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Denbury Beats Q4 Earnings Estimates as Production Grows - Analyst Blog

Zacks Equity Research

Denbury Resources Inc. (DNR) – a predominantly oil exploration and production company – reported fourth-quarter 2014 earnings of 27 cents per share (excluding one-time items), flat year over year. The bottom line, however, came above the Zacks Consensus Estimate of 23 cents. The outperformance was mainly backed by higher production.

For full-year 2014, adjusted profit was $1.04 per share versus $1.46 in the prior year. The reported figure comfortably surpassed our expectation of $1.02.
 


Denbury Resources Inc. - Earnings Surprise | FindTheBest

Fourth-quarter total revenue of $483.7 million decreased from $599.1 million a year ago and also came below the Zacks Consensus Estimate of $572.0 million. Full-year 2014 total revenue decreased 3.1% year over year to $2,417.0 million. This also came below the Zacks Consensus Estimate of $2,443.0 million
 
Operational Performance

During the reported quarter, production averaged 74,875 barrels of oil equivalent per day (Boe/d) versus 71,466 Boe/d in the prior-year quarter.

Oil production averaged 70,909 barrels per day (or 95% of total volume), up 4.5% from the year-ago level. Natural gas production averaged 23,796 thousand cubic feet/Mcf (up almost 10%), on a daily basis.

The company’s production from tertiary operations averaged 41,873 barrels per day, representing an 8% increase year over year. In the reported quarter, higher production at Bell Creek, Oyster Bayou, Tinsley, Heidelberg and Hastings fields more than offset production declines in mature properties and the reversionary assignment of approximately 25% of interest in the Delhi Field.

Oil price realization (including the impact of hedges) averaged $86.67 per barrel in the quarter, reflecting a fall of 6.8% year over year, while gas prices rose 2.9% year over year to $3.60 per Mcf. On an oil equivalent basis, the overall price realization was $83.22 per barrel, down 6.9% from the year-earlier level of $89.37 per barrel.

Financials

Cash flow from operations was $1,223 million in 2014 versus $1,361 million in the prior year. Oil & natural gas capital investments for 2014 were approximately $1,074.8 million, down from the year-earlier level of $2,175.7 million. Cash balance as of Dec 31, 2014, was $23.2 million and total debt was $3,571.4 million.

Guidance

Denbury expects full-year 2015 production in the range of 72,500–75,500 Boe/d. Full-year capital expenditure is still expected at $550 million.

Zacks Rank & Stock Picks

Denbury currently carries a Zacks Rank #4 (Sell). Better-ranked players in the energy sector include InterOil Corp. (IOC), Golar LNG Partners LP (GMLP) and Valero Energy Partners LP (VLP). All these stocks sport a Zacks Rank #1 (Strong Buy).


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