Thought the following was kind of interesting just passing it along for those that may have missed it:
Denbury Sells Enron Claim for $9.2 Million
DALLAS--(BUSINESS WIRE)--Feb. 18, 2002--Denbury Resources Inc. (NYSE:DNR - news; TSE:DNR - news; ``Denbury'' or the ``Company'') today announced that on Feb. 15, 2002 it sold its claim in bankruptcy against Enron Corporation and its subsidiaries (NYSE:ENE - news) for net proceeds of $9.2 million. The claim relates primarily to the natural gas hedges Denbury purchased from Enron for 2002 and 2003 natural gas production relating to the July 2001 Matrix Oil & Gas acquisition. Overall, the Company paid approximately $18.0 million for all of the hedges relating to the Matrix acquisition. For this, the Company received a total of $21.9 million back in net cash receipts, including the $9.2 million from this most recent transaction.
The Company assigned its bankruptcy claims against Enron relating to its derivative hedge assets and certain unpaid natural gas sale receivables for approximately $9.2 million. As part of the transfer, the Company made certain representations and warranties typical for this type of transaction. Although the Company does not anticipate any issues relating to these representations, under certain conditions it could result in a refund of certain amounts. The Company does not anticipate that these refunds will be material, if any.
Assuming that there will be no further adjustments in the future to the claim value, the effect on the Company's earnings will be as previously announced. To account for its losses relating to these hedge assets and the subsequent sale of its bankruptcy claim, the Company anticipates recording (i) a pre-tax write down of its derivative hedge assets and other receivables relating to Enron of approximately $25.2 million in the fourth quarter of 2001, (ii) pre-tax income during 2002 of approximately $13.3 million, and (iii) pre-tax income during 2003 of approximately $5.1 million. The three year total net loss after tax relating to these transactions with Enron is approximately $4.3 million or approximately $0.08 per common share based on the current common shares outstanding. |
