Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 31, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-12935 | |
Entity Registrant Name | DENBURY INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-0467835 | |
Entity Address, Address Line One | 5851 Legacy Circle, | |
Entity Address, City or Town | Plano, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75024 | |
City Area Code | (972) | |
Local Phone Number | 673-2000 | |
Title of 12(b) Security | Common Stock $.001 Par Value | |
Trading Symbol | DEN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Bankruptcy Proceedings, Reporting Current | true | |
Entity Common Stock, Shares Outstanding | 50,109,950 | |
Entity Central Index Key | 0000945764 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 13,565 | $ 518 |
Restricted cash | 0 | 1,000 |
Accrued production receivable | 140,302 | 91,421 |
Trade and other receivables, net | 24,740 | 19,682 |
Derivative assets | 0 | 187 |
Prepaids | 12,454 | 14,038 |
Total current assets | 191,061 | 126,846 |
Oil and natural gas properties (using full cost accounting) | ||
Proved properties | 949,128 | 851,208 |
Unevaluated properties | 103,088 | 85,304 |
CO2 properties | 188,700 | 188,288 |
Pipelines | 143,633 | 133,485 |
Other property and equipment | 97,699 | 86,610 |
Less accumulated depletion, depreciation, amortization and impairment | (120,073) | (41,095) |
Net property and equipment | 1,362,175 | 1,303,800 |
Operating lease right-of-use assets | 19,000 | 20,342 |
Intangible assets, net | 92,814 | 97,362 |
Other assets | 85,044 | 86,408 |
Total assets | 1,750,094 | 1,634,758 |
Current liabilities | ||
Accounts payable and accrued liabilities | 163,905 | 112,671 |
Oil and gas production payable | 69,390 | 49,165 |
Derivative liabilities | 223,212 | 53,865 |
Current maturities of long-term debt | 34,498 | 68,008 |
Operating lease liabilities | 2,596 | 1,350 |
Total current liabilities | 493,601 | 285,059 |
Long-term liabilities | ||
Long-term debt, net of current portion | 35,000 | 70,000 |
Asset retirement obligations | 226,615 | 179,338 |
Derivative liabilities | 22,164 | 5,087 |
Deferred tax liabilities, net | 1,187 | 1,274 |
Operating lease liabilities | 18,157 | 19,460 |
Other liabilities | 26,172 | 20,872 |
Total long-term liabilities | 329,295 | 296,031 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity | ||
Preferred stock, $.001 par value, 50,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $.001 par value, 250,000,000 shares authorized; 50,017,491 and 49,999,999 shares issued, respectively | 50 | 50 |
Paid-in capital in excess of par | 1,125,143 | 1,104,276 |
Accumulated deficit | (197,995) | (50,658) |
Total stockholders' equity | 927,198 | 1,053,668 |
Total liabilities and stockholders' equity | $ 1,750,094 | $ 1,634,758 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Stockholders' equity | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 50,017,491 | 49,999,999 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Revenues and other income | $ 301,368,000 | $ 117,875,000 | $ 552,527,000 | $ 360,076,000 | |
Expenses | |||||
Taxes other than income | 22,382,000 | 10,372,000 | 41,345,000 | 30,058,000 | |
General and administrative expenses | 15,450,000 | 23,776,000 | 47,433,000 | 33,509,000 | |
Interest, net of amounts capitalized of $1,168, $8,729, $2,251 and $18,181, respectively | 1,252,000 | 20,617,000 | 2,788,000 | 40,563,000 | |
Depletion, depreciation, and amortization | 36,381,000 | 55,414,000 | 75,831,000 | 152,276,000 | |
Commodity derivatives expense (income) | 172,664,000 | 40,130,000 | 288,407,000 | (106,641,000) | |
Gain on debt extinguishment | 0 | 0 | 0 | (18,994,000) | |
Write-down of oil and natural gas properties | 0 | 662,440,000 | 14,377,000 | 734,981,000 | |
Other expenses | 3,214,000 | 11,290,000 | 5,360,000 | 13,784,000 | |
Total expenses | 379,359,000 | 917,055,000 | 700,402,000 | 1,095,856,000 | |
Loss before income taxes | (77,991,000) | (799,180,000) | (147,875,000) | (735,780,000) | |
Income tax benefit | (296,000) | (101,706,000) | (538,000) | (112,322,000) | |
Net loss | $ (77,695,000) | $ (697,474,000) | $ (147,337,000) | $ (623,458,000) | |
Net loss per common share | |||||
Basic | $ (1.52) | $ (1.41) | $ (2.91) | $ (1.26) | |
Diluted | $ (1.52) | $ (1.41) | $ (2.91) | $ (1.26) | |
Weighted average common shares outstanding | |||||
Basic | 50,999 | 495,245 | 50,661 | 494,752 | |
Diluted | [1] | 50,999 | 495,245 | 50,661 | 494,752 |
Other income | |||||
Revenues and other income | $ 707,000 | $ 494,000 | $ 1,067,000 | $ 1,322,000 | |
Transportation and marketing | |||||
Operating expenses | 8,522,000 | 9,388,000 | 16,319,000 | 19,009,000 | |
Oil, natural gas, and related product sales | |||||
Revenues and other income | 282,708,000 | 109,387,000 | 518,153,000 | 339,011,000 | |
Operating expenses | 110,225,000 | 81,293,000 | 192,195,000 | 190,563,000 | |
CO2 | |||||
Revenues and other income | 10,134,000 | 6,504,000 | 19,362,000 | 14,532,000 | |
Operating expenses | 1,531,000 | 885,000 | 2,524,000 | 1,637,000 | |
Oil marketing | |||||
Revenues and other income | 7,819,000 | 1,490,000 | 13,945,000 | 5,211,000 | |
Operating expenses | $ 7,738,000 | $ 1,450,000 | $ 13,823,000 | $ 5,111,000 | |
[1] | If the Company had recognized net income, the weighted average diluted shares outstanding would have been 54.3 million and 587.1 million for the three months ended June 30, 2021 and 2020, respectively, and 52.7 million and 586.6 million for the six months ended June 30, 2021 and 2020, respectively. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Expenses | ||||
Capitalized interest | $ 1,168 | $ 8,729 | $ 2,251 | $ 18,181 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (147,337,000) | $ (623,458,000) |
Adjustments to reconcile net loss to cash flows from operating activities | ||
Depletion, depreciation, and amortization | 75,831,000 | 152,276,000 |
Write-down of oil and natural gas properties | 14,377,000 | 734,981,000 |
Deferred income taxes | (87,000) | (106,513,000) |
Stock-based compensation | 20,232,000 | 3,540,000 |
Commodity derivatives expense (income) | 288,407,000 | (106,641,000) |
Receipt (payment) on settlements of commodity derivatives | (101,796,000) | 70,267,000 |
Gain on debt extinguishment | 0 | (18,994,000) |
Debt issuance costs and discounts | 1,370,000 | 9,921,000 |
Other, net | 744,000 | (1,642,000) |
Changes in assets and liabilities, net of effects from acquisitions | ||
Accrued production receivable | (48,881,000) | 62,063,000 |
Trade and other receivables | (5,578,000) | (16,162,000) |
Other current and long-term assets | 1,294,000 | (4,552,000) |
Accounts payable and accrued liabilities | 27,292,000 | (60,295,000) |
Oil and natural gas production payable | 20,224,000 | (22,217,000) |
Other liabilities | (2,554,000) | 237,000 |
Net cash provided by operating activities | 143,538,000 | 72,811,000 |
Cash flows from investing activities | ||
Oil and natural gas capital expenditures | (53,411,000) | (79,897,000) |
Acquisitions of oil and natural gas properties | (10,811,000) | 0 |
Pipelines and plants capital expenditures | (4,851,000) | (10,962,000) |
Net proceeds from sales of oil and natural gas properties and equipment | 18,456,000 | 40,971,000 |
Other | (4,159,000) | (105,000) |
Net cash used in investing activities | (54,776,000) | (49,993,000) |
Cash flows from financing activities | ||
Bank repayments | (485,000,000) | (226,000,000) |
Bank borrowings | 450,000,000 | 491,000,000 |
Interest payments treated as a reduction of debt | 0 | (42,506,000) |
Cash paid in conjunction with debt repurchases | 0 | (14,171,000) |
Pipeline financing and capital lease debt repayments | (33,510,000) | (7,015,000) |
Other | (2,735,000) | (9,529,000) |
Net cash provided by (used in) financing activities | (71,245,000) | 191,779,000 |
Net increase in cash, cash equivalents, and restricted cash | 17,517,000 | 214,597,000 |
Cash, cash equivalents, and restricted cash at beginning of period | 42,248,000 | 33,045,000 |
Cash, cash equivalents, and restricted cash at end of period | $ 59,765,000 | $ 247,642,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock ($.001 Par Value) | Paid-In Capital in Excess of Par | Retained Earnings (Accumulated Deficit) | Treasury Stock (at cost) |
Beginning balance, shares at Dec. 31, 2019 | 508,065,495 | 1,652,771 | |||
Beginning balance at Dec. 31, 2019 | $ 1,412,259 | $ 508 | $ 2,739,099 | $ (1,321,314) | $ (6,034) |
Issued pursuant to stock compensation plans, shares | 312,516 | ||||
Issued pursuant to directors' compensation plan, shares | 37,367 | ||||
Stock-based compensation, value | 3,204 | 3,204 | |||
Tax withholding for stock compensation plans, shares | 175,673 | ||||
Tax withholding for stock compensation plans, value | (34) | $ (34) | |||
Net income (loss) | 74,016 | 74,016 | |||
Ending balance, shares at Mar. 31, 2020 | 508,415,378 | 1,828,444 | |||
Ending balance at Mar. 31, 2020 | 1,489,445 | $ 508 | 2,742,303 | (1,247,298) | $ (6,068) |
Beginning balance, shares at Dec. 31, 2019 | 508,065,495 | 1,652,771 | |||
Beginning balance at Dec. 31, 2019 | 1,412,259 | $ 508 | 2,739,099 | (1,321,314) | $ (6,034) |
Net income (loss) | (623,458) | ||||
Ending balance, shares at Jun. 30, 2020 | 509,553,960 | 1,828,444 | |||
Ending balance at Jun. 30, 2020 | 804,419 | $ 510 | 2,754,749 | (1,944,772) | $ (6,068) |
Beginning balance, shares at Mar. 31, 2020 | 508,415,378 | 1,828,444 | |||
Beginning balance at Mar. 31, 2020 | 1,489,445 | $ 508 | 2,742,303 | (1,247,298) | $ (6,068) |
Canceled pursuant to stock compensation plans, shares | (6,218,868) | ||||
Canceled pursuant to stock compensation plans, value | $ (6) | 6 | |||
Issued pursuant to notes conversion, shares | 7,357,450 | ||||
Issued pursuant to notes conversion, value | 11,461 | $ 8 | 11,453 | ||
Stock-based compensation, value | 987 | 987 | |||
Net income (loss) | (697,474) | (697,474) | |||
Ending balance, shares at Jun. 30, 2020 | 509,553,960 | 1,828,444 | |||
Ending balance at Jun. 30, 2020 | 804,419 | $ 510 | 2,754,749 | (1,944,772) | $ (6,068) |
