UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 1, 2010
DENBURY RESOURCES INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation or organization)
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1-12935
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20-0467835 |
(Commission File Number)
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(I.R.S. Employer |
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Identification No.) |
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5100 Tennyson Parkway |
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Suite 1200 |
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Plano, Texas
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75024 |
(Address of principal executive offices)
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(Zip code) |
Registrants telephone number, including area code: (972) 673-2000
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c)) |
Item 2.02. Results of Operations and Financial Condition
On February 1, 2010 Denbury Resources Inc. (Denbury) issued a press release announcing oil,
natural gas and carbon dioxide
(CO2) reserve information at year-end 2009, and preliminary estimates of its 2009
fourth quarter and full-year production and its 2009 capital expenditures. A copy of the press
release is attached hereto as Exhibit 99.1.
As provided in General Instruction B.2 to Form 8-K, the information furnished in this Item
2.02 and in Exhibit 99.1 hereto shall not be deemed filed for purposes of Section 18 of the
Securities and Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference
in any filing with the Securities and Exchange Commission, except as shall be expressly provided by
specific reference in such filing.
Item 8.01 Other Events
Year-End Proved Reserves and Analysis
Denburys total proved oil and natural gas reserves as of December 31, 2009 were 207.5 million
barrels of oil equivalent (MMBOE), consisting of 192.9 million barrels (MMBbls) of crude oil,
condensate and natural gas liquids and 88.0 billion cubic feet (Bcf) (14.7 MMBOE) of natural gas.
The Company also announced that its proved CO2 reserves were 6.3
trillion cubic feet (Tcf) at year-end 2009. The independent reservoir engineering firm of
DeGolyer and MacNaughton prepared Denburys year-end reserve report, including its proved CO2
reserve quantities. Denburys year-end 2009 proved reserves are 93% oil, 62% are proved
developed, and 65% of the year-end reserves are tertiary oil reserves.
In accordance with Securities and Exchange Commission requirements, Denburys proved reserves
at December 31, 2009 were computed using first-day-of-the-month 12-month average 2009 commodity
prices of $61.18 per Bbl of oil (based on NYMEX prices) and a Henry Hub cash price of $3.87 per
MMBtu of natural gas, with necessary adjustments applied to each field to arrive at the net price
received by the Company. Denburys net average prices contained in the reserve report, were
approximately $58.36 per Bbl of oil, $38.56 per Bbl of natural gas liquids, and $3.99 per Mcf of
natural gas. Using these prices, the estimated discounted net present value of Denburys proved
reserves, before projected income taxes, using a 10% per annum discount rate (PV-10 Value) was
$3.1 billion at December 31, 2009, as compared to a PV-10 value of $1.9 billion a year earlier
prepared based upon unescalated year-end 2008 prices.
Proved reserves at December 31, 2008 were computed using unescalated NYMEX commodity prices of
$44.60 per Bbl of oil and a Henry Hub cash price of $5.71 per MMBtu of natural gas. The Company
estimates that the PV-10 Value at December 31, 2009 would change by approximately $95 million for
each dollar change in the oil price per Bbl and approximately $4 million for each $0.10 change in
the natural gas price per Mcf, if the oil and natural gas prices were to change by relatively minor
amounts. If oil and/or natural prices were to change significantly, it is likely that the NYMEX
differentials and cost assumptions used in estimating the proved reserves would also need to be
adjusted.
PV-10 Value is a non-GAAP measure and is different than the Standardized Measure of Discounted
Future Net Cash Flows (Standardized Measure) in that PV-10 Value is a pre-tax number, while the
Standardized Measure includes the effect of estimated future income taxes.
Estimates of 2009 Production
Based on preliminary data, the Companys estimated average daily production rate for its
tertiary oil production during the fourth quarter of 2009 is approximately 26,300 Bbls/d, an 8%
sequential increase over its third quarter 2009 average tertiary production of 24,347 Bbls/d.
Estimated 2009 average tertiary oil production is approximately 24,343 Bbls/d. The Companys
preliminary fourth quarter total production is approximately 44,940 BOE/d, a 5% sequential increase
over the third quarter of 2009 average of 42,659 BOE/d. This results in an average annual
production rate for 2009 of approximately 48,280 BOE/d.