Energy Prospectus

Denbury Resources Q4 profit beats Street 02/23 08:06 AM

Feb 23 (Reuters) - Independent oil and gas company Denbury Resources Inc (DNR:$22.8100,$0.0400,0.18%) posted better-than-expected quarterly results, helped by higher production levels and commodity prices.
The company posted a fourth-quarter net income of $10.4 million, or 3 cents a share, compared with $3.5 million, or a cent per share, a year ago.
Excluding items, the company earned 22 cents a share.
Revenue nearly doubled to $485.3 million.
Analysts, on an average, were expecting earnings of 19 cents a share on revenue of $491.78 million, according to Thomson Reuters I/B/E/S.
Denbury shares touched a three-year high of $23.94 before closing at $22.81 on Tuesday on the New York Stock Exchange. (Reporting by Swetha Gopinath; Editing by Joyjeet Das)

Adjusted Net Income per share came in well above my forecast of $0.15. I'm working on the forecast now and will have more on DNR late today.

PLANO, Texas--(BUSINESS WIRE)-- Denbury Resources Inc. (NYSE:DNR - News) ("Denbury" or the "Company") today announced its fourth quarter and full year 2010 financial and operating results.

Fourth quarter 2010 net income was $10.4 million, or $0.03 per basic common share, as compared to $3.5 million, or $0.01 per basic common share in the fourth quarter of 2009. Fourth quarter 2010 results included the following unusual or non-cash items:
•non-cash losses on the change in fair value of derivatives of $129.6 million before taxes,
•merger and other related expenses associated with the acquisition of Encore Acquisition Company (“Encore”) of $13.0 million before taxes,
•income of $10.0 million before taxes from early cash settlement of certain 2011 natural gas derivative contracts terminated in response to the sale of the Haynesville and East Texas natural gas properties in December 2010, and
•an increase in deferred tax expense resulting from a change in the Company’s statutory tax rate due to asset dispositions and corporate legal entity restructuring ($4.5 million).

Net income adjusted to exclude these four items would have been approximately $86.9 million, or $0.22 per basic common share in the fourth quarter of 2010, as compared to adjusted net income of $45.8 million, or $0.18 per basic common share in the prior year fourth quarter, after adjustments for changes in the fair value of derivatives and Encore merger related expenses in the 2009 period (see the accompanying schedules for a reconciliation of “net income” as defined by generally accepted accounting principles (GAAP) to the non-GAAP measure “adjusted net income”).

I'm increasing my Fair Value estimate for DNR to $28/share, primarily the result of the fact that DNR sells most of their oil into the Gulf Coast market where they are now getting over $100/bbl.

FYI: DNR now has approximately 90% of 2011 natural gas production hedged with floors at $6.20/mcf.

My updated Net Income and Cash Flow Forecast will be posted to the website as soon as Kim returns from Vietnam. She is currently in an area with now internet access so it may be this weekend.

Note from transcript:

You may have noticed recently that the Light Louisiana Sweet oil price has traded at a significant premium to the WTI NYMEX oil price. Throughout most of 2010, LLS [Light Louisiana Sweet] traded at slightly positive to $5 higher than WTI. Since near the end of January 2011, LLS has traded between $10 to $20 higher than WTI. The significance of this is that roughly 40% of our oil production is marketed on an oil price that incorporates this positive LLS differential. In general, the average of this differential goes into a pricing formula that is realized in the following month.

Analyst Actions: Denbury Resources Upgraded to Buy from Neutral at SunTrust 02/24 07:08 AM

08:08 AM Eastern Standard Time, 02/24/2011 (MidnightTrader) -- Denbury Resources (DNR:$23.5600,$0.7500,3.29%) is reportedly upgraded to Buy from Neutral at SunTrust. The firm cited stronger oil prices and Bakken growth. Price target is set at $30. Price: 23.56, Change: 0, Percent Change: 0
http://www.midnighttrader.com

Analyst Actions: Denbury Resources Upgraded to Buy from Neutral at SunTrust 02/24 07:08 AM

08:08 AM Eastern Standard Time, 02/24/2011 (MidnightTrader) -- Denbury Resources (DNR:$23.5600,$0.7500,3.29%) is reportedly upgraded to Buy from Neutral at SunTrust. The firm cited stronger oil prices and Bakken growth. Price target is set at $30. Price: 23.56, Change: 0, Percent Change: 0
http://www.midnighttrader.com