Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 30, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-12935 | |
Entity Registrant Name | DENBURY INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-0467835 | |
Entity Address, Address Line One | 5851 Legacy Circle, | |
Entity Address, City or Town | Plano, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75024 | |
City Area Code | (972) | |
Local Phone Number | 673-2000 | |
Title of 12(b) Security | Common Stock $.001 Par Value | |
Trading Symbol | DEN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Bankruptcy Proceedings, Reporting Current | true | |
Entity Common Stock, Shares Outstanding | 50,277,186 | |
Entity Central Index Key | 0000945764 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
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 |
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 | 0 |
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 |
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 | 0 |
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 | 0 | 0 |
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 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheet (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Stockholders’ equity | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per shares) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 50,276,526 | 49,814,874 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues | $ 339,723 | $ 411,609 |
Other income | 1,295 | 250 |
Total revenues and other income | 341,018 | 411,859 |
Taxes other than income | 29,038 | 31,381 |
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 (in dollars per shares) | $ 1.73 | $ (0.02) |
Diluted (in dollars per shares) | $ 1.66 | $ (0.02) |
Weighted average common shares outstanding | ||
Basic (in shares) | 51,503 | 51,602 |
Diluted (in shares) | 53,763 | 51,602 |
Oil, natural gas, and related product sales | ||
Revenues | $ 314,489 | $ 384,911 |
Results of Operations, Production or Lifting Costs | 129,174 | 117,828 |
Operating expenses | 5,389 | 4,645 |
CO2 sales and transportation fees | ||
Revenues | 10,686 | 13,422 |
Operating expenses | 1,196 | 2,817 |
Oil marketing revenues | ||
Revenues | 14,548 | 13,276 |
Operating expenses | $ 14,468 | $ 13,040 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Expenses | ||
Interest costs capitalized | $ 1,693 | $ 1,158 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 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) | 0 |
Pipelines and plants capital expenditures | (623) | (15,204) |
Equity investments | (7,108) | 0 |
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 | 358,000 | 274,000 |
Other | 5,619 | (3,068) |
Net cash provided by (used in) financing activities | 44,619 | (3,068) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 69 | (3,132) |
Cash, cash equivalents, and restricted cash at beginning of period | 47,880 | 50,344 |
Cash, cash equivalents, and restricted cash at end of period | $ 47,949 | $ 47,212 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock ($.001 Par Value) | Paid-In Capital in Excess of Par | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2021 | 50,193,656 | |||
Beginning balance at Dec. 31, 2021 | $ 1,135,390 | $ 50 | $ 1,129,996 | $ 5,344 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issued pursuant to stock compensation plans (in shares) | 141,581 | |||
Stock-based compensation | 3,142 | 3,142 | ||
Tax withholding for stock compensation plans | (58) | (58) | ||
Issued pursuant to exercise of warrants (in shares) | 14,153 | |||
Issued pursuant to exercise of warrants | 47 | 47 | ||
Net income (loss) | (872) | (872) | ||
Ending balance (in shares) at Mar. 31, 2022 | 50,349,390 | |||
Ending balance at Mar. 31, 2022 | $ 1,137,649 | $ 50 | 1,133,127 | 4,472 |
Beginning balance (in shares) at Dec. 31, 2022 | 49,814,874 | 49,814,874 | ||
Beginning balance at Dec. 31, 2022 | $ 1,532,617 | $ 50 | 1,047,063 | 485,504 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issued pursuant to stock compensation plans (in shares) | 268,748 | |||
Stock-based compensation | 5,320 | 5,320 | ||
Tax withholding and retirement related to stock compensation plans (in shares) | (16,281) | |||
Tax withholding and retirement related to stock compensation plans | (2,683) | (2,683) | ||
Issued pursuant to exercise of warrants (in shares) | 209,185 | |||
Issued pursuant to exercise of warrants | 130 | 130 | ||
Net income (loss) | $ 89,199 | 89,199 | ||
Ending balance (in shares) at Mar. 31, 2023 | 50,276,526 | 50,276,526 | ||
Ending balance at Mar. 31, 2023 | $ 1,624,583 | $ 50 | $ 1,049,830 | $ 574,703 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation Organization and Nature of Operations Denbury Inc., a Delaware corporation, is an independent energy company with operations focused in the Gulf Coast and Rocky Mountain regions of the United States. The Company is differentiated by its focus on CO 2 enhanced oil recovery (“EOR”) and the emerging carbon capture, use, and storage (“CCUS”) industry, supported by the Company’s CO 2 EOR technical and operational expertise and its extensive CO 2 pipeline infrastructure. Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of Denbury Inc. and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements and the notes thereto should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”). Unless indicated otherwise or the context requires, the terms “we,” “our,” “us,” “Company” or “Denbury,” refer to Denbury Inc. and its subsidiaries. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end, and the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of our consolidated financial position as of March 31, 2023, our consolidated results of operations for the three months ended March 31, 2023 and 2022, our consolidated cash flows for the three months ended March 31, 2023 and 2022, and our consolidated statements of changes in stockholders’ equity for the three months ended March 31, 2023 and 2022. Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on our reported net income (loss), current assets, total assets, current liabilities, total liabilities or stockholders’ equity. Cash, Cash Equivalents, and Restricted Cash We consider all highly liquid investments to be cash equivalents if they have maturities of three months or less at the date of purchase. The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents, and restricted cash at end of period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: In thousands March 31, 2023 March 31, 2022 Cash and cash equivalents $ 525 $ 517 Restricted cash for future asset retirement obligations 47,424 46,695 Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 47,949 $ 47,212 Restricted cash for future asset retirement obligations in the table above consists of escrow accounts that are legally restricted for certain of our asset retirement obligations. Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Basic weighted average common shares exclude shares of nonvested restricted stock (although nonvested restricted stock is issued and outstanding upon grant). As these restricted shares vest, they will be included in the shares outstanding used to calculate basic net income (loss) per common share. Restricted stock units and performance stock units are also excluded from basic weighted average common shares outstanding until the vesting date. Basic weighted average common shares during the three months ended March 31, 2023 includes 1,775,182 performance-based and restricted stock units which are fully vested as of March 31, 2023; however, the shares underlying these awards are not included in shares currently issued or outstanding as actual delivery of the shares is not scheduled to occur until December 4, 2023. Diluted net income (loss) per common share is calculated in the same manner but includes the impact of all potentially dilutive securities. Potentially dilutive securities include restricted stock, restricted stock units, performance stock units, shares to be issued under the employee stock purchase plan (“ESPP”), and series A and series B warrants . For each of the three months ended March 31, 2023 and 2022, there were no adjustments to net income (loss) for purposes of calculating basic and diluted net income (loss) per common share. The following table sets forth the weighted average shares used for purposes of calculating basic and diluted net income (loss) per common share for the periods indicated: Three Months Ended March 31, In thousands 2023 2022 Weighted average common shares outstanding – basic 51,503 51,602 Effect of potentially dilutive securities Restricted stock, restricted stock units and performance stock units 360 — Warrants 1,899 — Employee Stock Purchase Program 1 — Weighted average common shares outstanding – diluted 53,763 51,602 For the three months ended March 31, 2022, the weighted average common shares outstanding used to calculate basic earnings per share and diluted earnings per share were the same, since the Company recorded a net loss for the period. Assuming the Company had recorded net income during the three months ended March 31, 2022, the weighted average diluted shares outstanding would have been 55.0 million (including the impact of 0.6 million restricted stock units and 2.8 million shares with respect to warrants). For purposes of calculating diluted weighted average common shares, unvested restricted stock units, unvested restricted stock, unvested performance stock units, ESPP shares and unexercised warrants are included in the diluted shares computation using the treasury stock method. The following outstanding securities were excluded from the computation of diluted net income (loss) per share for the three months ended March 31, 2023 and March 31, 2022, as their effect would have been antidilutive, as of the respective dates: March 31, In thousands 2023 2022 Restricted stock, restricted stock units and performance stock units 490 1,005 Warrants — 5,162 At March 31, 2023, the Company had approximately 2.9 million warrants outstanding that can be exercised for shares of our common stock, at an exercise price of $32.59 per share for the 1.8 million Series A warrants outstanding and at an exercise price of $35.41 per share for the 1.1 million Series B warrants outstanding. The warrants may be exercised for cash or on a cashless basis. The Series A warrants are exercisable until September 18, 2025, and the Series B warrants are exercisable until September 18, 2023, at which times the warrants expire. Through March 31, 2023, 0.9 million series A warrants and 1.8 million series B warrants were exercised for a total of 1.5 million shares, most of which were exercised on a cashless basis. Oil and Natural Gas Properties Write-Down of Oil and Natural Gas Properties. Under full cost accounting, the net capitalized costs of oil and natural gas properties are limited to the lower of unamortized cost or the cost center ceiling. The cost center ceiling is defined as (1) the present value of estimated future net revenues from proved oil and natural gas reserves before future abandonment costs (discounted at 10%), based on the average first-day-of-the-month oil and natural gas price for each month during a 12-month rolling period prior to the end of a particular reporting period; plus (2) the cost of properties not being amortized; plus (3) the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any; less (4) related income tax effects. Our future net revenues from proved oil and natural gas reserves are not reduced for development costs related to the cost of drilling for and developing CO 2 reserves nor those related to the cost of constructing CO 2 pipelines, as we do not have to incur additional CO 2 capital costs to develop the proved oil and natural gas reserves. Therefore, we include in the ceiling test, as a reduction of future net revenues, that portion of our capitalized CO 2 costs related to CO 2 reserves and CO 2 pipelines that we estimate will be consumed in the process of producing our proved oil and natural gas reserves. The fair value of our oil and natural gas derivative contracts is not included in the ceiling test, as we do not designate these contracts as hedge instruments for accounting purposes. The cost center ceiling test is prepared quarterly. We did not record a ceiling test write-down during the three months ended March 31, 2023 or March 31, 2022. CCUS Storage Sites and Other Assets CCUS Investments. During the first quarter of 2023, we made two investments in carbon capture technology companies, including a $2 million equity investment in Aqualung Carbon Capture AS and a $5 million equity investment in ION Clean Energy, Inc. In April 2023, based on the achievement of certain milestones, we invested the remaining $10 million of our original $20 million commitment in Clean Hydrogen Works, the project development company of a planned blue hydrogen/ammonia multi-block facility for which we have signed a definitive agreement for the transportation and storage of CO 2 for the first two blocks of the proposed plant. These investments are included in “Other assets” in the Unaudited Condensed Consolidated Balance Sheet as of March 31, 2023. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 2. Revenue Recognition We record revenue in accordance with Financial Accounting Standards Board (“FASB”) Codification (“FASC”) Topic 606, Revenue from Contracts with Customers . The core principle of FASC Topic 606 is that an entity should recognize revenue for the transfer of goods or services equal to the amount of consideration that it expects to be entitled to receive for those goods or services. Once we have delivered the volume of commodity to the delivery point and the customer takes delivery and possession, we are entitled to payment and we invoice the customer for such delivered production. Payment under most oil and CO 2 contracts is received within one month following product delivery, and for natural gas and NGL contracts, payment is generally received within two months following delivery. Timing of revenue recognition may differ from the timing of invoicing to customers; however, as the right to consideration after delivery is unconditional based on only the passage of time before payment of the consideration is due, upon delivery we record a receivable in “Accrued production receivable” in our Unaudited Condensed Consolidated Balance Sheets. In certain situations, the Company enters into marketing arrangements for the purchase and subsequent sale of crude oil from third parties. We recognize the revenue received and the associated expense incurred on these sales on a gross basis, as “Oil marketing revenues” and “Oil marketing purchases” in our Unaudited Condensed Consolidated Statements of Operations, since we act as a principal in the transaction by assuming control of the commodities purchased and responsibility to deliver the commodities sold. Revenue is recognized when control transfers to the purchaser at the delivery point based on the price received from the purchaser. Disaggregation of Revenue The following table summarizes our revenues by product type for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, In thousands 2023 2022 Oil sales $ 312,572 $ 381,242 Natural gas sales 1,917 3,669 CO 2 sales and transportation fees 10,686 13,422 Oil marketing revenues 14,548 13,276 Total revenues $ 339,723 $ 411,609 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 3. Long-Term Debt The table below reflects long-term debt outstanding as of the dates indicated: In thousands March 31, 2023 December 31, 2022 Senior Secured Bank Credit Agreement $ 68,000 $ 29,000 Capital lease obligations 383 — Total debt principal balance 68,383 29,000 Less: current maturities of long-term debt (107) — Long-term debt and capital lease obligations $ 68,276 $ 29,000 Senior Secured Bank Credit Agreement In September 2020, we entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and other lenders party thereto (as amended, the “Bank Credit Agreement”). The Bank Credit Agreement is a senior secured revolving credit facility with a maturity date of May 4, 2027. Under the Bank Credit Agreement, letters of credit are available in an aggregate amount not to exceed $100 million, and short-term swingline loans are available in an aggregate amount not to exceed $25 million, each subject to the available commitments under the Bank Credit Agreement. Availability under the Bank Credit Agreement is subject to a borrowing base, which is redetermined semiannually on or around May 1 and November 1 of each year. The borrowing base is adjusted at the lenders’ discretion and is based, in part, upon external factors over which we have no control. If our outstanding debt under the Bank Credit Agreement exceeds the then-effective borrowing base, we would be required to repay the excess amount over a period not to exceed six months. As part of our Spring 2023 semiannual borrowing base redetermination, the borrowing base and lender commitments for our Bank Credit Agreement were reaffirmed at $750 million, with our next scheduled redetermination around November 1, 2023. The undrawn portion of the aggregate lender commitments under the Bank Credit Agreement is subject to a commitment fee of 0.5% per annum. As of March 31, 2023, we had $10.1 million of outstanding letters of credit. On January 20, 2023, we entered into a Third Amendment to the Bank Credit Agreement, which among other things, provides us the ability to make and repay certain Secured Overnight Financing Rate (“SOFR”) loan borrowings on a weekly basis. The Bank Credit Agreement limits our ability to, among other things, incur and repay other indebtedness; grant liens; engage in certain mergers, consolidations, liquidations and dissolutions; engage in sales of assets; make acquisitions and investments; make other restricted payments (including redeeming, repurchasing or retiring our common stock); and enter into commodity derivative agreements, in each case subject to certain exceptions to such limitations, as specified in the Bank Credit Agreement. The Bank Credit Agreement is secured by (1) our proved oil and natural gas properties, which are held through our restricted subsidiaries; (2) the pledge of equity interests of such subsidiaries; (3) a pledge of our commodity derivative agreements; (4) a pledge of deposit accounts, securities accounts and our commodity accounts of Denbury Inc. and such subsidiaries (as applicable); and (5) a security interest in substantially all other collateral that may be perfected by a Uniform Commercial Code filing, subject to certain exceptions. The Bank Credit Agreement contains certain financial performance covenants including the following: • A Consolidated Total Debt to Consolidated EBITDAX covenant (as defined in the Bank Credit Agreement), with such ratio not to exceed 3.5 times; and • A requirement to maintain a current ratio (i.e., Consolidated Current Assets to Consolidated Current Liabilities) of 1.0. For purposes of computing the current ratio per the Bank Credit Agreement, Consolidated Current Assets exclude the current portion of derivative assets but include available borrowing capacity under the Bank Credit Agreement, and Consolidated Current Liabilities exclude the current portion of derivative liabilities as well as the current portions of long-term indebtedness outstanding. The weighted average interest rate on borrowings outstanding as of March 31, 2023 under the Bank Credit Agreement was 8%. As of March 31, 2023, we were in compliance with all debt covenants under the Bank Credit Agreement. The above description of our Bank Credit Agreement, including certain referenced defined terms, is a summary of certain principal terms and conditions contained in the Bank Credit Agreement and amendments thereto. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 4. Stockholders’ Equity Share Repurchase Program In early May 2022, our Board of Directors authorized a common share repurchase program for up to $250 million of outstanding Denbury common stock. During June and July 2022, the Company repurchased 1,615,356 shares of Denbury common stock under this program for approximately $100 million, at an average price of $61.92 per share. In August 2022, the Board increased Denbury’s stock repurchase authorization by $100 million, thus a total of $250 million of common stock currently remains authorized for future repurchases under this program. The program has no pre-established ending date and may be suspended or discontinued at any time. The Company is not obligated to repurchase any dollar amount or specific number of shares of its common stock under the program. Retirement of Treasury Stock During the year ended December 31, 2022, we retired 1.6 million shares of existing treasury stock, with a carrying value of $100 million, acquired through our stock repurchase program. Upon the retirement of treasury stock, we reduce common stock by the par value of common stock retired, and we reduce additional paid-in capital by the value of those shares in excess of par value. Tax Withholding and Treasury Stock Retirement in Connection with Stock Compensation