Denbury (DNR) Q1 Loss Wider Than Expected, Revenues Beat

Denbury Resources Inc. (NYSE:DNR) – a predominantly oil exploration and production company – incurred first-quarter 2017 loss of 2 cents per share (excluding one-time items), wider than the Zacks Consensus Estimate of a loss of 1 cent per share. Lower production adversely affected the results. The company had posted a loss of 3 cents in the first quarter of 2016.

First-quarter total revenue of $275.4 million increased from $194.8 million a year ago. The top line also beat the Zacks Consensus Estimate of $251.3 million.

Operational Performance

During the reported quarter, production averaged 59,933 barrels of oil equivalent per day (Boe/d) compared with 69,351 Boe/d in the prior-year quarter.

Oil production averaged 58,303 barrels per day (approximately 97.3% of the total volume), down 11.8% from the year-ago level. Natural gas production averaged 9,778 thousand cubic feet/Mcf (down 49.3%), on a daily basis.

The company’s production from tertiary operations averaged 37,070 barrels per day, down 8.4% year over year.

Oil price realization (including the impact of hedges) averaged $45.17 per barrel in the quarter, up 5.8% year over year. Gas prices also rose 47.1% year over year to $2.50 per Mcf. On an oil equivalent basis, the overall price realization was $44.35 per barrel, up 7.6% from the year-earlier level of $41.20 per barrel.

Financials

Cash flow from operations was $24.3 million in the reported quarter compared with $2.0 million in the prior year. Oil and natural gas capital investments for the reported period were approximately $53.3 million compared with the year-earlier level of $52.3 million. As of Mar 31, 2017, cash balance was $1.7 million and total debt was $2,826.2 million.

Guidance

Denbury expects full-year 2017 production in the range of 58,000–62,000 Boe/d. Full-year capital expenditure is still expected at $300 million.

Zacks Rank

Denbury currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks from the same space are SunCoke Energy, Inc. (NYSE:SXC) , Gran Tierra Energy Inc (TO:GTE) and Global Partners L.P. (NYSE:GLP) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SunCoke Energy posted a positive earnings surprise of 120.0% in the preceding quarter. The company beat estimates in two of the four trailing quarters with an average negative earnings surprise of 35.78%.

Gran Tierra Energy posted a positive earnings surprise of 105.88% in the year-ago quarter. It posted an average positive earnings surprise of 18.63% over the four trailing quarters.

Global Partners posted a positive earnings surprise of 83.41% in the preceding quarter. It surpassed estimates in two of the four trailing quarters with an average positive earnings surprise of 96.55%.

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