DNR Q1 Production higher than forecast
Posted: Mon Apr 16, 2012 10:48 am
Denbury's 1st quarter production is above what I had in my forecast model. I am adjusting the forecast model and will have it posted this afternoon. - Dan
Denbury's preliminary average first quarter 2012 production is estimated to be 71,532 barrels of oil equivalent per day ("BOE/d"), an 8% increase from the fourth quarter of 2011 levels after adjusting both periods for the 2012 property sales detailed below, with 93% of this production being oil.
First quarter production estimates include 33,257 barrels per day ("Bbls/d") of tertiary oil production, a 7% increase from that in the fourth quarter of 2011, and 15,114 BOE/d of Bakken production, a 29% increase from fourth quarter of 2011 levels. Sequential growth in tertiary oil production was primarily driven by new tertiary floods at the Oyster Bayou and Hastings fields, and a sooner than anticipated production response at Tinsley Field (this is very good news). By field, tertiary oil production estimates for the first quarter of 2012 are 877 Bbls/d at Oyster Bayou, 618 Bbls/d at Hastings and 7,297 Bbls/d at Tinsley. Bakken production growth was the result of the Company's drilling program and favorable winter operating conditions in that area (good news for all of our Bakken companies). Updated information on individual Bakken well performance is provided in today's presentation.
Included in the preliminary first quarter 2012 production volumes are 1,759 BOE/d from non-core assets Denbury has divested to date in 2012. Excluding the contribution from these non-core assets, first quarter 2012 production would have been 2% lower at 69,773 BOE/d. As a result of these non-core asset sales, Denbury has revised its estimate of 2012 production by 2% to 68,625-to-73,625 BOE/d from 70,250-to-75,250 BOE/d.
Denbury also announced that its preliminary average realized oil price, excluding derivative settlements, was $102.52 per barrel in the first quarter of 2012, down slightly from $103.08 per barrel in the fourth quarter of 2011. First quarter 2012 realized oil prices were $0.37 per barrel less than the average NYMEX oil price in the quarter, down from the $9.14 premium to NYMEX realized in the fourth quarter of 2011. The decrease in the differential was the result of a decline in the Light Louisiana Sweet index premium and a lower price received for Bakken oil production due to wider than normal NYMEX differentials. Including derivative settlements, Denbury's preliminary average realized oil price was $101.16 per barrel in the first quarter of 2012, down from $102.86 per barrel in the fourth quarter of 2011.
Phil Rykhoek, Denbury's President and CEO, said, "Our production is off to a strong start in 2012, with a 7% sequential quarterly production increase in our tertiary operations. Our two new floods at the Hastings and Oyster Bayou fields are starting off well, contributing a combined 1,477 Bbls/d to our sequential tertiary production growth. Also, production from Tinsley Field responded favorably to the resumption of full CO2 injections at the field, increasing 15% on a sequential quarterly basis. While tertiary production at Heidelberg Field decreased slightly sequentially, we are beginning to see positive signs there related to the conformance work performed in the second half of 2011 and expect continuing positive results later this year. We continue to see production growth from our drilling activities in the Bakken as production increased 29% sequentially. We are currently keeping our previous estimates of 2012 production unchanged, other than adjusting for asset sales, but are increasingly optimistic about our 2012 production outlook. With our favorable first quarter production results and completion of our planned assets sales at attractive prices, we remain well positioned to execute our oil-focused growth strategy."
Denbury's preliminary average first quarter 2012 production is estimated to be 71,532 barrels of oil equivalent per day ("BOE/d"), an 8% increase from the fourth quarter of 2011 levels after adjusting both periods for the 2012 property sales detailed below, with 93% of this production being oil.
First quarter production estimates include 33,257 barrels per day ("Bbls/d") of tertiary oil production, a 7% increase from that in the fourth quarter of 2011, and 15,114 BOE/d of Bakken production, a 29% increase from fourth quarter of 2011 levels. Sequential growth in tertiary oil production was primarily driven by new tertiary floods at the Oyster Bayou and Hastings fields, and a sooner than anticipated production response at Tinsley Field (this is very good news). By field, tertiary oil production estimates for the first quarter of 2012 are 877 Bbls/d at Oyster Bayou, 618 Bbls/d at Hastings and 7,297 Bbls/d at Tinsley. Bakken production growth was the result of the Company's drilling program and favorable winter operating conditions in that area (good news for all of our Bakken companies). Updated information on individual Bakken well performance is provided in today's presentation.
Included in the preliminary first quarter 2012 production volumes are 1,759 BOE/d from non-core assets Denbury has divested to date in 2012. Excluding the contribution from these non-core assets, first quarter 2012 production would have been 2% lower at 69,773 BOE/d. As a result of these non-core asset sales, Denbury has revised its estimate of 2012 production by 2% to 68,625-to-73,625 BOE/d from 70,250-to-75,250 BOE/d.
Denbury also announced that its preliminary average realized oil price, excluding derivative settlements, was $102.52 per barrel in the first quarter of 2012, down slightly from $103.08 per barrel in the fourth quarter of 2011. First quarter 2012 realized oil prices were $0.37 per barrel less than the average NYMEX oil price in the quarter, down from the $9.14 premium to NYMEX realized in the fourth quarter of 2011. The decrease in the differential was the result of a decline in the Light Louisiana Sweet index premium and a lower price received for Bakken oil production due to wider than normal NYMEX differentials. Including derivative settlements, Denbury's preliminary average realized oil price was $101.16 per barrel in the first quarter of 2012, down from $102.86 per barrel in the fourth quarter of 2011.
Phil Rykhoek, Denbury's President and CEO, said, "Our production is off to a strong start in 2012, with a 7% sequential quarterly production increase in our tertiary operations. Our two new floods at the Hastings and Oyster Bayou fields are starting off well, contributing a combined 1,477 Bbls/d to our sequential tertiary production growth. Also, production from Tinsley Field responded favorably to the resumption of full CO2 injections at the field, increasing 15% on a sequential quarterly basis. While tertiary production at Heidelberg Field decreased slightly sequentially, we are beginning to see positive signs there related to the conformance work performed in the second half of 2011 and expect continuing positive results later this year. We continue to see production growth from our drilling activities in the Bakken as production increased 29% sequentially. We are currently keeping our previous estimates of 2012 production unchanged, other than adjusting for asset sales, but are increasingly optimistic about our 2012 production outlook. With our favorable first quarter production results and completion of our planned assets sales at attractive prices, we remain well positioned to execute our oil-focused growth strategy."