Denbury Inc. emerged from bankruptcy and resumed trading on the New York Stock Exchange on Sept. 21 following completion of its financial restructuring.
Earlier this year, Denbury—whose CO₂ EOR-focused operations are based in the Rocky Mountains and Gulf Coast—joined a growing wave of E&P companies to voluntarily file for Chapter 11 bankruptcy protection following the oil market crash caused by the coronavirus and a Saudi-Russia price war.
When the company filed for bankruptcy in late July, Denbury was the fifth largest oil and gas producer to seek bankruptcy protection so far this year.
Last month, analysts with Rystad Energy predicted another 150 E&Ps in North America would need to seek Chapter 11 bankruptcy protection through 2022. The number of North American E&P bankruptcies so far in 2020 stood at 36 as of Aug. 31, according to law firm Haynes and Boone LLP.
Denbury, which produced around 56,000 bbl/d of oil in 2019, has struggled with its debt load. Total debt at the end of 2019 was $2.3 billion, half of which was due to mature by mid-2022.
Through the “pre-packaged” plan under its restructuring support agreement completed on Sept. 18, Denbury said it restructured its balance sheet and eliminated $2.1 billion of bond debt.
Denbury will now focus on leveraging its expertise and strategic assets into an emerging carbon capture, use and storage business, Chris Kendall, president and CEO of the Plano, Texas-based company, said in a statement.
“Having quickly and efficiently completed our restructuring process, Denbury is now a stronger company with the financial flexibility to continue building on our unique CO₂ EOR-focused strategy for many years to come,” Kendall said in the Sept. 18 statement. “As a result of this process, we are better positioned to compete in a dynamic and evolving energy market and capitalize on the many opportunities ahead.”
Upon emergence from bankruptcy, Denbury entered into a reserve-based revolving credit facility with a $100 million commitment amount and an initial borrowing base of $575 million.
The company also changed its corporate name from Denbury Resources Inc. to Denbury Inc. Its stock was expected to commence trading on the NYSE under the ticker symbol DEN at market open on Sept. 21.
Kirkland & Ellis LLP provided legal counsel to Denbury for the restructuring. Evercore Inc. was its financial adviser and Alvarez & Marsal served as restructuring adviser.