SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): May 14, 2002
DENBURY RESOURCES INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation or organization)
1-12935 75-2815171
(Commission File Number) (I.R.S. Employer
Identification No.)
5100 Tennyson Parkway
Suite 3000
Plano, Texas 75024
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (972) 673-2000
Item 5. Other Events.
Acquisition of Genesis Energy, LLC
On May 14, 2002, Denbury Resources Inc. ("Denbury") (NYSE: DNR) closed,
through its wholly owned subsidiary Denbury Gathering & Marketing, Inc.
("Denbury G&M"), the purchase of Genesis Energy, L.L.C. of Houston, Texas
("Genesis"), which acts as the general partner of Genesis Energy, L.P. (AMEX:
GEL) (the "Partnership"). As previously announced on May 6, 2002, Denbury
entered into a purchase agreement with Salomon Smith Barney Holdings, Inc. and
Salomon Brothers Holding Inc. (collectively, the "Sellers") to acquire Genesis
from the Sellers for approximately $1.5 million paid by Denbury out of its
available cash.
Four of the five prior directors of Genesis will continue to serve on the
Genesis board. Denbury also anticipates the continuation of Genesis' management.
In addition to the four continuing directors, Denbury has elected four of its
executive officers to serve on the Genesis board, and is also considering asking
an outside director to serve on the Genesis board in the near future.
Background of Genesis
Genesis owns a 2.0% general partner's interest in the Partnership, which is
a publicly traded master limited partnership whose shares are traded on the
American Stock Exchange, and a 0.01% general partner's interest in the
Partnership's subsidiary, Genesis Crude Oil, L.P. By virtue of its general
partner's interests, Denbury may be deemed to "control" these entities, as that
term is defined under the Securities Exchange Act of 1934.
Denbury believes that this acquisition will strategically strengthen its
position in those states in which Genesis operates. Through its operating
entities, Genesis is engaged in two primary lines of business: crude oil
gathering and marketing and pipeline transportation.
The Partnership utilizes a trucking fleet of 75 leased tractor-trailers to
transport crude oil purchased at the wellhead to pipeline injection points,
terminals or refineries. These operations are concentrated in Alabama, Florida,
Mississippi, Louisiana, and Texas.
The Partnership also owns and operates three common carrier crude oil
pipeline systems. They include the 703 mile Texas system, the 114 mile Jay
System extending between Florida and Alabama and the 261 mile Mississippi system
extending between Mississippi and Louisiana. Complementing the pipelines is 1.5
million barrels of crude oil storage capacity.
In the past the Partnership has purchased crude oil on a bulk basis, but
has substantially decreased these purchases since January 1, 2002 following a
decision to discontinue its bulk purchase activities.
Financial Statements
Denbury does not believe, based upon its review of Genesis' financial
statements, that the acquisition of Genesis involves the purchase of a
significant amount of assets to Denbury under the standards of Item 2 of Form
8-K, nor that the acquisition involves a business that is significant to Denbury
under the standards of Rule 11.01 (b) of Regulation S-X, as Genesis does
not constitute a "significant subsidiary" under Rule 1-02(w) of Regulation S-X.
If it is determined that this analysis is incorrect, Denbury will amend this
report within 60 days to provide any necessary financial statements and pro
forma financial statements of Denbury and the Partnership.
Forward Looking Statements
This Form 8-K, other than historical financial information, contains
forward looking statements that involve risks and uncertainties including
Denbury's belief that the acquisition of Genesis will strategically strengthen
Denbury's position, and those risks and uncertainties detailed in Denbury's
filings with the Securities and Exchange Commission, including Denbury's reports
on Form 10-K and 10-Q. These reports are incorporated by this reference as
though fully set forth herein. These statements are based on operating
assumptions that management believes are reasonable based on currently available
information; however, management's assumptions and Denbury's future performance
are both subject to a wide range of business risks, and there is no assurance
that these goals and projections can or will be met. Actual results may vary
materially.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Denbury Resources Inc.
(Registrant)
Date: May 22, 2002 By: /s/ Phil Rykhoek
---------------------------------
Phil Rykhoek
Chief Financial Officer
Houston 254148 v 4, 28040.00026