Plans |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 5. Income Taxes We make estimates and judgments in determining our income tax expense for financial reporting purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities that arise from differences in the timing and recognition of revenue and expense for tax and financial reporting purposes. Significant judgment is required in estimating valuation allowances, and in making this determination we consider all available positive and negative evidence and make certain assumptions. The realization of a deferred tax asset ultimately depends on the existence of sufficient taxable income in the applicable carryback or carryforward periods. In our assessment, we consider the nature, frequency, and severity of current and cumulative losses, as well as historical and forecasted financial results, the overall business environment, our industry’s historic cyclicality, the reversal of existing deferred tax assets and liabilities, and tax planning strategies. We assess the valuation allowance recorded on our deferred tax assets on a quarterly basis, which was $59.2 million at December 31, 2022. This valuation allowance relates primarily to our Louisiana net deferred tax assets of $55.4 million, as well as our Alabama net deferred tax assets and certain Mississippi tax credits totaling $3.8 million. We have concluded that the benefits of such deferred tax assets are not more likely than not to be realized due to lack of sufficient taxable income to fully realize the benefits of such deferred tax assets. We evaluate our estimated annual effective income tax rate based on current and forecasted business results and enacted tax laws on a quarterly basis and apply this tax rate to our ordinary income or loss to calculate our estimated tax liability or benefit. Our income taxes are based on an estimated combined federal and state statutory rate of approximately 25% in 2023 and 2022. Our effective tax rate for the three months ended March 31, 2023 was slightly lower than our estimated statutory rate primarily due to excess stock compensation deductions that were recorded discretely in the quarter. Our effective tax rate for the three months ended March 31, 2022 was higher than our estimated statutory rate due to the release of a portion of the valuation allowance on our deferred tax assets combined with the net loss for the period. |
Commodity Derivative Contracts
Commodity Derivative Contracts | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity Derivative Contracts | Note 6. Commodity Derivative Contracts We do not apply hedge accounting treatment to our oil and natural gas derivative contracts; therefore, the changes in the fair values of these instruments are recognized in income in the period of change. These fair value changes, along with the settlements of expired contracts, are shown under “Commodity derivatives expense (income)” in our Unaudited Condensed Consolidated Statements of Operations. Historically, we have entered into various oil and natural gas derivative contracts to provide an economic hedge of our exposure to commodity price risk associated with anticipated future oil and natural gas production and to provide more certainty to our future cash flows. We do not hold or issue derivative financial instruments for trading purposes. Generally, these contracts have consisted of various combinations of price floors, collars, three-way collars, fixed-price swaps, fixed-price swaps enhanced with a sold put, and basis swaps. The production that we hedge has varied from year to year depending on our levels of debt, financial strength and expectation of future commodity prices, and occasionally requirements under our bank credit facility. We manage and control market and counterparty credit risk through established internal control procedures that are reviewed on an ongoing basis. We attempt to minimize credit risk exposure to counterparties through formal credit policies, monitoring procedures and diversification, and all of our commodity derivative contracts are with parties that are lenders under our Bank Credit Agreement (or affiliates of such lenders). As of March 31, 2023, all of our outstanding derivative contracts were subject to enforceable master netting arrangements whereby payables on those contracts can be offset against receivables from separate derivative contracts with the same counterparty. It is our policy to classify derivative assets and liabilities on a gross basis on our balance sheets, even if the contracts are subject to enforceable master netting arrangements. The following table summarizes our commodity derivative contracts as of March 31, 2023, none of which are classified as hedging instruments in accordance with the FASC Derivatives and Hedging topic: Months Index Price Volume (Barrels per day) Contract Prices ($/Bbl) Weighted Average Price Swap Floor Ceiling Oil Contracts: 2023 Fixed-Price Swaps Apr – June NYMEX 9,500 $ 76.65 $ — $ — July – Dec NYMEX 14,000 78.46 — — 2023 Collars Apr – June NYMEX 17,500 $ — $ 69.71 $ 100.42 July – Dec NYMEX 9,000 — 68.33 100.69 2024 Fixed-Price Swaps Jan – June NYMEX 2,000 $ 75.21 $ — $ — July – Dec NYMEX 1,000 75.12 — — |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 7. Fair Value Measurements The FASC Fair Value Measurement topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (often referred to as the “exit price”). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We primarily apply the income approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. We are able to classify fair value balances based on the observability of those inputs. The FASC establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities as of the reporting date. • Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. Instruments in this category include non-exchange-traded oil derivatives that are based on NYMEX. Our costless collars are valued using the Black-Scholes model, an industry standard option valuation model that takes into account inputs such as contractual prices for the underlying instruments, maturity, quoted forward prices for commodities, interest rates, volatility factors and credit worthiness, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. • Level 3 – Pricing inputs include significant inputs that are generally less observable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. We adjust the valuations from the valuation model for nonperformance risk, using our estimate of the counterparty’s credit quality for asset positions and our credit quality for liability positions. We use multiple sources of third-party credit data in determining counterparty nonperformance risk, including credit default swaps. The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that were accounted for at fair value on a recurring basis as of the periods indicated: Fair Value Measurements Using: In thousands Quoted Prices Significant Significant Total March 31, 2023 Assets Oil derivative contracts – current $ — $ 23,554 $ — $ 23,554 Oil derivative contracts – long-term — 1,617 — 1,617 Total Assets $ — $ 25,171 $ — $ 25,171 Liabilities Oil derivative contracts – current $ — $ (1,613) $ — $ (1,613) Total Liabilities $ — $ (1,613) $ — $ (1,613) December 31, 2022 Assets Oil derivative contracts – current $ — $ 15,517 $ — $ 15,517 Total Assets $ — $ 15,517 $ — $ 15,517 Liabilities Oil derivative contracts – current $ — $ (13,018) $ — $ (13,018) Total Liabilities $ — $ (13,018) $ — $ (13,018) Since we do not apply hedge accounting for our commodity derivative contracts, any gains and losses on our assets and liabilities are included in “Commodity derivatives expense (income)” in the accompanying Unaudited Condensed Consolidated Statements of Operations. Other Fair Value Measurements The carrying value of our loans under our Bank Credit Agreement approximate fair value, as they are subject to short-term floating interest rates that approximate the rates available to us for those periods. The estimated fair value of the principal amount of our debt as of March 31, 2023 and December 31, 2022 was $68.0 million and $29.0 million, respectively. We have other financial instruments consisting primarily of cash, cash equivalents, U.S. Treasury notes, short-term receivables and payables that approximate fair value due to the nature of the instrument and the relatively short maturities. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies Litigation and Regulatory Proceedings We are involved in various lawsuits, claims and regulatory proceedings incidental to our businesses. We are also subject to audits for various taxes (income, sales and use, and severance) in the various states in which we operate, and from time to time receive assessments for potential taxes that we may owe. While we currently believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on our financial position, results of operations or cash flows, litigation and regulatory proceedings are subject to inherent uncertainties. We accrue for losses from litigation and claims if we determine that a loss is probable and the amount can be reasonably estimated. On May 26, 2022, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) of the U.S. Department of Transportation issued a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (“NOPV”) relating to the February 2020 CO 2 release from a pipeline failure near Satartia, Mississippi in our CO 2 pipeline running between the Tinsley and Delhi fields, and assessed a preliminary civil penalty of $3.9 million, which the Company recorded in its financial statements in the second quarter of 2022. On March 24, 2023, Denbury and PHMSA entered into a final Consent Order and Consent Agreement that settled all of the allegations in the NOPV and also reduced the assessed penalty to $2.9 million. The $1.0 million reduction was reflected in “Other Expenses” in our Unaudited Condensed Consolidated Statement of Operations in the first quarter of 2023. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying unaudited condensed consolidated financial statements of Denbury Inc. and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements and the notes thereto should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”). Unless indicated otherwise or the context requires, the terms “we,” “our,” “us,” “Company” or “Denbury,” refer to Denbury Inc. and its subsidiaries. |
Use of Estimates | Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end, and the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of our consolidated financial position as of March 31, 2023, our consolidated results of operations for the three months ended March 31, 2023 and 2022, our consolidated cash flows for the three months ended March 31, 2023 and 2022, and our consolidated statements of changes in stockholders’ equity for the three months ended March 31, 2023 and 2022. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on our reported net income (loss), current assets, total assets, current liabilities, total liabilities or stockholders’ equity. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash We consider all highly liquid investments to be cash equivalents if they have maturities of three months or less at the date of purchase. The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents, and restricted cash at end of period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: In thousands March 31, 2023 March 31, 2022 Cash and cash equivalents $ 525 $ 517 Restricted cash for future asset retirement obligations 47,424 46,695 Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 47,949 $ 47,212 Restricted cash for future asset retirement obligations in the table above consists of escrow accounts that are legally restricted for certain of our asset retirement obligations. |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Basic weighted average common shares exclude shares of nonvested restricted stock (although nonvested restricted stock is issued and outstanding upon grant). As these restricted shares vest, they will be included in the shares outstanding used to calculate basic Diluted net income (loss) per common share is calculated in the same manner but includes the impact of all potentially dilutive securities. Potentially dilutive securities include restricted stock, restricted stock units, performance stock units, shares to be issued under the employee stock purchase plan (“ESPP”), and series A and series B warrants . |
Oil and Natural Gas Properties | Oil and Natural Gas Properties Write-Down of Oil and Natural Gas Properties. Under full cost accounting, the net capitalized costs of oil and natural gas properties are limited to the lower of unamortized cost or the cost center ceiling. The cost center ceiling is defined as (1) the present value of estimated future net revenues from proved oil and natural gas reserves before future abandonment costs (discounted at 10%), based on the average first-day-of-the-month oil and natural gas price for each month during a 12-month rolling period prior to the end of a particular reporting period; plus (2) the cost of properties not being amortized; plus (3) the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any; less (4) related income tax effects. Our future net revenues from proved oil and natural gas reserves are not reduced for development costs related to the cost of drilling for and developing CO 2 reserves nor those related to the cost of constructing CO 2 pipelines, as we do not have to incur additional CO 2 capital costs to develop the proved oil and natural gas reserves. Therefore, we include in the ceiling test, as a reduction of future net revenues, that portion of our capitalized CO 2 costs related to CO 2 reserves and CO 2 pipelines that we estimate will be consumed in the process of producing our proved oil and natural gas reserves. The fair value of our oil and natural gas derivative contracts is not included in the ceiling test, as we do not designate these contracts as hedge instruments for accounting purposes. The cost center ceiling test is prepared quarterly. We did not record a ceiling test write-down during the three months ended March 31, 2023 or March 31, 2022. CCUS Storage Sites and Other Assets CCUS Investments. During the first quarter of 2023, we made two investments in carbon capture technology companies, including a $2 million equity investment in Aqualung Carbon Capture AS and a $5 million equity investment in ION Clean Energy, Inc. In April 2023, based on the achievement of certain milestones, we invested the remaining $10 million of our original $20 million commitment in Clean Hydrogen Works, the project development company of a planned blue hydrogen/ammonia multi-block facility for which we have signed a definitive agreement for the transportation and storage of CO 2 for the first two blocks of the proposed plant. These investments are included in “Other assets” in the Unaudited Condensed Consolidated Balance Sheet as of March 31, 2023. |
