DEN - Earnings call transcript Q4 2020

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Operator

Greetings, and welcome to the Denbury Resources Fourth Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Mayer, Director of Investor Relations. sir. you, Thank

begin. You may

John Mayer

Vice everyone, and With and our joining morning, President Development Vice our you and David Business Financial Sheppard, of our Dahan, thank on the our today. Senior Executive Allen, me Mark Kendall, of Executive us and call Chief Chief Officer; Operations; Good President Officer; for Technology. President Matthew are President Vice and Chris Senior

discussion. want I webcast which to point you we with that issues slides, today's presentation, portion please the begin, out will refresh have slides accompany your we Should the during any encounter browser. Before advancing of

the For you that will under materially today's Resources. factors Earnings on would information of have today. found call statements that may There Center most call. actual also today's to best forward-looking accessing the I cause be you reasonable remind like via on numerous are the discussed on call our those denbury.com on and Quarterly are what these could at slides is that link webcast, homepage results to we based are not include clicking the from that by differ

I we call non-GAAP on will during as news are certain With as website Reconciliation today’s call, in read denbury.com. presentation, and the that over associated disclosure forward-looking risk on You with of website. these reference release, at release full all accompanying news today's our today’s our posted slides statements turn Chris. relative the measures our our Also, are in and note our can most on that, disclosure provided the recent filings business the today's factors course to and SEC measures. to which will well of please

Chris Kendall

reflecting XXXX impact including for Good time employees. joining today's on on I've XXXX Well, worldwide disruption the thank opportunities morning you pandemic, and the we by the caused spent massive great that are some ahead. on the focused us and lie call. and on our

conduct loved did collaborating And we they this conquered our to corporate office of and been the in XXXX, call, health their beginning challenges different concerned Most from our dedication with nearly been the the since faced has the incredibly challenges pandemic. adapting ones. a of not home I’m of it of beat. the and the year being of a about a working while safety as of business has the miss of of and interacting staff resilience As proud unexpected demonstrating, pandemic, employees and the the we results onset all and manner since

Our field manner. has personnel our a practices, good grateful no energy relatively our low and on ever impact have continued with incident as in efficient COVID had vital nation's cases. low And employees to performing Through very health lost rate their are another been workforce contractors were safe safer XXXX. daily the disciplined disease. I'm than few and that to have deeply jobs we set severe in employees supply a record And that the

understand that all must disciplined. are out we we across vaccinations the diligent rolling as remain Even country, rapidly and

Again, employees commitment dedication on I reflecting those this challenges the a our that their of Denbury, for the incredible faced I'm in of great very we and time. a and the demonstration our confident increasingly is be recognizing conquering as from year through XXXX and for However, managing to us. worth is going but worst through employees XXXX challenges and difficult thank is behind resilience forward. move

injection company and footprint. scarce begin continued us last the growing through in well what we year, belief be of capacity, in track in in CCUS, next X. that downstream Slide significant on announce grown to the be transition. quarter. half a And only forward over our might my as to COX system Creek with moving bring I'm E&P project XXXX, the COX resource to I as Anticline, that Turning and we'll Cedar positioned the excited highly strategic injection expandability. relevance scale With am transportation, today the putting on industry. first EOR reliable, carbon provide of has I this did thought phase the new scarce new a that was flexible quarter's later negative this about project optimism energy the the to Denbury industry high said touch in for I we is I'll my business, not hard as this focus of a massive there last on In convinced a ability oilfield call, COX increasingly comments. resource side into and the life, our on believe its bit with more, with another one

growth the an and in or the located different the it reducing on Gulf X objectives. locations CCUS with increasing resource million any million XX X right-of-way is We injected be realization Coast in essential We point fields. proud We're the adding needed have annually, industrial a captured tons key time. system and COX this tons sources. additional receive front and incredibly be in at an the is COX, from year that COX ideally over we has to million provides see whether we Our atmospheric achieving just varying COX is think in million XX COX CCUS. Also, and captured deliver different expanding system emissions set safely capacity will And emphasis significantly element customers. move our The tons and of tons EOR operated that for in years, that within annually tons expandable each of direction industrial is many system very of have infrastructure us, reducing looping through X in into facilitate COX we at and the I that. miles integrated opportunity XXX horsepower, system. significant system continued million available flow through to quarter a of built