Canceled pursuant to stock compensation plans, shares | (95,016) | ||||
Issued pursuant to notes conversion, shares | 14,800 | ||||
Issued pursuant to notes conversion, value | 40 | 40 | |||
Stock-based compensation, value | 10,126 | 10,126 | |||
Tax withholding for stock compensation plans, shares | 567,189 | ||||
Tax withholding for stock compensation plans, value | (134) | $ (134) | |||
Cancellation of Predecessor equity, shares | (509,473,744) | (2,395,633) | |||
Cancellation of Predecessor equity, value | (5,331) | $ (510) | (2,764,915) | 2,753,892 | $ 6,202 |
Issuance of Successor equity, shares | 49,999,999 | ||||
Issuance of Successor equity, value | 1,095,419 | $ 50 | 1,095,369 | ||
Net income (loss) | (809,120) | (809,120) | |||
Ending balance, shares at Sep. 18, 2020 | 49,999,999 | ||||
Ending balance at Sep. 18, 2020 | 1,095,419 | $ 50 | 1,095,369 | ||
Net income (loss) | 2,758 | 2,758 | |||
Ending balance, shares at Sep. 30, 2020 | 49,999,999 | ||||
Ending balance at Sep. 30, 2020 | 1,098,177 | $ 50 | 1,095,369 | 2,758 | |
Stock-based compensation, value | 8,907 | 8,907 | |||
Net income (loss) | $ (53,416) | (53,416) | |||
Ending balance, shares at Dec. 31, 2020 | 49,999,999 | 49,999,999 | |||
Ending balance at Dec. 31, 2020 | $ 1,053,668 | $ 50 | 1,104,276 | (50,658) | |
Stock-based compensation, value | 19,172 | 19,172 | |||
Tax withholding for stock compensation plans, value | (1,467) | (1,467) | |||
Issued pursuant to exercise of warrants, shares | 5,620 | ||||
Issued pursuant to exercise of warrants, value | 195 | $ 0 | 195 | ||
Net income (loss) | (69,642) | (69,642) | |||
Ending balance, shares at Mar. 31, 2021 | 50,005,619 | ||||
Ending balance at Mar. 31, 2021 | $ 1,001,926 | $ 50 | 1,122,176 | (120,300) | |
Beginning balance, shares at Dec. 31, 2020 | 49,999,999 | 49,999,999 | |||
Beginning balance at Dec. 31, 2020 | $ 1,053,668 | $ 50 | 1,104,276 | (50,658) | |
Net income (loss) | $ (147,337) | ||||
Ending balance, shares at Jun. 30, 2021 | 50,017,491 | 50,017,491 | |||
Ending balance at Jun. 30, 2021 | $ 927,198 | $ 50 | 1,125,143 | (197,995) | |
Beginning balance, shares at Mar. 31, 2021 | 50,005,619 | ||||
Beginning balance at Mar. 31, 2021 | 1,001,926 | $ 50 | 1,122,176 | (120,300) | |
Stock-based compensation, value | 2,682 | 2,682 | |||
Tax withholding for stock compensation plans, value | (7) | (7) | |||
Issued pursuant to exercise of warrants, shares | 11,872 | ||||
Issued pursuant to exercise of warrants, value | 292 | $ 0 | 292 | ||
Net income (loss) | $ (77,695) | (77,695) | |||
Ending balance, shares at Jun. 30, 2021 | 50,017,491 | 50,017,491 | |||
Ending balance at Jun. 30, 2021 | $ 927,198 | $ 50 | $ 1,125,143 | $ (197,995) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Note 1. Basis of Presentation Organization and Nature of Operations Denbury Inc. (“Denbury,” “Company” or the “Successor”), a Delaware corporation, is an independent energy company with operations focused in the Gulf Coast and Rocky Mountain regions. The Company is differentiated by its focus on CO 2 enhanced oil recovery (“EOR”) and the emerging carbon capture, use, and storage (“CCUS”) industry, supported by the Company’s CO 2 EOR technical and operational expertise and its extensive CO 2 pipeline infrastructure. The utilization of captured industrial-sourced CO 2 in EOR significantly reduces the carbon footprint of the oil that Denbury produces, underpinning the Company’s goal to fully offset its Scope 1, 2, and 3 CO 2 emissions within this decade, primarily through increasing the amount of captured industrial-sourced CO 2 used in its operations. Emergence from Voluntary Reorganization Under Chapter 11 of the Bankruptcy Code On July 30, 2020, Denbury Resources Inc. (the “Predecessor”) and its subsidiaries filed petitions for reorganization in a “prepackaged” voluntary bankruptcy under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) under the caption “ In re Denbury Resources Inc., et al. , Case No. 20-33801”. On September 2, 2020, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the prepackaged joint plan of reorganization (the “Plan”) and approving the Disclosure Statement, and on September 18, 2020 (the “Emergence Date”), the Plan became effective in accordance with its terms and the Company emerged from Chapter 11 as the successor reporting company of Denbury Resources Inc. On April 23, 2021, the Bankruptcy Court entered a final decree closing the Chapter 11 case captioned “ In re Denbury Resources Inc., et al. , Case No. 20-33801”, so all of the Chapter 11 cases have been closed. Upon emergence from bankruptcy, we met the criteria and were required to adopt fresh start accounting in accordance with Financial Accounting Standards Board Codification (“FASC”) Topic 852, Reorganizations . Fresh start accounting requires that new fair values be established for the Company’s assets, liabilities and equity as of the Emergence Date, and therefore certain values and operational results of the condensed consolidated financial statements subsequent to September 18, 2020 are not comparable to those in the Company’s condensed consolidated financial statements prior to, and including September 18, 2020. The Emergence Date fair values of the Successor’s assets and liabilities differ materially from their recorded values as reflected on the historical balance sheets of the Predecessor contained in periodic reports previously filed with the Securities and Exchange Commission. References to “Successor” relate to the financial position and results of operations of the Company subsequent to September 18, 2020, and references to “Predecessor” relate to the financial position and results of operations of the Company prior to, and including, September 18, 2020. Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of Denbury Inc. and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements and the notes thereto should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Form 10-K”). Unless indicated otherwise or the context requires, the terms “we,” “our,” “us,” “Company” or “Denbury,” refer to Denbury Inc. and its subsidiaries. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end, and the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of our consolidated financial position as of June 30, 2021 (Successor); our consolidated results of operations for the three and six months ended June 30, 2021 (Successor) and June 30, 2020 (Predecessor); our consolidated cash flows for the six months ended June 30, 2021 (Successor) and June 30, 2020 (Predecessor); and our consolidated statements of changes in stockholders’ equity for the three and six months ended June 30, 2021 (Successor), for the period January 1, 2020 through September 18, 2020 (Predecessor), and for the period September 19, 2020 through December 31, 2020 (Successor). Upon the adoption of fresh start accounting, the Company’s assets and liabilities were recorded at their fair values as of the fresh start reporting date. As a result of the adoption of fresh start accounting, certain values and operational results of the Company’s condensed consolidated financial statements subsequent to September 18, 2020 are not comparable to those in its condensed consolidated financial statements prior to, and including September 18, 2020. Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on our reported net income (loss), current assets, total assets, current liabilities, total liabilities or stockholders’ equity. Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents, and restricted cash at end of period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: Successor In thousands June 30, 2021 December 31, 2020 Cash and cash equivalents $ 13,565 $ 518 Restricted cash, current — 1,000 Restricted cash included in other assets 46,200 40,730 Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 59,765 $ 42,248 Restricted cash included in other assets in the table above consists of escrow accounts that are legally restricted for certain of our asset retirement obligations, and are included in “Other assets” in the accompanying Unaudited Condensed Consolidated Balance Sheets. Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is calculated in the same manner but includes the impact of potentially dilutive securities. Potentially dilutive securities during the Successor periods consist of nonvested restricted stock units and outstanding series A and series B warrants, and during the Predecessor periods consisted of nonvested restricted stock, nonvested performance-based equity awards, and convertible senior notes . For the three and six months ended June 30, 2021 and 2020, there were no adjustments to net loss for purposes of calculating basic and diluted net loss per common share. The following is a reconciliation of the weighted average shares used in the basic and diluted net loss per common share calculations for the periods indicated: Successor Predecessor Successor Predecessor In thousands Three Months Ended Three Months Ended Six Months Ended Six Months Ended Weighted average common shares outstanding – basic 50,999 495,245 50,661 494,752 Effect of potentially dilutive securities Restricted stock units — — — Warrants — — — — Restricted stock and performance-based equity awards — — — — Convertible senior notes (1) — — — — Weighted average common shares outstanding – diluted (2) 50,999 495,245 50,661 494,752 (1) In connection with the Company’s emergence from bankruptcy on September 18, 2020, all outstanding convertible senior notes were fully extinguished. (2) If the Company had recognized net income, the weighted average diluted shares outstanding would have been 54.3 million and 587.1 million for the three months ended June 30, 2021 and 2020, respectively, and 52.7 million and 586.6 million for the six months ended June 30, 2021 and 2020, respectively. Basic weighted average common shares during the Successor periods includes 987,987 and 563,416 performance stock units during the three and six months ended June 30, 