Revenue Recognition | We record revenue in accordance with Financial Accounting Standards Board (“FASB”) Codification (“FASC”) Topic 606, Revenue from Contracts with Customers . The core principle of FASC Topic 606 is that an entity should recognize revenue for the transfer of goods or services equal to the amount of consideration that it expects to be entitled to receive for those goods or services. Once we have delivered the volume of commodity to the delivery point and the customer takes delivery and possession, we are entitled to payment and we invoice the customer for such delivered production. Payment under most oil and CO 2 contracts is received within one month following product delivery, and for natural gas and NGL contracts, payment is generally received within two months following delivery. Timing of revenue recognition may differ from the timing of invoicing to customers; however, as the right to consideration after delivery is unconditional based on only the passage of time before payment of the consideration is due, upon delivery we record a receivable in “Accrued production receivable” in our Unaudited Condensed Consolidated Balance Sheets. In certain situations, the Company enters into marketing arrangements for the purchase and subsequent sale of crude oil from third parties. We recognize the revenue received and the associated expense incurred on these sales on a gross basis, as “Oil marketing revenues” and “Oil marketing purchases” in our Unaudited Condensed Consolidated Statements of Operations, since we act as a principal in the transaction by assuming control of the commodities purchased and responsibility to deliver the commodities sold. Revenue is recognized when control transfers to the purchaser at the delivery point based on the price received from the purchaser. |
Income Taxes | We evaluate our estimated annual effective income tax rate based on current and forecasted business results and enacted tax laws on a quarterly basis and apply this tax rate to our ordinary income or loss to calculate our estimated tax liability or benefit. Our income taxes are based on an estimated combined federal and state statutory rate of approximately 25% in 2023 and 2022. |
Commodity Derivative Contracts | We do not apply hedge accounting treatment to our oil and natural gas derivative contracts; therefore, the changes in the fair values of these instruments are recognized in income in the period of change. These fair value changes, along with the settlements of expired contracts, are shown under “Commodity derivatives expense (income)” in our Unaudited Condensed Consolidated Statements of Operations. Historically, we have entered into various oil and natural gas derivative contracts to provide an economic hedge of our exposure to commodity price risk associated with anticipated future oil and natural gas production and to provide more certainty to our future cash flows. We do not hold or issue derivative financial instruments for trading purposes. Generally, these contracts have consisted of various combinations of price floors, collars, three-way collars, fixed-price swaps, fixed-price swaps enhanced with a sold put, and basis swaps. The production that we hedge has varied from year to year depending on our levels of debt, financial strength and expectation of future commodity prices, and occasionally requirements under our bank credit facility. We manage and control market and counterparty credit risk through established internal control procedures that are reviewed on an ongoing basis. We attempt to minimize credit risk exposure to counterparties through formal credit policies, monitoring procedures and diversification, and all of our commodity derivative contracts are with parties that are lenders under our Bank Credit Agreement (or affiliates of such lenders). As of March 31, 2023, all of our outstanding derivative contracts were subject to enforceable master netting arrangements whereby payables on those contracts can be offset against receivables from separate derivative contracts with the same counterparty. It is our policy to classify derivative assets and liabilities on a gross basis on our balance sheets, even if the contracts are subject to enforceable master netting arrangements. |
Fair Value Measurements | The FASC Fair Value Measurement topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (often referred to as the “exit price”). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We primarily apply the income approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. We are able to classify fair value balances based on the observability of those inputs. The FASC establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities as of the reporting date. • Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. Instruments in this category include non-exchange-traded oil derivatives that are based on NYMEX. Our costless collars are valued using the Black-Scholes model, an industry standard option valuation model that takes into account inputs such as contractual prices for the underlying instruments, maturity, quoted forward prices for commodities, interest rates, volatility factors and credit worthiness, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. • Level 3 – Pricing inputs include significant inputs that are generally less observable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. We adjust the valuations from the valuation model for nonperformance risk, using our estimate of the counterparty’s credit quality for asset positions and our credit quality for liability positions. We use multiple sources of third-party credit data in determining counterparty nonperformance risk, including credit default swaps. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents, and restricted cash at end of period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: In thousands March 31, 2023 March 31, 2022 Cash and cash equivalents $ 525 $ 517 Restricted cash for future asset retirement obligations 47,424 46,695 Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 47,949 $ 47,212 |