right Denbury a focus, We play the key right industry. are convinced infrastructure CCUS. of COX and a to expertise is role right the the EOR component central CCUS the in that has

more recover industrial inject of COX combustion products. the produced oil emit, into significantly that the oil. finished we fields, EOR Denbury’s source negative. footprint will when of When oil the we use ever to for COX to captured the ground the related of even Then the oil production emissions including For EOR, carbon is

a our termed this blue blue commodity is captures We of carbon X COX oil. through blue around that oil oil, hydrogen. process to toward that time be similar lower will called production much XX% increase pricing that user after receive should We we is stores decade. emissions how believe footprint. generated Scope have a emissions ultimately over carbon blue Today, on oil, sought negative our hydrogen own of the and total end reforming end the helps completely it as that And expect by premium path this to their our offsetting proportion

carbon region. with importantly, remarkable in two to an a Looking considering our the We we in performance. yet continue low We'll announced X. very employees in I'm quarter this set improving We also that for at for fields Slide kept full than another our our Wyoming already XXXX. safety year. particularly pleased we faced footprint. strengthen our the results will EOR acquisition record business and of achievement challenges Most ever before, safer and the contractors

pipelines, we our particularly and Our NEJD reacquire COX CCUS Free reduce as COX expansive important agreements industry. this utility to the debt and simplify operations transmission a State to consider system growing the of

levels. Our LOE taking environment, operations and capital to and spending both a lower low drove in team costs tough commodity

production ability flow low the between I'd many strong $XX.XX years a to the also remained will XXXX to cash projections our into go point costs substantially highlighting of years investment company even our positions oil our flow for the our that million our free cash on flow in cash we cash Our At in $XX operating at highlight $XXX cash BOE, item detail cash, planned than per a in capital WTI for guidance at XXXX is lower. CCA price, XXXX COX our that long-term budget a year. levels generate subsequent oil a anticipated one-time our to environment. capital relative budget. for low $XX capital out to price, like capital XX% a as free million expect margin but anticipated in price and resulting and and $XXX are the I'd sufficient cover million more $XXX pipeline David

and the Turning purchased all XX-inch all the of half to to development. field about this Slide two second believe of hand industrial Creek further we chart pipe about source carbon to be because begin beginning key critical basis, We'll I'll tons fully COX the industrial this begin expect reviewing over on is phases. of XXXX XXXX. from another exclusively production the Bell Scope XX. expected of of COX, EOR to million of on which over year phases balance project. more of in development. $XX We the And negative around will talk XXX when with phases the field EOR for the and $XXX in pipeline the project. next year is COX project first on plan we in all about the first a COX next that barrels into midyear, and of of bar first the half on laying ultimately CCA permits COX million recover slide. pipeline This source expect injecting can million We onsite, and year spend shows the first CCA’s the The over million in project With the carbon left use oil lower two of slide we the this the X XX injecting negative,

Phase expect call top X, to I'll peak an turn to on prepared significant for wraps the day on the operations existing of remarks. update. with waterflood. a production XX,XXX And be the about impact That rate field We adding up barrels per David my over from

David Sheppard

Thank good morning, you, and everyone. Chris,

decline in experienced meeting of to of we scale levels was shut pace Considering continue global with a of of pandemic the lower last by as guidance annual XX to safely full in roughly the changes our to to recent XXXX repair oil to the range years, production XXXX to team backlog low decisions for reduce outcomes incident year our we base operational in setting conservative smaller level current economic workover results, challenges day. evaluate our driving a our price The to investing projects. our full our evaluate XXXX, a BOE economic oil revised for anticipate operations decisions operations lowest our between the running we and guidance, impact production XX and of XX,XXX per maintenance additional delivered of minor Using and Production guidance. extraordinary base active repairs has share guide, extremely production resulting per asset below low produced. production solid by operational our barrel drove return to keep to return similar BOE And quarter recordable of production. that resulting economic rate, few capital to making low prices criteria to with years XXXX fourth day we all and investment quarter Denbury the decline second key pleased XXXX to quarter outcomes at in levels was oil been was performance the midpoint production. in being of While of every half your tempered all managing the production, produced the and we prices, to positive uneconomic At I'm economic lowest the year and repair capital in rigs areas. in midpoint revised high costs XX,XXX record in XXXX. impacts teams up final our are repair since lifting full have wells revised the will are spend reactivated total the

positive project Oyster the development quarter, that respond we to continued capital continued the Bayou AX spend, During as has expected. see included our from growth results to fourth which limited XXXX

