Earnings call transcript Q4 2022

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Operator

Good day, ladies and gentlemen, and welcome to Denbury's 2022 Results and 2023 Outlook Webcast. My name is Tia and I will be your operator for today's call. [Operator Instructions]

I would like to now turn the conference call over to your host, Brad Whitmarsh, Head of Investor Relations. Please proceed, sir.

Brad Whitmarsh

thank joining and today. everyone, morning, you us for Good as covering three quarter exciting This for well provided releases consumption. CCUS supplemental our your as an morning, we’ve and news fourth presentation outlook earnings, update, a XXXX

our of and at chance review I All a denbury.com, them. had website available you've items are to these on hope

actual I statements reasonable on cause based and most to that information. that remind are results our today's that factors event today's from discussed everyone to materially are want will forward-looking numerous There what include differ on best could is call.

full You recent can most slides read and on our in today's with accompanying disclosures SEC associated filings risk our the business the factors and our statements today's presentation, forward-looking releases. news

the reference we during well. deck disclosure today's Also, in is and Reconciliation slide please certain measures. to earnings course may those relative measures as today's provided that event of and non-GAAP release note

prepared Mark is Matt our of morning to Carbon comments Solutions. Development Kendall, Dahan, from David Chris the in participate Wood, here of Nik Technology, and CFO; This COO; Business Allen, and SVP come CEO; all SVP will Q&A. President Sheppard,

turn I'll over to the Chris. call that, With

Chris Kendall

Denbury the XXQ for current is credit clear of of you secure In an position policy imbalance Thanks, scratching world's of and Good everyone, global oil economically. all and continues energy are for today's an greater sources need we technology a oil the U.S. grow. price CCUS. production that tax the time. combination will CCUS scale to future some CCUS stress and portion the on of significant years in captured and exist world's vast that surface could we've many environment door be carbon improvements in in see today and to seen than to we the underinvestment has joining the begun for opening believe have as demand, It industry's just supply support capture in stronger several in of types The is thank past morning, on us call. we of for to Brad. enter U.S. resulting is the years, amazing for the XXXX. also recovering never put ability emissions a I been for

Considering in that not backdrop, Denbury be better a could place.

and exciting, Our and high-growth the dioxide we unique first the just the carbon of infrastructure in us put CCUS expertise story center are chapter. in

business Cedar development greater reach decades great Our of long and negative oil blue beginning of EOR Creek lived this massive carbon path year, milestone focused significant this of of multiyear ever asset. with the EOR first of proportion oil the resource from Anticline toward production negative, high-margin many first is COX carbon an EOR key will oil, providing production our a

X.X sourced COX achieve of to again increased use Scope Our exciting our while industrial time tons valuable, Denbury an meaningfully extensive operations, negative intensity emissions energy incredibly company. essential, is net This X in the the in year. providing is million important source. XXXX, for help in and which low-carbon once company also for situated play part reducing emissions, carbon a an to the uniquely X

and than CCUS agreements. cumulative a for conviction, million and agreements transport key tons high goals business industry Denbury. tons billion XXXX, We believe doubled growth XX results X Underscoring based be over per exceeding that and will in high our force in storage growth that CCUS more a for our year

multiple we crown attractive investments for progressed development and jewel EOR of oil COX which drive mix oil company be that, We In many the should vital a EOR blue touch have energy year fundamentals. also be Denbury's reaching to growth lost of for date. in this on our produced believe produced through oil production achievements, these blue and made that XXXX, intensity our project, carbon this sight teams will CCA XXX% projects we more. up, business lowest we excellent But the is focused to it oil is as never In said sourced global oil. decades I've excellent using that flood that long will ramps part expect the as delivering industrial year-after-year. preferred top are operations David foundation the performance safety safe people keeping our remains proving beginning priority. this and

are for our few EOR preparing a XXXX in At to development start ever priorities for Our largest on successes. XXXX our just months. we build CCA, up

CCUS right and business. We strategy, rapidly are I deliver growth Denbury line doubled with and more the more the that right investing than we has our in multiple high than projects plans confident people portfolio to right am our transformational assets across for in have the our to that capital return oil-focused ever grow shareholders.

over over will turn results I who financial now XXXX our it Mark, will XXXX to outlook. go our and

Mark Allen

of overview and call on XXXX, Thank results a then David for priorities we and provide plans for more XXXX to I'll will morning, allocation Today, next operations over capital our guidance Denbury's you, for enter and our Chris, address an good the cover hand few a as I financial information brief items. everyone. year. update

million share. X% capital free hedges of a below million operating This and oil was before generated resulting $XX barrel realized per purchase in of of the after capital price our full to average this exceeded per $XXX around year. shareholders year repurchase hedges. $XX our the an of Cash XXXX free gas about at per and changes cash significantly of shares was before Our and price returned $XX and flow oil barrel million was expenditures, $XXX for CCUS cash working outstanding flow for cash through combined capital million working on flow $XXX changes. $XXX cash before flow

$XX we project front more built to also proactively costs, on $XX and of we XXXX, assets, near development some a of Donaldsonville, blue ammonia greenfield addressing in During million our for be the abandonment allocated and mature plugging invested million CCUS the Louisiana.

priorities allocation XXXX, As our move we into are unchanged. capital

to of Last of the $XXX credit at increased at balance had in the top liquidity the into for only end $XXX Financial borrowing XXXX, is of our we as $XX sheet end higher move base priority, of we foremost, CCUS spend periods year, our capital was we million health and First particularly million. facility And year a bank our debt. million. robust activities.

year So very strong we the are entering financial in current a position.

