Denbury Resources Inc.
) reported its preliminary fourth quarter as well as full year
2012 production. The company also disclosed its 2012 proved
Production from the continuing operations jumped 7% sequentially
to 60,052 barrels of oil equivalent per day (Boe/d) in the fourth
quarter. The figures for both the periods are adjusted for the
2012 property sales.
Tertiary production in the fourth quarter increased 8%
sequentially buoyed by robust contributions from the company's
latest CO2 floods at Hastings and Oyster Bayou fields and the
expansion of the existing CO2 floods at Delhi and Tinsley fields.
On the other hand, non-tertiary production increased 6%
sequentially mainly due to the assets acquired from the U.S.
). The properties contributed approximately 1,200 Boe/d to
For 2012, the company achieved 14% year-over-year production
growth from its core business, CO2 EOR. The company has been able
to realize the level in the upper half of its guided range.
At year-end 2012, Denbury had estimated approximately 409 million
oil-equivalent barrels (MMBOE) in proved reserves, of which 80%
was oil, 60% was proved developed and 49% was proved tertiary oil
Denbury is the leading carbon dioxide (CO2) Enhanced Oil Recovery
(EOR) company in the U.S. with a unique profile. Its proved
carbon dioxide reserves were 9.6 trillion cubic feet (Tcf) as of
Dec 31, 2012, an 8% increase over the year-end 2011 level.
The current Zacks Consensus Estimates for Denbury are $1.39 and
$1.17 per share for fiscal years 2012 and 2013, respectively. The
estimates represent a year-over-year decrease of 2.9% for 2012
and 16.1% for 2013. For the fourth quarter of 2012, the Zacks
Consensus Estimate is 30 cents, which represents a 34.4% decrease
over the prior-year quarter.
Recently, Denbury closed the second and final phase of its
previously announced divestiture program to ExxonMobil and its
wholly owned subsidiary, XTO Energy. The company plans to use
most of the proceeds raised from its asset sale to work out a
purchase deal with
Last month, Denbury inked an agreement with a wholly owned
subsidiary of ConocoPhillips to purchase the producing property
interests in Cedar Creek Anticline (CCA) for $1.05 billion in
cash. The CAA acreage matches Denbury's existing portfolio. Also,
recovery from these fields requires supply of carbon dioxide - a
process in which Denbury excels in the Gulf of Mexico.
Denbury is scheduled to report its fourth quarter as well as
full-year earnings results on Feb 21. The company holds a Zacks
Rank #3 (short-term Hold rating).
However, there are other companies in the oil and gas industry
Cabot Oil & Gas Corporation
) that offer value and are worth buying now. Cabot sports a Zacks
Rank #1 (Strong Buy).
CABOT OIL & GAS (COG): Free Stock Analysis
CONOCOPHILLIPS (COP): Free Stock Analysis
DENBURY RES INC (DNR): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
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