Denbury (DNR) Beats Earnings, Revenue Estimates In Q3

Denbury Resources Inc.’s (NYSE:DNR) third-quarter 2018 earnings per share (EPS) of 13 cents (excluding one-time items) beat the Zacks Consensus Estimate of 11 cents and improved from the year-ago quarter’s earnings of 4 cents.

Total revenues of $395 million rose from $266.5 million in the year-ago quarter. The top line also surpassed the Zacks Consensus Estimate of $357 million.

Higher realized crude price attributed to the strong quarterly results.

Operational Performance

During the quarter, production averaged 59,181 barrels of oil equivalent per day (Boe/d) compared with 60,328 Boe/d in the prior-year quarter.

Oil production averaged 57,410 barrels per day (bpd) (approximately 97% of the total volume), down from the year-ago quarter’s level of 58,376 bpd. Natural gas production averaged 10,623 thousand cubic feet/Mcf (down 9.3%) on a daily basis.

The company’s production from tertiary operations averaged 37,219 barrels per day, down 2.9% year over year.

Oil price realization (including the impact of hedges) averaged $59.78 per barrel in the quarter, up 25.1% year over year. Gas prices fell 4.9% year over year to $2.35 per Mcf. On an oil equivalent basis, the overall price realization was $58.41 per barrel, up 25.1% from the year-earlier quarter’s level of $46.69 per barrel.

Financials

Adjusted cash flow from operations was $135 million in the reported quarter compared with $68 million in the year-ago quarter. The company’s capital spending rose to $95.6 million from the year-earlier quarter’s figure of $67.3 million. As of Sep 30, 2018, cash balance was $66.7 million and total debt was $2.5 billion.

Guidance

Denbury continues to expect 2018 production in the range of 60,000-64,000 Boe/d. The company reiterated its capital expenditure in the range of $300 million-$325 million.

Zacks Rank & Other Stocks to Consider

Denbury carries a Zacks Rank #2 (Buy).

A few other top-ranked players in the same sector are Hess Corp. (NYSE:E) , Enterprise Products Partners L.P. (NYSE:EPD) and Eni SpA (NYSE:E) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

New York-based Hess is a global integrated energy company. It delivered an average positive earnings surprise of 230.5% in the last four quarters.

Headquartered in Houston, TX, Enterprise Products Partners is among the leading midstream energy players in North America. It pulled off an average positive earnings surprise of 9.3% in the last four quarters.

Based in Rome, Italy, Eni is among the leading integrated energy players in the world. The partnership witnessed a negative earnings surprise of 0.3% in the preceding four quarters.

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