Schedule of Restricted Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents, and restricted cash at end of period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: In thousands March 31, 2023 March 31, 2022 Cash and cash equivalents $ 525 $ 517 Restricted cash for future asset retirement obligations 47,424 46,695 Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 47,949 $ 47,212 |
Schedule of Net Loss Per Share, Basic and Diluted | The following table sets forth the weighted average shares used for purposes of calculating basic and diluted net income (loss) per common share for the periods indicated: Three Months Ended March 31, In thousands 2023 2022 Weighted average common shares outstanding – basic 51,503 51,602 Effect of potentially dilutive securities Restricted stock, restricted stock units and performance stock units 360 — Warrants 1,899 — Employee Stock Purchase Program 1 — Weighted average common shares outstanding – diluted 53,763 51,602 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following outstanding securities were excluded from the computation of diluted net income (loss) per share for the three months ended March 31, 2023 and March 31, 2022, as their effect would have been antidilutive, as of the respective dates: March 31, In thousands 2023 2022 Restricted stock, restricted stock units and performance stock units 490 1,005 Warrants — 5,162 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes our revenues by product type for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, In thousands 2023 2022 Oil sales $ 312,572 $ 381,242 Natural gas sales 1,917 3,669 CO 2 sales and transportation fees 10,686 13,422 Oil marketing revenues 14,548 13,276 Total revenues $ 339,723 $ 411,609 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Outstanding | The table below reflects long-term debt outstanding as of the dates indicated: In thousands March 31, 2023 December 31, 2022 Senior Secured Bank Credit Agreement $ 68,000 $ 29,000 Capital lease obligations 383 — Total debt principal balance 68,383 29,000 Less: current maturities of long-term debt (107) — Long-term debt and capital lease obligations $ 68,276 $ 29,000 |
Commodity Derivative Contracts
Commodity Derivative Contracts (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity Derivative Contracts Not Classified as Hedging Instruments | The following table summarizes our commodity derivative contracts as of March 31, 2023, none of which are classified as hedging instruments in accordance with the FASC Derivatives and Hedging topic: Months Index Price Volume (Barrels per day) Contract Prices ($/Bbl) Weighted Average Price Swap Floor Ceiling Oil Contracts: 2023 Fixed-Price Swaps Apr – June NYMEX 9,500 $ 76.65 $ — $ — July – Dec NYMEX 14,000 78.46 — — 2023 Collars Apr – June NYMEX 17,500 $ — $ 69.71 $ 100.42 July – Dec NYMEX 9,000 — 68.33 100.69 2024 Fixed-Price Swaps Jan – June NYMEX 2,000 $ 75.21 $ — $ — July – Dec NYMEX 1,000 75.12 — — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair value Hierarchy of Financial Assets and Liabilities | The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that were accounted for at fair value on a recurring basis as of the periods indicated: Fair Value Measurements Using: In thousands Quoted Prices Significant Significant Total March 31, 2023 Assets Oil derivative contracts – current $ — $ 23,554 $ — $ 23,554 Oil derivative contracts – long-term — 1,617 — 1,617 Total Assets $ — $ 25,171 $ — $ 25,171 Liabilities Oil derivative contracts – current $ — $ (1,613) $ — $ (1,613) Total Liabilities $ — $ (1,613) $ — $ (1,613) December 31, 2022 Assets Oil derivative contracts – current $ — $ 15,517 $ — $ 15,517 Total Assets $ — $ 15,517 $ — $ 15,517 Liabilities Oil derivative contracts – current $ — $ (13,018) $ — $ (13,018) Total Liabilities $ — $ (13,018) $ — $ (13,018) |
Basis of Presentation (Cash, Ca
Basis of Presentation (Cash, Cash Equivalents, and Restricted Cash) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 525 | $ 521 | $ 517 | |
Restricted cash for future asset retirement obligations | 47,424 | 47,359 | 46,695 | |
Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows | $ 47,949 | $ 47,880 | $ 47,212 | $ 50,344 |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) | 3 Months Ended | 30 Months Ended | |||
Mar. 31, 2023 USD ($) shares investment $ / shares | Mar. 31, 2022 USD ($) shares | Mar. 31, 2023 shares investment $ / shares | Apr. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Weighted average common shares outstanding – basic (in shares) | 51,503,000 | 51,602,000 | |||
Weighted average common shares outstanding – diluted (in shares) | 53,763,000 | 51,602,000 | |||
Dilutive impact of warrants (in shares) | 1,899,000 | 0 | |||
Number of warrants outstanding (in shares) | 2,900,000 | 2,900,000 | |||
Number of warrants exercised (in shares) | 1,500,000 | ||||
Write-down of oil and natural gas properties | $ | $ 0 | $ 0 | |||
Number of investment | investment | 2 | 2 | |||
Equity investment | $ | $ 7,108,000 | $ 0 | |||
Aqualung Carbon Capture AS | Investment Commitment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Equity investment | $ | 2,000,000 | ||||
ION Clean Energy, Inc. | Investment Commitment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Equity investment | $ | $ 5,000,000 | ||||
Project Development Company of Planned Louisiana Blue Hydrogen Ammonia Project | Investment Commitment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Committed to invest, on certain milestone achieved | $ | $ 20,000,000 | ||||
Project Development Company of Planned Louisiana Blue Hydrogen Ammonia Project | Investment Commitment | Subsequent Event | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Committed to invest, on certain milestone achieved | $ | $ 10,000,000 | ||||
Series A Warrants | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Number of warrants outstanding (in shares) | 1,800,000 | 1,800,000 | |||
Exercise price of warrants (in dollars per share) | $ / shares | $ 32.59 | $ 32.59 | |||
Number of warrants exercised (in shares) | 900,000 | 900,000 | |||
Series B Warrants | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Number of warrants outstanding (in shares) | 1,100,000 | 1,100,000 | |||
Exercise price of warrants (in dollars per share) | $ / shares | $ 35.41 | $ 35.41 | |||
Number of warrants exercised (in shares) | 1,800,000 | 1,800,000 | |||
Net Income Scenario | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Weighted average common shares outstanding – diluted (in shares) | 55,000,000 | ||||
Dilutive impact of warrants (in shares) | 2,800,000 | ||||
Net Income Scenario | Restricted stock units | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Dilutive impact of restricted stock units (in shares) | 600,000 | ||||
Performance-based and restricted stock units | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Weighted average common shares outstanding – basic (in shares) | 1,775,182 |
Basis of Presentation (Schedule
Basis of Presentation (Schedule of Earnings Per Share Basic and Diluted) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average common shares outstanding – basic (in shares) | 51,503 | 51,602 |
