Denbury Resources Earnings: Profits Beat Street

Although S&P 500 (NYSE:SPY) component Denbury Resources Inc.’s (NYSE:DNR) net income fell in the second quarter from a year earlier, profit exceeded analysts’ expectations. Denbury Resources is an independent oil and gas company that acquires and develops oil and natural gas properties in the United States Gulf Coast region.

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Denbury Resources Inc. Earnings Cheat Sheet

Results: Net income for Denbury Resources Inc. fell to $211.9 million (54 cents per share) vs. $259.2 million (64 cents per share) a year earlier. This is a decline of 18.3% from the year-earlier quarter.

Revenue: Remained constant at $601.8 million.

Actual vs. Wall St. Expectations: Denbury Resources Inc. beat the mean analyst estimate of 36 cents per share. It fell short of the average revenue estimate of $621 million.

Quoting Management: Phil Rykhoek, Denbury’s President and CEO, commented, “We continued to execute our unique and profitable oil production growth strategy in the second quarter. Total tertiary production reached a new record level due to strong contributions from our newest floods at Hastings and Oyster Bayou and continued growth at Tinsley. Given Hastings’ strong tertiary production response, we booked initial proved tertiary reserves for the field sooner than expected. Our proved reserve additions at Hastings, Oyster Bayou, and the Bakken in the first half of 2012 drove a 12% increase in our estimates of proved reserves at mid-year 2012 from year-end 2011 levels. The positive results we are experiencing at Hastings bode well for the carbon dioxide (“CO2″) flood we have planned for the recently acquired Thompson Field, which is approximately 18 miles from Hastings Field and produces oil from the same geologic formation. While our Bakken production increased by 99% from the year ago quarter, the rate of sequential quarterly production growth slowed as expected in the quarter primarily due to the reduction in our operated rig count in the area to four from a peak of seven in 2011. With our solid second quarter results, we remain confident that both our tertiary and total production should be in the upper half of our estimated 2012 production ranges.”

Key Stats:

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 12 cents in the first quarter, by 8 cents in the fourth quarter of the last fiscal year, and by 3 cents in the third quarter of the last fiscal year.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the third quarter has risen to 38 cents per share from 31 cents. Over the past three months, the average estimate for the fiscal year has climbed from $1.37 per to share to $1.61.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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