relatively Based equity $XX budget, million a and current with expected a activity include $XX cash planned projections, on capital million which flows price, of our assuming barrel $XXX investments. in XXXX balanced per investments, CCUS our oil P&A million $XX are

additional move results flow. price $X each oil million in purposes, sensitivity For in of approximately $XX cash

our projects. over the targeting modest operations, strength in at growth through our return investments other the flood oil maintain will and base oil we of development CCA oil weighted high mid-term Secondly, COX

the oil be EOR and Phase growth on Our new Denbury. driving CCA bringing investments production of project focused for this also X COX XXXX flood are in this year later to

prioritize to growth for intend we Thirdly, the CCUS. needs capital

out next As and Outlook out will will years, we our network. capital Event several over as be continue expect transportation increase Business we sequestration we laid in build we leading the industry's CCUS to last year, COX CCUS what the believe

amazing last continue more XXXX expansion Our budget XXXX in this system. as is the foresee out we we of further capital than XXXX, year, double from and build and planned CCUS

that for spend above is do prudent securing to of capital as flow beyond our cash some returning CCUS. believe price near-term generated anticipated as on will especially we shareholders. higher needs, into certainty move our our continue We a focus is capital we and period Finally, business, to for

our last hedges. upside XXXX, year, in covered exposure. production around current year prices XX% higher more at by of we comparison And and For have to our hedges are anticipated provide

oil average roughly million, we cash change of an at price hedges will nice last year. from per barrel, benefit $XX expect our XXXX, For flow $XX our by a

a current year to our Next, relative I few outlook. will items cover

can a awards two expense $XX we million the have from third guidance XXXX for information, a in find long-term from objectives; for price $XX be be costs. with full million We in cost supporting $XX that up up million drivers. headcount, XXXX. expect two, projected to capital G&A estimate currently to and you is As One, by oil a compensation impacted will increase we slide the our included in emergence. XX% being last and is in year expense, those year CCUS particularly stock and on expense long-term our XX% following differentials various cumulative XXXX, and equity really production, between that growth of supplemental

a first On per barrel. This price markets on NYMEX. depend in couple oil had a the differentials, back we price $X years, would is barrel of below I range we dynamics move side to minus differential differential prices. the The year, likely wider we below year to of the to underlying receive but pricing $X.XX the with $X.XX and this guiding will to around on various of locations. we on are of XXXX. market NYMEX around $X.XX are in differentials of index, going coming But January below $X.XX negative expect differentials range had months in of the throughout formulas $X.XX different per our the couple

offsetting per certain we Denbury do to much valuation in on statutory cash following assuming due expect release of $XX our for be And our rate the XXXX of I this allowance little oil tax on expect to an rate taxes, year, assets. deferred rate around tax effective price tax our XX%, lower XXXX tax very effective barrel.

us want over confidence emphasize to our it our great execute financial long-term ability I As gives in our I strategy. turn that to to position, David, David? strong

David Sheppard

outlook. of on lastly, I including XXXX certainly at good will XXXX Thanks, will an capital our XXXX the throughout update for some from And cover include production last safety response start give the milestone program, of am COX this details we for Mark, performance, morning how efforts fruit XXXX, everyone. comments see CCA. executed EOR on CCA to project. I'm our and year's very our and highlights morning, the excited My as proud provide teams some

and always core to be stewardship success. Safety our operational environmental will

and on that also but emissions absolute rate we Earlier, reducing previous mentioned second our contractor combined Scope incident XXXX, the point in lowest company achieved Scope the negative highly and net in it reportable achieved of rate our X our to out record Scope total second are X.XX, only overall for X X focused year. low we X is Chris XXXX, emissions and to For important terms.

reduction X electricity and instead the River achieved of our reduction. ideas In electricity grid, While intensity Wind the in X.X% our yet helped full finalized, quarter, through assets, gas shut compared to how third our chose of X natural numbers carbon low we a this example from XXXX. Scope a great emissions to emissions electively generation the and we drive down purchased fired year not innovative end are

for and total consisting of the wells active new drilled It year producers in in was an highest X us the XX last XX injectors, as we extremely years. XXXX X

average on XX on operated workover rigs we year In and capital through LOE projects. addition, the both

closures. development also including XXX projects As restorations in over Mark XXX reservoir Beaver Creek XXXX the temporarily Rodessa abandoning the Rocky the million referenced, out to couple other executed from P&A region. along surface we campaign me and that XX projects our projects facility in really Gulf $XX project A are in SoSo in the wells, ARO Coast consisting Mountain stand with wells, of of E/F development the

mature EOR flood Mississippi per from of began first the yielding X,XXX total to project climbed wells XXXX, we outstanding production the COX of most the At Delhi the as one a where day, been our highly over within formation. Soso Rodessa in our field economic barrels XX Results converted have has mature in assets. portion in non-producers production

We XXXX. expect development will to and adding this response be phase in continue another to we

Basin River for have Wind Denbury. outstanding another been story assets Wyoming Our in

value Big acquisition the You BOE all-in. will increased have recall within per outstanding per million X,XXX new XX%, $XX XXXX the assets around the to from high of production that over across opportunities at day. example redevelopment create nearly the XXXX time. taking early in and identify we quarter fields E/F as in fourth The Draw we work the of well X,XXX a these were the realignment And reaching Creek in Beaver closed them. by reservoir our This a flood, through producing COX another flood significant as organization place day approximately BOE for activities Sand of quarterly the is

than X,XXX and by Coast The lower that As day, nearly in to slightly of severe around winter impact Mountain both primarily storms was our online fourth was Rocky production due for per mentioned back earnings release, regions. production XQ was that Gulf all BOE quarter impacted our mid-January. planned,

in quarter capital gas were spend than year development As highest expected, oil our with the fourth development our $XXX for at the and expenditures XX% of the quarter. CCA million representing capital EOR more

at Webster Mission CCA program Charles Mission balance included and on online near Canyon horizontal estimated the in the wells Other XXXX. focused The a BOE came year the around of horizons. day drilling of of end in combined to several first the Gulf key with in activities Canyon drilling the well online the The Coast and XXXX. area coming XXX produce for net quarter annualized projects a the other per program is

