Despite what investors think, Denbury Resources (DNR) is making all the right moves. While its decision not to join the MLP bandwagon sent its stock more than 10% lower over the past few months, it still was a smart move for the company. Today, Denbury Resources announced a few new moves that should create even more value its investors over the long term. Let's take a closer look.

Backing up the truck on a buyback
When Denbury Resources announced its new game plan, which included a newly initiated dividend, the company also increased the amount authorized for its share repurchase program. That announcement was made this past November and boosted the buyback authorization from just over $100 million to $250 million. In just two months the company spent $78 million dollars from that program as it took advantage of its sliding stock price to pick up about 5 million shares.

Denbury Resources really believes that its stock remains cheap. That's why today we find it reloading the authorization with an additional $250 to bring it up to a total of $422 million. That represents 7% of the company's outstanding shares, which is a lot considering Denbury has already repurchased more than 12% of its outstanding shares since it began buying back stock in 2011. Denbury Resources is one of the few companies that actually reduces its share count with a buyback instead of just offsetting dilution.

Locking in cash flow
The other smart move the company announced today was that it's switching its commodity hedging program from collars to fixed-priced swaps. Basically, what this means is that instead of allowing it to profit from the upside in oil prices, Denbury Resources is locking in the price it'll sell its oil for in 2014.

That suggests just one thing: It really believes that oil prices in America could be heading lower in 2014. Under the former hedging plan, the company could have increased its profits as oil prices rose to a ceiling of $102 per barrel in the first half of the year. But it was also exposed to falling oil prices all the way down to $80 per barrel. With that downside risk a distinct possibility thanks to America's oil boom, Denbury Resources decided to remove that risk and lock in its cash flow.

Oil and gas companies manage commodity price risk in many different ways. For example, oil and gas MLP LINN Energy LLC (LINEQ) hedges 100% of its production out for the next four to six years. Most of LINN Energy's hedges are in fixed-price swaps as locking in cash flow is critical to LINN's operations. Other oil and gas producers like EOG Resources Inc (EOG -0.48%) face a larger risk because it doesn't hedge as much of its volumes. While EOG Resources uses its rail infrastructure to obtain premium prices for its oil, the company is still more exposed to the downside of oil prices than either LINN Energy or Denbury Resources in 2014.

Investor takeaway
Denbury Resources really is making all the right moves these days. Its stock is cheap so it is doubling down on its stock buyback program. At the same time it sees the potential for weaker oil prices this year as America's oil boom shifts into overdrive. It's taking advantage of the opportunity of current high oil prices to lock in its cash flow for the year. Both moves should create value for investors over the long term.