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Denbury Resources Inc. Message Board

  • moosebit moosebit Feb 19, 2004 12:07 PM Flag

    Good CC

    I thought they did a much better job in presenting the results and status than last Qs disaster. CO2 execution is looking good. I'm not sure what to make of their G&A discussion -- the re-org was supposed to drop future G&A but they stated in the call G&A might not drop. Maybe they were referring to the ex-reorg G&A increases?

    They also indicated that the previous diversification moves could end up on the block since C02 is working.

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    • Mdwitte,

      I think what you are saying is smart. Stick with what you know. On the other hand, I'm looking out some years and trying to get a handle on other commodity markets. Metals is an area of current interest but on a TA basis only. Shipping is another area, also on a largely technical basis.

      I find that I can't force myself to study the issues unless I am invested (however briefly) so I put up a little money and force myself to think through the issues as best I can. I am indebted to folks like Hugh who mention all kinds of different new areas to think about.

      So, I guess using your knowledge is very important but expanding your base of knowledge is also very important.



    • Peter: I've taken a quick look at the tankers also...but when I read the posts by tanker_broker, I realize how little I know about the industry...and in the past, whenever I stary from energy stocks (which I know about $.02 about), I've lost. So I think I'll just sit tight with my E&P' least until new LNG terminals relieve some of the pressure on gas supplies.

    • CSense,

      If you don't show up more often, I'm going to have to show up on your doorstep and throw things at your house. My folks have a place in Sarasota so I even have an advance base camp. So watch out!

      I really, really enjoyed your post. Lots and lots of acronyms to think about. SNG is the scariest and most wonderful thing out here at the moment. I note that EP (the majority partner there) finally moved today. Who knows? One of the smartest and most talented posters that we have who never shows up here is all over SNG for, I think, the right reasons.

      Don't you love it out here? We are running out of the stuff and some folks might, and I underline might still be able to find some. A little renaissance in the middle, and I underline middle, of the middle ages.

      I like your idea about the tanker's and ocean haulers. I couldn't quite squeek in a purchase on OMM on a slight decline recently but did get a little MCX at what I hope is a bottom.

      The very large cargo carrier idea is big and I am going to take a better look at that one. Lot's of risk, maybe plenty of reward. Pretty scary, I think. Better take a peek at a chart. But, I like the way you think. Nothing ventured, nothing gained.

      I hate Canroys but own lots of them now. Not thinking of bailing but thinking of the earliest ideas about when to bail. Hate the gross model. Hate the potential interest rate risk. (Hate bonds for e.g.) Hate the possibility of a possible moderating of US$ risk. But, I like income.

      If you have been out of touch, you missed a giant buying op on WZR yesterday morning. I am sorry that I did not post it here.

      I am hoping that we see another few days of weekness for commodity gold in which instance I would get back into some of Mdwitte's favorites: CBJ, BGO, WHT. CBJ seems to me to be the bellweather and needs to be looked at when it approaches the bottom bollinger band as it did today.


      I hope he isn't down in Florida relaxing with the Sea Cows. We need some finer, and I underline finer, TA out here just about now.



    • Thanks for the come back. I like the oil slate. May pick up some tomorrow. At the moment have finally bailed on NXTL a lot of small neg. vibs. in the short run. Had hoped for LTCgains with a 15tish base thought that the additional wait could prove costly. However, have been buying into my favorite sector energy. In the past few days have been adding to the tankers NAT core + Vlnnc along with
      ECA, CNQ, and had been holding PXP. Have been in out and in again on SNG. If this hits could be an easy double or more. Also along with the oil slate have bought into a full position of NXY. Other energy interest include FDG and a few Can Roy's but have not added as of yet. (should have never sold I might add.)

      OT: Peter: you would love the wild life here in SW Florida birds. Manaties, and fish life forms everywhere. Regards Csense

      PS. SNG for the more adventurous. If it hits could be an easy double but Greg N> CEO of SNG has a spotted rep. JA little advise. Csense

    • My bad - The 71.6mil deferred liability charges were deferred taxes from the 2002 year end balance sheet. Please ignore previous message. Too much caffine today.

    • Does anyone know the nature of DNRs $53mil increase in balance sheet item "Deferred Long Term Liability Charges" - 71,663 on 12/31/02 vs 18,422 on 12/31/03?

    • I see GEL has increased its 4th qtr distribution to $.15, which means an additional $1.2mil botom line income for DNR 1st qtr.

    • Using $32 oil and $5.10 NG with 35000BOE/d production, 2004 hedges and level expenses, I see a $4mil increase in bottom line for 1st qtr. This translates to a 26% increase in eps over 4th qtr 2003. I haven't included and revenues from GEL distributions, or tax savings.

    • Gh,

      The hedges in place are in this link. I don't believe that any hedges were added q4.

      In 2003 nearly 90% of DNR's production was hedged. In q4 of '03 their net of hedges revenue/boe was about $25.50

      Assuming $30 oil and $5Ng and equal-weight production for the year and applying the hedges in place for '04 my gut says that they would achieve $28.50/boe or about a 12% increase. Interestingly, to add some sensitivity analysis to the mix, they would have no Ng hedging losses on the above assumption nor would they until $5.50 were reached. Thus, if one believed in $5.50 Ng, there is and additional 5% revenue upside potential.

      Gross revenues are now approximately $83mm/q which means that $10mm to $15mm/q top line increases should be available to DNR.

      Expenses will be higher/boe but most of that should flow through to the bottom line

      All of that having been said, the downside protection is absolutely no longer there in a meaningful sense. For '04 about 40% of oil production is swapped at $23 and about the same portion of Ng production has a floor of $3.

      If we had a $3Ng market and a $23 oil market, DNR would have about $65mm of top line/q and would have profits of about 9 cents/shr./q.

      Most of that math I round numbered in my head so someone else might want to check it.



    • Gh,

      I didn't look up all of the positions before responding to your post now but my gut is that about 33% of the limiting hedges (assuming current pricing) dropped as of Jan 1.

      One crummy hedge does not a risk-management program make fekhat.

      I'm cooking dinner but I'll look up the hedges tomorrow and tell you what the delta is.



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