-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OuAx6GPQA4MfeNo/lektFBsJZfNW6jfulHQ3fHSgXVxbkrmZcUymJDQ+DLfNzzSu iSYe+GOLCzJf/SsY+Zj4hQ== 0000945764-97-000020.txt : 19970918 0000945764-97-000020.hdr.sgml : 19970918 ACCESSION NUMBER: 0000945764-97-000020 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970912 ITEM INFORMATION: FILED AS OF DATE: 19970912 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DENBURY RESOURCES INC CENTRAL INDEX KEY: 0000945764 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12935 FILM NUMBER: 97679825 BUSINESS ADDRESS: STREET 1: 17304 PRESTON RD STREET 2: STE 200 CITY: DALLAS STATE: TX ZIP: 75252 BUSINESS PHONE: 2147133000 MAIL ADDRESS: STREET 1: 17304 PRESTON RD STREET 2: STE 200 CITY: DALLAS STATE: TX ZIP: 75252 FORMER COMPANY: FORMER CONFORMED NAME: NEWSCOPE RESOURCES LTD DATE OF NAME CHANGE: 19950627 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported) September 12, 1997 DENBURY RESOURCES INC. (Exact name of Registrant as specified in its charter) Canada (State or other jurisdiction of incorporation or organization) 33-93722 Not applicable (Commission File (I.R.S. Employer Number) Identification No.) 17304 Preston Road Suite 200 Dallas, TX 75252 (Address of principal (Zip code) executive offices) Registrant's telephone number, including area code: (972)713-3000 Item 5. Other Events During the last week, Denbury Resources Inc. (the "Company") evaluated three recently completed wells which have significantly increased the Company's proved reserves. Two wells, the Stanley 1-11 #8 and the Stanley 1-14 #2, were recently completed at its East Eucutta Field in Wayne County, Mississippi. Analysis of electric logs and core samples indicate over 140 net feet of pay in each of these two wells in seven Paluxy sands between 7,700 and 8,500 feet. These wells are expected to add approximately 4.2 million barrels of additional net proved oil reserves to the Company based on estimates from Netherland, Sewell and Associates, Inc., the Company's independent consulting engineers. At least six additional wells will be drilled to produce these reserves. The Company has a 100% working interest and an 87.5% net revenue interest in these two wells. The Company also completed the Harry Bourg #1 well at Bayou Rambio Field in Terrebonne Parish, Louisiana. Analysis of electric logs and core samples indicate over 90 net feet of pay in this well in seven Miocene sands between 11,000 and 13,500 feet. This well is expected to add approximately 6.7 billion cubic feet of additional net proved gas reserves and 40,000 barrels of additional net proved oil reserves to the Company based on estimates from Netherland & Sewell. At least one additional well will be drilled to produce these reserves. The Company has a 70% working interest and an 52% net revenue interest in this well. The Company expects all three wells to commence production within the next two to three weeks. As of December 31, 1996, the Company's net proved reserves consisted of approximately 15 million barrels of oil and 74.1 billion cubic feet of natural gas or approximately 27.4 million barrels of oil equivalent (on a 6:1 basis). Item 7. Financial Statements and Exhibits 99. Reserve estimates dated September 11, 1997 regarding certain reserve additions from Netherland, Sewell & Associates, Inc., independent petroleum engineers. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. DENBURY RESOURCES INC. Date: September 12, 1997 By: /s/ Phil Rykhoek ------------------------------ Phil Rykhoek Chief Financial Officer 3 EXHIBIT INDEX Exhibit No. Exhibit - ----------- ------- 99. Reserve estimates dated September 11, 1997 regarding certain reserve additions from Netherland, Sewell & Associates, Inc., independent petroleum engineers. 4 September 11, 1997 Mr. William E. Gross Denbury Management, Inc. Suite 200 17304 Preston Road Dallas, Texas 75252 Dear Mr. Gross: In accordance with your request, we have estimated the proved developed non-producing and proved undeveloped reserves and future revenue, as of October 1, 1997, to the Denbury Management, Inc. (DMI) interest in certain oil and gas properties located in Bayou Rambio Field, Terrebonne Parish, Louisiana, and in East Eucutta Field, Wayne County, Mississippi, as listed in the accompanying tabulations. As requested, our estimates are limited to reserves and future revenue for those reservoirs discovered as a result of recent drilling activity. This report has been prepared using constant prices and costs as set forth in this letter. As presented in the accompanying summary projections, Tables I through III, we estimate the net reserves and future net revenue to the DMI interest, as of October 1, 1997, to be: Net Reserves Future Net Revenue ------------------------- ---------------------------- Oil Gas Present Worth Category (Barrels) (MCF) Total at 10% - ----------------- ---------- ----------- ------------ ------------ Proved Developed Non-Producing 667,429 3,683,160 $16,660,000 $ 11,481,300 Proved 3,599,868 6,292,000 58,068,200 39,650,900 Undeveloped ---------- ----------- ------------ ------------ Total Proved 4,267,297 9,975,160 $74,728,200 $ 51,132,200 The oil reserves shown include crude oil and condensate. Oil volumes are expressed in barrels which are equivalent to 42 United States gallons. Gas volumes are expressed in thousands of standard cubic feet (MCF) at the contract temperature and pressure bases. This report includes summary projections of reserves and revenue for each reserve category; one-line summaries of reserves, economics, and basic data by lease; and summaries of supplemental data. For the purposes of this report, the term "lease" refers to a single economic projection. 