DENBURY INC

DENBURY INC deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

The Exxon merger closed on 2 Nov 2023: Denbury is now a wholly owned Exxon subsidiary, and every Denbury share was cancelled and converted into 0.840 Exxon share plus cash for fractions. Denbury's stock stopped trading on the NYSE before the open on 2 Nov, the revolving credit facility was paid off and terminated, all eight directors resigned and officers left their roles, and Denbury intends to file Form 15 to end its SEC reporting. This resolves the merger, vote, delisting and credit-facility threads.

business combination

DENBURY INC's exchange filed to remove a class of its securities from listing.

listing compliance notice

Denbury sent shareholders the final proxy statement/prospectus for the Exxon merger, with a special meeting on 31 Oct 2023 (record date 27 Sep 2023). Each Denbury share would get 0.840 Exxon share, worth about $100.35 at Exxon's $119.47 close on 28 Sep 2023, a roughly 14.36% premium to Denbury's $87.75 close on 12 Jul 2023; the board unanimously recommends a vote in favour, and approval needs a majority of outstanding shares. This continues the pending merger and moves it to the shareholder vote.

business combination

Denbury's merger agreement with Exxon Mobil gives each Denbury share 0.840 Exxon shares (cash for fractions), with existing Denbury shares cancelled at closing. Closing needs Denbury shareholder approval, US antitrust (HSR) clearance, an effective Form S-4 and NYSE listing of the new shares; either side can walk away after 13 Jul 2024 (extendable to 13 Jan 2025 if only regulatory approvals are missing). Denbury owes Exxon a $144m fee if it changes its recommendation or takes a superior proposal, and Exxon owes Denbury $144m if it terminates over a 'Specified Pipeline Event'. The deal is pending, so the equity outcome is not yet final.

business combination

On 13 Jul 2023 Denbury agreed to be acquired by Exxon Mobil Corporation through a merger in which Denbury would survive as a wholly owned subsidiary of Exxon. This filing is the announcement notice (with a joint press release); the deal terms are in the companion filing, and the deal still needs shareholder and regulatory approval.

business combination

After emerging from bankruptcy, Denbury bought back two CO2 pipelines from Genesis Energy on 30 Oct 2020: the Northeast Jackson Dome pipeline for $70m (paid as four $17.5m quarterly instalments through 31 Oct 2021, via a secured promissory note) and the Free State pipeline for $22.5m paid at once. This settles the old pipeline financing lease listed as accelerated debt in the bankruptcy; the company says remaining obligations for these arrangements fell by about $25m to about $91m, partly due to fresh start accounting applied 18 Sep 2020.

debt financing

the exchange certified DENBURY INC's securities for listing, clearing them to begin trading.

listing compliance notice

On 2 September 2020 the bankruptcy court confirmed Denbury's Chapter 11 plan. When the plan takes effect, all existing common stock (507,063,311 shares at 31 July 2020) will be cancelled and existing debt discharged. Second lien holders receive 95% of the new stock and convertible holders 5% plus Series A Warrants; existing shareholders get only a share of 45.45% of the Series B Warrants. The company targets the effective date of 16 September 2020 but gives no assurance. Bank lenders are to be paid in full or left unimpaired, and a management incentive plan of up to 10% of new equity is to be adopted.

bankruptcy or receivership

DENBURY INC's exchange filed to remove a class of its securities from listing.

listing compliance notice

On 31 July 2020, because of the Chapter 11 filing, the NYSE began delisting proceedings and suspended trading of Denbury's common stock. The stock began trading on the OTC Pink market as DNRCQ the same day. Denbury does not intend to appeal. This ends the earlier below-$1.00 listing issue, since the stock is leaving the NYSE regardless, and the company says the OTC market is more limited and likely less liquid.

listing compliance notice

On 30 July 2020 Denbury and all its wholly owned subsidiaries filed voluntary Chapter 11 petitions in the Southern District of Texas, as contemplated by the earlier support agreement, and will keep operating as debtors-in-possession. The filing is an event of default that accelerated the company's debt, including $230.0m of bank borrowings plus $94.7m of letters of credit, $584.7m of 9% second lien notes, $455.7m of 9¼% second lien notes, $531.8m of 7¾% second lien notes, $225.7m of 6⅜% convertible notes and the subordinated notes, though enforcement is automatically stayed. The company warns that trading in its securities is highly speculative and prices may bear little relation to any recovery.

