Why We're Buying (More of) This Oil Company

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics around the investing world.

John and Dave think Denbury Resources is one of the most attractive energy investments in the market today. That's why they're buying more shares for their real-money portfolio. Unlike ExxonMobil and Chevron, which are diversified energy companies, Denbury Resources is a specialist. Denbury uses carbon dioxide to extract oil from older oil fields, whereas traditional E&Ps need to find the oil and drill wells. Denbury is the second largest tertiary recovery company behind Occidental Petroleum and ahead of Kinder Morgan. Denbury trades at a very attractive price today. It has 20-plus years' worth of CO2 and more than 1 billion PPP reserves, yet David estimates it trades at a significant discount to its net asset value. It's not often the market offers such a strong company at bargain prices.

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David Meier has no positions in the stocks mentioned above. John Reeves owns shares of Denbury Resources. The Motley Fool owns shares of Denbury Resources, Kinder Morgan, and ExxonMobil. Motley Fool newsletter services recommend Chevron and Kinder Morgan. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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