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Denbury (DNR) Beats Earnings and Revenue Estimates in Q4

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Denbury Resources Inc. (DNR - Free Report) delivered earnings of 10 cents per share in fourth-quarter 2018 (excluding one-time items), which beat the Zacks Consensus Estimate of 9 cents. However, the figure declined from the year-ago quarter’s figure of12 cents.

In 2018, adjusted profit was 48 cents per share compared with 14 cents a year ago. The figure surpassed the Zacks Consensus Estimate of 47 cents.

Higher oil and gas price realizations as well as lower expenses contributed to growth, which was offset by lower production.

In fourth-quarter 2018, total revenues were $338.4 million, up from $326.6 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $328 million.

Total revenues in 2018 rose 30.4% year over year to $1,473.6 million. The figure surpassed the Zacks Consensus Estimate of $1,460.0 million.

Operational Performance

During the quarter, production averaged 59,867 barrels of oil equivalent per day (Boe/d) compared with 61,144 Boe/d in the prior-year quarter.

Oil production averaged 58,266 barrels per day (97.3% of the total volume), down 1.4% from the year-ago quarter’s level. Natural gas production fell 22.2% and averaged 9,603 thousand cubic feet (Mcf) on a daily basis.

The company’s production from tertiary operations averaged 37,764 barrels of oil equivalent per day, down 3.2% year over year.

Oil price realization (including the impact of hedges) averaged $55.75 per barrel in the quarter, up 0.5% year over year. Gas prices surged 40.4% year over year to $3.44 per Mcf. On an oil equivalent basis, the overall price realization was $54.81 per barrel, up 1.3% from the year-earlier quarter’s level of $54.11 per barrel.   

Total Expenses

During the quarter, total expenses were $115.7 million, down 65.3% year over year.

Financials

Cash flow from operations was $136.2 million, up from $124.3 million in the year-ago quarter. Oil and natural gas capital investments were approximately $101.1 million compared with $58.2 million in the year-ago quarter. As of Dec 31, 2018, cash balance was $38.6 million and total debt was $2.5 billion.

Reserves

As of Dec 31, 2018, total proved reserves were 262 million Boe (MMBoe), up from 260 MMBoe as on Dec 31, 2017. Of the total reserves, 97% was liquids and 88% was proved developed. The company replaced 111% of 2018 production.

Guidance

Denbury — a predominant oil exploration and production company — expects 2019 production in the range of 56,000-60,000 barrels of oil equivalent per day (BOE/d). The mid-point of this range is likely to be almost flat with the company’s 2018 exit rate of 59,867 BOE/d. Capital expenditure is estimated in the range of $240-$260 million, down 20-25% from the 2018 capital spending level.

Q4 Price Performance

During the fourth quarter, shares of Denbury Resources plunged 72.1% compared with the industry’s decline of 38.9%.

Zacks Rank & Key Picks

Denbury carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector can opt for some better-ranked stocks as given below.

CrossAmerica Partners L.P. (CAPL - Free Report) is involved in the wholesale distribution of motor fuels, comprising gasoline and diesel fuel. The company delivered average positive earnings surprise of 436.7% in the last four quarters. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

San Antonio, TX-based NuStar Energy L.P. (NS - Free Report) is a midstream energy company. For 2019, the bottom line, which has witnessed three upside revision in the past 30 days, is expected to grow 64.2% year over year. The company currently holds a Zacks Rank #2 (Buy).

Madrid, Spain-based Repsol, S.A. (REPYY - Free Report) is an integrated energy company. The bottom line for 2019 is expected to increase 13.7% year over year. The company delivered average positive earnings surprise of 9% in the trailing four quarters. The stock currently has a Zacks Rank #2.

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