Interactive 2009 Annual Report (PDF 7.56 MB) - Denbury Resources ...

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104 Denbury Resources Inc. 2009 Annual ReportWe are involved in other various lawsuits, claims and regulatory proceedings incidental to our businesses. While wecurrently believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not have amaterial adverse effect on our financial position or overall trends in results of operations or cash flows, litigation issubject to inherent uncertainties. If an unfavorable ruling were to occur, there exists the possibility of a material adverseimpact on our net income in the period in which the ruling occurs. We provide accruals for litigation and claims if wedetermine that a loss is probable and the amount can be reasonably estimated.Note 13. Supplemental InformationSignificant Oil and Natural Gas PurchasersOil and natural gas sales are made on a day-to-day basis or under short-term contracts at the current area marketprice. The loss of any purchaser would not be expected to have a material adverse effect upon our operations. Forthe year ended December 31, 2009, two purchasers accounted for 10% or more of our oil and natural gas revenues:Marathon Petroleum Company LLC (52%) and Hunt Crude Oil Supply Co. (21%). For the year ended December 31,2008, we had three significant purchasers that each accounted for 10% or more of our oil and natural gas revenues:Marathon Petroleum Company LLC (49%), Hunt Crude Oil Supply Co. (20%) and Crosstex Energy Field Services Inc.(14%). For the year ended December 31, 2007, three purchasers each accounted for 10% or more of our oil and naturalgas revenues: Marathon Petroleum Company LLC (43%), Hunt Crude Oil Supply Co. (19%) and Crosstex Energy FieldServices Inc. (16%).Accounts Payable and Accrued LiabilitiesDecember 31,In thousands 2009 2008Accounts payable $ 40,140 $ 111,899Accrued exploration and development costs 40,375 50,571Accrued compensation 35,292 10,746Accrued lease operating expense 14,512 10,014Accrued interest 24,214 6,780Taxes payable 5,358 6,282Asset retirement obligations – current 1,087 1,712Other 8,896 4,629Total $ 169,874 $ 202,633Supplemental Cash Flow InformationYear Ended December 31,In thousands, except shares 2009 2008 2007Cash paid for interest, net of amounts capitalized $ 20,924 $ 26,997 $ 27,892Cash paid for income taxes 241 70,349 10,277Interest capitalized 68,596 29,161 20,385Increase (decrease) in liabilities for capital expenditures (76,025) 59,183 (421)Common stock issued pursuant to Conroe Field Acquisition 168,723 — —Genesis common units received in lease financing — 25,000 —Market value of restricted stock issued $ 13,781 $ 8,749 $ 6,487Shares of restricted stock issued 1,032,896 278,973 367,108Note 14. Condensed Consolidating Financial InformationOur subordinated debt is fully and unconditionally guaranteed jointly and severally by all of Denbury Resources Inc.’ssubsidiaries other than minor subsidiaries, except that with respect to our $225 million of 7.5% Senior SubordinatedNotes due 2013, Denbury Resources Inc. and Denbury Onshore, LLC are co-obligors. Except as noted in the foregoingsentence, Denbury Resources Inc. is the sole issuer and Denbury Onshore, LLC is a subsidiary guarantor. The resultsForm 10-K Part IINotes to Consolidated Financial Statements
Denbury Resources Inc. 2009 Annual Report 105of our equity interest in Genesis are reflected through the equity method by one of our subsidiaries, Denbury Gathering& Marketing. Each subsidiary guarantor and the subsidiary co-obligor are 100% owned, directly or indirectly, byDenbury Resources Inc. The following is condensed consolidating financial information for Denbury Resources Inc.,Denbury Onshore, LLC, and subsidiary guarantors:Condensed Consolidating Balance SheetsDecember 31, 2009Denbury DenburyResources Inc. Onshore, LLC Denbury(Parent and (Issuer and Guarantor Resources Inc.In thousands Co-Obligor) Co-Obligor) Subsidiaries Eliminations ConsolidatedAssetsCurrent assets $ 637,334 $ 253,601 $ 20,718 $ (655,891) $ 255,762Property and equipment — 3,482,310 220,562 — 3,702,872Investment in subsidiaries (equity method) 1,303,728 23,792 1,299,186 (2,551,689) 75,017Other assets 746,442 225,938 6,078 (742,131) 236,327Total assets $ 2,687,504 $ 3,985,641 $ 1,546,544 $ (3,949,711) $ 4,269,978Liabilities and Stockholders’ EquityCurrent liabilities $ 14,827 $ 795,486 $ 239,368 $ (655,891) $ 393,790Long-term liabilities 700,440 1,942,194 3,448 (742,131) 1,903,951Stockholders’ equity 1,972,237 1,247,961 1,303,728 (2,551,689) 1,972,237Total liabilities and stockholders’ equity $ 2,687,504 $ 3,985,641 $ 1,546,544 $ (3,949,711) $ 4,269,978December 31, 2008Denbury DenburyResources Inc. Onshore, LLC Denbury(Parent and (Issuer and Guarantor Resources Inc.In thousands Co-Obligor) Co-Obligor) Subsidiaries Eliminations ConsolidatedAssetsCurrent assets $ 458,051 $ 408,940 $ 14,992 $ (466,784) $ 415,199Property and equipment — 2,973,947 28,250 — 3,002,197Investment in subsidiaries (equity method) 1,371,347 24,901 1,368,759 (2,685,003) 80,004Other assets 312,239 89,471 899 (310,335) 92,274Total assets $ 2,141,637 $ 3,497,259 $ 1,412,900 $ (3,462,122) $ 3,589,674Liabilities and Stockholders’ EquityCurrent liabilities $ 970 $ 810,476 $ 41,405 $ (466,784) $ 386,067Long-term liabilities 300,599 1,373,127 148 (310,335) 1,363,539Stockholders’ equity 1,840,068 1,313,656 1,371,347 (2,685,003) 1,840,068Total liabilities and stockholders’ equity $ 2,141,637 $ 3,497,259 $ 1,412,900 $ (3,462,122) $ 3,589,674Condensed Consolidating Statements of OperationsYear Ended December 31, 2009Denbury DenburyResources Inc. Onshore, LLC Denbury(Parent and (Issuer and Guarantor Resources Inc.In thousands Co-Obligor) Co-Obligor) Subsidiaries Eliminations ConsolidatedRevenues $ 58,984 $ 882,492 $ 1 $ (58,984) $ 882,493Expenses 64,348 996,138 9,837 (58,984) 1,011,339Loss before the following: (5,364) (113,646) (9,836) — (128,846)Equity in net earnings of subsidiaries (67,689) 528 (59,635) 133,453 6,657Income before income taxes (73,053) (113,118) (69,471) 133,453 (122,189)Income tax provision (benefit) 2,103 (47,354) (1,782) — (47,033)Net loss $ (75,156) $ (65,764) $ (67,689) $ 133,453 $ (75,156)Notes to Consolidated Financial StatementsForm 10-K Part II
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2009 ANNUAL REPORTDenbury Resources
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