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Denbury Restarts 90% Production as Harvey Makes an Exit

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Upstream energy player Denbury Resources Inc. (DNR - Free Report) announced that it is restoring production in fields hit by Hurricane Harvey.

Over the past few days, the company has resumed oil and gas production in five of the six fields that had been shut down after Harvey had hit the Gulf coast.

Thompson is the only oil field that is yet to resume production. Before the hurricane had made landfall, the field was producing 1,000 barrels of oil equivalent (BOE) a day. It is to be noted that none of the fields have affected beyond repair.

The estimate given by Denbury clearly shows that roughly 90% of the production capacity – 16,000 BOE a day – has been restored. The upstream firm is now working on bringing the Thompson field back to operations at full capacity in the next eight weeks.

Harvey is not expected to alter Denbury’s full-year 2017 production guidance, which is presently pegged at 60,000 to 62,000 BOE per day. However, the third-quarter 2017 output might be reduced by 2,000-2,200 BOE a day, according to the company.

Although Harvey might dent cashflow for shareholders in the short term, returns for stockholders over the long haul will not likely be affected.  

Plano, TX-based Denbury is a growing oil and gas exploration and production company with strong activities in the areas of Gulf Coast and Rocky Mountain. The company posted a positive earnings surprise of 25% for the last four quarters.

However, Denbury’s price performance fails to impress. Year to date, the company has lost 70.1%, significantly underperforming the industry’s 31% decline.

The company currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.

A few better-ranked players in the energy sector are TransCanada Corporation (TRP - Free Report) , Transmontaigne Partners LP (TLP - Free Report) and Range Resources Corporation (RRC - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Calgary, Canada, TransCanada is a midstream energy firm in North America. The company posted an average positive earnings surprise of 4.06% for the last four quarters.

Transmontaigne – headquartered in Denver, CO – is involved in the transportation and storage of refined petroleum products. The firm recorded an average positive earnings surprise of 6.60% over the last four quarters.

Based in Fort Worth, TX, Range Resources is an independent oil and gas company, engaged in the exploration, development and acquisition of U.S. oil and gas resources. The company’s 2017 earnings are estimated to grow 1,487.2%.

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