den-20230930

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2023

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to ________

Commission file number: 001-12935

DENBURY INC.

(Exact name of registrant as specified in its charter)

Delaware

20-0467835

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

5851 Legacy Circle,

Plano,

75024

(Address of principal executive offices)

(Zip Code)


Registrant’s telephone number, including area code:						(972)			673-2000

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class:	Trading Symbol:	Name of Each Exchange on Which Registered:
	None

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☑ No ☐

The number of shares outstanding of the registrant’s Common Stock, $1.00 par value, as of November 2, 2023, was 1,000.

Denbury Inc.

Explanatory Note

On July 13, 2023, Denbury Inc. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Exxon Mobil Corporation, a New Jersey corporation (“ExxonMobil”), and EMPF Corporation, a Delaware corporation and a wholly-owned subsidiary of ExxonMobil (“Merger Sub”). Upon the terms and subject to the conditions set forth in the Merger Agreement, on November 2, 2023 (the closing date of the Merger, as defined below), Merger Sub merged with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of ExxonMobil (the “Surviving Corporation”). The Company remains an ExxonMobil wholly-owned subsidiary as of the date of this filing.

Although the New York Stock Exchange (“NYSE”) on November 2, 2023 filed a Form 25-NSE with the U.S. Securities and Exchange Commission to remove the common stock, par value $0.001 per share, of the Company from listing on the NYSE, this Form 10-Q for the quarterly period ended September 30, 2023 is being filed because the delisting of the Company’s common stock and related suspension of reporting obligations under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), did not occur until November 12, 2023 (10 days after the NYSE’s filing of Form 25-NSE), which date occurred after the due date for filing of this Form 10-Q. Promptly following the filing of this Form 10-Q, the Company expects to file a Form 15 to suspend its remaining reporting obligations under the Exchange Act. Unless otherwise specified herein, all information in this report is provided as of September 30, 2023.

Denbury Inc.

Table of Contents

Page

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

Unaudited Condensed Consolidated Balance Sheets

Unaudited Condensed Consolidated Statements of Operations

Unaudited Condensed Consolidated Statements of Cash Flows

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

Notes to Unaudited Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II. OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Denbury Inc.

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except par value and share data)



	September 30, 2023		December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	803	$	521
Accrued production receivable	161,953		144,277
Trade and other receivables, net	18,239		27,343
Derivative assets	98		15,517
Prepaids	13,204		18,572
Total current assets	194,297		206,230
Property and equipment
Oil and natural gas properties (using full cost accounting)
Proved properties	1,882,430		1,414,779
Unevaluated properties	119,557		240,435
CO2 properties	199,609		190,985
Pipelines	223,779		220,125
CCUS storage sites and related assets	141,829		64,971
Other property and equipment	117,858		107,133
Less accumulated depletion, depreciation, amortization and impairment	(427,759)		(306,743)
Net property and equipment	2,257,303		1,931,685
Operating lease right-of-use assets	18,257		18,017
Derivative assets	26		—

Intangible assets, net	72,293		79,128
Restricted cash for future asset retirement obligations	49,027		47,359
Other assets	59,996		45,080
Total assets	$	2,651,199	$	2,327,499
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable and accrued liabilities	$	250,938	$	248,800
Oil and gas production payable	79,496		80,368
Derivative liabilities	40,813		13,018
Current maturities of long-term debt	13		—
Operating lease liabilities	5,136		4,676
Total current liabilities	376,396		346,862
Long-term liabilities
Long-term debt, net of current portion	70,336		29,000
Asset retirement obligations	350,448		315,942
Derivative liabilities	336		—
Deferred tax liabilities, net	110,556		71,120
Operating lease liabilities	14,797		15,431
Other liabilities	12,556		16,527
Total long-term liabilities	559,029		448,020
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, $.001 par value, 50,000,000 shares authorized, none issued and outstanding	—		—
Common stock, $.001 par value, 250,000,000 shares authorized; 51,446,811 and 49,814,874 shares issued, respectively	51		50
Paid-in capital in excess of par	1,076,632		1,047,063
Retained earnings	639,091		485,504

Total stockholders’ equity	1,715,774		1,532,617
Total liabilities and stockholders’ equity	$	2,651,199	$	2,327,499

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Table of Contents

Denbury Inc.

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per-share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues and other income
Oil, natural gas, and related product sales	$	325,870	$	395,223	$	943,305	$	1,232,104
CO2 sales and transportation fees	12,706		18,586		34,556		44,618
Oil marketing revenues	15,820		17,663		44,351		47,725
Other income	851		8,015		3,036		9,055
Total revenues and other income	355,247		439,487		1,025,248		1,333,502
Expenses
Lease operating expenses	127,440		134,464		386,905		376,643
Transportation and marketing expenses	5,474		5,191		16,022		14,638
CO2 operating and discovery expenses	2,138		2,066		4,931		6,564
Taxes other than income	29,072		33,789		85,047		101,487
Oil marketing purchases	15,519		19,095		43,909		47,162
General and administrative expenses	26,430		21,071		76,302		58,998
Interest, net of amounts capitalized of $2,502, $1,044, $6,454 and $3,177, respectively	843		909		2,595		3,092
Depletion, depreciation, and amortization	52,917		37,680		144,716		108,425
Commodity derivatives expense (income)	85,251		(109,248)		42,451		140,325


Other expenses	14,143		2,726		19,624		11,459
Total expenses	359,227		147,743		822,502		868,793
Income (loss) before income taxes	(3,980)		291,744		202,746		464,709
Income tax provision (benefit)	(1,087)		41,321		49,159		59,664
Net income (loss)	$	(2,893)	$	250,423	$	153,587	$	405,045

Net income (loss) per common share
Basic	$	(0.06)	$	4.89	$	2.96	$	7.86
Diluted	$	(0.06)	$	4.66	$	2.85	$	7.43

Weighted average common shares outstanding
Basic	52,417		51,182		51,916		51,512
Diluted	52,417		53,715		53,941		54,524

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Table of Contents

Denbury Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)


	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities
Net income	$	153,587	$	405,045
Adjustments to reconcile net income to cash flows from operating activities
Depletion, depreciation, and amortization	144,716		108,425

Deferred income taxes	39,436		53,301
Stock-based compensation

SEC Form 10-Q filed by Denbury Inc.