Denbury’s 2019 capital budget, excluding acquisitions and capitalized interest, is between $240 million and $260 million, a decrease of 20% to 25% from the Company’s 2018 capital spending level. The budget provides for approximate spending as follows:

• $100 million for tertiary oil field expenditures;
• $70 million for other areas, primarily non-tertiary oil field expenditures including exploitation projects;
• $30 million for CO2 sources and pipelines; and
• $50 million for other capital items such as capitalized internal acquisition, exploration and development costs and pre-production tertiary startup costs.

In addition, capitalized interest for 2019 is estimated at between $30 million and $40 million.  At this spending level, the Company currently anticipates 2019 production of between 56,000 and 60,000 BOE/d and expects to generate free cash flow of $50 million to $100 million assuming a $50 per Bbl WTI oil price.

2018 proved reserves and production

The Company’s total estimated proved oil and natural gas reserves at December 31, 2018 were 262 million BOE, consisting of 255 million barrels of crude oil, condensate and natural gas liquids (together, “liquids”), and 43 billion cubic feet (7 million BOE) of natural gas. Reserves were 97% liquids and 88% proved developed, with 58% of total proved reserves attributable to Denbury’s CO2 tertiary operations. Total proved reserves increased by 24 million BOE, representing a 111% replacement of 2018 production.  The increase was primarily due to 22 million BOE of positive revisions of previous estimates associated with changes in commodity prices, production timing and performance.

Denbury’s production averaged 59,867 BOE/d during fourth quarter 2018, including 37,764 barrels of oil per day (“Bbls/d”) from tertiary properties and 22,103 BOE/d from non-tertiary properties. On a sequential-quarter basis, production in fourth quarter 2018 increased by 686 BOE/d, or 1%, from third quarter 2018 (the “prior quarter”), primarily due to continued response from Bell Creek’s CO2 flood expansion and additional drilling in the Company’s Cedar Creek Anticline Mission Canyon drilling program. On an annual basis, Denbury’s 2018 production averaged 60,341 BOE/d, slightly above 2017 levels.

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