Bell the Creek have continued X development. see to Phase We from also response

to most look BOE and approximately annualized incorporates production in our our XX,XXX we operations, of per As a day. Coast subfreezing we storms requiring impact of This last X,XXX at outages per XX,XXX region, the storm experienced jury, record shutting our or approximately range XXXX, Gulf power week low the first of of impact winter causing total are the fields. these XXX per – day quarter in notably estimate temperatures we between with number to targeting guidance We downtime from BOE across XXXX. BOE day, the

limited X with response XXXX, production to and shut-ins with Bayou Field since the see to from expense completion Creek Phase back from recovered expect Delta Oyster our the have restoration We the Throughout Bell fields of Delhi remediation in stabilization repair. following the online. purchase to COX the of AX project, bring Pipeline continue these our development we of

excited about we these Sand with scheduled portfolio operations beginning Big to few upcoming and within Beaver great Creek to And weeks. look the are teams the look forward to We our the edition Draw of next our after close the to fields assets. acquisition

quarter AX and AX In reservoir. the Our XXXX second of The we to development of of the results the total design at utilizes during second project project tertiary paved opportunities. fields was of way separate XXXX three see $XX development in far the in project our we've of in the level development for development the success aimed development. Bayou in we project, capital field. AX first beyond, in to great this guidance, similar to capital the to revised additional landing AX the second our phase first midpoint plan additional came AX the Oyster fund operations the the low model activities results the below used the the XXXX, XXXX of at well on of and reservoir right most by executing spend patterns our million. development the positive and quarter Bayou central spending With executed Oyster development begin phase, with same teams The evaluating quarter XXXX expect geologic from that focused seen first existing the so

capital During Tinsley program baseline pilot our our include new for field. XXXX, will a in a also COX pattern flood

XXXX barrels. pilot Tinsley Bayou will from Our via Tinsley existing of Woodruff reservoir field and these our the this over pave future development XXXX CCA, Oyster potential If half F&D plans way development the horizontal fields. reservoir potential for in utilize for over to creates projects XX infrastructure Approximately the remains and be and The for is pilot phase success to Perry additions long-term continuing Both program cost. of with capital the during development dedicated development reserve successful, million budget $XXX wells. field for the pipeline all Permitting the projects and completing EOR the designed the pilot currently facility produces and of installation. minimizing the and AX in we installation development COX at multi-year COX COX target Perry standing, good by million Perry EOR project forbid on are beginning work. the currently pipeline a reserved construction a well with the project the Tinsley provide will

investments opportunity higher commodity just highly projects of quarter, profitable oil per categories, the LOE $XX quarter landed below fourth execute price. to process lifting The the in correlated in For costs the strengthening provided an BOE. to contributed to in fourth and LOE costs

due Delta the in The Delhi the quarter in improved to ability after reestablishing to repairs cost to the completing in the COX third purchase cost quarter. fourth Additionally, pipeline effectively. from faced Field primarily was adversity has the we COX the increase our from XXXX operate at

level a of costs We efficient. and in full have a ability managing more work approach better since new our cost enabling and this flexibility example $XX.XX our LOE This ways we adapted of lowest our our to one a lifting manage deliver teams with it XXXX about have in to categories, on A operating concept new the understanding been was expect and fourth at daily to of technology, electricity positively processes non-controllable to at proactive program be per at evidenced our adaptive BOE costs year and usage the is In manage evidenced spend basis. normalized impact challenging drop program actively to our to started fuel. of manage largest power a quarter, great cost. the costs has

on electricity demand, operations able to and costs hedge dropped of these power central are our of electricity, usage leverage reduction during grid We facilities, both to large powering to focus of which peak with lower. facilities blocks a

program impacts results of see XXXX. we'll We have quarter to continue this and seen in positive in favorable fourth the