bankruptcy or receivership

On 28 July 2020 Denbury signed a Restructuring Support Agreement with its bank lenders (100%), and holders of about 67.2% of its second lien notes and about 70.8% of its 6⅜% convertible notes, to restructure through a prepackaged Chapter 11 plan. Under the plan, second lien holders get 95% of the new stock and convertible holders get 5% plus Series A Warrants. Existing shareholders would receive only a share of 45.45% of the Series B Warrants, and only if both the subordinated notes class and the existing equity class vote to accept. The bank lenders agreed to provide up to $615m of debtor-in-possession financing that would roll into an exit facility. This follows the skipped June interest payment and the 'strategic alternatives' review, which have now resolved into this filing-for-bankruptcy route.

material agreement

On 26 June 2020 Denbury signed an Eighth Amendment to its bank credit agreement. It reaffirmed the $615m borrowing base but temporarily cut maximum availability to $275m plus outstanding letters of credit (up to $100m) until the fall 2020 redetermination, and added temporary dollar limits on certain covenant baskets. Denbury also chose not to pay the roughly $8m interest due 30 June 2020 on its 6⅜% convertible notes due 2024 'to evaluate certain strategic alternatives', none implemented yet. A 30-day grace period applies before it becomes an event of default. It drew $200m on the credit facility on 29 June as a precaution, leaving $265m borrowed and about $95m of letters of credit. Skipping the interest payment and drawing the facility is a negative signal for shareholders and raises the risk to their position; the filing does not say what the alternatives are.

debt financing

On 5 March 2020 the NYSE told Denbury its average share price over 30 trading days was below $1.00, the minimum for listing. Denbury has six months to cure, and says it is considering options including a reverse stock split, which needs board and stockholder approval. The shares keep trading as DNR with a '.BC' (below compliance) marker, and the company says the notice does not trigger any violation of its debt obligations. Failure to cure could lead to delisting.

listing compliance notice

Between 7 and 16 October 2019 Denbury agreed to issue 13,690,000 common shares and pay $5.8m cash for $13.2m of 5½% 2022 and $29.3m of 4⅝% 2023 subordinated notes. It also bought back $11.3m of 2022 notes on the open market for about $5.4m. In total it retired $53.8m (about 15%) of its $357.8m of sub notes outstanding at 30 June 2019, for about $11.2m cash plus the new shares. This continues the debt-reduction exchanges, now paid partly in stock, which dilutes existing shareholders. The company says it may do more but is not obliged to.

capital raising announcement

On 19 June 2019 Denbury settled the early-participation part of the exchange announced 3 June. It accepted about $152.2m of 6⅜% 2021 sub notes, $219.9m of 5½% 2022 sub notes, $96.3m of 4⅝% 2023 sub notes and $425.4m of old 7½% second lien notes. In return it issued about $528.0m of new 7¾% second lien notes due 2024 and $245.5m of new 6⅜% convertible notes due 2024, and paid about $120.0m cash. The new convertibles convert at 370 shares per $1,000 and auto-convert if the share price stays at or above $2.43 (10 of 15 trading days), so shareholders face possible dilution (the earlier context put the maximum at ~92m shares). This completes the pending exchange's main settlement; the filing text was truncated after the convertible terms.

capital raising announcement

On 3 June 2019 Denbury announced private exchange agreements and public exchange offers to swap its 6⅜% subordinated notes due 2021, 5½% subordinated notes due 2022 and 7½% second lien notes due 2024 for new 7¾% second lien notes due 2024, new 6⅜% convertible notes due 2024, or cash. The private deals cover about $44.8m of 2021 notes, $93.1m of 2022 notes and $96.3m of 4⅝% 2023 notes for about $48.5m cash, $36.6m new second lien notes and $149.1m new convertible notes, plus $168.0m of old second liens for the same amount of new second liens. The new convertibles convert at 370 shares per $1,000 (about $2.70 per share), with up to about 92 million shares possible, so this could dilute shareholders if the notes convert. This continues the earlier pattern of note exchanges; closing depends on the exchange offers completing.

capital raising announcement

Denbury and Penn Virginia mutually terminated their 28 Oct 2018 merger agreement on 21 March 2019 and released each other from claims. Denbury's CEO cited difficult market conditions since announcement and opposition from some Penn Virginia shareholders making the required super-majority approval unlikely. The 17 April Denbury stockholder meeting will not happen and neither side owes the other a payment, so the share dilution tied to the deal (up to 191.8m shares) and the authorised share increase will not occur. Management said it expects well over $100 million of free cash flow in 2019 at current oil prices (a forward-looking statement).

