The following video is part of our “Motley Fool Conversations” series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.
Denbury Resources and ExxonMobil, two companies that John and David own in their real-money portfolio, cut a deal for some properties. Denbury’s core business is flooding older oilfields with CO2 in order to extract oil left behind. It’s the second largest tertiary oil recovery company behind Occidental Petroleum. ExxonMobil is in a better position to compete in the Bakken with Continental Resources and Kodiak Oil and Gas in that area. David thinks this is a great deal for Denbury from a strategic standpoint. This keeps Denbury focused on its strengths. Management says it will use the proceeds to pay down debt and repurchase shares. At these prices, and with those prospects, John and David are likely to be buying right alongside management.
There are many different ways to play the energy sector, and our analysts have uncovered an under-the-radar company that's dominating its industry. This company is a leading provider of equipment and components used in drilling and production operations. To learn more about this exciting company, check out our special free report: "The Only Energy Stock You'll Ever Need." Don't miss out on this limited-time offer, and your opportunity to discover this under-the-radar company before the market does. Click here to access your report -- it's totally free.