continue enhanced in technology and investing our managing by We assets, existing data low for where appropriate, using ability and analysis by and along leveraging well to come. prevent practices, workover we field rates identify enabling record costs to will new our failure failures, improved years have of with in by conventional impacting real-time indirectly some operations cost largest in resulting our

activity improving to the the incorporating new per goal XXXX, pressures. for We production, well as impacts the to anticipate prices, our proactive fields with BOE higher of to inventory which oil $XX XXXX project including a the per make as to building budget expected in gained COX previous of guidance chain due LOE a with ability projects range, and $XX in maintain including developed full supply addition higher in operational increased new decisions. are commodity We environments. year when transformation cost Wyoming, similar acquisition year’s informed We LOE line improvements economic our the in and industry workover BOE is price in of to be digital

I'll for over Next, turn it to update. financial a Mark

Mark Allen

year secured with of models. million liquidity. bank help on our will guidance financial I'll $XX Thank and We on the some some My credit. senior million I of today start comments $XXX facility, $XXX with considering XXXX, you, approximately highlight credit forward-looking discussing Primarily of items from drawn third will leaving provide financial sequential our the profile you us also David. in letters outstanding quarter the ended update by for after our release. focusing the million debt XXXX changes your to of liquidity

on XXXX, restructured COX in we paid We the $XX.X in call, Genesis reacquisition million of two resulting our course over the Free fourth will pay to installments $XX.X arrangements quarter's free If $XX our decline term. to total expect to debt lease. the ratio the less continue leverage we XX. million which the based financing cash at at current of for satisfy our with half be $XX facility, than in Pipeline based of made hold pipelines. Under by near flow. was equal of we quarter fourth expected was require last State EBITDAX paid on end four at or the discussed our our January a financing those million, million total NEJD would oil debt bank credit remaining obligation As to level balance annualized divided on our The XXXX, quarterly levels, under first the in year prices quarter, and XXXX, pipeline Pipeline on would

of likely million to is litigation with of a helium up non-cash adjusted free which matter Turning longer quarter was XXXX generated we million had difference $X.XX cash due million or in working $XX fair $XX million flow was you primary $XX quarter million due the of and million cash expense to fourth derivatives. contract, between supply expenditures. slide of no after quarter, can flow than value per We in changes was of working non-GAAP Slide Ridge see quarter, net outflow from which net fourth $XX cash consensus effect. and the a our $XX changes that better for of million operations capital primarily for diluted to the Riley a $X income considering commodity share, from adjusted analysts, capital final quarter, in adjusted cash last in associated million our with The the XX, payment On operations, $XX $XX the settlement XX, quarter, income excludes fourth fourth estimates. GAAP

was XXXX, range. $XX as our development year guidance low cash $XX our which and million, capital to of capital the free costs we of we at controlled full end million, spending For combined generated flow limited

XXXX our In first from also our farm million from addition Gulf the we of of consisting acreage million from asset in free cash our Houston sales, realized operations, and down primarily $XX million to quarter proceeds sales. from flow area surface $XX approximately of $XX Coast

the prices. oil summary differentials, average realized from realized Slide our after price $XX due quarter of up price from of our fourth price was a oil to barrel, in XX higher third excluding oil X% quarter, impact provides NYMEX hedges any per hedges. Our

the the quarter's from Our realized oil which call. down quarter, on guidance, below was prices at our quarter, per and barrel barrel low end NYMEX per price approximately last averaged in of approximately we fourth last $X.XX $X provided

review our covered to the that since ahead of of we will quarter oil line $X expenses. expense G&A already somewhat I start will David with NYMEX. a first operating lease differential XXXX, in range $X.XX below XX Slide Looking expect improve of a to items. certain overall provides

the from for issued primarily million in Denbury million million Our XXXX quarter, quarter fourth first in in these awards compensation amount and increase The over equity current accelerated prior of is G&A the expense fourth $XX new awards of with fourth stock resulting these the $X stock-based of performance-based expense, an was was expensing based quarter. for of Included quarter. criteria $X the on quarter equity an the price performance awards XXXX. quarter associated of