2021, respectively, with vesting parameters tied to the Company’s common stock trading prices and which became fully vested on March 3, 2021. Although the performance measures for vesting of these awards have been achieved, the shares underlying these awards are not currently outstanding as actual delivery of the shares is not scheduled to occur until after the end of the performance period, December 4, 2023. Basic weighted average common shares during the Predecessor periods included time-vesting restricted stock that vested during the periods. The following outstanding securities were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive, as of the respective dates: Successor Predecessor In thousands June 30, 2021 June 30, 2020 Restricted stock units 1,255 — Warrants 5,503 — Stock appreciation rights — 1,493 Nonvested time-based restricted stock and performance-based equity awards — 5,572 Convertible senior notes — 83,495 For the Successor period, the Company’s restricted stock units and series A and series B warrants were antidilutive based on the Company’s net loss position for the period. At June 30, 2021, the Company had approximately 5.5 million warrants outstanding that can be exercised for shares of the Successor’s common stock, at an exercise price of $32.59 per share for the 2.6 million series A warrants and at an exercise price of $35.41 per share for the 2.9 million series B warrants. The series A warrants are exercisable until September 18, 2025, and the series B warrants are exercisable until September 18, 2023, at which time the warrants expire. The warrants were issued pursuant to the Plan to holders of the Predecessor’s convertible senior notes, senior subordinated notes, and equity. As of June 30, 2021, 2,315 series A warrants and 20,927 series B warrants had been exercised. The warrants may be exercised for cash or on a cashless basis. If warrants are exercised on a cashless basis, the amount of dilution will be less than 5.5 million shares. Oil and Natural Gas Properties Unevaluated Costs. Under full cost accounting, we exclude certain unevaluated costs from the amortization base and full cost ceiling test pending the determination of whether proved reserves can be assigned to such properties. These costs are transferred to the full cost amortization base as these properties are developed, tested and evaluated. At least annually, we test these assets for impairment based on an evaluation of management’s expectations of future pricing, evaluation of lease expiration terms, and planned development activities. In the first quarter of 2020 Predecessor period, given the significant declines in NYMEX oil prices in March and April 2020, we reassessed our development plans and transferred $244.9 million of our unevaluated costs to the full cost amortization base. Upon emergence from bankruptcy, the Company adopted fresh start accounting which resulted in our oil and natural gas properties, including unevaluated properties, being recorded at their fair values at the Emergence Date. Write-Down of Oil and Natural Gas Properties. Under full cost accounting, the net capitalized costs of oil and natural gas properties are limited to the lower of unamortized cost or the cost center ceiling. The cost center ceiling is defined as (1) the present value of estimated future net revenues from proved oil and natural gas reserves before future abandonment costs (discounted at 10%), based on the average first-day-of-the-month oil and natural gas price for each month during a 12-month rolling period prior to the end of a particular reporting period; plus (2) the cost of properties not being amortized; plus (3) the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any; less (4) related income tax effects. Our future net revenues from proved oil and natural gas reserves are not reduced for development costs related to the cost of drilling for and developing CO 2 reserves nor those related to the cost of constructing CO 2 pipelines, as we do not have to incur additional CO 2 capital costs to develop the proved oil and natural gas reserves. Therefore, we include in the ceiling test, as a reduction of future net revenues, that portion of our capitalized CO 2 costs related to CO 2 reserves and CO 2 pipelines that we estimate will be consumed in the process of producing our proved oil and natural gas reserves. The fair value of our oil and natural gas derivative contracts is not included in the ceiling test, as we do not designate these contracts as hedge instruments for accounting purposes. The cost center ceiling test is prepared quarterly. We recognized a full cost pool ceiling test write-down of $14.4 million during the three months ended March 31, 2021, with first-day-of-the-month NYMEX oil prices for the preceding 12 months averaging $36.40 per Bbl, after adjustments for market differentials and transportation expenses by field. The write-down was primarily a result of the recent acquisition (see Note 2 – Acquisition and Divestiture ) which was recorded based on a valuation that utilized NYMEX strip oil prices at the acquisition date, which were significantly higher than the average first-day-of-the-month NYMEX oil prices used to value the cost ceiling. We also recognized full cost pool ceiling test write-downs of $662.4 million and $72.5 million during the Predecessor three months ended June 30, 2020 and March 31, 2020, respectively. We did not record a ceiling test write-down during the three months ended June 30, 2021. Recent Accounting Pronouncements Recently Adopted Income Taxes. In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The objective of ASU 2019-12 is to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and to provide more consistent application to improve the comparability of financial statements. Effective January 1, 2021, we adopted ASU 2019-02. The implementation of this standard did not have a material impact on our consolidated financial statements and related footnote disclosures. |
Acquisition and Divestiture
Acquisition and Divestiture | 6 Months Ended |
Jun. 30, 2021 | |
Business Combinations [Abstract] | |
Acquisition and Divestiture | Note 2. Acquisition and Divestiture Acquisition of Wyoming CO 2 EOR Fields On March 3, 2021, we acquired a nearly 100% working interest (approximately 83% net revenue interest) in the Big Sand Draw and Beaver Creek EOR fields located in Wyoming from a subsidiary of Devon Energy Corporation for $10.7 million cash (before final closing adjustments), including surface facilities and a 46-mile CO 2 transportation pipeline to the acquired fields. The acquisition agreement provides for us to make two contingent cash payments, one in January 2022 and one in January 2023, of $4 million each, conditioned on NYMEX WTI oil prices averaging at least $50 per Bbl during 2021 and 2022, respectively. The fair value of the contingent consideration on the acquisition date was $5.3 million, and as of June 30, 2021, the fair value of the contingent consideration recorded on our unaudited condensed consolidated balance sheets was $7.0 million. The $1.7 million increase from the March 2021 acquisition date fair value was the result of higher NYMEX WTI oil prices and was recorded to “Other expenses” in our Unaudited Condensed Consolidated Statements of Operations. The fair values allocated to our assets acquired and liabilities assumed for the acquisition were based on significant inputs not observable in the market and considered level 3 inputs. The following table presents a summary of the fair value of assets acquired and liabilities assumed in the acquisition: In thousands Consideration: Cash consideration $ 10,657 Less: Fair value of assets acquired and liabilities assumed: (1) Proved oil and natural gas properties 59,852 Other property and equipment 1,685 Asset retirement obligations (39,794) Contingent consideration (5,320) Other liabilities (5,766) Fair value of net assets acquired $ 10,657 (1) Fair value of assets acquired and liabilities assumed is preliminary, pending final closing adjustments and further evaluation of reserves and liabilities assumed. Divestiture of Hartzog Draw Deep Mineral Rights On June 30, 2021, we closed the sale of undeveloped, unconventional deep mineral rights in Hartzog Draw Field in Wyoming. The cash proceeds of $18 million were recorded to “Proved properties” in our Unaudited Condensed Consolidated Balance Sheets. The proceeds reduced our full cost pool; therefore, no gain or loss was recorded on the transaction, and the sale had no impact on our production or reserves. