8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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): August 13, 2018

DENBURY RESOURCES INC.

(Exact name of registrant as specified in its charter)

Delaware	1-12935	20-0467835
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS EmployerIdentification No.)

5320 Legacy Drive

Plano, Texas

(Address of principal executive offices)

75024

(Zip code)

(972) 673-2000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o

Section 1 – Registrant’s Business and Operations

Item 1.01 – Entry into a Material Definitive Agreement

On August 13, 2018, Denbury Resources Inc. (the “Company”) entered into a Sixth Amendment (the “Amendment”) to its December 9, 2014 Amended and Restated Credit Agreement among the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the financial institutions party thereto (the “Credit Agreement”), pursuant to which, on August 13, 2018, the Amendment increased the amount of Permitted Junior Lien Debt Principal Amount that the Company can incur from $1.2 billion to $1.65 billion outstanding in the aggregate at any one time. The Company currently has $1.07 billion of Permitted Junior Lien Debt outstanding.

Upon the Company’s receipt of proceeds upon the closing of the Offering referenced in Item 8.01 below, the Amendment also will (i) extend the Maturity Date of the Credit Agreement to December 9, 2021, provided that the Maturity Date may occur earlier (between February 2021 and August 2021) if the Company’s 9% Senior Secured Second Lien Notes due 2021 or 6⅜% Senior Subordinated Notes due 2021 are not repaid or refinanced by their respective maturity dates, (ii) require that the Company pay down its outstanding borrowings under the Credit Agreement by not less than $350 million on the closing date of the Offering, (iii) reduce the Borrowing Base and Total Commitments under the Credit Agreement to $615 million in connection with a reduction in the number of Lenders that are party to the Credit Agreement and (iv) add a Consolidated Total Debt to Consolidated EBITDAX financial maintenance covenant with a ratio that is not to exceed 5.25 to 1.0 through December 31, 2020, and 4.50 to 1.0 thereafter through the Maturity Date.

Capitalized terms used in this Item 1.01 and not defined have the respective meanings given to such terms in the Amendment or the Credit Agreement, as applicable. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which is filed as Exhibit 10.1 hereto. A copy of the press release related to the Amendment is filed as Exhibit 99.1 hereto.

Section 2 – Financial Information

Item 2.03 – Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information regarding the Amendment provided in Item 1.01 above is incorporated by reference in this Item 2.03.

Section 8 – Other Events

Item 8.01 – Other Events

On August 14, 2018, the Company issued a press release announcing the commencement of a private offering (the “Offering”) of $400 million aggregate principal amount of Senior Secured Second Lien Notes due 2024 to those believed to be qualified institutional buyers or who are non-U.S. persons. The Offering is being made upon the terms and subject to the conditions set forth in a confidential preliminary offering memorandum. A copy of the press release related to the Offering is filed as Exhibit 99.2 hereto.

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Section 9 – Financial Statements and Exhibits

Item 9.01 – Financial Statements and Exhibits

(d) Exhibits.

The following exhibits are furnished in accordance with the provisions of Item 601 of Regulation S-K:

Exhibit Number	Description
10.1*	Sixth Amendment to Amended and Restated Credit Agreement, dated as of August 13, 2018, by and among Denbury Resources Inc., as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and the financial institutions party thereto.
99.1*	Denbury press release regarding the Sixth Amendment to its Credit Agreement, dated August 14, 2018.
99.2*	Denbury press release regarding commencement of a private offering, dated August 14, 2018.

* Included herewith.

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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. (Registrant)
Date: August 14, 2018	By:	/s/ James S. Matthews
		James S. Matthews
		Executive Vice President, Chief Administrative Officer, General Counsel and Secretary

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INDEX TO EXHIBITS

Exhibit Number	Description
10.1	Sixth Amendment to Amended and Restated Credit Agreement, dated as of August 13, 2018, by and among Denbury Resources Inc., as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, and the financial institutions party thereto.
99.1	Denbury press release regarding the Sixth Amendment to its Credit Agreement, dated August 14, 2018.
99.2	Denbury press release regarding commencement of a private offering, dated August 14, 2018.

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EX-10.1

	
		
		
		Exhibit
	
	

EX-99.1

News

DENBURY ANNOUNCES AMENDMENT AND

EXTENSION OF BANK CREDIT FACILITY

PLANO, TX – August 14, 2018 – Denbury Resources Inc. (NYSE: DNR) (“Denbury” or the “Company”) today announced that it has entered into a Sixth Amendment (the “Amendment”) to its Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A. and other bank lenders (the “Credit Facility”). As detailed below, certain provisions of the Amendment expanding the amount of junior lien debt the Company may incur became effective upon execution of the Amendment, and other provisions will become effective simultaneously with the closing of a private offering of $400 million aggregate principal amount of the Company’s new Senior Secured Second Lien Notes due 2024 (the “Offering”), the commencement of which is being separately announced by the Company today.

The Amendment, among other things, extends the maturity date of the Credit Facility by two years, to December 2021, and increases the amount of junior lien debt that the Company may have outstanding by $450 million, to an aggregate total amount of $1.65 billion. In connection with the Amendment, the size of the bank group has been streamlined to 14 banks and the aggregate commitment by the banks has been reduced from $1.05 billion to $615 million, which is more than offset by the $450 million increase in junior lien debt capacity. Combined with the existing junior lien debt capacity, the Company has approximately $580 million of aggregate junior lien debt capacity under the amended Credit Facility, enabling the Company to commence the Offering today.