of normal such, to quarter in expense. be this up restructuring quarterly million decrease higher $XX $XX to our than the our last G&A $X compensation $X we range to $XX compensation million of million $XX of making was $X of XXXX, quarter with of million at at in of that arrangements. and from approximately the $XX normalize million million to Net due be pipeline As XXXX, debt expect financing primarily After to $X total million quarter, and million. the first stock quarter, to a G&A to would expense first we stock interest the million bond expect

quarter and of is the was full million $X to the bottom the the in breakout million for range of capitalized a the our currently slide, there this On we expect $X components be detailed $X Capitalized XXXX. of expense. for of of interest year interest million approximately fourth interest to portion

range slide XXXX oil My slight that first depreciation of expense provides will and a to of a $XX current the million. depletion was DD&A quarter currently million, price our expect summary in for Our from quarter. hedges. last the $XX of We XX quarter million this be increase the prior

we to have As which hedges, in you under approved mostly the requirements covering production during were required year bank mid facility, of the fourth XXXX required around certain hedges And our XXXX, production may amount a quarter we currently through We compliance turn end back added new of swaps credit recall, by our XXXX. were of those place Using the now end. in at midpoint our our XX% hedging and estimated John. I'll those guidance, were production. our with hedges it cover to of

John Mayer

Thank you, Mark. Operator, you That open for remarks. concludes our please questions? prepared up can call the

Operator

you. Thank

We a Our be session. Rice. line [Operator question question. from Charles first with conducting the will your proceed with now of comes question-and-answer Meade Instructions] Please Johnson

Charles Meade

and morning, Good you team your whole Chris, there.

Chris Kendall

Charles. Hey,

Charles Meade

together, in sense see the the just Chris, of guys a deliberations to this a you great do you priority for composition it's of team price has us going and strength of particularly the that ahead right, board are guys as pipeline quarter. this and do had it's give years, But forward oil manager little go this, to certainly and board a wondered light the forward. to and so you decide been your for if this moving guys could new I given and understandable your great CCA you

Chris Kendall

it's management that something to CCA of about mentioned really Charles, I support bet wanted speaking we great company. the those thinking negative broadly that carbon deliberations, is You benefit footprint across and for the earlier highlight. The an is just added there

we're so as adding negative diligently toward. that story we see working carbon that footprint to So that

to by the open, if the that we auctions I'd we add So right see for that that. way it can a cash in that it's now, that wanted which is level lower real centered off we bring look going internally on at spins capital the alternative and or what funding internally, conversation some free should EOR the – project we it and it's that a it to financing, and we decades. fund to good we now, business say think primary right spend our And we'll outside to year, fund project, whether see the to after reduces around we're keep stable least this keeps something

now and And prices since think we decision so that only the time improved. is have

Charles Meade

being to if about about a that second saw you mentioned on insight, I are little remaining point that, curious in that My good your would hurdles that more could guys And any start give XXQ I these reemphasized. capture great, final see be I the to with capital point of that deserves think are you you wanted a rules. onetime news open gates sanctioned to – Right. hurdles And to final is ask question, expect item mid-January or there final any rules. there post to the actually that I'm to rules but projects remaining there some be new projects? a

Chris Kendall

see that through great January There on reasons January And to so a Charles come work. that's next why are for not was just we CCUS milestone that leg that and makes we're excited a pretty tough XX of saw news, whole about as it. it because was many this in

those think industries EOR are needing of And structure, like that we'll we'll such it, a processing, that there. that credit lower this just beginning year. direct but to see to the see what tax those projects. the levels capture you first wedge I when sanctions the this for the for us about ourselves within enable tackle of So out we that projects that will sequestration reaching think and $XX grow $XX for industry price and expand, Ultimately, I we're gas fit that that does natural hopeful can sanctions some ammonia or see for mentioned, as of and cost of

Charles Meade

hop let on. more Thank it. you. someone questions, else but Got I'll – Lot’s some

Chris Kendall

Thank you, Charles.