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 3. Revenue Recognition We record revenue in accordance with FASC Topic 606, Revenue from Contracts with Customers . The core principle of FASC Topic 606 is that an entity should recognize revenue for the transfer of goods or services equal to the amount of consideration that it expects to be entitled to receive for those goods or services. Once we have delivered the volume of commodity to the delivery point and the customer takes delivery and possession, we are entitled to payment and we invoice the customer for such delivered production. Payment under most oil and CO 2 contracts is received within a month following product delivery and for natural gas and NGL contracts payment is generally received within two months following delivery. Timing of revenue recognition may differ from the timing of invoicing to customers; however, as the right to consideration after delivery is unconditional based on only the passage of time before payment of the consideration is due, upon delivery we record a receivable in “Accrued production receivable” in our Unaudited Condensed Consolidated Balance Sheets. From time to time, the Company enters into marketing arrangements for the purchase and sale of crude oil for third parties. Revenues and expenses from these transactions are presented on a gross basis, as we act as a principal in the transaction by assuming control of the commodities purchased and responsibility to deliver the commodities sold. Revenue is recognized when control transfers to the purchaser at the delivery point based on the price received from the purchaser. Disaggregation of Revenue The following table summarizes our revenues by product type: Successor Predecessor Successor Predecessor In thousands Three Months Ended Three Months Ended Six Months Ended Six Months Ended Oil sales $ 280,577 $ 108,538 $ 513,621 $ 337,115 Natural gas sales 2,131 849 4,532 1,896 CO 2 sales and transportation fees 10,134 6,504 19,362 14,532 Oil marketing revenues 7,819 1,490 13,945 5,211 Total revenues $ 300,661 $ 117,381 $ 551,460 $ 358,754 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 4. Long-Term Debt The table below reflects long-term debt outstanding as of the dates indicated: Successor In thousands June 30, 2021 December 31, 2020 Senior Secured Bank Credit Agreement $ 35,000 $ 70,000 Pipeline financings 34,498 68,008 Total debt principal balance 69,498 138,008 Less: current maturities of long-term debt (34,498) (68,008) Long-term debt $ 35,000 $ 70,000 Senior Secured Bank Credit Agreement On the Emergence Date, we entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and other lenders party thereto (the “Bank Credit Agreement”). The Bank Credit Agreement is a senior secured revolving credit facility with an initial borrowing base and lender commitments of $575 million. Availability under the Bank Credit Agreement is subject to a borrowing base, which is redetermined semiannually on or around May 1 and November 1 of each year, with our next scheduled redetermination around November 1, 2021. The borrowing base is adjusted at the lenders’ discretion and is based, in part, upon external factors over which we have no control. If our outstanding debt under the Bank Credit Agreement exceeds the then-effective borrowing base, we would be required to repay the excess amount over a period not to exceed six months. The Bank Credit Agreement matures on January 30, 2024. The weighted average interest rate on borrowings outstanding as of June 30, 2021 under the Bank Credit Agreement was 4.0%. The undrawn portion of the aggregate lender commitments under the Bank Credit Agreement is subject to a commitment fee of 0.5% per annum. The Bank Credit Agreement prohibits us from paying dividends on our common stock through September 17, 2021. Commencing on September 18, 2021, we may pay dividends on our common stock or make other restricted payments in an amount not to exceed “Distributable Free Cash Flow”, but only if (1) no event of default or borrowing base deficiency exists; (2) our total leverage ratio is 2 to 1 or lower; and (3) availability under the Bank Credit Agreement is at least 20%. The Bank Credit Agreement also limits our ability to, among other things, incur and repay other indebtedness; grant liens; engage in certain mergers, consolidations, liquidations and dissolutions; engage in sales of assets; make acquisitions and investments; make other restricted payments (including redeeming, repurchasing or retiring our common stock); and enter into commodity derivative agreements, in each case subject to customary exceptions. The Successor Bank Credit Agreement is secured by (1) our proved oil and natural gas properties, which are held through our restricted subsidiaries; (2) the pledge of equity interests of such subsidiaries; (3) a pledge of our commodity derivative agreements; (4) a pledge of deposit accounts, securities accounts and our commodity accounts; and (5) a security interest in substantially all other collateral that may be perfected by a Uniform Commercial Code filing, subject to certain exceptions. The Bank Credit Agreement contains certain financial performance covenants including the following: • A Consolidated Total Debt to Consolidated EBITDAX covenant (as defined in the Bank Credit Agreement), with such ratio not to exceed 3.5 times; and • A requirement to maintain a current ratio (i.e., Consolidated Current Assets to Consolidated Current Liabilities) of 1.0 time. For purposes of computing the current ratio per the Bank Credit Agreement, Consolidated Current Assets exclude the current portion of derivative assets but include available borrowing capacity under the Bank Credit Agreement, and Consolidated Current Liabilities exclude the current portion of derivative liabilities as well as the current portions of long-term indebtedness outstanding. As of June 30, 2021, we were in compliance with all debt covenants under the Bank Credit Agreement. The above description of our Bank Credit Agreement is qualified by the express language and defined terms contained in the Bank Credit Agreement. Pipeline Financing Transactions During the first half of 2021, Denbury paid $35.0 million to Genesis Energy, L.P., half of the four quarterly installments totaling $70 million to be paid during 2021 in accordance with the October 2020 restructuring of the financing arrangements of our NEJD CO 2 pipeline system. The third quarterly installment of $17.5 million was paid in July 2021, and the final quarterly payment of $17.5 million is payable on October 31, 2021. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 5. Income Taxes We evaluate our estimated annual effective income tax rate based on current and forecasted business results and enacted tax laws on a quarterly basis and apply this tax rate to our ordinary income or loss to calculate our estimated tax liability or benefit. Our income taxes are based on an estimated combined federal and state statutory rate of approximately 25% in 2021 and 2020. Our effective tax rates for the three and six months ended June 30, 2021 (Successor) differed from our estimated statutory rate as the deferred tax benefit generated from our operating losses were offset by a valuation allowance applied to our underlying federal and state deferred tax assets. |
Commodity Derivative Contracts
Commodity Derivative Contracts | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity Derivative Contracts | Note 6. Commodity Derivative Contracts We do not apply hedge accounting treatment to our oil and natural gas derivative contracts; therefore, the changes in the fair values of these instruments are recognized in income in the period of change. These fair value changes, along with the settlements of expired contracts, are shown under “Commodity derivatives expense (income)” in our Unaudited Condensed Consolidated Statements of Operations. Historically, we have entered into various oil and natural gas derivative contracts to provide an economic hedge of our exposure to commodity price risk associated with anticipated future oil and natural gas production and to provide more certainty to our future cash flows. We do not hold or issue derivative financial instruments for trading purposes. Generally, these contracts have consisted of various combinations of price floors, collars, three-way collars, fixed-price swaps, fixed-price swaps enhanced with a sold put, and basis swaps. The production that we hedge has varied from year to year depending on our levels of debt, financial strength and expectation of future commodity prices. In addition, our new senior secured bank credit facility entered into on the Emergence Date required that, by December 31, 2020, we have certain minimum commodity hedge levels in place covering anticipated crude oil production through July 31, 2022. The requirement is non-recurring, and we were in compliance with the hedging requirements as of December 31, 2020. We manage and control market and counterparty credit risk through established internal control procedures that are reviewed on an ongoing basis. We attempt to minimize credit risk exposure to counterparties through formal credit policies, monitoring procedures and diversification, and all of our commodity derivative contracts are with parties that are lenders under our Bank Credit Agreement (or affiliates of such lenders). As of June 30, 2021, all of our outstanding derivative contracts were subject to enforceable master netting arrangements whereby payables on those contracts can be offset against receivables from separate derivative contracts with the same counterparty. It is our policy to classify derivative assets and liabilities on a gross basis on our balance sheets, even if the contracts are subject to enforceable master netting arrangements. The following table summarizes our commodity derivative contracts as of June 30, 2021, none of which are classified as hedging instruments in accordance with the FASC Derivatives and Hedging topic: Months Index Price Volume (Barrels per day) Contract Prices ($/Bbl) Range (1) Weighted Average Price Swap Floor Ceiling Oil Contracts: 2021 Fixed-Price Swaps July – Dec NYMEX 29,000 $ 38.68 – 56.00 $ 43.86 $ — $ — 2021 Collars July – Dec NYMEX 4,000 $ 45.00 – 59.30 $ — $ 46.25 $ 53.04 2022 Fixed-Price Swaps Jan – June NYMEX 15,500 $ 42.65 – 58.15 $ 49.01 $ — $ — July – Dec NYMEX 9,000 50.13 – 60.35 56.35 — — 2022 Collars Jan – June NYMEX 11,000 $ 47.50 – 70.75 $ — $ 49.77 $ 64.31 July – Dec NYMEX 10,000 47.50 – 70.75 — 49.75 64.18 (1) Ranges presented for fixed-price swaps represent the lowest and highest fixed prices of all open contracts for the period presented. For collars, ranges represent the lowest floor price and highest ceiling price for all open contracts for the period presented. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 7. Fair Value Measurements The FASC Fair Value Measurement topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (often referred to as the “exit price”). