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Denbury (DNR) Q2 Earnings Beat Estimates on Higher Production

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Denbury Resources Inc.’s (DNR - Free Report) second-quarter 2018 earnings per share of 13 cents (excluding one-time items) beat the Zacks Consensus Estimate of 10 cents and also improved from the year-ago quarter’s breakeven.

Total revenues of $387.1 million rose from $261.2 million a year ago. The top line also surpassed the Zacks Consensus Estimate of $329 million.

Increased production of oil along with higher realized crude price attributed to the strong quarterly results.

Operational Performance

During the reported quarter, production averaged 61,994 barrels of oil equivalent per day (Boe/d) compared with 59,774 Boe/d in the prior-year quarter.

Oil production averaged 60,109 barrels per day (bpd) (approximately 97% of the total volume), up from the year-ago quarter’s 57,867 bpd. However, natural gas production averaged 11,314 thousand cubic feet/Mcf (down 1.1%) on a daily basis.

The company’s production from tertiary operations averaged 38,514 barrels per day, up 5% year over year.

Oil price realization (including the impact of hedges) averaged $58.23 per barrel in the quarter, up 30% year over year. Gas prices fell 10% year over year to $2.21 per Mcf. On an oil equivalent basis, the overall price realization was $56.86 per barrel, up 29.4% from the year-earlier quarter’s level of $43.96 per barrel.   

Financials

Adjusted cash flow from operations was $134 million in the reported quarter compared with $65 million in the year-ago quarter. The company’s capital spending plunged to $90.4 million from the year-earlier quarter’s $152.6 million. As of Jun 30, 2018, cash balance was $4.5 billion and total debt was $2.5 billion.

Guidance

Denbury continues to expect 2018 production in the range of 60,000-64,000 Boe/d.

Denbury Resources Inc. Price, Consensus and EPS Surprise

Denbury Resources Inc. Price, Consensus and EPS Surprise | Denbury Resources Inc. Quote

Zacks Rank & Other Stocks to Consider

Denbury carries a Zacks Rank #2 (Buy). Other top-ranked players in the energy space are Northern Oil and Gas, Inc. (NOG - Free Report) , McDermott International, Inc. (MDR - Free Report) and Murphy Oil Corp. (MUR - Free Report) . While Murphy Oil carries a Zacks Rank #2, McDermott and Northern Oil sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.   

Northern Oil beat the Zacks Consensus Estimate in three of the prior four quarters, the average positive earnings surprise being 160.4%.

McDermott’s earnings surpassed the Zacks Consensus Estimate in the last four quarters, the average positive surprise being 101.7%.

Murphy Oil’s bottom line surpassed the consensus mark in each of the last four quarters, the average positive surprise being 102.5%.

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