Operator

Please One. Tullis Our Capital Richard line comes next question. question with from of the with proceed your

Richard Tullis

up morning Charles’ questions you, everyone Thank good Chris, a on bit. following to there.

for – Cedar toward million level XXXX. XXXX, What in be would So with of move spend you the half the XXXX Anticline of and CapEx XXXX? for you associated do spend CapEx $XXX oil Creek anticipate as us, level first second

Chris Kendall

and really where You high that how we in put the that, demonstrates time. slide and in XXXX a profile that the level we shows and deck over bet Richard, diminishes are

both but in there of can talking substantially, drops level X than point the is XXXX, that lower at about we're spend Phase in see now, so, the X spend we're Phase right And showing then that coming you in XXXX. even

out I'd the XX So to $XXX $XX what million the next can to of plot that overall, XX million see say kind years you on is over you're Slide we've a number range or got it so. going Richard. there, And in from

Richard Tullis

XXQ that some transparency? some of as you could of see say release, on the the Okay. provide going what Are then with tightened mentioned the details any that carbon driving the admitters what's the you being and capture better and more projects, press with X.X up Can pipeline? you in years beyond Green the you back And level in sanctioned think over the Pipeline? to then there you do guidelines projects the of bit next in capture currently encouragement discussions admissions COX year. sanctioned, a in to And call carbon the close kind near could coming clarity be earlier

Chris Kendall

seeing those that public a tremendous news XXQ about several industries and bet few broad companies past and the You pressure that a in companies capture there, and much that thinking helps a – on to besides you're of months. incentivize is and the there things In is investor sanction there Richard, projects. I'm over sense, in certainly

sanction. year. optimistic these the just I the drivers look sheer very all numbers we From that capacity that that pointing stated combination, and requests that be some on have means plants towards being that of plants. emphasized beyond and So But When having then projects some it's say inbound are internal that new see are into we this an the just beyond contemplated well part volumes the that capture expanding I'd would we some would driving why being specific built sanctioned captured, to have macro our striking plants a that have built we see of we is that number standpoint, we're there towards those existing these from are the other of us add want which or are either of are projects and capacity to that, across conversations that. view, the we'll we've various start have pipeline, had of XXQ of is then a – incentives in and we – today, that just think that even

Richard Tullis

jump That's queue. back in helpful, the you. Thank I'll Chris,

Chris Kendall

Richard. Thanks,

Operator

next comes with the Capital. Kuzma from Brian question. line of Our your Thomist with question Please proceed

Brian Kuzma

Hey, Chris, thanks taking for the call.

Chris Kendall

good Brian, Hey, morning,

Brian Kuzma

the have the CI the LCFS things, or of of lower the terms on like CFS any any gotten that? market you something a terms feedstock feedback in On or you're – oil able the benefit early a feedback capture side blue to of that market, Canadian in with refinery of in

Chris Kendall

just step the they it, can that And and understand just question, – way. we're Great the that This the Brian. how there attributable those for is I is look great a back of we when Coast. work reservoirs EOR is they feedback, to takes lot yet. have, Gulf bit little reservoirs What at great fields. partly just for folks to it's nature ready say no to COX, we would share on of take those a And EOR, particularly it

head at and have look balance thinking your the takes that that little get negative come to we that it's so we in our the aggregate that you is a it it fact, works. a something when business and around, out but And way is

that year started I talk and think areas – work it's but the that as different path think in And so, to you ways, working including and we as progress mentioned, days that some good something progresses will down about, we'll multiple and the here. still early I that it's make have on continue

Brian Kuzma

I for a of makes That stuff. processes these and guys it. lot implementing a of it's for know early lot still Got sense.

$XX like them, going you on So ton Canadian million-plus or ask can the – like to with system. XX LCFS diesel or for you XX renewable ton that's look ethanol. at ton CFS to when to context spread credits I'm a and hydrogen a or are right XXQ, versus on your $XXX mean, – $XXX plus a capture I those

absurd in products, you actually almost like credit a that be mean You advantage you just have scarce. Reggie, $X reached is here, captured, the could that’s guys Valero, but Plug, value of Like, not have not I numbers year infrastructure value. – it in a guys like air not terms the that billion here seems

just product make it alleviate like, low they build yourself? can one about yourself. go we'll do and an just And all you’d stuff negotiations you don't this Have it why ourselves thought then like, a of and from So buy carbon you with build us we'll it? of the you'll emitter, just