5 The estimated reserves and future revenue shown in this report are for proved developed non-producing and proved undeveloped reserves. No study was made to determine whether probable or possible reserves might be established for these properties. This report does not include any value which could be attributed to interests in undeveloped acreage beyond those tracts for which undeveloped reserves have been estimated. Future gross revenue to the DMI interest is prior to deducting state production taxes. Future net revenue is after deducting these taxes, future capital costs, and operating expenses, but before consideration of federal income taxes. The future net revenue has been discounted at an annual rate of 10 percent to determine its "present worth." The present worth is shown to indicate the effect of time on the value of money and should not be construed as being the fair market value of the properties. For the purposes of this report, a field inspection of the properties has not been performed nor has the mechanical operation or condition of the wells and their related facilities been examined. We have not investigated possible environmental liability related to the properties; therefore, our estimates do not include any costs which may be incurred due to such possible liability. Also, our estimates do not include any salvage value for the lease and well equipment nor the cost of abandoning the properties. As requested, oil prices used in this report are based on a June 30, 1997 Koch Oil Company West Texas Intermediate posted price of $17.18 per barrel, adjusted by lease for gravity, transportation fees, and regional posted price differentials. Gas prices used in this report are based on a June 30, 1997 NYMEX Henry Hub posted price of $2.35 per MMBTU, adjusted by lease for transportation fees, BTU content, and regional price differentials. Oil and gas prices are held constant throughout the life of the properties. Lease and well operating costs are based on operating expense records of DMI for similar wells in the fields. As requested, lease and well operating costs include only direct lease and field level costs. Headquarters general and administrative overhead expenses of DMI are not included. Lease and well operating costs are held constant throughout the life of the properties. Capital costs are included as required for workovers, new development wells, and production equipment. 6 The reserves included in this report are estimates only and should not be construed as exact quantities. They may or may not be recovered; if recovered, the revenues therefrom and the costs related thereto could be more or less than the estimated amounts. These reserves are for behind-pipe zones and undeveloped locations which lack data upon which performance-related estimates of reserves can be based. Therefore, these reserves are based on estimates of reservoir volumes and recovery efficiencies along with analogies to similar production. As such reserve estimates are usually subject to greater revision than those based on substantial production and pressure data, it may be necessary to revise these estimates up or down in the future as additional performance data become available. The sales rates, prices received for the reserves, and costs incurred in recovering such reserves may vary from assumptions included in this report due to governmental policies and uncertainties of supply and demand. Also, estimates of reserves may increase or decrease as a result of future operations. In evaluating the information at our disposal concerning this report, we have excluded from our consideration all matters as to which legal or accounting, rather than engineering and geological, interpretation may be controlling. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geological data; therefore, our conclusions necessarily represent only informed professional judgments. The titles to the properties have not been examined by Netherland, Sewell & Associates, Inc., nor has the actual degree or type of interest owned been independently confirmed. The data used in our estimates were obtained from Denbury Management, Inc. and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. We are independent petroleum engineers, geologists, and geophysicists; we do not own an interest in these properties and are not employed on a contingent basis. Basic geologic and field performance data together with our engineering work sheets are maintained on file in our office. Very truly yours, /s/ Clarence Netherland DMA:EIB 7 -----END PRIVACY-ENHANCED MESSAGE-----