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Denbury Resources (DNR) Posts Q4 Loss as Expected, Sales Top

Denbury Resources Inc.DNR reported a loss of 2 cents per share in fourth-quarter 2016 (excluding one-time items), in line with the Zacks Consensus Estimate. The company had incurred loss of 1 cent per share a year ago. A significant rise in total expense, lower production as well as weaker oil and gas price realizations contributed to the deterioration.

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For full-year 2016, adjusted profit was 4 cents per share compared with 37 cents in the prior year. The reported figure surpassed our expectation of 3 cents per share.

Fourth-quarter total revenue of $271.6 million increased from $269.6 million a year ago. The top line also beat the Zacks Consensus Estimate of $235 million.

Total revenue for the full year decreased 28.9% year over year to $975.6.0 million. This also came in below the Zacks Consensus Estimate of $1,014.0 million

Operational Performance

During the reported quarter, production averaged 60,685 barrels of oil equivalent per day (Boe/d) compared with 72,002Boe/d in the prior-year quarter.

Oil production averaged 58,429 barrels per day (96.3% of the total volume), down 14.6% from the year-ago level. Natural gas production inched up 1% and averaged 13,538 thousand cubic feet/Mcf, on a daily basis.

The company's production from tertiary operations averaged 37,346 barrels of oil equivalent per day, down 9.3% year over year.

Oil price realization (including the impact of hedges) averaged $41.93 per barrel in the quarter, down 20.4% year over year. Gas prices jumped 27.5% year over year to $2.55 per Mcf. On an oil equivalent basis, overall price realization plunged 19.5% from the year-earlier level of $50.83 to $40.94 per barrel.

Total Expense

During the quarter, the company witnessed 47.8% year-over-year decrease in total expense to $868.9 million.

Financials

Cash flow from operations for the fourth quarter was $60 million as against $165 million in the comparable period a year ago. Oil and natural gas capital investments for the reported period were approximately $61.4 million compared with the year-earlier level of $109 million. As of Dec 31, 2016, cash balance was $1.6 million and total debt was $2.8 billion.

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Guidance

Denbury - a predominantly oil exploration and production company - expects full-year 2017 production in the range of 58,000-62,000 barrels of oil equivalent per day (BOE/d). The mid-point of this range is likely to be almost flat with the company's 2016 exit rate of just below 60,000 BOE/d. Full-year capital expenditure is expected at $300 million, up 44% from the 2016 capital spending level.

Zacks Rank and Key Stock Picks

Denbury carries a Zacks Rank #3 (Hold). A couple of better-ranked players in the same space include Delek Logistics Partners, LP DKL and Sunrun Inc. RUN . Both these stocks sport a Zacks Rank #1 (Strong Buy). Another stock from the same space is W&T Offshore Inc. WTI , which holds a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Delek Logistics Partners posted a negative earnings surprise of 25.45% in the preceding quarter. It had an average negative earnings surprise of 11.32% in the four trailing quarters.

Sunrun posted a positive earnings surprise of 137.21% in the preceding quarter. It beat estimates in all the four trailing quarters with an average positive earnings surprise of 134.71%.

W&T Offshore posted a positive earnings surprise of 44.19% in the preceding quarter. It beat estimates in all the four trailing quarters with an average positive earnings surprise of 31.49%.

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Denbury Resources Inc. (DNR): Free Stock Analysis Report

W&T Offshore, Inc. (WTI): Free Stock Analysis Report

Delek Logistics Partners, L.P. (DKL): Free Stock Analysis Report

Sunrun Inc. (RUN): 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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