Chris Kendall

have nicely over the period here we say the and we're the ground, areas and a the back to for liquid, very day, to and we're EOR, places we out through, we've being through the end I'd great and compressing Yes. injecting that spectrum, storage. a is in we as it in look contemplated end one Denbury Even related where for leaving adjacencies It's of direct the fits in a COX wells, spectrum. thought, there very just before the into short do where we're many invested are EOR. to we're that on be the worked can it sequestration ground. worked space, sequestration we've Certainly At that at the to Brian. it of question best so transportation years great into taking what a storage in successful and the with That's it a back we with something put

a call. in a that and of So system I and the doors. forward. we lot expandability and open step lot why reliability earlier that which flexibility mentioned straight the resource, see very scarce about as But it up huge as that think a has integrated we back it and can this think and do that bit We is

those all we’re that the still and things you of through possibilities so, thinking And mentioned. including

Brian Kuzma

ahead of luck. opportunity we That's set great. you wish great guys and you It's a

Chris Kendall

Thank Ryan. you very much,

Operator

Our Please next proceed Robertson line Research. Water of from Jeff Tower comes with question. question the your with

Jeff Robertson

Thanks. Chris, EOR CCA, one at versus your some you the economics of can production Gulf projects? of CCA on question Coast about talk

Chris Kendall

the every we're have very I'd decades. hard that develop CCA that chance smaller. queue. You projects, to to And very very those Oyster Matt hit project. team are Tinsley get, lasting Much Bayou mentioned the of here. those I'll the working the wide has explain like very that our see into and of them And of get project at projects a very that and been our David different call we indeed a life what a Coast long-term we look and David large, Coast some them Gulf is just bet, that it of And attractive than and We high prices. and execute earlier. projects range across Jeff. CCA are doing economics, quick on portfolio Gulf the

for investments a will the think of mid-teens at $XX the we year And after we roll with so burdening still when following at oil what's we when installation, of This see be years. here on long But life in Coast over right now. smaller see were this I useful purposes happening and although the a we price will And that type the looked pipeline the making this we've we'll of that that in, as just investment that's many CCA, project. economics of other be the attractive the with – return. because be all time, pipeline Gulf that

significant develop field. generating expanse one miles of through we from the as the Matt phases end field, be so the XXX to will continue different project We other. mentioned the from to just this upwards frequently, of cash

the CCA, that think the then many higher today. smaller top goes the that is many subsequent we the that that the a advantage here return see cash of burden that decades we getting time there. see are of I'd we that on every projects free is So the of on. one flow higher rest there's as that to of in And they just about lot say it. have what in the portfolio I projects Jeff same we do then But from that's initially, of have of have but way generally,

Jeff Robertson

Thanks. Phase you XXXX need prepare that any capital show between inject? about Is can talk wells XXXX, to any in of and you kind the well is that X versus to of to conversions facilities split do that, – for how you is much

Matthew Dahan

using take I’ll new not Certainly, any of, speak Yes, the question. existing wells really we’re we're in Matt just is wells. this that Dahan. first phase to drilling

the injection lines, of with most out keep wells and for CapEx So that is development, That's we injection of type then which separation is is compression. And taking place. really associated the associated adding we as and just work, build prepping facilities COX spent.

Jeff Robertson

there's maybe have sounds it well. might. than you Rockies but if for COX opportunity. could Okay. the long-term, leverage believe differently that a CCUS bit Last will I question, you you Gulf the little in the like Chris, you assets that Like Coast, as

Mark Allen

Jeff, it be Coast, on that corridor looks we the up that regions, do. over what but We are look the as are as through not dense And are in certainly time industrial there. Gulf there different as emitters at could developed opportunities they just

on the strategy And so we're honestly, focused up there. same

Jeff Robertson

much. Great. Thank you very

Chris Kendall

Thanks Jeff.

