A month has gone by since the last earnings report for Denbury Resources Inc. . Shares have added about 7.4% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is DNR due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2017 Results
Denbury Resources reported earnings of 12 cents per share in fourth-quarter 2017 (excluding one-time items), which beat the Zacks Consensus Estimate of 7 cents. The company had incurred loss of 2 cents in the year-ago quarter. A significant decline in total expense, improved production and higher oil price realization drove results.
In fourth-quarter 2017, total revenues were $327 million, up from $272 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $308 million.
Operational Performance
During the reported quarter, production averaged 61,144 barrels of oil equivalent per day (Boe/d) compared with 60,685 Boe/d in the prior-year quarter.
Oil production averaged 59,086 barrels per day (96.6% of the total volume), down 1.1% from the year-ago quarter’s level. Natural gas production fell 8.8% and averaged 12,351 thousand cubic feet/Mcf on a daily basis.
The company’s production from tertiary operations averaged 39,488-37,346 barrels of oil equivalent per day, up 5.7% year over year.
Oil price realization (including the impact of hedges) averaged $55.49 per barrel in the quarter, up 32.3% year over year. Gas prices deteriorated 4% year over year to $2.45 per Mcf. On an oil equivalent basis, overall price realization rose 32.2% from the year-ago quarter’s level of $40.94 to $54.11 per barrel.
Total Expenses
During the quarter, total expenses were $333.5 million, down 61.6% year over year.
Financials
Cash flow from operations was $124 million, up from $60 million in the year-ago quarter. Oil and natural gas capital investments were approximately $58.2 million compared with $61.4 million in the year-ago quarter. As of Dec 31, 2017, cash balance was $0.6 million and total debt was $2.8 billion.
Guidance
Denbury Resources — a predominantly oil exploration and production company — expects full-year 2018 production in the range of 60,000-64,000 barrels of oil equivalent per day (BOE/d). The mid-point of this range is likely to be almost flat with the company’s 2017 exit rate of 61,144 BOE/d. Capital expenditure is estimated in the range of $300-$325 million, up 21-38% from the 2017 capital spending level of $235.7 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter compared to one lower.
Denbury Resources Inc. Price and Consensus
VGM Scores
At this time, DNR has an average Growth Score of C, however its Momentum is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for value investors while also being suitable for those looking for momentum and to a lesser degree growth.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Interestingly, DNR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Denbury Resources (DNR) Up 7.4% Since Its Last Earnings Report?
A month has gone by since the last earnings report for Denbury Resources Inc. . Shares have added about 7.4% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is DNR due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2017 Results
Denbury Resources reported earnings of 12 cents per share in fourth-quarter 2017 (excluding one-time items), which beat the Zacks Consensus Estimate of 7 cents. The company had incurred loss of 2 cents in the year-ago quarter. A significant decline in total expense, improved production and higher oil price realization drove results.
In fourth-quarter 2017, total revenues were $327 million, up from $272 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $308 million.
Operational Performance
During the reported quarter, production averaged 61,144 barrels of oil equivalent per day (Boe/d) compared with 60,685 Boe/d in the prior-year quarter.
Oil production averaged 59,086 barrels per day (96.6% of the total volume), down 1.1% from the year-ago quarter’s level. Natural gas production fell 8.8% and averaged 12,351 thousand cubic feet/Mcf on a daily basis.
The company’s production from tertiary operations averaged 39,488-37,346 barrels of oil equivalent per day, up 5.7% year over year.
Oil price realization (including the impact of hedges) averaged $55.49 per barrel in the quarter, up 32.3% year over year. Gas prices deteriorated 4% year over year to $2.45 per Mcf. On an oil equivalent basis, overall price realization rose 32.2% from the year-ago quarter’s level of $40.94 to $54.11 per barrel.
Total Expenses
During the quarter, total expenses were $333.5 million, down 61.6% year over year.
Financials
Cash flow from operations was $124 million, up from $60 million in the year-ago quarter. Oil and natural gas capital investments were approximately $58.2 million compared with $61.4 million in the year-ago quarter. As of Dec 31, 2017, cash balance was $0.6 million and total debt was $2.8 billion.
Guidance
Denbury Resources — a predominantly oil exploration and production company — expects full-year 2018 production in the range of 60,000-64,000 barrels of oil equivalent per day (BOE/d). The mid-point of this range is likely to be almost flat with the company’s 2017 exit rate of 61,144 BOE/d. Capital expenditure is estimated in the range of $300-$325 million, up 21-38% from the 2017 capital spending level of $235.7 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter compared to one lower.
Denbury Resources Inc. Price and Consensus
Denbury Resources Inc. Price and Consensus | Denbury Resources Inc. Quote
VGM Scores
At this time, DNR has an average Growth Score of C, however its Momentum is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for value investors while also being suitable for those looking for momentum and to a lesser degree growth.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Interestingly, DNR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.