Mark Allen, Denbury’s Executive Vice President and CFO, commented, “We are very pleased with the amendment and extension of our bank credit facility, and we believe these actions, combined with the closing of the private offering of new second lien notes announced and commenced today, will provide Denbury with essentially the same level of liquidity, which we view as more than sufficient for Denbury’s current plans and operational flexibility. We also feel very good about the right-sizing of our bank group, which now consists of 14 top-tier energy banks that are all supportive of Denbury, our business model and our future. We greatly appreciate the support we have received from these banks over the years, and we look forward to continuing our strong relationship with each of them.

“Denbury’s leverage profile is rapidly improving, and the progress we have made on debt reduction, cost savings and operational improvements and efficiencies, together with improved oil prices, is having a tremendously positive impact on our balance sheet, and has also put us on a trajectory for continued improvement. We believe these transactions announced today are additional positive steps in the right direction for Denbury and will prove beneficial to all of our stakeholders.”

In addition to the immediate increase in the Company’s junior lien debt basket detailed above, upon the Company’s receipt of proceeds from the closing of the Offering, the following Amendment provisions will become effective:

• the extension of the maturity date of the Credit Facility to December 9, 2021, provided that the maturity date may occur earlier (between February 2021 and August 2021) if the Company’s 9% Senior Secured Second Lien Notes due 2021 or 6⅜% Senior Subordinated Notes due 2021 are not repaid or refinanced by their respective maturity dates;

• the requirement to pay down the Company’s outstanding borrowings under the Credit Facility by not less than $350 million;

• the reduction of the borrowing base and lender commitments under the Credit Facility to $615 million; and

• the addition of a financial maintenance covenant with respect to the Company’s consolidated total debt to consolidated EBITDAX ratio, which is not to exceed 5.25 to 1.0 through December 31, 2020, and 4.5 to 1.0 thereafter through the maturity date of the Credit Facility.

This press release contains forward-looking statements that involve risks and uncertainties that are based on assumptions that management believes are reasonable based on currently available information. There is no assurance that these assumptions will prove to be correct. In addition, any forward-looking statements represent the Company’s estimates only as of today and should not be relied upon as representing its estimates as of any future date. Denbury assumes no obligation to update its forward-looking statements.

Denbury is an independent oil and natural gas company with operations focused in two key operating areas: the Gulf Coast and Rocky Mountain regions. The Company’s goal is to increase the value of its properties through a combination of exploitation, drilling and proven engineering extraction practices, with the most significant emphasis relating to CO₂ enhanced oil recovery operations.

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DENBURY CONTACTS:    

Mark C. Allen, Executive Vice President and Chief Financial Officer, 972.673.2000

John Mayer, Director of Investor Relations, 972.673.2383

EX-99.2

News

DENBURY ANNOUNCES PRIVATE OFFERING OF

NEW SENIOR SECURED SECOND LIEN NOTES DUE 2024

PLANO, TX – August 14, 2018 – Denbury Resources Inc. (NYSE: DNR) (“Denbury” or the “Company”) today announced the commencement of a private offering (the “Offering”) of $400 million aggregate principal amount of new Senior Secured Second Lien Notes due 2024 (the “New Second Lien Notes”) to Eligible Holders (as defined below). The Offering is being made upon the terms and subject to the conditions set forth in a preliminary confidential offering memorandum.

The covenants and priority of the New Second Lien Notes, along with the collateral securing the New Second Lien Notes, will be substantially similar to those of the Company’s existing second lien notes, and the New Second Lien Notes will become the Company’s general senior secured obligations, secured by second-priority liens on all the assets that secure the Company’s senior secured bank credit facility. The New Second Lien Notes will be senior to all existing and future subordinated indebtedness that the Company may incur. The Company expects to use the net proceeds from the Offering to repay substantially all of its outstanding borrowings under its senior secured bank credit facility, which were $410 million as of July 31, 2018, and to pay related fees and expenses. In a separate press release today, the Company announced various amendments to its senior secured bank credit facility.

The New Second Lien Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or under any state or other securities laws, and the New Second Lien Notes will be issued pursuant to an exemption therefrom, and may not be offered or sold within the United States, or to or for the account or benefit of any U.S. Person, absent registration or an applicable exemption from registration requirements.

The Offering is being made only to “Eligible Holders” who are either believed to be “qualified institutional buyers” under Rule 144A or who are non-“U.S. persons” under Regulation S as defined under applicable securities laws.

This press release does not constitute an offer to sell or a solicitation of any offer to buy any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This press release is being issued pursuant to Rule 135c under the Securities Act.

This press release contains forward-looking statements that involve risks and uncertainties that are based on assumptions that management believes are reasonable based on currently available information. There is no assurance that these assumptions will prove to be correct. In addition, any forward-looking statements represent the Company’s estimates only as of today and should not be relied upon as representing its estimates as of any future date. Denbury assumes no obligation to update its forward-looking statements.

Denbury is an independent oil and natural gas company with operations focused in two key operating areas: the Gulf Coast and Rocky Mountain regions. The Company’s goal is to increase the value of its properties through a combination of exploitation, drilling and proven engineering extraction practices, with the most significant emphasis relating to CO₂ enhanced oil recovery operations.

#      #      #

DENBURY CONTACTS:    

Mark C. Allen, Executive Vice President and Chief Financial Officer, 972.673.2000

John Mayer, Director of Investor Relations, 972.673.2383

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