I as Phase update a provide would injection CCA COX an X. now like continuous full the year project, from into to had have we EOR of

a started As February X, injected then X.XX reminder, tons metric of on we injection a since XXXX COX cumulative COX. and have million

rates pleased which to for is higher sign been have flood anticipated, injection than generally We we COX see well performance. positive

surrounding COX curtail from slow of have expectations through injected the in of we to COX our were injection quarter leading BOE fourth the to we production arrival wells, anticipate Curtailed temporarily XXX per reservoir, and moved of recycle the the day, XXXX. has areas, completion producing wells first slightly COX the in volumes those early in these volumes progressing around the As facilities. in observed into rates several end the while quarter on us increase

up year, expect online as we start We throughout that bring recycle production to facilities. back the

throughout expected of first the operational online in to first later the facilities with additional facilities quarter, those The X year. is be coming

We ramping of we production half up oil still year initial response second the in facilities as bring online. with X response recycle time expect additional over Phase the EOR

incremental set indicators estimates production and reaching outlook injection timing and While we response BOE performance year per us this so BOE BOE per have COX X,XXX range data the we day confident far, XXX resource calibrated our the XX,XXX expected EOR ramp of X,XXX late the arrival seen flood our by progresses, opportunity per Considering the around CCA. day year, for day the production latest exact for exiting very as actual be remain and XXXX. to the will multi-decade by early near performance, at the in have

capital XXXX well COX XXXX for various mentioned, EOR, $XXX with our found was these consistent Roughly all earlier, detailed our for the Mark $XX our mainly in we guidance amount capital, and capital I including for As gas oil capitalized infield to CCA earnings set respect XX% at planned million, be spending. supplement. With of for this XXXX metrics expenditures for of can with to midpoint million facilities planned expansion prepare focused at Remaining additional facilities, will pre-production progressing lines. mentioned capacity CCA recycle installing accelerating COX. installing additional work on along be flow producers compression response,

fourth I expect some first of in operating in profile production our range EOR Production XX,XXX oil benefiting year. gas the of for activities, the production and our development our activities have both as fields. from well CCA, the us CCA. expected include and equivalent should from XXXX we This of quarter some convinced range oil half per mostly ramping are day. EOR minor oil fluctuations the barrels of quarter XXXX over non-CCA per for up is to Webster midpoint development our new will between barrels path from Our projects across development with and on impact focused on set XX,XXX XX,XXX a expected Creek as in from to regions second Beaver uplift XXXX to Conroe CCA our of equivalent to at this Eucutta volumes The good of day. XXXX due the XXXX see actuals, seeing and to

sourced to BOE. to range and expected slightly higher unit to are: The $XX year at Lastly, we the of increase with rate the between the incentives $XX of Air than with drivers anticipate on XXQ average in receive first, end XXXX. Products COX our the expenses, legacy we this under the price per operating costs of of exploration increase contract be industrial the XXXX, the purchase

unit LOE of be Secondly, initial as CCA stage temporarily higher typical for during new plugs, EOR the will production. at

strong ultimately overall driver As CCA materially BOE. become up will our corporate throughout a LOE production CCAs response XXXX, that I expect per to reduce ramps

I year. in pleased through is business navigated EOR on on Wrapping and gas just comment where be headed, oil industry our transformational that past am commence to production we year the with the considering a as challenges how want our CCA. for especially will XXXX responsive I we business up,

We company. our of are certainly the strengthening foundation

Nik it update I'll off our hand on carbon to now an business. for solutions

Nik Wood

We I'm more COX to Good than at David. going morning, last storage offtake volume our plans. agreements agreement transportation about it per quick about our But provide everyone. XX we to very to Today a XXXX we tons cumulative and want announced per million the to Thanks, COX represents what new I today. take first, outlook think than XXXX. an you worldwide a successful volume back a million bringing our much for mentioned year, But six scale increase when half to to plans metric have before. tons size business is date. And We captured metric what of that larger XX year, clearly, year. look assigned

executed we COX evaluated in potential XXXX. sites storage new And agreements we six year. of addition, last sites on dozens In

XXX support storage Our Louisiana are relationships form two risk owners years. To mitigation The than partnerships. within included construction emissions metric requires and extensive with VI be year in of Alabama, portfolio we complete submitted Alabama of COX the The accounting. our relations, mutually these our Texas, government of permit of our technically Denbury. we deemed for permit to Mississippi, were the expect totaling Near permits sites building pore more January, Class permits to long-term the foundation the at procedures. agreements our receive site. we Class customers potential. VI These from complete first regulatory, in the engineering and and and evaluations, X we and by throughout tons three commercial over end storage included technical approval of collaboration beneficial end pages well year, land, EPA EPA the This development, billion to plans space includes legal, expect first what

with future experience submission Class Our will these accelerate of first VI permit permits applications.

