Denbury beats my forecast

[dan_s]

PLANO, Texas, Feb. 21, 2013 (GLOBE NEWSWIRE) -- Denbury Resources Inc. (DNR) ("Denbury" or the "Company") today announced adjusted net income (a non-GAAP measure)(1) of $137 million for the fourth quarter of 2012, or $0.36 per diluted share. This compares to $127 million of adjusted net income, or $0.33 per diluted share for the third quarter of 2012(2), and $175 million of adjusted net income, or $0.45 per diluted share, for the prior year fourth quarter. Fourth quarter of 2012 net income (the GAAP measure) was $115 million, or $0.30 per diluted share, on quarterly revenues of $603 million. This compares to net income of $85 million, or $0.22 per diluted share, on revenues of $595 million for the third quarter of 2012, and net income of $53 million, or $0.13 per diluted share, on revenues of $612 million for the prior year fourth quarter.

Adjusted cash flow from operations (a non-GAAP measure)(1) for the fourth quarter of 2012 was $316 million, but would have been $358 million if the increase in current income taxes related to the Bakken transaction(3) were excluded.

I will have an updated forecast model posted under the Sweet 16 Tab today. - Dan

[dan_s]

Sweet 16 Growth Portfolio: An updated Net Income & Cash Flow Forecast model for Denbury Resources (DNR) has been posted under the Sweet 16 Tab.

First Call's price target is $23/share but I am holding with my Fair Value Estimate of $30/share. DNR has 13% to 15% annual production and proven reserve growth locked in for AT LEAST the next ten years with it's existing projects. It also has HUGE CO2 reserves that I don't think Wall Street gives them much credit for. Their CO2 reserves and their CO2 pipeline system are very valuable assets.

I also like how they have restructured their debt to lower interest expense and extend maturities.

It is very important to note that they sell a high percentage of their oil into the Gulf Coast Market at about a $10/bbl premium to WTI.

The company's production will dip in Q1 as a result of the sale of their Bakken assets but it should grow steadily from there. Since they now generate a lot of FREE CASH FLOW, I do expect them to make some strategic acquisitions that should increase production over what I have in the forecast model.