Denbury Resources (DNR)
Posted: Mon May 10, 2010 9:04 pm
Denbury deserves "Core Holding" status within the Sweet-16. It is always difficult to forecast results for a company while they are still within the transition period of a major merger but DNR looks solid. - Dan
2010 Outlook
Denbury’s 2010 development and exploration budget (excluding acquisitions) remains at $1.0 billion, with approximately 60% of the budget to be spent on tertiary related operations. The Company’s pending $900 million property sale is expected to close during May 2010, the proceeds of which will be used to repay most, if not all, of the Company’s outstanding bank debt. This divestiture is not expected to have a material impact on the Company’s 2010 capital budget.
Phil Rykhoek, Chief Executive Officer, said: “The first four months of 2010 have been extremely busy and positive for Denbury. We successfully financed and closed our Encore acquisition, and then within a few weeks entered into a $900 million sales transaction to repay most of our acquisition debt. This asset sale is expected to close within the next few weeks, and we will use the proceeds to repay most, if not all, of our bank credit line, leaving us with reasonable debt metrics and significant credit availability (up to $1.6 billion of unused credit assuming the banks do not reduce our borrowing base as a result of the property sale). While this quarter’s financials are a bit difficult to analyze with so many unusual items included therein, if you look at our core operations, we’re excited to report that our production is ahead of budget and we have accordingly increased our projected 2010 targets. Our employees are working extremely hard doing a great job at maintaining our operations while simultaneously working on the Encore integration. Things are going well, oil prices remain strong, and we are delighted to be one of the most oil-focused independents in the United States.”
2010 Outlook
Denbury’s 2010 development and exploration budget (excluding acquisitions) remains at $1.0 billion, with approximately 60% of the budget to be spent on tertiary related operations. The Company’s pending $900 million property sale is expected to close during May 2010, the proceeds of which will be used to repay most, if not all, of the Company’s outstanding bank debt. This divestiture is not expected to have a material impact on the Company’s 2010 capital budget.
Phil Rykhoek, Chief Executive Officer, said: “The first four months of 2010 have been extremely busy and positive for Denbury. We successfully financed and closed our Encore acquisition, and then within a few weeks entered into a $900 million sales transaction to repay most of our acquisition debt. This asset sale is expected to close within the next few weeks, and we will use the proceeds to repay most, if not all, of our bank credit line, leaving us with reasonable debt metrics and significant credit availability (up to $1.6 billion of unused credit assuming the banks do not reduce our borrowing base as a result of the property sale). While this quarter’s financials are a bit difficult to analyze with so many unusual items included therein, if you look at our core operations, we’re excited to report that our production is ahead of budget and we have accordingly increased our projected 2010 targets. Our employees are working extremely hard doing a great job at maintaining our operations while simultaneously working on the Encore integration. Things are going well, oil prices remain strong, and we are delighted to be one of the most oil-focused independents in the United States.”