den-20230331

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2023

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to ________

Commission file number: 001-12935

DENBURY INC.

(Exact name of registrant as specified in its charter)

Delaware

20-0467835

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

5851 Legacy Circle,

Plano,

75024

(Address of principal executive offices)

(Zip Code)


Registrant’s telephone number, including area code:						(972)			673-2000

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class:	Trading Symbol:	Name of Each Exchange on Which Registered:
Common Stock $.001 Par Value	DEN	New York Stock Exchange

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☑ No ☐

The number of shares outstanding of the registrant’s Common Stock, $.001 par value, as of April 30, 2023, was 50,277,186.

Denbury Inc.

Table of Contents

Page

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

Unaudited Condensed Consolidated Balance Sheets

Unaudited Condensed Consolidated Statements of Operations

Unaudited Condensed Consolidated Statements of Cash Flows

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

Notes to Unaudited Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II. OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Denbury Inc.

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except par value and share data)



	March 31, 2023		December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	525	$	521
Accrued production receivable	143,484		144,277
Trade and other receivables, net	29,770		27,343
Derivative assets	23,554		15,517
Prepaids	14,803		18,572
Total current assets	212,136		206,230
Property and equipment
Oil and natural gas properties (using full cost accounting)
Proved properties	1,474,721		1,414,779
Unevaluated properties	284,584		240,435
CO2 properties	192,107		190,985
Pipelines	218,822		220,125
CCUS storage sites and related assets	85,059		64,971
Other property and equipment	111,265		107,133
Less accumulated depletion, depreciation, amortization and impairment	(340,312)		(306,743)
Net property and equipment	2,026,246		1,931,685
Operating lease right-of-use assets	16,768		18,017
Derivative assets	1,617		—

Intangible assets, net	76,849		79,128
Restricted cash for future asset retirement obligations	47,424		47,359
Other assets	51,023		45,080
Total assets	$	2,432,063	$	2,327,499
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable and accrued liabilities	$	215,291	$	248,800
Oil and gas production payable	77,507		80,368
Derivative liabilities	1,613		13,018
Current maturities of long-term debt	107		—
Operating lease liabilities	4,430		4,676
Total current liabilities	298,948		346,862
Long-term liabilities
Long-term debt, net of current portion	68,276		29,000
Asset retirement obligations	315,169		315,942

Deferred tax liabilities, net	97,031		71,120
Operating lease liabilities	14,407		15,431
Other liabilities	13,649		16,527
Total long-term liabilities	508,532		448,020
Commitments and contingencies (Note 8)
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; 50,276,526 and 49,814,874 shares issued, respectively	50		50
Paid-in capital in excess of par	1,049,830		1,047,063
Retained earnings	574,703		485,504

Total stockholders’ equity	1,624,583		1,532,617
Total liabilities and stockholders’ equity	$	2,432,063	$	2,327,499

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Table of Contents

Denbury Inc.

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per-share data)


	Three Months Ended March 31,
	2023		2022
Revenues and other income
Oil, natural gas, and related product sales	$	314,489	$	384,911
CO2 sales and transportation fees	10,686		13,422
Oil marketing revenues	14,548		13,276
Other income	1,295		250
Total revenues and other income	341,018		411,859
Expenses
Lease operating expenses	129,174		117,828
Transportation and marketing expenses	5,389		4,645
CO2 operating and discovery expenses	1,196		2,817
Taxes other than income	29,038		31,381
Oil marketing purchases	14,468		13,040
General and administrative expenses	22,977		18,692
Interest, net of amounts capitalized of $1,693 and $1,158, respectively	927		657
Depletion, depreciation, and amortization	42,032		35,345
Commodity derivatives expense (income)	(23,123)		192,719


Other expenses	1,491		2,112
Total expenses	223,569		419,236
Income (loss) before income taxes	117,449		(7,377)
Income tax provision (benefit)	28,250		(6,505)
Net income (loss)	$	89,199	$	(872)

Net income (loss) per common share
Basic	$	1.73	$	(0.02)
Diluted	$	1.66	$	(0.02)

Weighted average common shares outstanding
Basic	51,503		51,602
Diluted	53,763		51,602

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Table of Contents

Denbury Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities
Net income (loss)	$	89,199	$	(872)
Adjustments to reconcile net income (loss) to cash flows from operating activities
Depletion, depreciation, and amortization	42,032		35,345

Deferred income taxes	25,912		(5,944)
Stock-based compensation	4,938		2,971
Commodity derivatives expense (income)	(23,123)		192,719
Receipt (payment) on settlements of commodity derivatives	2,065		(93,057)
Debt issuance costs	531		685

Other, net	(1,958)		(1,267)
Changes in assets and liabilities, net of effects from acquisitions
Accrued production receivable	793		(72,795)
Trade and other receivables	(2,425)		1,644
Other current and long-term assets	4,506		189
Accounts payable and accrued liabilities	(42,247)		11,410
Oil and natural gas production payable	(2,861)		23,348
Asset retirement obligations and other liabilities	(8,840)		(4,233)

Net cash provided by operating activities	88,522		90,143

Cash flows from investing activities
Oil and natural gas capital expenditures	(104,782)		(58,707)
CCUS storage sites and related capital expenditures	(14,645)		(14,900)
Acquisitions of oil and natural gas properties	(35)		—
Pipelines and plants capital expenditures	(623)		(15,204)

Equity investments	(7,108)		—
Other	(5,879)		(1,396)
Net cash used in investing activities	(133,072)		(90,207)

Cash flows from financing activities
Bank repayments	(319,000)		(274,000)
Bank borrowings

SEC Form 10-Q filed by Denbury Inc.