morning, last budget XXXX, outlook Building long This our midpoint of our largest at increase is the located and compared The represents strategically our to million our our an of cover $XX objectives highly which additional stratigraphic million, last our budget budget the test item morning, announced XXXX acquisition for important capital in we I'll the sites. are $XXX XXXX which goals, Outlook momentum XXXX. we of on from next, right communicated to we million This acquiring allocated between aligned purchasing year. The with in also December. COX includes time storage also and items. way wells, communicated that lead CCUS long-term $XXX Business

objective first of to with opportunity customers, Our to negotiations this on XX the year. sign brownfield reach encouraged year's of is exceed ongoing and again hopefully total the extensive once to our tons customers agreements Based metric accomplish a goal. number and with per industrial greenfield both with I'm million

As in we you have signed X.X total of a agreements may million announcement, year. for two tons seen new have this per transportation morning's

is eFuels their The to facility Texas. in COX County, Matagorda first with agreement move to HIF

second Freeport with COX is their Beaumont, The in Monarch Energy sites to Texas. transport to and

multiple storage second add to portfolio. sites to new our dedicated is The objective located, strategically

storage distinct that site There are Denbury. make three factors for a strategic

that their This need for line also segment, will storage will improve current capacity. for sites additional stations reliability as while pipeline and loops capacity serves some COX for and First, our reduce pipeline the increasing segments approaching or for placement their offering pump capitals are volume. total that our an because

stones dedicated sites finally, shorten the as sites in Secondly, will for network. is A new emissions we morning Mountain Northeast Rockies good our our network. of And outside site. underneath the example site to first securing the Wyoming. storage from markets will Coast. in located in extension some region. pipeline the announced be customers will This our this continual stepping we directly These Gulf Greencore is is storage the serve It sites Rocky distance our

located reliable us most offer storage the the CCUS over sites year, capital see add network strategically available. plans efficient progressing steadily will our and You to

wells. Class VI to Our is new and our this permitting third key applications progress objective EPA with drilling year test

of the set permits expect for submitted the will year. year before to submit the permits four on this I have We EPA storage sites. midpoint goal have several we to additional the

our two our will whale drill I'm And least permitting in We site stratigraphic Orion wells year. at first pleased is also in VI test this on Class Alabama. our currently that support drilling

continue Our have partnerships. strategic we to to announced two Today, fourth is progress investments made in we technology capture that minor carbon goal equity companies.

Energy types our and Clean are to customers. based and will the reliable reducing forward and an Our a with can These of a technology, on for and that expand whole host other service investments companies the edge in the both economic of emissions. customers based away We the of sizes we look COX two aiming membrane working offering capture companies most of bring one with ION take solutions. Aqualung, providing the cost leading solution, to our and

capacity The CCUS CCUS team in is it is achieve excited and we to everything highly growth our transformative Denbury, a in our shareholders. will goals deliver to XXXX. opportunity our energized do and to for

now call Operator, questions. for you open the let's

Operator

Our Instructions] [Operator question from unmute question. yourself Mariani. Leo ask to Please comes first a

Leo Mariani

in bit Wanted production follow-up a cadence of to on XXXX. just the little

before it some it I Is up goes wells comments. XQ think start growth right, as generally in quarter sort right on what I came bit 'XX terms a if expect, in production start it heard? late that heard contribute. the prepared XQ as that production some this XQ on like bit of of from I sounds to the XXXX the of a of and might response the result in production of CCA. little And we in of in falling to a little in But that some you alluded first

Chris Kendall

And the see we flood the And then that the year. Hey, that in you of real that on This an about see the ramp it, coming. this have think somewhat we when of The hitting Absolutely. of have David talked early year. impact will impact from driver Chris. an that is part is CCA way about we'll that end Leo, good the morning. program

kind how throughout up we be in it'll most that's year. the up. leading But that I'd that of expect So year. shapes And it to the say late of moderate changes

Leo Mariani

wanted on just CCA. And to then follow-up

You in you've guys sign. And speak encouraging the where you kind getting the projects in maybe comments does if past? COX similar you've breakthrough Could typically was which your that had that led that guys guys maybe had thought other good targets, talked getting of situation, sort of Does you prepared early some miscibility competence years, are about ability to of increase you an COX which a what look of to? and significant your that in on show your really couple does volume as a the analogs CCA? of obviously you to growth is out hit there those

Chris Kendall

Sure, Leo.

was right those facilities, right here of to a arrival we'd the back as what in I I'll things But, accelerated that ask to Matt going reservoir movement started historically. So on high right the expected. good see bit expectations. flip in we the thing. when was so injection the and couple talked we've have the about one weigh than through place The as of of the on this our kind recall, last moving better first the of seen that's that I things It And we in the more flood year. expected. end and field that we first to in of now. am accordingly, think we That's we a injection the of time as much side you'll And in is close working direction. had February it's of is going And could. we say a on as you'd means recycle faster And COX than

thoughts Matt I'll weigh of to your add But how he'd see it. on question. kind other that's So to I ask in that

Matt Dahan

But Good respond Leo. of looks drivers we I A, And the those on on-track big what seeing early every that, Yes, And an of Yes. But like. very to typically, indicate we we here we CCA very go. field come are what with kind about just from are one happy injectivity of we know great response compressors all shortly will is see morning, value. mean, signs and differently. are there. ready slightly encouragement once

Leo Mariani

the those compressors sounds couple ready It in that right? of Okay. up like start next are months. to Is getting

Matt Dahan

right. That's

We have those quarter. the of first this

actually we if than think operational, a should that less month from goes have today, all well. I

Operator

Our Meade. Please unmute to ask next question your comes yourself from Charles question.