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We primarily apply the income approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. We are able to classify fair value balances based on the observability of those inputs. The FASC establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities as of the reporting date. • Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. Instruments in this category include non-exchange-traded oil derivatives that are based on NYMEX and regional pricing other than NYMEX (e.g., Light Louisiana Sweet). Our costless collars and the sold put features of our three-way collars are valued using the Black-Scholes model, an industry standard option valuation model that takes into account inputs such as contractual prices for the underlying instruments, maturity, quoted forward prices for commodities, interest rates, volatility factors and credit worthiness, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. • Level 3 – Pricing inputs include significant inputs that are generally less observable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. We adjust the valuations from the valuation model for nonperformance risk, using our estimate of the counterparty’s credit quality for asset positions and our credit quality for liability positions. We use multiple sources of third-party credit data in determining counterparty nonperformance risk, including credit default swaps. The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that were accounted for at fair value on a recurring basis as of the periods indicated: Fair Value Measurements Using: In thousands Quoted Prices Significant Significant Total June 30, 2021 Liabilities Oil derivative contracts – current $ — $ (223,212) $ — $ (223,212) Oil derivative contracts – long-term — (22,164) — (22,164) Total Liabilities $ — $ (245,376) $ — $ (245,376) December 31, 2020 Assets Oil derivative contracts – current $ — $ 187 $ — $ 187 Total Assets $ — $ 187 $ — $ 187 Liabilities Oil derivative contracts – current $ — $ (53,865) $ — $ (53,865) Oil derivative contracts – long-term — (5,087) — (5,087) Total Liabilities $ — $ (58,952) $ — $ (58,952) Since we do not apply hedge accounting for our commodity derivative contracts, any gains and losses on our assets and liabilities are included in “Commodity derivatives expense (income)” in the accompanying Unaudited Condensed Consolidated Statements of Operations. Other Fair Value Measurements The carrying value of our loans under our Bank Credit Agreement approximate fair value, as they are subject to short-term floating interest rates that approximate the rates available to us for those periods. The estimated fair value of the principal amount of our debt as of June 30, 2021 and December 31, 2020, excluding pipeline financing obligations, was $35.0 million and $70.0 million. We have other financial instruments consisting primarily of cash, cash equivalents, U.S. Treasury notes, short-term receivables and payables that approximate fair value due to the nature of the instrument and the relatively short maturities. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies Chapter 11 Proceedings On July 30, 2020, Denbury Resources Inc. and each of its wholly-owned subsidiaries filed for relief under chapter 11 of the Bankruptcy Code. The chapter 11 cases were administered jointly under the caption “ In re Denbury Resources Inc., et al. , Case No. 20-33801”. On September 2, 2020, the Bankruptcy Court entered the Confirmation Order and on the Emergence Date, all of the conditions of the Plan were satisfied or waived and the Plan became effective and was implemented in accordance with its terms. On September 30, 2020, the Bankruptcy Court closed the chapter 11 cases of each of Denbury Inc.’s wholly-owned subsidiaries. On April 23, 2021, the Bankruptcy Court entered a final decree closing the Chapter 11 case captioned “ In re Denbury Resources Inc., et al. , Case No. 20-33801”, so all of the Chapter 11 cases have been closed. Litigation We are involved in various lawsuits, claims and regulatory proceedings incidental to our businesses. We are also subject to audits for various taxes (income, sales and use, and severance) in the various states in which we operate, and from time to time receive assessments for potential taxes that we may owe. While we currently believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on our financial position, results of operations or cash flows, litigation is subject to inherent uncertainties. We accrue for losses from litigation and claims if we determine that a loss is probable and the amount can be reasonably estimated. |
Additional Balance Sheet Detail
Additional Balance Sheet Details | 6 Months Ended |
Jun. 30, 2021 | |
Disclosure Text Block [Abstract] | |
Additional Balance Sheet Details | Note 9. Additional Balance Sheet Details Trade and Other Receivables, Net Successor In thousands June 30, 2021 December 31, 2020 Trade accounts receivable, net $ 11,795 $ 11,691 Federal income tax receivable, net 597 597 Commodity derivative settlement receivables — 5,716 Other receivables (1) 12,348 1,678 Total $ 24,740 $ 19,682 (1) Primarily consists of a currently estimated $9.9 million benefit under the Company’s power agreements for reduced power usage during the winter storms in February 2021. Accounts Payable and Accrued Liabilities Successor In thousands June 30, 2021 December 31, 2020 Accounts payable $ 27,166 $ 18,629 Accrued derivative settlements 26,121 3,908 Accrued lease operating expenses 24,802 21,294 Accrued compensation 21,428 7,512 Accrued exploration and development costs 12,361 1,861 Taxes payable 10,180 17,221 Accrued general and administrative expenses 4,432 21,825 Other 37,415 20,421 Total $ 163,905 $ 112,671 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations Denbury Inc. (“Denbury,” “Company” or the “Successor”), a Delaware corporation, is an independent energy company with operations focused in the Gulf Coast and Rocky Mountain regions. The Company is differentiated by its focus on CO 2 enhanced oil recovery (“EOR”) and the emerging carbon capture, use, and storage (“CCUS”) industry, supported by the Company’s CO 2 EOR technical and operational expertise and its extensive CO 2 pipeline infrastructure. The utilization of captured industrial-sourced CO 2 in EOR significantly reduces the carbon footprint of the oil that Denbury produces, underpinning the Company’s goal to fully offset its Scope 1, 2, and 3 CO 2 emissions within this decade, primarily through increasing the amount of captured industrial-sourced CO 2 used in its operations. |
Interim Financial Statements - Basis of Accounting, Policy | Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of Denbury Inc. and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements and the notes thereto should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Form 10-K”). Unless indicated otherwise or the context requires, the terms “we,” “our,” “us,” “Company” or “Denbury,” refer to Denbury Inc. and its subsidiaries. |
Interim Financial Statements - Use of Estimates | Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end, and the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of our consolidated financial position as of June 30, 2021 (Successor); our consolidated results of operations for the three and six months ended June 30, 2021 (Successor) and June 30, 2020 (Predecessor); our consolidated cash flows for the six months ended June 30, 2021 (Successor) and June 30, 2020 (Predecessor); and our consolidated statements of changes in stockholders’ equity for the three and six months ended June 30, 2021 (Successor), for the period January 1, 2020 through September 18, 2020 (Predecessor), and for the period September 19, 2020 through December 31, 2020 (Successor). Upon the adoption of fresh start accounting, the Company’s assets and liabilities were recorded at their fair values as of the fresh start reporting date. As a result of the adoption of fresh start accounting, certain values and operational results of the Company’s condensed consolidated financial statements subsequent to September 18, 2020 are not comparable to those in its condensed consolidated financial statements prior to, and including September 18, 2020. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on our reported net income (loss), current assets, total assets, current liabilities, total liabilities or stockholders’ equity. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents, and restricted cash at end of period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: Successor In thousands June 30, 2021 December 31, 2020 Cash and cash equivalents $ 13,565 $ 518 Restricted cash, current — 1,000 Restricted cash included in other assets 46,200 40,730 Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 59,765 $ 42,248 Restricted cash included in other assets in the table above consists of escrow accounts that are legally restricted for certain of our asset retirement obligations, and are included in “Other assets” in the accompanying Unaudited Condensed Consolidated Balance Sheets. |
