June 1, 2017 - 8:19 AM EDT
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Blog Coverage: Denbury Resources Acquires 23% Stake in Salt Creek

Upcoming AWS Coverage on EOG Resources Post-Earnings Results

LONDON, UK / ACCESSWIRE / June 1, 2017 / Active Wall St. blog coverage looks at the headline from Denbury Resources Inc. (NYSE: DNR) as the Company announced on May 30, 2017, that it has entered into a definitive agreement with certain subsidiaries of Linn Energy, Inc., to acquire 23% non-operated working interest in Salt Creek Field in Wyoming for $71.5 million. The Company plans to fund the acquisition with its bank line and anticipates this cost will ultimately be offset by the sale of non-productive surface acreage, ideally suitable for commercial development in the Houston area. Register with us now for your free membership and blog access at:

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One of Denbury Resources' competitors within the Independent Oil & Gas space, EOG Resources, Inc. (NYSE: EOG), reported on May 08, 2017, its financial results for Q1 2017. AWS will be initiating a research report on EOG Resources in the coming days.

Today, AWS is promoting its blog coverage on DNR; touching on EOG. Get all of our free blog coverage and more by clicking on the link below:

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The Acquired Asset

The net production from the acquired interest is currently estimated at about 2,100 barrels per day with production expected to surge over the next several years, subject to planned field development projects. According to the Company, the proved developed resources for the acquired interest are estimated at about 9 million barrels of oil where Denbury expects to recognize an additional 9 million barrels of oil of proved undeveloped reserves based on current development plans. The exploration is set to have in estimation finding and development costs of less than $7 per barrel including both the acquisition and future development costs, where the net estimated capital costs for FY17 was about $5 million.

The acquisition of the interest is expected to close by the end of June 2017 and is subject to satisfactory completion of diligence reviews and customary closing conditions. The purchase price for the agreement is subject to standard purchase price adjustments for revenues and costs between the March 01, 2017, effective date and closing date of the transaction.

Denbury's Portfolio

Denbury is an independent oil and natural gas firm with operations focused on two primary areas of operation, namely the Gulf Coast and the Rocky Mountain regions. The Company plans to increase the value of its portfolio and properties through a combination of exploitation, drilling, and proven engineering extraction practices, with the most significant emphasis to CO2 enhanced oil recovery operations. Recently, on May 04, 2017, the Company announced net income of $22 million for Q1 FY17.

Denbury's capital budget for FY17, excluding acquisitions and capitalized interest, remained unchanged from the previously estimated amount of about $300 million, according to the announcement made on May 04, 2017. The capital budget consists of about $245 million of tertiary, non-tertiary, and CO2 supply and pipeline projects, plus about $55 million of estimated capitalized costs. About 18%, or $53 million, of the combined capital expenditure amount has been incurred in Q1 FY17. Denbury's estimated FY17 production remained unchanged from a previously disclosed range of 58,000 to 62,000 BOE/d.

Chris Kendall, COO of Denbury, views this agreement as the perfect strategy for the Company where Salt Creek is complementary to its portfolio. The growth in the particular area involves building scale at the center of core Rockies region, with production set to be advanced and many opportunities for future expansion in this large and long-lived interest. The acquisition builds upon the Company's goal to resume production by 2018, and the attractive price should improve the Company's key credit metrics in the near term, with the added feasibility to make additional enhancement in the future.

Stock Performance

Denbury Resources' share price finished yesterday's trading session at $1.53, tumbling 8.93%. A total volume of 10.71 million shares exchanged hands, which was higher than the 3 months average volume of 7.70 million shares. The stock currently has a market cap of $602.47 million.

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SOURCE: Active Wall Street


Source: ACCESSWIRE (June 1, 2017 - 8:19 AM EDT)

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