1-12935
(Commission File Number)
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20-0467835
(I.R.S. Employer Identification No.)
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5320 Legacy Drive,
Plano, Texas
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75024
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(Address of principal
executive offices)
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(Zip code)
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Registrant's telephone number, including area code:
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(972) 673-2000
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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(b)
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Pro forma financial information.
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(d)
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Exhibits.
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Exhibit Number
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Description
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99.1*
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Unaudited pro forma condensed combined financial information
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Denbury Resources Inc.
(Registrant)
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Date: January 18, 2013
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By:
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/s/ Alan Rhoades
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Alan Rhoades
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Vice President and Chief Accounting Officer
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Exhibit Number
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Description
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99.1
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Unaudited pro forma condensed combined financial information
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- 4 - |
·
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Exchange Transaction. Denbury and ExxonMobil closed the first and second phases of the Exchange Transaction on November 30, 2012 and December 21, 2012, respectively. Cash proceeds of $1.3 billion include preliminary closing adjustments received by Denbury primarily representing estimated adjustments for net revenues and capital expenditures of the transferred assets from the effective date of July 1, 2012 up to (i) the closing date of November 30, 2012 for the assets transferred in the first phase closing, and (ii) the closing date of December 21, 2012 for the assets transferred in the second phase closing.
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·
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Paydown of Credit Facility. Denbury utilized a portion of cash proceeds received from the Exchange Transaction to pay down a portion of outstanding borrowings on the Company’s bank credit facility.
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Denbury
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Exchange
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Denbury
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|||||||||||
Historical
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Transaction
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Pro Forma
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|||||||||||
(in thousands)
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|||||||||||||
Assets
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|||||||||||||
Cash and cash equivalents
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$ | 24,034 | $ | 1,331,684 |
(a)
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$ | 1,105,718 | ||||||
(250,000 | ) |
(b)
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|||||||||||
Other current assets
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484,734 | (30,000 | ) |
(a)
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454,734 | ||||||||
Net property and equipment
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8,981,651 | (1,377,684 | ) |
(a)
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7,603,967 | ||||||||
Goodwill
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1,363,547 | 21,000 |
(a)
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1,384,547 | |||||||||
Other assets
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251,980 | 61,000 |
(a)
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312,980 | |||||||||
Total assets
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$ | 11,105,946 | $ | (244,000 | ) | $ | 10,861,946 | ||||||
Liabilities and stockholders' equity
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|||||||||||||
Taxes payable
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$ | 29,393 | $ | 116,000 |
(c)
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$ | 145,393 | ||||||
Other current liabilities
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613,217 | (10,000 | ) |
(a)
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604,417 | ||||||||
1,200 |
(d)
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||||||||||||
Long-term debt
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3,038,865 | (250,000 | ) |
(b)
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2,788,865 | ||||||||
Deferred taxes
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2,095,850 | (116,000 | ) |
(c)
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1,979,850 | ||||||||
Other liabilities
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109,401 | 16,000 |
(a)
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125,401 | |||||||||
Total stockholders' equity
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5,219,220 | (1,200 | ) |
(d)
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5,218,020 | ||||||||
Total liabilities and stockholders' equity
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$ | 11,105,946 | $ | (244,000 | ) | $ | 10,861,946 |
(a)
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Represents pro forma adjustments to dispose of the Company’s Bakken area assets and to record the estimated fair value of assets acquired and liabilities assumed in the Exchange Transaction.
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(b)
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Represents the assumed paydown of a portion of the outstanding borrowings under Denbury’s bank credit facility with a portion of the net cash proceeds from the Exchange Transaction.
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(c)
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Represents the pro forma income tax liability estimated to be incurred in conjunction with the Exchange Transaction using an estimated statutory tax rate of 38%. This pro forma estimate assumes the utilization of federal tax rules on like-kind exchanges to defer a portion of the cash income taxes on the Exchange Transaction, including Denbury’s recently agreed upon, and currently pending, purchase of qualifying oil and gas property interests in the Cedar Creek Anticline of Montana and North Dakota, which is expected to close in March 2013.
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(d)
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Represents estimated nonrecurring transaction costs incurred by Denbury in conjunction with the Exchange Transaction and not reflected in Denbury’s September 30, 2012 balance sheet. These costs are reflected in the unaudited pro forma balance sheet as a reduction of equity as the costs will be expensed by Denbury at the acquisition date.
