Denbury Resources Inc. has elected not to make the approximately $3 million interest payment due and payable on July 15, 2020 with respect to its 4 5/8% Senior Subordinated Notes due 2023 on the due date in order to evaluate certain strategic alternatives, none of which have been implemented at this time. Under the indenture governing the 2023 Notes, the Company has a 30-day grace period to make the Interest Payment before such non-payment constitutes an “event of default” under such indenture.
Headquartered in Plano, Texas, Denbury Resources Inc. is an independent oil and natural gas company with operations focused in two key operating areas: the Gulf Coast and Rocky Mountain regions. The Company’s goal is to increase the value of its properties through a combination of exploitation, drilling and proven engineering extraction practices, with the most significant emphasis relating to CO2 enhanced oil recovery operations.
As of March 31, 2020, the Company had $4.61 billion in total assets, $258.72 million in total current liabilities, $2.86 billion in total long-term liabilities, and $1.49 billion in total stockholders’ equity.
Denbury received on March 5, 2020 formal notice from the New York Stock Exchange that the average closing price of the Company’s
shares of common stock had fallen below $1.00 per share over a period of 30 consecutive trading days, which is the minimum average share price for continued listing on the NYSE. The NYSE notification does not affect Denbury’s ongoing business operations or its U.S. Securities and Exchange Commission reporting requirements, nor does it trigger any violation of its debt obligations. Denbury is considering all available options to regain compliance with the NYSE’s continued listing standards,
which may include a reverse stock split, subject to approval of the Company’s board of directors and stockholders.
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As reported by the TCR on July 7, 2020, S&P Global Ratings lowered its long-term issuer credit rating on U.S.-based oil and gas exploration and production company Denbury Resources Inc. (DNR) to ‘D’ from ‘CCC+’. “The downgrade reflects our view that DNR will not make the $8 million interest payment on its 6.375% senior convertible notes due in 2024 within the 30-day grace period while the company continues discussions with its debtholders. Given the current weak macroeconomic and industry conditions and Denbury’s high debt, we believe the company will seek a debt restructuring,” S&P said.
As reported by the TCR on July 3, 2020, Moody’s Investors Service downgraded Denbury Resources Inc.’s corporate family rating to Ca from Caa2. “The downgrade of Denbury Resources’ ratings reflects the high probability the company will default on its debt obligations after it elected not to make an approximately $8 million interest payment due on June 30th with respect to the 6-3/8% convertible senior notes due 2024,” commented James Wilkins, Moody’s vice president.