Denbury (DNR) Q2 Earnings Beat Estimates, Revenues Fall Y/Y

Denbury Resources Inc (NYSE:DNR). DNR reported second-quarter 2016 earnings of 8 cents per share (excluding one-time items) that beat the Zacks Consensus Estimate of 1 cent. The quarterly figure, however, declined from 13 cents pre share earned in the year-earlier quarter.

Second-quarter total revenue of $253 million decreased from $374 million a year ago.

Operational Performance

During the reported quarter, production averaged 64,506 barrels of oil equivalent per day (Boe/d) compared with 73,716 Boe/d in the prior-year quarter.

Oil production averaged 61,952 barrels per day (approximately 96% of the total volume), down 11.3% from the year-ago level. Natural gas production declined 34.1% and averaged 15,328 thousand cubic feet/Mcf, on a daily basis.

The company’s production from tertiary operations averaged 39,212 barrels per day, down 7.9% year over year.

Oil price realization (including the impact of hedges) averaged $52.61 per barrel in the quarter, down 31% year over year. Gas prices plunged 48.1% year over year to $1.50 per Mcf. On an oil equivalent basis, the overall price realization was $50.88 per barrel, down 30.5% from the year-earlier level of $73.2.

Financials

Cash flow from operations was $62.9 million in the first six months of 2016 as against $426.7 million in the comparable period a year ago. Oil and natural gas capital investments for the reported period were approximately $48.2 million, down from the year-earlier level of $90.8 million. Cash balance as of Jun 30, 2016 was $2.5 million and total debt was $2,844.7 million.

Guidance

Denbury – a predominantly oil exploration and production company – expects full-year 2016 production to decrease to 64,000–66,000 Boe/d from its earlier guidance of 64,000–68,000 Boe/d. Full-year capital expenditure is still expected at $200 million.

Zacks Rank

Denbury carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are Sasol Ltd. SSL, Enbridge, Inc. ENB and Total SA (PA:TOTF) TOT. Each of these stocks sports a Zacks Rank #1 (Strong Buy).