Denbury Resources, Inc. Q3 2009 Earnings Conference Call

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2009-11-05 15:10:28.0

Tags: Carbon Dioxide, Earnings, Natural Gas, Source, Denbury Resources Inc., Telecom & Utilities, Seeking Alpha

Question-and-Answer Session

Operator

We will begin now begin the question and answer session. (Operator Instructions). At this time, we will pause momentarily to assemble our roster. Our first question is from Mike Scialla with Thomas Weisel Partners. Please go ahead, sir.

Mike Scialla - Thomas Weisel Partners

Question I should have asked you the other day after the acquisition, if I can go back to that, on those CO2 sources in the Rockies. You alluded to there are some naturally occurring sources there that have not been tapped. Just wondering, have those been identified or have they just been off-limits? And why do you think Denbury can get their hands on it?

Tracy Evans

Well, a lot of the natural sources we're talking about there are the sources of CO2 that are produced with natural gas. A lot of other people refer to those primarily as anthropogenic, but it's coming out of the ground just like the natural gas. So we may have confused people a little bit in that regard.

Mike Scialla - Thomas Weisel Partners

So this is similar to like a La Barge situation, but?

Tracy Evans

Right.

Mike Scialla - Thomas Weisel Partners

In addition to La Barge?

Tracy Evans

Right.

Mike Scialla - Thomas Weisel Partners

And then looking at your tertiary volumes, if I am calculating things right, it sounds like from what Bob was talking about you, you're looking for some additional ramp between now and the end of the year, say 500 barrels a day or so. Is that fair?

Phil Rykhoek

We're actually, the last couple weeks of October, we are already in that 25.5to 26, and in the last week I think we've been running just a little bit over 26, which I think is about where we need to be to meet that annual forecast. So we're pretty much there.

Tracy Evans

Particularly Heidelberg should perform for us.

Mike Scialla - Thomas Weisel Partners

And if it does continue to ramp, I guess between now and the end of the year, just looking at the numbers. So you get to 26.5or so, and then looking at your production guidance for next year, doesn't look like you're projecting a whole lot of growth above that number for an average of 27,000 next year. And I was thinking that we're going to see more growth out of Tinsley, Heidelberg. You will have Delhi coming on. Soso and Lockhart I would think are still increasing. Do you think you are being conservative, or is there an underlying decline? What is the decline I guess what I am after Little Creek and Mallalieu, are they declining the way you would expect?

 

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