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Denbury
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Exchange
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Denbury
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|||||||||||
Historical
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Transaction
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Pro Forma
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|||||||||||
(In thousands, except per share data)
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|||||||||||||
Revenues and other income
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|||||||||||||
Oil, natural gas, and related product sales
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$ | 1,813,798 | $ | (309,046 | ) |
(a)
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$ | 1,573,342 | |||||
68,590 |
(b)
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||||||||||||
Other revenues and other income
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33,470 | — | 33,470 | ||||||||||
Total revenues and other income
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1,847,268 | (240,456 | ) | 1,606,812 | |||||||||
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|||||||||||||
Expenses
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|||||||||||||
Lease operating expenses
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392,960 | (21,781 | ) |
(c)
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394,371 | ||||||||
23,192 |
(d)
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||||||||||||
Marketing expenses
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37,776 | (9,280 | ) |
(c)
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29,476 | ||||||||
980 |
(d)
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||||||||||||
Taxes other than income
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122,518 | (30,702 | ) |
(c)
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98,281 | ||||||||
6,465 |
(d)
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||||||||||||
General and administrative
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109,631 | (670 | ) |
(e)
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108,961 | ||||||||
Interest, net of amounts capitalized
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115,745 | 680 |
(f)
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116,425 | |||||||||
Depletion, depreciation, and amortization
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390,119 | (112,630 | ) |
(g)
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277,489 | ||||||||
Derivatives income
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(32,203 | ) | — | (32,203 | ) | ||||||||
Other expenses
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49,230 | — | 49,230 | ||||||||||
Total expenses
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1,185,776 | (143,746 | ) | 1,042,030 | |||||||||
Income (loss) before income taxes
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661,492 | (96,710 | ) | 564,782 | |||||||||
Income tax provision (benefit)
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250,793 | (36,750 | ) |
(h)
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214,043 | ||||||||
Net income (loss)
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$ | 410,699 | $ | (59,960 | ) | $ | 350,739 | ||||||
Net income per common share – basic
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$ | 1.06 | $ | 0.91 | |||||||||
Net income per common share – diluted
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$ | 1.05 | $ | 0.90 | |||||||||
Weighted average common shares outstanding
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|||||||||||||
Basic
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387,015 | 387,015 | |||||||||||
Diluted
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390,854 | 390,854 |
Denbury
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Exchange
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Denbury
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|||||||||||
Historical
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Transaction
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Pro Forma
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|||||||||||
(In thousands, except per share data)
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|||||||||||||
Revenues and other income
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|||||||||||||
Oil, natural gas, and related product sales
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$ | 2,269,151 | $ | (276,552 | ) |
(a)
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$ | 2,082,534 | |||||
89,935 |
(b)
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||||||||||||
Other revenues and other income
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40,173 | — | 40,173 | ||||||||||
Total revenues and other income
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2,309,324 | (186,617 | ) | 2,122,707 | |||||||||
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|||||||||||||
Expenses
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|||||||||||||
Lease operating expenses
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507,397 | (18,392 | ) |
(c)
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518,038 | ||||||||
29,033 |
(d)
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||||||||||||
Marketing expenses
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26,047 | (2,234 | ) |
(c)
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25,046 | ||||||||
1,233 |
(d)
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||||||||||||
Taxes other than income
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147,534 | (27,603 | ) |
(c)
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129,833 | ||||||||
9,902 |
(d)
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||||||||||||
General and administrative
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125,525 | — | 125,525 | ||||||||||
Interest, net of amounts capitalized
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164,360 | 5,767 |
(f)
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170,127 | |||||||||
Depletion, depreciation, and amortization
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409,196 | (74,831 | ) |
(g)
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334,365 | ||||||||
Derivatives income
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(52,497 | ) | — | (52,497 | ) | ||||||||
Other expenses
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57,717 | — | 57,717 | ||||||||||
Total expenses
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1,385,279 | (77,125 | ) | 1,308,154 | |||||||||
Income (loss) before income taxes
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924,045 | (109,492 | ) | 814,553 | |||||||||
Income tax provision (benefit)
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350,712 | (41,607 | ) |
(h)
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309,105 | ||||||||
Net income (loss)
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$ | 573,333 | $ | (67,885 | ) | $ | 505,448 | ||||||
Net income per common share – basic
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$ | 1.45 | $ | 1.28 | |||||||||
Net income per common share – diluted
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$ | 1.43 | $ | 1.26 | |||||||||
Weighted average common shares outstanding
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|||||||||||||
Basic
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396,023 | 396,023 | |||||||||||
Diluted
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400,958 | 400,958 |
(a)
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Represents the decrease in revenues from oil and natural gas production from the Bakken area assets being sold.
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(b)
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Represents the increase in revenues from oil and natural gas production from the Webster and Hartzog Draw fields being acquired.
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(c)
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Represents the decrease in expenses attributable to the Bakken area assets being sold.
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(d)
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Represents the increase in expenses attributable to the Webster and Hartzog Draw fields being acquired.
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(e)
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Represents a reduction in historical general and administrative expenses to eliminate nonrecurring expenses previously incurred in conjunction with the Exchange Transaction.
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(f)
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Represents the increase in interest expense resulting from interest previously capitalized on Bakken area assets being sold, offset slightly by a decrease in interest expense due to the paydown of a portion of the borrowings under our bank credit facility with a portion of the proceeds received in the Exchange Transaction.
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(g)
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Represents the change in depletion resulting from the Exchange Transaction.
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(h)
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Represents the income tax effect of the pro forma adjustments calculated using the estimated statutory tax rate of 38%. An estimate for income taxes resulting from the taxable gain on the Exchange Transaction is not included in the unaudited pro forma condensed combined statements of operations.
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·
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Final adjustments to the amount of consideration that Denbury will receive attributable to net revenues received and capital and operating costs expended, on exchanged fields after July 1, 2012, as well as any title defects; and
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·
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Changes in the estimated fair values of Bakken area assets, assets acquired and liabilities assumed, which could result from changes in reserves or cost estimates related to future production, review of asset retirement obligations or the identification of additional assets or liabilities.
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Pro forma consideration:
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||||
Fair value of net assets transferred
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$ | 1,922,000 | ||
Less: Fair value of assets acquired and liabilities assumed:
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||||
Cash
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$ | 1,331,684 | ||
Other current assets
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2,000 | |||
Net property and equipment
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550,316 | |||
Other assets
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61,000 | |||
Other current liabilities
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(27,000 | ) | ||
Other liabilities
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(17,000 | ) | ||
Amount attributable to assets acquired and liabilities assumed
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$ | 1,901,000 | ||
Goodwill
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$ | 21,000 |
- 7 - |