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Denbury (DNR) Q3 Earnings Beat, Revenues Lag Estimates

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Denbury Resources Inc. 's DNR third-quarter 2015 adjusted earnings of 18 cents per share (excluding one-time items) beat the Zacks Consensus Estimate of 14 cents. However, quarterly results were lower than the year-earlier adjusted earnings of 26 cents mainly due to lower price realization.

Denbury Resources Inc. (DNR) - Earnings Surprise | FindTheCompany

Third-quarter total revenue of $303.6 million decreased from $637.7 million in the year-ago quarter and missed the Zacks Consensus Estimate of $454 million.

Operational Performance

During the reported quarter, production averaged 71,410 barrels of oil equivalent per day (Boe/d) compared with 73,810 Boe/d in the prior-year quarter. Production comprised 70.5% oil compared with 95.7% in the prior-year period.

Oil production averaged 67,900 barrels per day, down from the year-ago level of 70,619 barrels per day. Natural gas production averaged 21,066 thousand cubic feet (down from 19,147 thousand cubic feet in the year-ago period), on a daily basis.

Tertiary oil production decreased 2% year over year, or 793 barrels per day, primarily impacted by the contractual reversionary assignment in Delhi Field occurring on Nov 1, 2014, which hurt third-quarter 2015 production by approximately 1,200 barrels per day. This was partially offset by production growth at Oyster Bayou Field.

Oil price realization (including the impact of hedges) averaged $71.32 per barrel in the quarter, down from $90.92 per barrel in the year-ago quarter. Gas prices fell to $2.87 per Mcf from $3.61 in the year-ago quarter. On an oil equivalent basis, the overall price realization was $68.66 per barrel, down from the year-earlier level of $87.93 per barrel.

Financials

Cash flow from operations was $699.4 million in the first nine months of 2015 against $885.1 million a year ago. Cash balance as of Sep 30, 2015 was $12.2 million and total debt was $3,357.3 million.

Guidance

Denbury expects 2015 production in the range of 72,500-75,500 Boe/d. The company estimates tertiary production in the range of 42,100-43,700 Boe/d. The capital expenditure budget for 2015 has been reduced by $95 million, offset in part by a higher capitalized interest. As a result, the current guidance is at $475 million, down from the previously estimated total capital spending of $550 million. The capital budget consists of approximately $370 million of tertiary, non-tertiary, and CO2 supply and pipeline projects, plus approximately $105 million of estimated capitalized costs. Of this combined capital expenditure amount, approximately $313 million (66%) has been incurred through the first nine months of 2015.

Zacks Rank

Denbury currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are Sprague Resources LP SRLP , Seadrill Partners LLC SDLP and Paragon Offshore plc PGN . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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DENBURY RES INC (DNR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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