business combination

The U.S. Federal Trade Commission granted early termination of the antitrust (Hart-Scott-Rodino) waiting period for the Penn Virginia acquisition on 27 Dec 2018, clearing one of the merger conditions. Denbury now expects completion in the first quarter of 2019, still subject to both companies' shareholder approvals and other customary conditions.

business combination

Denbury filed the S-4 registration statement for the Penn Virginia merger, registering up to 191,784,216 new Denbury shares, based on 15,466,469 Penn Virginia shares at the 12.4 exchange ratio. Terms match the 28 Oct deal: $25.86 cash plus 12.4 shares, or $79.80 cash, or 18.3454 shares per Penn Virginia share, with total cash prorated to $400 million. Meeting dates are blank; Denbury holders will vote on the share issuance and an increase in authorised shares, and both boards unanimously recommend the deal. For Denbury shareholders, this puts a ceiling on dilution at that share count.

business combination

On 28 Oct 2018 Denbury agreed to acquire Penn Virginia Corporation by merger. Each Penn Virginia share can be exchanged for $25.86 cash plus 12.4 Denbury shares, or $79.80 cash, or 18.3454 Denbury shares, with total cash capped at $400 million via proration. Closing needs approval from both companies' shareholders (including Denbury holders approving the share issuance and an increase in authorised shares), antitrust clearance and an effective S-4, and the deal can be ended if it has not closed by 30 April 2019; a $45 million break fee applies in specified cases for either side. Two Penn Virginia directors would join Denbury's board. For Denbury shareholders this means new share issuance (dilution) and a new asset base, a new thread beyond the debt refinancing.

business combination

Denbury closed the second lien notes offering on 21 Aug 2018, issuing $450 million of 7½% Senior Secured Second Lien Notes due Feb 2024 (upsized from the $400 million launched on 14 Aug). The press release says the proceeds repaid all outstanding bank credit facility borrowings and covered fees, with the remainder for general corporate purposes. The new notes rank equally with the existing 2021 and 2022 second lien notes, sit behind the bank facility, and restrict dividends and buybacks. This completes the refinancing launched on 14 Aug and so triggers the amended bank terms (inference: the filing says those take effect on receipt of proceeds).

debt financing

Denbury amended its bank credit agreement (Sixth Amendment, 13 Aug 2018) to raise the cap on junior-lien debt from $1.2 billion to $1.65 billion, with $1.07 billion currently outstanding, and launched a $400 million offering of new second lien notes due 2024. Once the offering closes, the bank facility's maturity moves to December 2021 (earlier, Feb-Aug 2021, if the 2021 second lien or 6⅜% subordinated notes are not repaid or refinanced), at least $350 million of bank borrowings must be repaid, the borrowing base falls from $1.05 billion to $615 million, and a new total debt/EBITDAX limit of 5.25x applies through 2020 (4.5x after). The company says proceeds will repay substantially all bank borrowings ($410 million at 31 July 2018). This continues the debt reshuffling since the Dec 2017/Jan 2018 exchanges.

debt financing

A further exchange offer closed on 9 January 2018: about $174.3 million of old 2021, 2022 and 2023 subordinated notes were swapped for about $133.5 million of new notes ($74.1 million of 9¼% second lien notes and $59.4 million of 5% convertibles due 2023). The convertibles could become up to 16.7 million shares. Combined with the December exchanges, debt principal falls by about $184.4 million, rising to about $269 million if the 3½% convertibles convert and about $329 million if the new 5% convertibles also convert. Outstanding subordinated notes are now $203.5 million (2021), $314.6 million (2022) and $308.0 million (2023).

capital raising announcement

The November exchange closed on 6 December 2017: about $610 million of old subordinated notes were swapped for about $467 million of new notes (~$382 million 9¼% second lien notes due March 2022 and ~$85 million 3½% convertibles due March 2024). The 2022 subordinated notes fall to $409 million and the 2023 notes to $377 million. The new second lien notes share security equally with the 9% 2021 second lien notes, and both new indentures restrict dividends and share buybacks. The convertibles can turn into 38-39 million shares, so existing shareholders may be diluted.