Net Loss per Common Share | Net Income (Loss) per Common Share Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is calculated in the same manner but includes the impact of potentially dilutive securities. Potentially dilutive securities during the Successor periods consist of nonvested restricted stock units and outstanding series A and series B warrants, and during the Predecessor periods consisted of nonvested restricted stock, nonvested performance-based equity awards, and convertible senior notes . For the three and six months ended June 30, 2021 and 2020, there were no adjustments to net loss for purposes of calculating basic and diluted net loss per common share. The following is a reconciliation of the weighted average shares used in the basic and diluted net loss per common share calculations for the periods indicated: Successor Predecessor Successor Predecessor In thousands Three Months Ended Three Months Ended Six Months Ended Six Months Ended Weighted average common shares outstanding – basic 50,999 495,245 50,661 494,752 Effect of potentially dilutive securities Restricted stock units — — — Warrants — — — — Restricted stock and performance-based equity awards — — — — Convertible senior notes (1) — — — — Weighted average common shares outstanding – diluted (2) 50,999 495,245 50,661 494,752 (1) In connection with the Company’s emergence from bankruptcy on September 18, 2020, all outstanding convertible senior notes were fully extinguished. (2) If the Company had recognized net income, the weighted average diluted shares outstanding would have been 54.3 million and 587.1 million for the three months ended June 30, 2021 and 2020, respectively, and 52.7 million and 586.6 million for the six months ended June 30, 2021 and 2020, respectively. Basic weighted average common shares during the Successor periods includes 987,987 and 563,416 performance stock units during the three and six months ended June 30, 2021, respectively, with vesting parameters tied to the Company’s common stock trading prices and which became fully vested on March 3, 2021. Although the performance measures for vesting of these awards have been achieved, the shares underlying these awards are not currently outstanding as actual delivery of the shares is not scheduled to occur until after the end of the performance period, December 4, 2023. Basic weighted average common shares during the Predecessor periods included time-vesting restricted stock that vested during the periods. The following outstanding securities were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive, as of the respective dates: Successor Predecessor In thousands June 30, 2021 June 30, 2020 Restricted stock units 1,255 — Warrants 5,503 — Stock appreciation rights — 1,493 Nonvested time-based restricted stock and performance-based equity awards — 5,572 Convertible senior notes — 83,495 |
Oil and Natural Gas Properties | Oil and Natural Gas Properties Unevaluated Costs. Under full cost accounting, we exclude certain unevaluated costs from the amortization base and full cost ceiling test pending the determination of whether proved reserves can be assigned to such properties. These costs are transferred to the full cost amortization base as these properties are developed, tested and evaluated. At least annually, we test these assets for impairment based on an evaluation of management’s expectations of future pricing, evaluation of lease expiration terms, and planned development activities. In the first quarter of 2020 Predecessor period, given the significant declines in NYMEX oil prices in March and April 2020, we reassessed our development plans and transferred $244.9 million of our unevaluated costs to the full cost amortization base. Upon emergence from bankruptcy, the Company adopted fresh start accounting which resulted in our oil and natural gas properties, including unevaluated properties, being recorded at their fair values at the Emergence Date. Write-Down of Oil and Natural Gas Properties. Under full cost accounting, the net capitalized costs of oil and natural gas properties are limited to the lower of unamortized cost or the cost center ceiling. The cost center ceiling is defined as (1) the present value of estimated future net revenues from proved oil and natural gas reserves before future abandonment costs (discounted at 10%), based on the average first-day-of-the-month oil and natural gas price for each month during a 12-month rolling period prior to the end of a particular reporting period; plus (2) the cost of properties not being amortized; plus (3) the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any; less (4) related income tax effects. Our future net revenues from proved oil and natural gas reserves are not reduced for development costs related to the cost of drilling for and developing CO 2 reserves nor those related to the cost of constructing CO 2 pipelines, as we do not have to incur additional CO 2 capital costs to develop the proved oil and natural gas reserves. Therefore, we include in the ceiling test, as a reduction of future net revenues, that portion of our capitalized CO 2 costs related to CO 2 reserves and CO 2 pipelines that we estimate will be consumed in the process of producing our proved oil and natural gas reserves. The fair value of our oil and natural gas derivative contracts is not included in the ceiling test, as we do not designate these contracts as hedge instruments for accounting purposes. The cost center ceiling test is prepared quarterly. We recognized a full cost pool ceiling test write-down of $14.4 million during the three months ended March 31, 2021, with first-day-of-the-month NYMEX oil prices for the preceding 12 months averaging $36.40 per Bbl, after adjustments for market differentials and transportation expenses by field. The write-down was primarily a result of the recent acquisition (see Note 2 – Acquisition and Divestiture ) which was recorded based on a valuation that utilized NYMEX strip oil prices at the acquisition date, which were significantly higher than the average first-day-of-the-month NYMEX oil prices used to value the cost ceiling. We also recognized full cost pool ceiling test write-downs of $662.4 million and $72.5 million during the Predecessor three months ended June 30, 2020 and March 31, 2020, respectively. We did not record a ceiling test write-down during the three months ended June 30, 2021. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Income Taxes. In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The objective of ASU 2019-12 is to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and to provide more consistent application to improve the comparability of financial statements. Effective January 1, 2021, we adopted ASU 2019-02. The implementation of this standard did not have a material impact on our consolidated financial statements and related footnote disclosures. |
Revenue Recognition | We record revenue in accordance with FASC Topic 606, Revenue from Contracts with Customers . The core principle of FASC Topic 606 is that an entity should recognize revenue for the transfer of goods or services equal to the amount of consideration that it expects to be entitled to receive for those goods or services. Once we have delivered the volume of commodity to the delivery point and the customer takes delivery and possession, we are entitled to payment and we invoice the customer for such delivered production. Payment under most oil and CO 2 contracts is received within a month following product delivery and for natural gas and NGL contracts payment is generally received within two months following delivery. Timing of revenue recognition may differ from the timing of invoicing to customers; however, as the right to consideration after delivery is unconditional based on only the passage of time before payment of the consideration is due, upon delivery we record a receivable in “Accrued production receivable” in our Unaudited Condensed Consolidated Balance Sheets. From time to time, |
Income Taxes | We evaluate our estimated annual effective income tax rate based on current and forecasted business results and enacted tax laws on a quarterly basis and apply this tax rate to our ordinary income or loss to calculate our estimated tax liability or benefit. Our income taxes are based on an estimated combined federal and state statutory rate of approximately 25% in 2021 and 2020. |
Commodity Derivative Contracts | We do not apply hedge accounting treatment to our oil and natural gas derivative contracts; therefore, the changes in the fair values of these instruments are recognized in income in the period of change. These fair value changes, along with the settlements of expired contracts, are shown under “Commodity derivatives expense (income)” in our Unaudited Condensed Consolidated Statements of Operations. Historically, we have entered into various oil and natural gas derivative contracts to provide an economic hedge of our exposure to commodity price risk associated with anticipated future oil and natural gas production and to provide more certainty to our future cash flows. We do not hold or issue derivative financial instruments for trading purposes. Generally, these contracts have consisted of various combinations of price floors, collars, three-way collars, fixed-price swaps, fixed-price swaps enhanced with a sold put, and basis swaps. The production that we hedge has varied from year to year depending on our levels of debt, financial strength and expectation of future commodity prices. In addition, our new senior secured bank credit facility entered into on the Emergence Date required that, by December 31, 2020, we have certain minimum commodity hedge levels in place covering anticipated crude oil production through July 31, 2022. The requirement is non-recurring, and we were in compliance with the hedging requirements as of December 31, 2020. |
Fair Value Measurements | The FASC Fair Value Measurement topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (often referred to as the “exit price”). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We primarily apply the income approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. We are able to classify fair value balances based on the observability of those inputs. The FASC establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities as of the reporting date. • Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. Instruments in this category include non-exchange-traded oil derivatives that are based on NYMEX and regional pricing other than NYMEX (e.g., Light Louisiana Sweet). Our costless collars and the sold put features of our three-way collars are valued using the Black-Scholes model, an industry standard option valuation model that takes into account inputs such as contractual prices for the underlying instruments, maturity, quoted forward prices for commodities, interest rates, volatility factors and credit worthiness, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. • Level 3 – Pricing inputs include significant inputs that are generally less observable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. We adjust the valuations from the valuation model for nonperformance risk, using our estimate of the counterparty’s credit quality for asset positions and our credit quality for liability positions. We use multiple sources of third-party credit data in determining counterparty nonperformance risk, including credit default swaps. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of cash, cash equivalents, and restricted cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported within the Unaudited Condensed Consolidated Balance Sheets to “Cash, cash equivalents, and restricted cash at end of period” as reported within the Unaudited Condensed Consolidated Statements of Cash Flows: Successor In thousands June 30, 2021 December 31, 2020 Cash and cash equivalents $ 13,565 $ 518 Restricted cash, current — 1,000 Restricted cash included in other assets 46,200 40,730 Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows $ 59,765 $ 42,248 |
