Denbury (DNR) Posts Earnings in Q3, Retains Capital View

DenburyResources Inc. DNR reported strong third-quarter 2017 results, courtesy of higher oil equivalent price realizations.

The upstream company’s earnings – after adjusting for one-time items – came in at 4 cents per share, comparing favorably with the Zacks Consensus Estimate of loss of a penny. The company’s earnings broke even in the last quarter.

Third-quarter total revenues of $267 million increased from $254 million a year ago. The top line also beat the Zacks Consensus Estimate of $254 million.

Operational Performance

During the reported quarter, production averaged 60,328 barrels of oil equivalent per day (Boe/d), compared with 61,533 Boe/d in the prior-year quarter.     

Oil production averaged 58,376 barrels per day (almost 97% of the total volume), down almost 2% from the year-ago level. Natural gas production averaged 11,710 thousand cubic feet/Mcf (down 12.7%) on a daily basis.  

The company’s production from tertiary operations averaged 38,873 barrels per day, up 4.5% year over year.

Oil price realization (including the impact of hedges) averaged $47.8 per barrel in the quarter, up 13.5% year over year. Gas prices, however, fell almost 4% year over year to $2.24 per Mcf. On an oil equivalent basis, the overall price realization was $46.69 a barrel, up 13.6% from the year-earlier level of $41.09.       

Lease Expenses

The company recorded lease operating expenses of $118 million, up 11% from the year-ago quarter.

Financials

Cash flow from operations was $68 million in the reported quarter, compared with $62 million in the prior-year quarter. Oil and natural gas capital investments in the reported quarter were approximately $53.3 million, compared with the year-earlier level of $44.6 million. As of Sep 30, 2017, cash balance was $57,000 and total debt was $2,952.3 million.

Guidance

Denbury has maintained its 2017 capital spending guidance at $250 million. Following Hurricane Harvey, the company expects 2017 production to match the low end of 60,000-62,000 Boe/d range.

Share Price Performance

Denbury has lost 12.4% in the July-to-September quarter of this year, underperforming the industry’s 5.1% gain. 

 

Zacks Rank & Key Picks

Denbury currently has a Zacks Rank #3 (Hold). A few better-ranked energy players are Par Pacific Holdings Inc. PARR, China Petroleum & Chemical Corporation SNP and Northern Oil and Gas, Inc. NOG. Par Pacific and China Petroleum sport a Zacks Rank #1 (Strong Buy), while Northern Oil carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

Headquartered in Houston, TX, Par Pacific managed to beat the Zacks Consensus Estimate in three of the last four quarters, the average earnings surprise being 195.26%.

Headquartered in headquartered in Beijing, China Petroleum is a leading integrated energy player. The company will likely witness year-over-year earnings growth of 59.1% in 2017.

Based in Minnetonka, MN, Northern Oil is an upstream energy player. The company’s 2017 revenues are estimated to grow 44.1%.

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