Denbury Resources Inc., Plano, Tex., expects it base 2020 capital budget, excluding acquisitions and capitalized interest, to be $175-$185 million, with an additional and conditional $140-$150 million for the carbon dioxide enhanced oil recovery project at Cedar Creek Anticline, which extends across Montana, North Dakota, and South Dakota (OGJ Online, June 19, 2018).
Dividing the capital plan into two parts, a base plan and a contingent portion, said Chris Kendall, Denbury’s president and chief executive officer, “allocates $175 million to $185 million primarily to high return capital projects within our existing portfolio, with an additional contingent $140 million to $150 million allocated to Cedar Creek Anticline EOR development. While we expect to proceed with the contingent CCA investment in 2020, considering the current market uncertainty and our focus on addressing 2021 and 2022 debt maturities, and with the bulk of our CCA capital investment planned for the second half of the year, we have decided that the best path forward is to defer the investment decision on this contingent portion of our capital budget until the second quarter.”
The 2020 base capital budget provides for $75 million for tertiary oil field expenditures, $55 million for other areas, primarily non-tertiary oil field expenditures including exploitation; $10 million for CO2 sources and pipelines; and $40 million for other capital items such as capitalized internal acquisition, exploration and development costs and pre-production tertiary startup costs.
Production for the year is expected to average 53,000-56,000 boe/d after adjusting for the Pending Gulf Coast Working Interests sale; comparative 2019 continuing production excluding production from the Pending Gulf Coast Working Interests sale would have been 56,900 boe/d.
An additional $140 million to $150 million of CCA CO2 tertiary flood development capital is subject to board approval. The aggregate planned 2020 CCA tertiary-related development capital consists of $105 million for the 105-mile extension of the Greencore Pipeline to CCA, with the remainder dedicated to facilities, well work, and field development.
2019
For full-year 2019, the company reported net income of $217 million. Net income for the year’s fourth quarter was $23 million. Adjusted net income (a non-GAAP measure) was $192 million for the year and $47 million for the quarter. The company invested $237 million of development capital in 2019, below the $240-$260 million capital budget range
Production for the quarter was 57,511 boe/d, up 2% from 3Q 2019. Full year production was 58,213 boe/d. The sequential-quarter increase was primarily due to higher production at Bell Creek field, where production was reduced in the prior quarter due to planned maintenance at the company’s primary CO2 source in the Rocky Mountain region.
On an annual basis, Denbury’s 2019 total production averaged 58,213 boe/d, in the top half of the 2019 guidance range of 56,000-60,000 boe/d, despite the sale of Citronelle field in mid-2019, and in-line with the mid-point of the company’s mid-year updated 2019 production guidance range.