Schedule of earnings per share, basic and diluted reconciliation | The following is a reconciliation of the weighted average shares used in the basic and diluted net loss per common share calculations for the periods indicated: Successor Predecessor Successor Predecessor In thousands Three Months Ended Three Months Ended Six Months Ended Six Months Ended Weighted average common shares outstanding – basic 50,999 495,245 50,661 494,752 Effect of potentially dilutive securities Restricted stock units — — — Warrants — — — — Restricted stock and performance-based equity awards — — — — Convertible senior notes (1) — — — — Weighted average common shares outstanding – diluted (2) 50,999 495,245 50,661 494,752 (1) In connection with the Company’s emergence from bankruptcy on September 18, 2020, all outstanding convertible senior notes were fully extinguished. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following outstanding securities were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive, as of the respective dates: Successor Predecessor In thousands June 30, 2021 June 30, 2020 Restricted stock units 1,255 — Warrants 5,503 — Stock appreciation rights — 1,493 Nonvested time-based restricted stock and performance-based equity awards — 5,572 Convertible senior notes — 83,495 |
Acquisition and Divestiture (Ta
Acquisition and Divestiture (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents a summary of the fair value of assets acquired and liabilities assumed in the acquisition: In thousands Consideration: Cash consideration $ 10,657 Less: Fair value of assets acquired and liabilities assumed: (1) Proved oil and natural gas properties 59,852 Other property and equipment 1,685 Asset retirement obligations (39,794) Contingent consideration (5,320) Other liabilities (5,766) Fair value of net assets acquired $ 10,657 (1) Fair value of assets acquired and liabilities assumed is preliminary, pending final closing adjustments and further evaluation of reserves and liabilities assumed. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes our revenues by product type: Successor Predecessor Successor Predecessor In thousands Three Months Ended Three Months Ended Six Months Ended Six Months Ended Oil sales $ 280,577 $ 108,538 $ 513,621 $ 337,115 Natural gas sales 2,131 849 4,532 1,896 CO 2 sales and transportation fees 10,134 6,504 19,362 14,532 Oil marketing revenues 7,819 1,490 13,945 5,211 Total revenues $ 300,661 $ 117,381 $ 551,460 $ 358,754 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Debt | The table below reflects long-term debt outstanding as of the dates indicated: Successor In thousands June 30, 2021 December 31, 2020 Senior Secured Bank Credit Agreement $ 35,000 $ 70,000 Pipeline financings 34,498 68,008 Total debt principal balance 69,498 138,008 Less: current maturities of long-term debt (34,498) (68,008) Long-term debt $ 35,000 $ 70,000 |
Commodity Derivative Contracts
Commodity Derivative Contracts (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity derivative contracts not classified as hedging instruments | The following table summarizes our commodity derivative contracts as of June 30, 2021, none of which are classified as hedging instruments in accordance with the FASC Derivatives and Hedging topic: Months Index Price Volume (Barrels per day) Contract Prices ($/Bbl) Range (1) Weighted Average Price Swap Floor Ceiling Oil Contracts: 2021 Fixed-Price Swaps July – Dec NYMEX 29,000 $ 38.68 – 56.00 $ 43.86 $ — $ — 2021 Collars July – Dec NYMEX 4,000 $ 45.00 – 59.30 $ — $ 46.25 $ 53.04 2022 Fixed-Price Swaps Jan – June NYMEX 15,500 $ 42.65 – 58.15 $ 49.01 $ — $ — July – Dec NYMEX 9,000 50.13 – 60.35 56.35 — — 2022 Collars Jan – June NYMEX 11,000 $ 47.50 – 70.75 $ — $ 49.77 $ 64.31 July – Dec NYMEX 10,000 47.50 – 70.75 — 49.75 64.18 (1) Ranges presented for fixed-price swaps represent the lowest and highest fixed prices of all open contracts for the period presented. For collars, ranges represent the lowest floor price and highest ceiling price for all open contracts for the period presented. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair value hierarchy of financial assets and liabilities | The following table sets forth, by level within the fair value hierarchy, our financial assets and liabilities that were accounted for at fair value on a recurring basis as of the periods indicated: Fair Value Measurements Using: In thousands Quoted Prices Significant Significant Total June 30, 2021 Liabilities Oil derivative contracts – current $ — $ (223,212) $ — $ (223,212) Oil derivative contracts – long-term — (22,164) — (22,164) Total Liabilities $ — $ (245,376) $ — $ (245,376) December 31, 2020 Assets Oil derivative contracts – current $ — $ 187 $ — $ 187 Total Assets $ — $ 187 $ — $ 187 Liabilities Oil derivative contracts – current $ — $ (53,865) $ — $ (53,865) Oil derivative contracts – long-term — (5,087) — (5,087) Total Liabilities $ — $ (58,952) $ — $ (58,952) |
Additional Balance Sheet Deta_2
Additional Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Table Text Block [Abstract] | |
Trade and Other Receivables, Net | Trade and Other Receivables, Net Successor In thousands June 30, 2021 December 31, 2020 Trade accounts receivable, net $ 11,795 $ 11,691 Federal income tax receivable, net 597 597 Commodity derivative settlement receivables — 5,716 Other receivables (1) 12,348 1,678 Total $ 24,740 $ 19,682 (1) Primarily consists of a currently estimated $9.9 million benefit under the Company’s power agreements for reduced power usage during the winter storms in February 2021. |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities Successor In thousands June 30, 2021 December 31, 2020 Accounts payable $ 27,166 $ 18,629 Accrued derivative settlements 26,121 3,908 Accrued lease operating expenses 24,802 21,294 Accrued compensation 21,428 7,512 Accrued exploration and development costs 12,361 1,861 Taxes payable 10,180 17,221 Accrued general and administrative expenses 4,432 21,825 Other 37,415 20,421 Total $ 163,905 $ 112,671 |
Basis of Presentation (Cash, Ca
Basis of Presentation (Cash, Cash Equivalents, and Restricted Cash) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 13,565 | $ 518 | ||
Restricted cash, current | 0 | 1,000 | ||
Restricted cash included in other assets | 46,200 | 40,730 | ||
Total cash, cash equivalents, and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows | $ 59,765 | $ 42,248 | $ 247,642 | $ 33,045 |
Basis of Presentation (Reconcil
Basis of Presentation (Reconciliation of Weighted Average Shares Table) (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||||
Weighted average common shares outstanding - diluted | [1] | 50,999 | 495,245 | 50,661 | 494,752 | ||
Weighted average common shares outstanding - basic | 50,999 | 495,245 | 50,661 | 494,752 | |||
Restricted stock units | 0 | 0 | 0 | ||||
Warrants | 0 | 0 | 0 | 0 | |||
Restricted stock and performance-based equity awards | 0 | 0 | 0 | 0 | |||
Convertible senior notes | 0 | 0 | [2] | 0 | 0 | [2] | |
Net Income Scenario | |||||||
Weighted average common shares outstanding - diluted | 54,300 | 587,100 | 52,700 | 586,600 | |||
[1] | If the Company had recognized net income, the weighted average diluted shares outstanding would have been 54.3 million and 587.1 million for the three months ended June 30, 2021 and 2020, respectively, and 52.7 million and 586.6 million for the six months ended June 30, 2021 and 2020, respectively. | ||||||
[2] | In connection with the Company’s emergence from bankruptcy on September 18, 2020, all outstanding convertible senior notes were fully extinguished. (2) If the Company had recognized net income, the weighted average diluted shares outstanding would have been 54.3 million and 587.1 million for the three months ended June 30, 2021 and 2020, respectively, and 52.7 million and 586.6 million for the six months ended June 30, 2021 and 2020, respectively. |
Basis of Presentation (Antidilu
Basis of Presentation (Antidilutive Securities) (Details) | Jun. 30, 2021shares | Jun. 30, 2020shares |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Warrants | 5,500,000 | |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of antidilutive equity-based instruments outstanding | 1,255,000 | 0 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Warrants | 5,503,000 | 0 |
Stock appreciation rights | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Stock appreciation rights | 0 | 1,493,000 |
Nonvested time-based restricted stock and performance-based equity awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of antidilutive equity-based instruments outstanding | 0 | 5,572,000 |
Convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Convertible senior notes | 0 | 83,495,000 |
Basis of Presentation (Details
Basis of Presentation (Details Textuals) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021warrants$ / sharesshares | Jun. 30, 2020shares | Jun. 30, 2021warrants$ / sharesshares | Jun. 30, 2020shares | |
Class of Warrant or Right [Line Items] | ||||
Weighted average common shares outstanding - basic | 50,999,000 | 495,245,000 | 50,661,000 | 494,752,000 |
Number of warrants outstanding | 5,500,000 | 5,500,000 | ||
Shares issuable upon exercise of series A and B warrants | 5,500,000 | 5,500,000 | ||
Performance share units | ||||
Class of Warrant or Right [Line Items] | ||||
