Denbury Inc.

Denbury reported operating cash flow before working capital changes of $140 million in Q1, exceeding development capital expenditures by $20 million. Sales volumes averaged around 47,700 BOE per day, up more than 1,000 BOE per day sequentially, and the company ended the quarter with $672 million of liquidity and $68 million of debt. Management said production, pricing and all cost items were in line with annual guidance, and they expect production to be relatively flat in Q2. Full-year midpoint capital remains $510 million, with second-quarter capital expected to be modestly higher due mainly to CCUS activity, including storage site acquisitions and predevelopment spend.

CEO Christian Kendall emphasized that the quarter showed strong operating execution and that the company is on track with its plan. He highlighted the strategic importance of Denbury’s EOR business in funding CCUS expansion, while noting that the company has a unique advantage from its Gulf Coast CO2 pipeline network and storage portfolio. His tone was optimistic, especially on CCA, Louisiana primacy for Class VI permitting, and the company’s cumulative 30 million metric ton per year CCUS target by year-end.

No formal CFO remarks were included in the prepared comments, but management provided several financial updates. Cash flow before working capital of $140 million covered development capex by $20 million, and the company spent nearly $9 million on asset retirement work and $7 million on equity investments in ION and Aqualung. Liquidity ended at $672 million, debt at $68 million, and management said the modest debt increase versus year-end was mainly due to seasonal working capital outflows for bonuses and ad valorem taxes. Full-year capital is still targeted at a midpoint of $510 million, with CCUS driving the expected Q2 step-up.

Analysts focused heavily on CCUS permitting timelines, storage-site competition, and pipeline economics. Management said EPA Class VI reviews are moving at the cadence they expected, still implying about a 2-year timeframe, while Louisiana primacy could be granted by year-end or early 2024 and could eventually speed the process. On Brownfield deals, management said the pipeline is active but these projects can take 2-3 years because they require more process rework; on CCA, they said the early data supports the plan, but the final 7,500 to 12,500 bpd range will depend on how the flood performs as more recycle facilities and compression come online.