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Denbury Resources (DNR) Beats on Q3 Earnings, Revenues

HLX DNR EQM UPLMQ

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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.

Operational Performance

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.   

Total Expense

During the quarter, the company witnessed a 91% year over year decrease in total expense to $293.1 million.

Financials

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.

Guidance

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.

DENBURY RES INC Price, Consensus and EPS Surprise

 

DENBURY RES INC Price, Consensus and EPS Surprise | DENBURY RES INC Quote

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. (UPLMQ - Free Report) , 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.

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