Charles Meade

basic. I Matt, team. Does Good Does does off And higher the and of that seeing forgive just the you was are some where actually in rest with rates sooner? of COX the you kind wondered what that could that possibilities and mean Just more higher these is injection me up? more me morning, your going are Chris left the blue mean these is pick oil if tell opens of produced that up experience under which and Denbury reservoir than jobs the beget? producing I guys most And Or you to is permeability to that COX call us recovery? mean the depth primary that, there kind COX think right it I effective? make that you a of modeled? does Is But that that what be possibly do. that difference oil. of these on wouldn't obviously with of have questions if that suggestions

Matt Dahan

this Matt mean, are is Yes. again. we what Charles, think CCA. about is acres. I you XX,XXX flooding about CHSU in itself

how quality how the been We doubt. reservoir handle on oil much produced. a has much got pretty was field, throughout place in varies good no So and

It's of across So that's an really not little field. bit variability a just the issue.

century little response a others quarter bit than what in are injection seen areas. some two will Not a quicker the what we see of and more we take wells we have last this. and doing across uncommon to Some our over portfolio

Charles Meade

the up the more between you injection storage your signing to I the business. it And you if can Thank this stage. permits really had the VI and all connecting center sites the then guys success Class to And -- has both me capture agreements, well you. Got CCUS that it. moved on with side that, the a on permitting. Can really have fees of is about those ask seems question two,

curious, is going path? so you is the now, bottleneck looks I'm Or become is way permitting Or guys. is now? to that And the And Class not is on process, that it it VI it’s to is if that the that critical the very soon? that

Nik Wood

this Charles, the Nik. question. is Thanks for

path I on I the VI to to great say where right Denbury topic Class that important for progress going think first the it's want an is now. critical lies. discuss

first process we've the all our VI submitted we've processing going that on of XXXX. know, is storage the acquired VI you we well are the at there so sites great. Class permit As end And and Class far, permits

What kind you a that learned of through first is we permitting can lot. went as we've think about process, the

we'll And through, next would progress Those the VI and can a Class the year would very hopefully faster. and us having you still -- available faster permits out both as so VI Class as quarter. we year, least through I much we acquisitions VI be in Class in And for in and Louisiana, going progress track one every permit permits storage in on XXXX. on. multiple the goes Texas, some places as Mississippi site we I’d are about say VI be to And at going expect Class as get come say

value will necessarily the the whole And so chain. that be this don't critical CCUS therefore, I for path think

the more necessary for I capture be components think that time other have some on there's executed to to get going side. to

to our So capture we're willing to partners from going done. I think and when it's ready COX be the take

Chris Kendall

love that fallback shared now one provide fields our extensive incredible what network. we have EOR storage this approved, towards within Class what is take on about significant a to Coast today it'll capacity just permits and that that this VI just is, just you the are Gulf working add I'd thing right add those is what COX. Chris, Denbury what this to portfolio of when those not able is he's to to we And is with be Charles, But Nik

And their to so them our getting really them storage, who's release thinking period putting capturing Class emissions move waiting have that of on tax fallback credit, we without is storage. a their is and what risk for the with that any project VI want can a industry into we the contemplating forward

to there, but a Class that very it today the So fallback forward. speak, the will we VI we gives much out that that's them confidence have ready special something think as go have we storage pretty

Operator

a Next question. and ask Please question yourself Sam Margolin. up, we unmute have from your

Sam Margolin

lot question. taking for a the Thanks

reserve CCA more the with extension. people XX. about talk And doesn't guess EOR mechanics in first that? development The the I did unconventional reserve a that works extension more But is on on if a just guess you not or could this something price. in is the E&P outcome if that timeline how I of operationally report for of one-on-one how familiar differentiated one I based you from a if it's like Lower on little it's it's - just wondering was and an generates going on there's If it's upstream. seem normal

Matt Dahan

Creek. year. Matt is this this Sam, some but we mentioned A what performance of Wind assets, strong lot had the Beaver we that in saw reserves at Yes, Daha. revisions, David particular, driven pleasing Yes, certainly price, very increase adds by River and our

performance in those projects. with some had The driver we additions reserve our redevelopment a along was the Coast there, Gulf in So increase. price significant and

Sam Margolin

see. I

equity fee if solution, or you Thank quick that on maybe just more proactive pool that's investments and target it's of a to And that more the a interest they opportunistically volume if I'm players. from the you. on of on a driving full emitters a made value the is CCUS technology capture Okay. capture best to then are looking Thank for wondering there of and take feedback position. chain one effort you. in

Matt Dahan

again, this entire big Matt a the in who's that players the to made we of plan them. business. were chain -- CCUS. technologies as of the look of always of value work did do always we part is two available, each I Sam, this the They parts deep -- we into dive When mean, different -- service do different our a investments

on really, stuff the ION post of they capture. million below larger being to are company, X particularly on focused as ton membrane And X.X thousands. X.X driven mark are tens million the as So side, million These in better. combustion the really even on bigger low Aqualung or a

do we is to a have with do have we some haven't. talking and capture emitters them what and overlapped different One, they they some things. add and been out, But couple folks to So targets. chasing they us of

both of a that themselves COX. some save low done So in proven they that going money the opportunity to what them as be on cost. perhaps the point them capture have expands by direction set work OpEx side, are that And that some instances, as is CapEx taker end emitters to and on the off can we these they of really and to technologies our progress looking In have we the there, then capture. with

Operator

Nathan unmute ask next and Please Our from comes your Pendleton. question question. yourself

Nathaniel Pendelton

Nik injection? morning. Thanks is completed given your towards EPA the see Class there receiving your you for that a Maybe to with taking that achieve for permit, going for team path your can question. Good can speak region are initial commercial operator potential working Orion one development we only the the at permit, in to what VI that Also timing and forward event for regarding least? milestones beyond permit other the my