capital raising announcement

Denbury announced agreements to swap about $610 million of its 5½% 2022 and 4⅝% 2023 subordinated notes for about $466 million of new notes: ~$382 million of 9¼% second lien notes due 2022 and ~$85 million of 3½% convertible notes due 2024. This continues the 2016 pattern of exchanging subordinated debt for secured debt. The convertibles could become 38-39 million new shares (automatic conversion if the stock is at or above $2.65 for 10 of 15 trading days), which would dilute existing holders. Management says debt falls $144 million at closing, or about $228 million if the convertibles fully convert. Closing was expected around 6 December 2017.

capital raising announcement

Denbury amended its bank credit agreement again (Fourth Amendment, 3 May 2017). The $1.05 billion borrowing base was reaffirmed, the total debt-to-EBITDAX test that was due back in 2018 was dropped, and the senior secured debt limit stays at 3.0x to Q1 2018 then 2.5x. Bank margins rose 0.5 percentage points. Drawn borrowings were $355 million at 31 March 2017 (up from $310.0 million a year earlier), with $72 million of letters of credit. The same filing carries Q1 2017 results: net income $22 million ($0.05 per share) against a $185 million loss a year earlier, though adjusted for special items it was a $7 million loss; production was 59,933 BOE/d. Denbury also bought a ~48% non-operating interest in West Yellow Creek Field, Mississippi for $16 million in March 2017. Next redetermination is around 1 November 2017.

debt financing

Denbury agreed a further exchange of about $135.3 million of old subordinated notes for about $83.8 million of new 9% second lien notes and about 3.8 million shares, expected to close 18 May 2016. Counting all exchanges, it will have issued about $615.1 million of new notes and about 40.7 million shares for about $1,058 million of old notes (the $175.1 million, $411.1 million and $471.8 million tranches by maturity). Pro forma total notes outstanding fall to $2,254.8 million from $2,697.7 million at 31 March 2016. This extends the earlier exchanges, with further share dilution.

capital raising announcement

On 10 May 2016 Denbury completed the note exchange: $922.5 million of old subordinated notes (6⅜% due 2021, 5½% due 2022, 4⅝% due 2023) were swapped for $531.2 million of new 9% Senior Secured Second Lien Notes due 2021 and 36.9 million new shares. The new notes pay interest each May and November from 15 November 2016, are secured by second liens behind the bank facility, and carry a 101% change-of-control put. The indenture limits dividends and share or subordinated-note repurchases, which bears on the dividend suspended in 2015 and the buyback reinstated in September 2015.

capital raising announcement

Denbury agreed privately to swap senior subordinated notes for new 9% Senior Secured Second Lien Notes due 2021 plus common stock. The 3 May deal covers $839.4 million of old notes for $482.9 million of new notes and 33.6 million shares; agreements through 4 May total $922.6 million of old notes for $531.2 million of new notes and 36.9 million shares, expected to close 10 May. For shareholders this means issuing new shares (dilution), while swapping unsecured debt for a smaller amount of secured debt. It follows through on the junior lien debt permission in the April bank amendment. Q1 2016 results in the same filing show a net loss of $185 million ($0.53 per share), including a $95 million gain on debt extinguishment from the note buybacks.

capital raising announcement

On 18 April 2016, in the May 2016 borrowing base review, Denbury's bank commitments and borrowing base were cut to $1.05 billion from $1.50 billion, so the two are now equal; the next review is around 1 November 2016. The Third Amendment also lets Denbury issue up to $1.0 billion of junior lien debt to swap for or refinance its existing senior subordinated notes (up to $300 million of proceeds for general purposes), and raises the required mortgaged collateral from 85% to 90% of proved reserve value. The press release says $310.0 million was drawn at 31 March 2016 (up from $175.0 million at year-end 2015), partly to buy back $152.3 million face of subordinated notes for about $55.5 million, and lists oil hedges through Q2 2017. This sets up the note exchanges that follow.

debt financing

Denbury signed a Second Amendment to its December 2014 bank credit agreement (JPMorgan Chase as agent) on 17 February 2016, loosening two financial covenants through 31 December 2017: senior secured debt to EBITDAX can now be up to 3.0x (was 2.5x), and EBITDAX to interest must be at least 1.25x (was 2.25x). In return, lender commitments fall from $1.6 billion to $1.5 billion, loan margins rise 75 basis points, the commitment fee rises to 0.50%, borrowing base reviews become twice yearly (May and November), cash is capped at $225 million if more than $250 million is drawn, and buybacks of its senior subordinated notes are capped at $225 million cash. The filing does not state why the changes were sought.