Weighted average common shares outstanding - basic | 987,987 | 563,416 | ||
Series A Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants outstanding | 2,600,000 | 2,600,000 | ||
Exercise price of warrants | $ / shares | $ 32.59 | $ 32.59 | ||
Number of warrants exercised | warrants | 2,315 | 2,315 | ||
Series B Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants outstanding | 2,900,000 | 2,900,000 | ||
Exercise price of warrants | $ / shares | $ 35.41 | $ 35.41 | ||
Number of warrants exercised | warrants | 20,927 | 20,927 |
Basis of Presentation (Detail_2
Basis of Presentation (Details Textuals 2) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($)$ / Barrel | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | |
Oil and Gas, Average Sale Price and Production Cost Per Unit [Line Items] | ||||||
Impairment of unevaluated costs | $ 244,900,000 | |||||
Write-down of oil and natural gas properties | $ 0 | $ 14,400,000 | $ 662,440,000 | $ 72,500,000 | $ 14,377,000 | $ 734,981,000 |
Oil | ||||||
Oil and Gas, Average Sale Price and Production Cost Per Unit [Line Items] | ||||||
Average price | $ / Barrel | 36.40 |
Acquisition and Divestiture (Pu
Acquisition and Divestiture (Purchase Price Allocation) (Details) - Big Sand Draw and Beaver Creek Fields $ in Thousands | Mar. 03, 2021USD ($) |
Business Acquisition [Line Items] | |
Cash consideration | $ 10,657 |
Proved oil and natural gas properties | 59,852 |
Other property and equipment | 1,685 |
Asset retirement obligations | (39,794) |
Contingent consideration | (5,320) |
Other liabilities | (5,766) |
Fair value of net assets acquired | $ 10,657 |
Acquisition and Divestiture (De
Acquisition and Divestiture (Details Textuals) | Jun. 30, 2021USD ($) | Mar. 03, 2021USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2021USD ($)$ / Barrel | Jun. 30, 2020USD ($) |
Business Acquisition, Contingent Consideration [Line Items] | |||||
Approximate working interest percentage acquired | 100.00% | ||||
Approximate net revenue interest percentage acquired | 83.00% | ||||
Acquisitions of oil and natural gas properties | $ 10,700,000 | $ 10,811,000 | $ 0 | ||
Contingent consideration | $ 7,000,000 | $ 7,000,000 | 7,000,000 | ||
Contingent consideration at acquisition date | $ 5,300,000 | ||||
Increase in contingent consideration | 1,700,000 | ||||
Cash proceeds on sale of Hartzog Draw deep mineral rights | 18,000,000 | 18,456,000 | $ 40,971,000 | ||
Gain (loss) on disposition of oil and gas properties | 0 | ||||
2021 | Devon Energy Corporation's Wind River Basin properties | |||||
Business Acquisition, Contingent Consideration [Line Items] | |||||
Contingent cash payment | 4,000,000 | 4,000,000 | $ 4,000,000 | ||
2021 | Minimum | Devon Energy Corporation's Wind River Basin properties | |||||
Business Acquisition, Contingent Consideration [Line Items] | |||||
Average price | $ / Barrel | 50 | ||||
2022 | Devon Energy Corporation's Wind River Basin properties | |||||
Business Acquisition, Contingent Consideration [Line Items] | |||||
Contingent cash payment | $ 4,000,000 | $ 4,000,000 | $ 4,000,000 | ||
2022 | Minimum | Devon Energy Corporation's Wind River Basin properties | |||||
Business Acquisition, Contingent Consideration [Line Items] | |||||
Average price | $ / Barrel | 50 |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 300,661 | $ 117,381 | $ 551,460 | $ 358,754 |
Oil sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 280,577 | 108,538 | 513,621 | 337,115 |
Natural gas sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,131 | 849 | 4,532 | 1,896 |
CO2 sales and transportation fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 10,134 | 6,504 | 19,362 | 14,532 |
Oil marketing revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 7,819 | $ 1,490 | $ 13,945 | $ 5,211 |
Long-Term Debt (Components of L
Long-Term Debt (Components of Long-Term Debt) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Debt and Lease Obligation [Abstract] | ||
Senior Secured Bank Credit Agreement | $ 35,000 | $ 70,000 |
Pipeline financings | 34,498 | 68,008 |
Total debt principal balance | 69,498 | 138,008 |
Less: current maturities of long-term debt | (34,498) | (68,008) |
Long-term debt | $ 35,000 | $ 70,000 |
Long-Term Debt (Details Textual
Long-Term Debt (Details Textuals) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2021 | Jun. 30, 2021 |
Senior Secured Bank Credit Facility [Abstract] | ||||
Borrowing base | $ 575,000,000 | |||
Lender commitments | $ 575,000,000 | |||
Weighted average interest rate | 4.00% | |||
Commitment fee percentage | 0.50% | |||
NEJD Pipeline | ||||
Senior Secured Bank Credit Facility [Abstract] | ||||
Payments to reacquire pipeline | $ 70,000,000 | $ 35,000,000 | ||
NEJD Pipeline | Subsequent Event | ||||
Senior Secured Bank Credit Facility [Abstract] | ||||
Payments to reacquire pipeline | $ 17,500,000 | $ 17,500,000 | ||
Minimum | ||||
Senior Secured Bank Credit Facility [Abstract] | ||||
Current ratio requirement | 1 | |||
Minimum | Dividend or Other Restricted Payment | ||||
Senior Secured Bank Credit Facility [Abstract] | ||||
Borrowing base availability requirement | 20.00% | |||
Maximum | ||||
Senior Secured Bank Credit Facility [Abstract] | ||||
Consolidated total debt to consolidated EBITDAX requirement | 3.5 | |||
Maximum | Dividend or Other Restricted Payment | ||||
Senior Secured Bank Credit Facility [Abstract] | ||||
Consolidated total debt to consolidated EBITDAX requirement | 2 |
Income Taxes (Details Textuals)
Income Taxes (Details Textuals) | 6 Months Ended | |
Jun. 30, 2021Rate | Jun. 30, 2020Rate | |
Income Tax Disclosure [Abstract] | ||
Statutory tax rate | 25.00% | 25.00% |
Commodity Derivative Contract_2
Commodity Derivative Contracts (Commodity Derivatives Outstanding Table) (Details) - NYMEX | Jun. 30, 2021bbl / d$ / Barrel |
Swap | Q3 - Q4 2021 | |
Derivative [Line Items] | |
Volume per day | bbl / d | 29,000 |
Weighted average swap price | 43.86 |
Swap | Q3 - Q4 2021 | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 38.68 |
Swap | Q3 - Q4 2021 | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 56 |
Swap | Q1 - Q2 2022 | |
Derivative [Line Items] | |
Volume per day | bbl / d | 15,500 |
Weighted average swap price | 49.01 |
Swap | Q1 - Q2 2022 | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 42.65 |
Swap | Q1 - Q2 2022 | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 58.15 |
Swap | Q3 - Q4 2022 | |
Derivative [Line Items] | |
Volume per day | bbl / d | 9,000 |
Weighted average swap price | 56.35 |
Swap | Q3 - Q4 2022 | Minimum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 50.13 |
Swap | Q3 - Q4 2022 | Maximum | |
Derivative [Line Items] | |
Derivative, Swap Type, Fixed Price | 60.35 |
Collars | Q3 - Q4 2021 | |
Derivative [Line Items] | |
Volume per day | bbl / d | 4,000 |
Derivative, Floor Price | 45 |
Derivative, Cap Price | 59.30 |
Weighted average floor price | 46.25 |
Weighted average ceiling price | 53.04 |
Collars | Q1 - Q2 2022 | |
Derivative [Line Items] | |
Volume per day | bbl / d | 11,000 |
Derivative, Floor Price | 47.50 |
Derivative, Cap Price | 70.75 |
Weighted average floor price | 49.77 |
Weighted average ceiling price | 64.31 |
Collars | Q3 - Q4 2022 | |
Derivative [Line Items] | |
Volume per day | bbl / d | 10,000 |
Derivative, Floor Price | 47.50 |
Derivative, Cap Price | 70.75 |
Weighted average floor price | 49.75 |
Weighted average ceiling price | 64.18 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Hierarchy Table) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts - current assets | $ 0 | $ 187 |
Total Assets | 187 | |
Oil derivative contracts - current liabilities | (223,212) | (53,865) |
Oil derivative contracts - long-term liabilities | (22,164) | (5,087) |
Total Liabilities | (245,376) | (58,952) |
Quoted Prices in Active Markets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts - current assets | 0 | |
Total Assets | 0 | |
Oil derivative contracts - current liabilities | 0 | 0 |
Oil derivative contracts - long-term liabilities | 0 | 0 |
Total Liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts - current assets | 187 | |
Total Assets | 187 | |
Oil derivative contracts - current liabilities | (223,212) | (53,865) |
Oil derivative contracts - long-term liabilities | (22,164) | (5,087) |
Total Liabilities | (245,376) | (58,952) |
Significant Unobservable Inputs (Level 3) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Oil derivative contracts - current assets | 0 | |
Total Assets | 0 | |
Oil derivative contracts - current liabilities | 0 | 0 |
Oil derivative contracts - long-term liabilities | 0 | 0 |
Total Liabilities | $ 0 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Textuals) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value Disclosures [Abstract] | ||
Fair value of debt | $ 35 | $ 70 |
Additional Balance Sheet Deta_3
Additional Balance Sheet Details (Trade and Other Receivables, Net) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Other receivables | $ 12,348 | [1] | $ 1,678 |
Trade accounts receivable, net | 11,795 | 11,691 | |
Federal income tax receivable, net | 597 | 597 | |
Commodity derivative settlement receivables | 0 | 5,716 | |
Total | 24,740 | $ 19,682 | |
Power Agreements | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Other receivables | $ 9,900 | ||
[1] | Primarily consists of a currently estimated $9.9 million benefit under the Company’s power agreements for reduced power usage during the winter storms in February 2021. |
Additional Balance Sheet Deta_4
Additional Balance Sheet Details (Accounts Payable and Accrued Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Accounts payable | $ 27,166 | $ 18,629 |
Accrued derivative settlements | 26,121 | 3,908 |
Accrued lease operating expenses | 24,802 | 21,294 |
Accrued compensation | 21,428 | 7,512 |
Accrued exploration and development costs | 12,361 | 1,861 |
Taxes payable | 10,180 | 17,221 |
Accrued general and administrative expenses | 4,432 | 21,825 |
Other | 37,415 | 20,421 |
Total | $ 163,905 | $ 112,671 |