Nik Wood

question, Sure. Thanks for the Nathan.

quickly go any Orion. I'll and next steps the general on of get there we So permit, steps the that emphasize to then go through through kind

a So to And defining then characterizing called permit ask or doing of then submit with bid and few we leads milestone of and permit, build that a a and a completeness. the EPA, the us particular months procedures of preparing to of will lot the site, geo models the the reservoir once the evaluation work nature. verdict have iterative we pay that the and process site, where they the kind we doing things emergency simulation of spend questions,

and EPA the back point then dig back the details goes and done of receive with when site will to all the so questions get really forward. from the this from forth EPA into And completeness, we the we

until construct be We the expect milestone, year. to well, the a receive be we from to about timeline permit the the now Class which will VI next

little from And lot VI at we and this Class will We be maybe we have are purchase move quickly. well. month. year, the to we’ll we a because That well, procedure forth, Class should to site, our permit be a construct. to of drill it's But drill a faster. be we seismic the back already drilling that relatively will we have receive it'll that first VI about going hoping that we point, core on the able about been already have able because take a to and Once

well some to the back and and deliver drill make that will also we and our deliver sure injection do can will and them ourselves We to testing for evaluation run the EPA deal lot we confident highly these what since and that which a of years. match expected we for reservoirs frequently some in we are predictions them of XX our with before about have

will those know pretty well on we injection out. the will some tests So how how go, turn and of

point, that the But permit we from will VI inject. Class to receive

anywhere year will expect permit that from VI a start course to to the intervals. take six storage time into Once the the receive Class permit to We to from Class to that VI ability we construct. COX we the we inject, our of have moving months have

will All of that building time, commercial in parallel, business. be we our

portfolio, the to for have our So which for we definitive not with offtake the all will COX agreements for will transportation storage. Orion in that building milestones the volumes we effectively just coming but mean around sites having for up be site,

Nathaniel Pendelton

the legacy Based regarding of the on for your CCS potentially from how highlighted both some then you Or demand provide most you can contracts, your structure anthropogenic promising CCUS can COX site? EOR supply compared on the now to on sources? in any Slide you XX? view speak COX new color Rockies, the the developments sources you you would to inject and of of And existing industrial

Nik Wood

pipeline, Oh, in already storage our ground us to XXX miles there yes, site North have very there excited that well. the the we utilize site in about very the underneath pipeline as new economic in we're our gives region. a dedicated It really there so Rockies Greencore COX of

emissions We as pipe fired to the to around a us. missions generation, capture much of that current as have working near miles not but XXQ. that coal lot get in are of the probably A of are economically a XXX COX those Coast we that lot Gulf lot work diligently power quite to economics underneath their like there have missions of

ground one economic because are very to in Rocky economically in most of be making We the economics if the the available -- should it viable in should reality sites be region, put storage dedicated not the site a this site to region. most helpful those COX the

we're very provide able to happy So that. be to

the in the soda a industry. ash see company with big that with right We're also We market now. exploring opportunities

type a whole the region. Mountain economic gas a also emission the that the in probably of capture That Rocky kind in there's in up So lot now. of with new Coast, right a of they're lot whole of don't Gulf market see really processing associated COX is emissions we area. opening There's source

into with might out And so working very soon we to those our be we system. will those able companies be to work how bring emissions

in go emissions the that into to greenfield And sheet one expected final very system. region bring already Mountain South that also COX there hydrogen with of there Wyoming project excited are -- term to group point that then at production with in and bring hard into hub a is in the There's our we're we've a there's working is, new looking system. hydrogen there's But Rockies. Rocky the a Central to lot the we the that development signed

Chris Kendall

is And Chris. Nathan, this

It's to the through our a this just sites expansiveness it's Coast. there. that shared. system the allows and The the Anyone close those add seeing just and I'd with advantage in advantage network that thing right think over both doing pipeline again. sequestration describing comes a very that if not you're that we great we Gulf was touch and we those as sites one can over and I And to just they are description put who into us Nik have Rockies system in of systems an Nik even to sites anywhere themselves what example the have are Just near that pipe. unique the

Operator

Sam have from we a your up, Burwell. ask question Please Next Sam. question,

Sam Burwell

model maintenance million. like budget a to guys. latest I get right estimate you like, way up? as -- that maintenance ask mean, it. how the you And going that we if does question what's CCA $XXX CCUS the of number think online? once the change to Is CapEx XXXX to the EOR mean, CapEx I isn't about million wanted CapEx better Hey, in business? for the if back I is CapEx CCUA, out to your $XXX forward about want frame the ramps EOR to should I just about? think on right

David Sheppard

generally Yes, David. say, it or for is our CapEx, take now. around, million that $XXX we about I'll maintenance think take question. give business right This I'd base

been, have historically. guess, saying $XXX We million around I

lifted that have We some seen have impacts there that other and degree. number inflation some to

to for paths are So, CCA, future general in would we kind that that able be base thinking of in on, going excited we it capital. come the I would that our the does decisions maintenance use, that run are some really But be business. investment make on to

Sam Burwell

you few can a year? small course of a fairly multi projects, really like, small your like, the very maybe specifics in this But, of Okay. by lot much time. of how it signs Follow projects, how large gets could end don't ball, ace, fairly lot of Great. that That Is only want us should ultimately to off is helpful. those this the something we would size get be Just incremental best to XX be guess expect give between? but get a Understand, achieved? year. on over and the or give to the achieved this MTPA MTPA projects so or not of you that but you take there to know as to, you at the