debt financing

Denbury suspended its $0.0625 quarterly dividend starting with the fourth quarter of 2015, ending the run of payments seen since at least January 2014; the September 29 payment will still be made. The company says this frees about $22 million per quarter ($88 million a year) and cites the low oil price environment and a wish to keep financial strength. The board also reinstated its share buyback program, suspended since November 2014, with about $222 million still authorized and no requirement to use it. The CEO said a dividend is expected to return in future but the timing is uncertain and likely depends on oil prices.

dividend declaration

Denbury replaced its bank credit agreement, which was due to mature in May 2016, with a new secured revolving facility from JPMorgan Chase and other lenders that runs to 9 December 2019. It has a $3.5 billion maximum size and $3.0 billion initial borrowing base, but lender commitments stay at $1.6 billion, and it carries covenants including debt to EBITDAX below 4.25 to 1. The company's press release says drawn borrowing costs fall by 25 basis points.

debt financing

Denbury closed the $1.25 billion 5½% Senior Subordinated Notes due 2022 on 30 April 2014 and used the proceeds to buy about $815 million (roughly 82%) of the 8¼% notes due 2020 that were tendered by the deadline. It also called the rest for redemption on 30 May 2014 and discharged that indenture; remaining proceeds are to reduce bank credit facility borrowings and for general corporate purposes. This completes the refinancing announced on 17 April.

debt financing

Denbury agreed to sell $1.25 billion of 5½% Senior Subordinated Notes due 2022 (closing expected 30 April 2014) and launched a cash tender offer for all $996.273 million of its 8¼% Senior Subordinated Notes due 2020, paying for the purchase with the new notes' proceeds. It also amended its bank credit agreement (15 April 2014) to raise the cap on additional permitted subordinated debt from $650 million to $1.15 billion. Any 8¼% notes not tendered are to be redeemed with the new proceeds, so this refinances existing debt rather than adding new borrowing capacity by itself.

material agreement

Denbury closed the $1.2 billion 4 5/8% notes due 2023 on 5 February 2013. It accepted about $191.7 million of the 9¾% notes (about 45%) and $186.6 million of the 9½% notes (about 83%) tendered early. It also called the remaining 9¾% notes for redemption on 7 March 2013 at $1,048.75 per $1,000, and stripped most restrictive covenants from the 9½% notes' indenture. This completes the refinancing started on 22 January; the tender offers stay open until 19 February 2013 unless extended.

debt financing

On 22 January 2013 Denbury agreed to sell $1.2 billion of 4.625% senior subordinated notes due 2023 and launched cash offers to buy back its 9¾% notes ($426.4 million) and 9½% notes ($224.9 million), both due 2016. Proceeds will fund the buybacks, then repay bank credit facility borrowings, then general corporate purposes.

material agreement

On 14 January 2013 Denbury agreed to buy producing Cedar Creek Anticline properties in Montana and North Dakota from ConocoPhillips' subsidiary for $1.05 billion in cash. It plans to pay from the ExxonMobil Bakken sale proceeds held in trust accounts. Closing is expected near the end of the first quarter of 2013, subject to due diligence and antitrust clearance.

material agreement

The second and final closing of the ExxonMobil exchange took place on 21 December 2012, finishing the Bakken sale. For the retained 17.5% Bakken interest, Denbury took about one-third of ExxonMobil's CO2 reserves in the LaBarge Field in Wyoming plus residual cash, rather than the withheld $350 million. This resolves the open question from the first closing; a substantial part of the cash remains in trust accounts for possible tax-deferred purchases.

asset acquisition disposition

The ExxonMobil Bakken exchange was split in two; the first closing on 30 November 2012 gave Denbury about $1.3 billion in cash plus the Webster and Hartzog Draw interests. Denbury kept about 17.5% of its Bakken interest, and ExxonMobil withheld $350 million, to be settled in a second closing for either a share of ExxonMobil's LaBarge Field CO2 reserves or the cash. Denbury expects no gain or loss on the sale and has put much of the cash in trust accounts for possible tax-deferred acquisitions.

asset acquisition disposition

Denbury's subsidiary agreed on 19 September 2012 to give ExxonMobil its Bakken assets in North Dakota and Montana for $1.6 billion in cash (before adjustments) plus ExxonMobil's operating interests in Webster Field (Texas) and Hartzog Draw Field (Wyoming). Closing needs due diligence, lender approval and antitrust clearance, and was expected late in the fourth quarter of 2012.

material agreement