using full
cost accounting)
Proved properties
1,149,762
1,109,011
Unevaluated properties
131,677
112,169
CO2 properties
184,043
183,369
Pipelines
226,766
224,394
CCUS storage sites and related assets
20,949
—
Other property and equipment
94,993
93,950
Less accumulated depletion, depreciation,
amortization and impairment
(210,537
)
(181,393
)
Net property and equipment
1,597,653
1,541,500
Operating lease right-of-use assets
18,595
19,502
Derivative assets
265
—
Deferred tax assets, net
4,306
—
Intangible assets, net
85,966
88,248
Cash restricted for future asset
retirement obligations
46,695
46,673
Other assets
33,445
31,625
Total assets
$
2,031,349
$
1,902,953
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable and accrued
liabilities
$
201,598
$
191,598
Oil and gas production payable
99,247
75,899
Derivative liabilities
223,598
134,509
Operating lease liabilities
4,683
4,677
Total current liabilities
529,126
406,683
Long-term liabilities
Long-term debt, net of current portion
35,000
35,000
Asset retirement obligations
282,792
284,238
Derivative liabilities
10,837
—
Deferred tax liabilities, net
—
1,638
Operating lease liabilities
16,095
17,094
Other liabilities
19,850
22,910
Total long-term liabilities
364,574
360,880
Commitments and contingencies
Stockholders’ equity
Preferred stock, $.001 par value,
50,000,000 shares authorized, none issued and outstanding
—
—
Common stock, $.001 par value, 250,000,000
shares authorized; 50,349,390 and 50,193,656 shares issued,
respectively
50
50
Paid-in capital in excess of par
1,133,127
1,129,996
Retained earnings
4,472
5,344
Total stockholders’ equity
1,137,649
1,135,390
Total liabilities and stockholders’
equity
$
2,031,349
$
1,902,953
DENBURY INC.
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
March 31,
2022
2021
Average daily sales (BOE/d)
Tertiary
Gulf Coast region
23,016
24,281
Rocky Mountain region
9,220
7,187
Total tertiary sales
32,236
31,468
Non-tertiary
Gulf Coast region
3,630
3,621
Rocky Mountain region
11,059
12,268
Total non-tertiary sales
14,689
15,889
Total Company
Oil (Bbls/d)
45,466
46,007
Natural gas (Mcf/d)
8,753
8,102
BOE/d (6:1)
46,925
47,357
Unit sales price (excluding derivative
settlements)
Gulf Coast region
Oil (per Bbl)
$
93.17
$
56.46
Natural gas (per mcf)
4.71
3.39
Rocky Mountain region
Oil (per Bbl)
$
93.16
$
56.03
Natural gas (per mcf)
4.62
3.20
Total Company
Oil (per Bbl)(1)
$
93.17
$
56.28
Natural gas (per mcf)
4.66
3.29
BOE (6:1)
91.14
55.24
(1)
Total company realized oil prices
including derivative settlements were $70.43 per Bbl and $47.00 per
Bbl during the three months ended March 31, 2022 and 2021,
respectively.
DENBURY INC.
SUPPLEMENTAL NON-GAAP FINANCIAL
MEASURES (UNAUDITED)
Reconciliation of net 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
March 31, 2022
March 31, 2021
In thousands, except per-share data
Amount
Per Diluted Share
Amount
Per Diluted Share
Net loss (GAAP measure)(1)
$
(872
)
$
(0.02
)
(69,642
)
$
(1.38
)
Adjustments to reconcile to adjusted net
income (non-GAAP measure)
Noncash fair value losses on commodity
derivatives(2)
99,662
1.81
77,290
1.51
Write-down of oil and natural gas
properties(3)
—
—
14,377
0.28
Noncash fair value adjustment - contingent
consideration(4)
185
0.01
—
—
Other(5)
—
—
325
0.03
Income taxes - valuation allowance
reversal(6)
(5,853
)
(0.11
)
—
—
Adjusted net income (non-GAAP
measure)
$
93,122
$
1.69
$
22,350
$
0.44
(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)
Full cost pool ceiling test write-downs
related to the Company’s oil and natural gas properties.
(4)
Expense related to the change in fair
value of the contingent consideration payments related to our March
2021 Wind River Basin CO2 EOR field acquisition.
(5)
Other adjustments primarily include <$1
million write-off of trade receivables during the three months
ended March 31, 2021.
(6)
The income tax adjustment removes the
impact of the valuation allowance reversed during the three months
ended March 31, 2022. During the three months ended March 31, 2022,
largely due to the significant increase in worldwide oil prices,
the Company determined that it was no longer appropriate to carry a
valuation allowance against certain of its federal and state
deferred tax assets, as we now consider it more likely than not
that we will realize those deferred tax assets. Accordingly, during
the three months ended March 31, 2022, we reversed $5.9 million of
the valuation allowance, which lowered our deferred tax expense. In
addition, we expect to reverse an additional $59.0 million of
valuation allowance during the second through fourth quarters of
2022.
DENBURY INC.
SUPPLEMENTAL NON-GAAP FINANCIAL
MEASURES (UNAUDITED)
Reconciliation of net 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 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 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 loss to Adjusted EBITDAX.
In thousands
Quarter Ended
March 31,
2022
2021
Net loss (GAAP measure)
$
(872
)
$
(69,642
)
Adjustments to reconcile to Adjusted
EBITDAX
Interest expense
657
1,536
Income tax expense (benefit)
(6,505
)
(242
)
Depletion, depreciation, and
amortization
35,345
39,450
Noncash fair value losses on commodity
derivatives
99,662
77,290
Stock-based compensation
2,971
17,680
Write-down of oil and natural gas
properties
—
14,377
Noncash, non-recurring and other
(411
)
1,467
Adjusted EBITDAX (non-GAAP
measure)
$
130,847
$
81,916
DENBURY INC.
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
March 31,
2022
2021
Cash flows from operations (GAAP
measure)
$
90,143
$
52,656
Net change in assets and liabilities
relating to operations
40,437
27,860
Adjusted cash flows from operations
(non-GAAP measure)(2)
130,580
80,516
Oil & gas development expenditures
(57,606
)
(20,079
)
CCUS storage sites and related capital
expenditures
(20,949
)
—
Capitalized interest
(1,158
)
(1,083
)
Free cash flow (non-GAAP
measure)
$
50,867
$
59,354
DENBURY INC.
CAPITAL EXPENDITURE SUMMARY
(UNAUDITED)(1)
Quarter Ended
March 31,
In thousands
2022
2021
Capital expenditure summary
CCA EOR field expenditures(2)
$
17,722
$
9
CCA CO2 pipelines
2,191
48
CCA tertiary development
19,913
57
Non-CCA tertiary and non-tertiary
fields
29,363
12,422
CO2 sources and other CO2 pipelines
730
—
Capitalized internal costs(3)
7,600
7,600
Oil & gas development capital
expenditures
57,606
20,079
CCUS storage sites and related capital
expenditures
20,949
—
Acquisitions of oil and gas
properties(4)
371
10,665
Capitalized interest
1,158
1,083
Total capital expenditures
$
80,084
$
31,827
(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 $2.8
million during the first quarter of 2022.
(3)
Includes capitalized internal acquisition,
exploration and development costs and pre-production tertiary
startup costs.
(4)
Primarily consists of working interest
positions in the Wind River Basin enhanced oil recovery fields
acquired on March 3, 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220505005182/en/
Brad Whitmarsh, 972.673.2020, brad.whitmarsh@denbury.com Beth
Bierhaus, 972.673.2554, beth.bierhaus@denbury.com
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