Operator

your comes the next America. with Bank with from Our question line Please proceed Vrabel Alex question. of of

Alex Vrabel

having call. for thanks me the guys, Hey on

Chris Kendall

Alex. morning, Good

Alex Vrabel

just Hey, a quick one. I had

and a Scope mentioned you this, So Obviously, X we about you quantify, goal you gets projects of portfolio Coast do existing opportunities would kind what you of of But of infrastructure the this kind capacity Scope to there? negative X when area. Gulf kind in you curious. or additional some this mean, have end on expansion you of being basis, can still see decade think I'm the XXXX? I just involve by getting

Chris Kendall

that about way the that. Alex, I question, think Good

here acquisition close once XX%. that as sit industrial So captured about captured also And we with using that of XX% using total to so up source or Wyoming that today will is production our take COX. this COX, we

of we advantage We be and from decade literally that that X take captured at we'll that's to I see source, do projects of we in and able Mississippi. the volumes. And get that Dome reduce capture by Generally, natural here, control we Every source. COX we're natural ourselves can progress and them the through at have slot point. production are our Jackson as XX% of can Scope today natural time decade, we source developed end we supported that online and EOR And closer proportion our the that part the that from that, a increase and in field numbers, the by our look as lot this XXX%, number. sanctioned is the of with when I to if our to supply take come

the that are be we'll on that, where I some things we directly sure decade. through COX other storage. think putting hope of into I top doing we're

as able or that And through essentially accomplished that be well. see when be earlier. But impact look so to that offset the majority will I there just can I I mentioned it, make we getting

Alex Vrabel

offset obviously, coined one, or of obviously, Thanks. a And color. believe you on I so guess far, users I and just are you've good just are really buyers something that there out quick that economics with I curious. your mean, I COX? mean, management interest And willing term look mentioned premium do to you commentary. of follow to base today, want premium? has mandate what oil you you in pay when see incremental when I'm the the curve, one carbon oil. that business been secondarily, that quick That's that might the business at are they today uses that's that being the storage something could potentially oil look this the it. to that, Got up blue

Matthew Dahan

barrel Matt. first far of the in product. is blue interest part can that kind oil. how see there Yes, from I'll as something do could a And it Certainly, the that concept see take that beneficial. next sectors that's like to of we challenge. our you is crude question particular sectors transportation of are that this The as get – the they is in refined

Chris Kendall

And COX business. oil I'll your part about time the over the of take thinking or COX costs can Alex, over then how impact really and second just the time price question

COX. of a fields. tune barrel oil natural been XXQ is at has level, $X for a a it's And a our cost captured general And more EOR the industrial than COX think with about question. much COX lower in past certainly I on interesting to in our the the business burden really expensive

source, As becoming over a possibility captured the we COX kind I change we that's actually of through I that think of really can the time, revenue that will think there. see how think cost that

attractive EOR of burden for if COX economics ongoing our And these in think burden of fields developments. that changes use some happens, or projects the to benefit. operations – of Now, sanctions for I a new would the the that the see the we becomes very of economic actually

way a but So to certainly early I days its the system that's possibility. that still think into work has

Alex Vrabel

Got it, taking in guys. Thanks queue. the questions. my hop back for I'll

Chris Kendall

Alex. Thanks Right.

Operator

is with question Tullis Our question. Capital proceed follow-up a Richard your from of One. Please

Richard Tullis

more one Mark. me, for Yes, Chris and just

acquisitions Looking acquisition of your CCA you view project? the now CapEx to course had future that at M&A, price. on recent commitment is the Rockies What the attractive pursuing an potential you at related have higher

Chris Kendall

fields. about to strategy. is And want that sense make the We expertise the way to those the opportunities was easy add industrial even in great certainly, to that right have we I we fields, Richard, for think business see fields. more for COX how always sense open the those ways can Wyoming assets apply to our our source there. to it of lot our for eyes EOR EOR make a use

look EOR strategy. other our within back the we'll well. something the to certainly strong And that they'll take we well opportunities, for we bit, be we that in will it's earlier within I to this any see ways profile say need business. bar and stepping us balance we'll I'd What Certainly, amazing we'll when as want a growing business mentioned through the CCUS development very be CCA doing keep continuing. a that outside of so as as – But opportunity our will them, but will to be here. grow on organically at is and a fits focus large consider we that want opportunities to held that see So just fit then

Richard Tullis

All much. so right, thanks

Chris Kendall

Thanks Richard. right. All

Operator

on the the session, participation that, call reached Thank today's month. will the one for have the with company's be your end today's today. We conclusion replay of A call. of of approximately you question-and-answer for and available website

now may your disconnect lines. You

Denbury (DNRWW) 25 Feb 212020 Q4 Earnings call transcript