Denbury Resources Inc. announced adjusted net income (a non-GAAP measure)1 of $138 million for the second quarter of 2012, or $0.35 per diluted share, on quarterly revenues of $597 million. This compares to $147 million of adjusted net income, or $0.36 per diluted share, on revenues of $596 million for the prior year second quarter, and $161 million of adjusted net income, or $0.41 per diluted share, on revenues of $640 million for the first quarter of 2012. Second quarter of 2012 net income (the GAAP measure) was $212 million, or $0.54 per diluted share. This compares to net income of $259 million, or $0.64 per diluted share, for the prior year second quarter, and net income of $113 million, or $0.29 per diluted share, for the first quarter of 2012.
Adjusted cash flow from operations (a non-GAAP measure)1 for the second quarter of 2012 was $362 million. This compares to $344 million of the same measure for the prior year second quarter, and $352 million for the first quarter of 2012. Net cash provided by operating activities (the GAAP measure) was $441 million for the second quarter of 2012, compared to $399 million of this same measure for the prior year second quarter and $292 million for the first quarter of 2012.
Production
Second quarter of 2012 continuing total production averaged 72,280 BOE/d, up 16% from the prior year period level, and up 4% from the first quarter of 2012 level. The comparative quarterly increases were the result of gains in tertiary and Bakken production, which were offset by reductions in conventional production. Excluded from second quarter 2012 continuing production volumes are 57 BOE/d of production from non-core properties sold in April 2012. Average production from non-core assets sold in the first half of 2012 was 2,591 BOE/d in the second quarter of 2011 and 1,762 BOE/d in the first quarter of 2012. Including production from these divested assets, production averaged 72,337 BOE/d in the second quarter of 2012, up 11% from 64,919 BOE/d produced in the prior year period, and up 1% from the 71,532 BOE/d produced in the first quarter of 2012.
Second quarter of 2012 production from tertiary operations averaged 35,208 Bbls/d, a 14% increase from the prior year second quarter level, and a 6% increase from the first quarter of 2012 level. The growth in tertiary production was driven by contributions from new floods at Oyster Bayou and Hastings fields and existing floods at Tinsley and Heidelberg fields.
Bakken production averaged 15,208 BOE/d in the second quarter of 2012, a 99% increase from the prior year second quarter level, and a small increase from the first quarter of 2012 level. The rapid year-over-year growth in Bakken production is a result of Denbury's active drilling program in the region. The slowdown in sequential quarterly growth primarily reflects the impact of a planned reduction in Denbury's operated rig count in the Bakken to four from a peak of seven in 2011.
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