Warrants (in shares) | 1,899 | 0 |
Weighted average common shares outstanding – diluted (in shares) | 53,763 | 51,602 |
Restricted stock, restricted stock units and performance stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Restricted stock, restricted stock units and performance stock units (in shares) | 360 | 0 |
Employee Stock Purchase Program (in shares) | 360 | 0 |
Employee Stock Purchase Plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Restricted stock, restricted stock units and performance stock units (in shares) | 1 | 0 |
Employee Stock Purchase Program (in shares) | 1 | 0 |
Basis of Presentation (Antidilu
Basis of Presentation (Antidilutive Securities) (Details) - shares shares in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Restricted stock, restricted stock units and performance stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of antidilutive equity-based instruments outstanding (in shares) | 490 | 1,005 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of antidilutive equity-based instruments outstanding (in shares) | 0 | 5,162 |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 339,723 | $ 411,609 |
Oil sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 312,572 | 381,242 |
Natural gas sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,917 | 3,669 |
CO2 sales and transportation fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 10,686 | 13,422 |
Oil marketing revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 14,548 | $ 13,276 |
Long-Term Debt (Schedule of Lon
Long-Term Debt (Schedule of Long-Term Debt Outstanding) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Senior Secured Bank Credit Agreement | $ 68,000 | $ 29,000 |
Capital lease obligations | 383 | 0 |
Total debt principal balance | 68,383 | 29,000 |
Less: current maturities of long-term debt | (107) | 0 |
Long-term debt and capital lease obligations | $ 68,276 | $ 29,000 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) | 3 Months Ended | ||||
Jan. 20, 2023 | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | May 04, 2022 USD ($) | Sep. 18, 2020 USD ($) | |
Debt Instrument [Line Items] | |||||
Borrowing base | $ 750,000,000 | ||||
Commitment fee percentage (as a percent) | 0.50% | ||||
Senior Secured Bank Credit Agreement | $ 68,000,000 | $ 29,000,000 | |||
Amount of letter of credit posted as security | $ 10,100,000 | ||||
Maximum | |||||
Debt Instrument [Line Items] | |||||
Consolidated total debt to consolidated EBITDAX requirement | 3.5 | ||||
Minimum | |||||
Debt Instrument [Line Items] | |||||
Current ratio requirement | 1 | ||||
Weighted Average | |||||
Debt Instrument [Line Items] | |||||
Weighted average interest rate | 8% | ||||
Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, capacity available for specific purpose other than for trade purchases | $ 100,000,000 | ||||
Swingline Loan | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, capacity available for specific purpose other than for trade purchases | $ 25,000,000 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jul. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Aug. 31, 2022 | May 31, 2022 | |
Stockholders' Equity Note [Abstract] | ||||||
Authorized amount under share repurchase program | $ 100,000,000 | $ 250,000,000 | ||||
Shares repurchased under share repurchase program (in shares) | 1,615,356 | |||||
Stock repurchase program | $ 100,000,000 | |||||
Average cost per share of shares repurchased under share repurchase program (in dollars per share) | $ 61.92 | |||||
Remaining amount authorized under share repurchase program | $ 250,000,000 | |||||
Retired treasury shares (in shares) | 16,281 | 1,600,000 | ||||
Treasury stock retired | $ 1,400,000 | $ 100,000,000 | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Tax withholding for stock compensation plans, value | $ 58,000 | |||||
Restricted stock units | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Tax withholding for stock compensation plans, value | $ 1,300,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Valuation Allowance [Line Items] | |||
Valuation allowance | $ 59.2 | ||
Federal and state statutory tax rate (as a percent) | 25% | 25% | |
LOUISIANA | |||
Valuation Allowance [Line Items] | |||
Deferred tax assets | 55.4 | ||
Alabama And Mississippi | |||
Valuation Allowance [Line Items] | |||
Deferred tax assets | $ 3.8 |
Commodity Derivative Contract_2
Commodity Derivative Contracts (Details) - NYMEX | Mar. 31, 2023 bbl / d $ / Barrel |
Swap | Apr – June | |
Derivative [Line Items] | |
Volume per day (Barrels per day) | bbl / d | 9,500 |
Weighted average swap price (in dollars per Barrel) | 76.65 |
Swap | July – Dec | |
Derivative [Line Items] | |
Volume per day (Barrels per day) | bbl / d | 14,000 |
Weighted average swap price (in dollars per Barrel) | 78.46 |
Swap | Jan – June | |
Derivative [Line Items] | |
Volume per day (Barrels per day) | bbl / d | 2,000 |
Weighted average swap price (in dollars per Barrel) | 75.21 |
Swap | July – Dec | |
Derivative [Line Items] | |
Volume per day (Barrels per day) | bbl / d | 1,000 |
Weighted average swap price (in dollars per Barrel) | 75.12 |
Collar | Apr – June | |
Derivative [Line Items] | |
Volume per day (Barrels per day) | bbl / d | 17,500 |
Weighted average floor price (in dollars per Barrel) | 69.71 |
Weighted average ceiling price (in dollars per Barrel) | 100.42 |
Collar | July – Dec | |
Derivative [Line Items] | |
Volume per day (Barrels per day) | bbl / d | 9,000 |
Weighted average floor price (in dollars per Barrel) | 68.33 |
Weighted average ceiling price (in dollars per Barrel) | 100.69 |
Fair Value Measurements (Fair v
Fair Value Measurements (Fair value Hierarchy of Financial Assets and Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts – current | $ 23,554 | $ 15,517 |
Oil derivative contracts – long-term | 1,617 | 0 |
Total Assets | 25,171 | 15,517 |
Oil derivative contracts – current | (1,613) | (13,018) |
Total Liabilities | (1,613) | (13,018) |
Quoted Prices in Active Markets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts – current | 0 | 0 |
Oil derivative contracts – long-term | 0 | |
Total Assets | 0 | 0 |
Oil derivative contracts – current | 0 | 0 |
Total Liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts – current | 23,554 | 15,517 |
Oil derivative contracts – long-term | 1,617 | |
Total Assets | 25,171 | 15,517 |
Oil derivative contracts – current | (1,613) | (13,018) |
Total Liabilities | (1,613) | (13,018) |
Significant Unobservable Inputs (Level 3) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts – current | 0 | 0 |
Oil derivative contracts – long-term | 0 | |
Total Assets | 0 | 0 |
Oil derivative contracts – current | 0 | 0 |
Total Liabilities | $ 0 | $ 0 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Fair value of debt | $ 68 | $ 29 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 24, 2023 | Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Preliminary assessed civil penalty | $ 3.9 | ||
Final penalty assessed | $ 2.9 | ||
Decrease in loss contingencies | $ 1 |