Denbury Resources Inc. (DNR - Free Report) reported a breakeven in third-quarter 2016 (excluding one-time items) as against the Zacks Consensus Estimate of a loss of 3 cents per share. A significant fall in total expense supported the result.
The company had reported earnings of 18 cents per share a year ago. The year-over-year downfall may be attributed to lower production and weaker oil and gas price realizations.
Third-quarter total revenue of almost $254 million decreased from $303.6 million a year ago. The top line, however, beat the Zacks Consensus Estimate of $250 million.
During the reported quarter, production averaged 61,533 barrels of oil equivalent per day (Boe/d) compared with 71,410 Boe/d in the prior-year quarter.
Oil production averaged 59,297 barrels per day (96.3% of the total volume), down 12.7% from the year-ago level. Natural gas production declined 36.2% and averaged 13,416 thousand cubic feet/Mcf, on a daily basis.
The company’s production from tertiary operations averaged 37,199 barrels of oil equivalent per day, down 8.8% year over year.
Oil price realization (including the impact of hedges) averaged $42.12 per barrel in the quarter, down 41% year over year. Gas prices plunged 18.8% year over year to $2.33 per Mcf. On an oil equivalent basis, overall price realization plunged 40.2% from the year-earlier level of $68.66 to $41.09 per barrel.
During the quarter, the company witnessed a 91% year over year decrease in total expense to $293.1 million.
Cash flow from operations was $96 million in the first nine months of 2016 as against $273 million in the comparable period a year ago. Oil and natural gas capital investments for the reported period were approximately $44.6 million, down from the year-earlier level of $75.8 million. As of Sep 30, 2016, cash balance was $3.3 million and total debt was $2.8 billion.
Denbury – a predominantly oil exploration and production company – expects full-year 2016 production to decrease to 64,000–65,000 Boe/d from its earlier guidance of 64,000–66,000 Boe/d. Full-year capital expenditure is still expected at $200 million.
Zacks Rank and Key Stock Picks
Denbury currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are Ultra Petroleum Corp. , EQT Midstream Partners, LP (EQM - Free Report) and Helix Energy Solutions Group Inc. (HLX - Free Report) .
Ultra Petroleum is likely to witness year-over-year earnings growth of 425.8% in the current year. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EQT Midstream is projected to witness year-over-year earnings growth of almost 12% in the current year. It has a Zacks Rank #2 (Buy).
Helix Energy posted an average positive earnings surprise of 56.42% in the last four quarters. The company has a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>