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Denbury Resources Inc. Message Board

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  • soscorp soscorp Sep 4, 2003 5:18 PM Flag

    DNRs Future

    Hi Peter
    I don't remember DNR projecting 33% annual oil production increases in each of the next 5 years from existing properties (slide 12). I was able to confirm with DNR IR that the uprade at Jackson Dome facility has been completed. I was also told to expect a news release on N. Lorette field within next two weeks. Only remaining concern is the TPG overhang.

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    • Soscorp,

      Thanks for your kind reply. The CO2 business model chart you reference has been in every DNR presentation for the last year. I apologize for not being able to post a comparable one but they have eliminated all of the prior presentations on the site.

      I recall your having a giant problem with the lack of production increases two weeks ago. Now you appear before us with the following statement:

      "I don't remember DNR projecting 33% annual oil production increases in each of the next 5 years from existing properties (slide 12)."

      DNR is most emphatically not projecting 33% annual increases in oil production from existing properties.

      They are projecting 33% annual increases from the CO2 tertiary recovery program which is about 1/3 of current oil production. Currently, DNR produces about 19,000 BOPD. They are projecting an increase from CO2 tertiary recovery next year of about 2000 BOPD or approximately a 10% increase--a great answer, incidentally. Subsequent yearly increases, all other things being equal, would be similar and also great but not 33%.


      Regards,

      Peter

      • 1 Reply to pddane_01929
      • Hi Peter

        You are correct that slide 12 refers only to CO2 fields. My observation was that I don't remember annual production increases from these existing fields being projected as high as 33%. Is this an improved projection (possibly due to the Jackson Dome upgrade), or is my memory going downhill?

        I am still concerned about 2003 diminished production-to-market vs 2002. The Lehman Bros presentation reiterated that the 2003 exit rate should be equal to, if not slightly better than 2002. With that, I've re-established a 50% position at these prices. I'll wait for TPGs next shoe to fall before fully committing myself.

        What is your investment stradegy with DNR?

 
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