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Denbury Resources Announces Third Quarter 2003 Results.

Article Excerpt
Energy Editors/Business Editors

DALLAS--(BUSINESS WIRE)--Nov. 3, 2003

Denbury Resources Inc. (NYSE:DNR) ("Denbury" or the "Company") today announced its third quarter 2003 financial and operating results. The Company posted earnings for the quarter of $15.1 million, or $0.28 per common share, as compared to earnings of $13.5 million, or $0.25 per common share, for the third quarter of 2002. Adjusted cash flow from operations for the quarter was $45.6 million, as compared to $44.2 million during the third quarter of 2002. (Please see the accompanying schedules for a reconciliation of net cash flow provided by operations, as defined by generally accepted accounting principles (GAAP), which is the GAAP measure, as opposed to adjusted cash flow, which is the non-GAAP measure). Net cash flow provided by operations, the GAAP measure, totaled $49.8 million during the third quarter of 2003, as compared to $44.4 million during the third quarter of 2002.

Third Quarter 2003 Financial Results

During late July and early August 2003, Denbury upgraded its CO2 facility at Jackson Dome, increasing the CO2 processing capacity of its facility by approximately 50%, from around 200 MMcf/d to approximately 300 MMcf/d. This upgrade was performed several months ahead of the original schedule to handle the higher than expected production volumes from its CO2 wells drilled during late 2002 and early 2003. At the same time, the Company increased the size of its CO2 processing facility at Mallalieu Field, increasing the amount of CO2 that the Company can recycle at that field from approximately 28 MMcf/d to approximately 108 MMcf/d. With the completion of the Company's third CO2 well, the Barksdale, coupled with the upgraded Jackson Dome facility, the Company's CO2 production capability is now around 220 MMcf/d, approximately double its production capability one year ago. As a result of these upgrades, which shut-in the Company's CO2 production and associated injections for approximately one week in late July, the Company's oil production from tertiary recovery decreased slightly in the third quarter to 4,227 BOE/d. However, with the increased CO2 production, oil production from these tertiary recovery properties is preliminarily estimated to average approximately 5,400 BOE/d during the month of October 2003, the Company's highest monthly average to date.

Denbury's overall third quarter 2003 average daily production of 33,116 BOE/d was 7% lower than the 35,506 BOE/d production average for the comparable period in 2002. Production decreased due to normal depletion, less than expected production increases from first half exploration and development results, unexpected delays offshore and the one-week temporary CO2 curtailment (see above). Property sales have also contributed to the production decrease. During the first nine months of 2003, the Company sold over $29 million of properties, principally the Laurel Field sold in February, with estimated aggregate production from these properties of approximately 2,000 BOE/d.

Commodity prices were higher in the third quarter...

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