Nik Wood

the Hi. This Yes. question. is Thanks again. Nik for

and thinking on paces. XX well moving plan are we brownfield that emission over the are both emission way the all they about more and with sources, So different approaching we now greenfield different projects, at right is, sources, XXX engaged towards

next. game so getting -- sometimes end which come exactly they the one But million we will lot a XX year. sometimes on as we to don't faster here see the And tons other, in than definitely accelerates XXXX know one per that

we million the per signed. already have about year X.X tons We are very excited

with of in Hydrogen engaged with large of also of some Clean indicated compete with that the projects have are very We you that Works. that you the of type the project many But we signed that projects same before are realm have scale there. kind size see we the

come accommodate and case, In flexible our And to enough happy pipeline. so and into accommodate may be given system greenfield is any projects. -- it the varying of of may system. storage it any We're of point. both type scale any may would any go that any at and go to that handle through in think either of any our we're able projects scale come that We our that brownfield to those that our way different with hydraulics

And we don't happy we're other really accommodate So goes to one the accommodate schedule. everyone's first. to whoever than prioritize versus other, trying

Chris Kendall

side based incentivized also that greenfield energy that just Chris. are It's Nik both set. amount big are The is, policy, greenfield on that what a think, and the just I opportunity out enormous really on enormous. said, that the projects and brownfield the see Sam, transition And we just enormous. opportunity through of there now emissions is set right is

Operator

we up, a Next from have Lambujon. question Jeoffrey

Jeoffrey Lambujon

Just on a the side me. for couple CCUS

heavier year. one years you more and first back this down wanted December? all some in to specifically then put outlook the maybe just the as being think near-term. that with I which buckets you first we different there the XXXX, here those speaking out XXXX there, in are break see all just of average, all to And in magnitude for just as comparison guess is just as could processes focus annual the the all out the you spoke outlook background the are things ongoing in the today, was about XXXX second, to and relatively on hoping detail, CapEx over the CCUS on contributing we So

Nik Wood

Nik, of storage where storage CCUS and at $XXX the CapEx capital on Jeoffrey, looking focused this on we're is again. breakdown mostly of is this the year, mostly The say the on I'll sites, million acquisition focused Sure. of sites.

goes we as the kind will can $XXX a to usually it you add that, of all our And sites the within large play. about pre-injection that strategic maybe acquired of rental be think payment, have continually million. storage. storage So we'll that dedicated upfront you that's includes having that our portion think of an also portfolio, or that can And ongoing. But previously as bonus into located a

these to continue we over to we that that's we of dedicated rental any have option sites, develop keep play, come sites these one so also as storage, into can So these time. acquire associated payments that to

that's portion. So another

VI wells, ongoing drilling a may the Class wells are strat on we may We amount need evaluations we what or we will varying to of drill, based there'll that that not our strat on permitting be be process. think depending upon drill

tests So the sites. portfolio storage stratigraphic a good of across of well amount we our could money drilling spend

that's another a big big bucket. So

of we've acquired. bit We to acquire ongoing on also storage to have land acreage sites work continue additional already that's a

that's storage storage with an when of we the to associated total these announce associated position we So site. sites give amount usually acreage that

we sites the As acreage that there's site. particular had imagine, offset in lot you can more to a storage storage

continually what we know do announce that just is in So the continually time don't total background add connecting acquire to we up add site. to that are leases that smaller site every to growing. we to continue small that these continue storage but additional and sites those the necessarily We are available portions, store for

business. So go of those items storage the are side big the into that the

also way. want of getting a And to because, we happy our up we of I some on out and need that important now, that. acquiring putting right be spending to really that's strategic And to do pipe good will on in right point money we to amount are to are the to progress connect emitters point our storage where system. start sites our we big

And that way to so the those due storage of and going who that. pipe are right miles on diligence out will those XXX now of and emitters right attach we is, in owns what doing doing sites our bind

we the be will And buying and have installing that we it. so acquired, once pipe

But And a 'XX right see 'XX of way as have period, us time the you of lot buying so this that we we into move and year, high. will purchase. will

kind year, addition will million $XXX year. so the the kind to a be you of And last that's of of that growth big continuation see this in

us We business. capital will to amount the necessary have that materials buy build this additional necessary are this for of to

pipe come will building 'XX will make capital or a on bit the and 'XX side. in the heavier play and them timeframe, And installation that of into the that so

Jeoffrey Lambujon

planned place helpful. Understood. will follow-up then speak take those just That's storage just next really developing operations wells you how that those plans year. a form strat for will progress those maybe thinking for thinking to make Can about are sites and as months And the of sites? of expected the quicker you the the over here on learnings on that about some couple that

Nik Wood

Yes.

things. we drill the we seals will will we That strat already. learning on the storage it and as our permeability So wells, One, these be a inform characteristics about seals confidence the have few the will reservoir that to of add site. and our

we well. mentioned, areas really like decades. been to we barriers, we we absolutely know these two working we shield verify So have these know know have for, these want what really, for formations And them. But in is we seals, these

that seal is verify that. core the containing. us us So these analyze to formations test that, wells to will and allow do allow them to It'll

X. note point that's So

And That is, wells understanding each with of sites. then of in the store future. comes injection amount next one for point us in allow plan the right the the that wells will of these to rate the

we to really times, hundreds that are we of type formation what are in each emissions, our injecting injection development lot well well, our because out we we we in the the based as of will wells storage staggering same the Coast. going Gulf well So our rates the test. always A sign be from for be site, know information on stratigraphic are gained across

potentially we not surprises kind really accommodate And we necessary if less injection expect that than surprises. to is or are will expected. get maybe wells, getting wells, additional find higher we learned. out So we if do, rates actually of there -- if have with those do But we we

Operator

a Next Tim question up, have Rezvan. we from

Tim Rezvan

Hi. Good afternoon, everybody.

I think quick. keep I'll we’re on the hour. it

a clarification. First question was

Is an You or per is that million year? XX from to talked to incremental about tons goal the that this target. XX get XX annum XX

A - Nik Wood

It's another Tim. aggregation,

to be to the would it aggregate. XX in get So

Tim Rezvan

Okay.

clear, I'm a I production you we in talked rate And about exit heard this correctly, thought that. XXXX. just X,XXX day at if barrels hit then potential you the I you on so a you could ramp, XXXX. peak CCA said end appreciate And Okay. of EOR

things? or expect So Would flood a entity. do own CCA about be there kind you is we that or is And existing And know of, then unimpacted a its are linear how there? ramp? other of production that milestones ramp? the the Do compression certain kind then each I with think by

David Sheppard

as exit at Tim, Hey, X,XXX the throughout question. CCA a end -- that we is rate of that of in XXXX. David, XXXX, X,XXX barrels an year. barrels take at XX,XXX this expect be end we to day, will actually of at near to And thinking do I'll go we the be the Yes, of barrels our around bandwidth

real what the make So, to from areas and wells, COX optimize going to of is ramp if that in flood. the see to focus characteristics injection will, producing decisions we candid, as like, response you we're just pull going levers, certain be to look

gateway If So, think do perspective, general it's but uplift. a that I year. from perfectly to of to going putting per your XX,XXX that in going not I'm -- that X,XXX ramp, you're barrels model, see It some be to to a X,XXX will character. overall have choppy together a from linear

Chris Kendall

we shared over better Yes. keep we're It's see, do on I'd we And, the David And what depending the as that COX how add time, could thing with not Tim, all And only performance targeted, goes. depending there, even that we David it. how range that's that working we're -- that we've injecting to is necessarily the to going on peak. that's can do but said, that the and that this is Chris.

Jeoffrey Lambujon

impacted sorry, is production, I'm all? that conventional has And at

David Sheppard

impacted Yes, in about and on or talked the barrels barrels, to the add the That XXX will to has That that. about in me. system roll fourth I in was here, XXX quarter. as -- been back jump excuse into online to these we recycled barrels a system. the those to as about so of few Chris first few in within going back within expect to facilities. a March we ones turn here, come weeks, talked roll on the just We a

of process we will haven't yet of conversion production, CHSU the continue that of it waterflood lab all touched base We our all and maintain now and on. in

Operator

question last [Clay from our Jackman]. And comes

Unidentified Analyst

on. Thanks I've for two getting got here. me

IRS First agreements it than guidance one, on your on left to over updated just get greenfields, the your Because defined to I later the that's think want this for offtake spring. market thoughts opportunities. expected XXQ? your stands, expectations as rather brownfields broader are that

And why this is to going if wondering I'm not? if not, So shift?

Chris Kendall

Chris. is This

guidance in looks the interested IRS like what as we're seeing I, well. So

out of markers We there. have good a couple

First hearing, And, we in out IRS program is see I are original everything that really me we the think that around guidance don't the anything XXQ that in I makes what came so XXXX. see that to how far be see out what would have that and there. seen significant there compared would But it will a just shift work, before. Government have comes we is what U.S. the to

stay will engaged that. and work within We

Unidentified Analyst

in question, I trending has level, XXX, Got wondering has is hold appreciate asked you spending if yet it fact production I'm question. My this follow-up of a it. I does And that. CCA Sam's second lower. around flat? When maintenance that because one and to the been guys includes define capital production been

Chris Kendall

Yes, we if lower way and the course, Clay, that, over at being capital outside take would that, that year, feather that any led rate. a in maintenance -- typical it gross EOR of may a of time. you But to greenfield depending number over run what maintenance then, think of new in years as expect projects I'd And bet. of my higher that on maintenance up capital. start look And type we type you CCA, With of the capital thinking to be is I it or about particular to just year. come

flood last we today, since years at we we new look you are nine so I think where many or spent if brought So have on. a years,

have we working existing fields that so have that been over with we And time.

do Now a whole we working of new opportunities the kind be field we what to David with mentioned those. what lines those have with can and new set assets River we that and are along of going a Wind of

out year works I led up depending a be to the we and is year. It's year what that the that way. different, did any what just specifics still little in on just going to think looking it particular during of

David Sheppard

CCA rate mix will production level come performance just that, base into as just our And capital I'll other and as to that short level our the maintenance rise flat. comment production rises, to keep base that

Operator

time. further I no remarks. Brad now at closing over are questions There this to will hand Whitmarsh for

Brad Whitmarsh

Beth want I on any coming Thanks. out us reach I. please Sure. to joining for Should us. Thanks to hesitate webcast. to days, thank everybody follow-up this over today have don't joining the for again you and

Brad Whitmarsh	Head of Investor Relations
Chris Kendall	President & Chief Executive Officer
Mark Allen	Executive Vice President & Chief Financial Officer
David Sheppard	Chief Operating Officer
Nik Wood	Senior Vice President-Carbon Solutions
Matt Dahan	Senior Vice President-Business Development & Technology
Leo Mariani	ROTH MKM
Charles Meade	Johnson Rice
Sam Margolin	Wolfe Research
Nathaniel Pendelton	Stifel
Sam Burwell	Jefferies
Jeoffrey Lambujon	Tudor, Pickering, Holt & Co.
Tim Rezvan	KeyBanc

Denbury (DNRWW) 23 Feb 232022 Q4 Earnings call transcript