Denbury Resources (NYSE: DNR ) released its first-quarter results before the opening bell this morning. The enhanced oil recovery specialist reported adjusted net income of $89 million, or $0.25 per share. That's $11 million less than the company earned last quarter and $34 million below what it earned in the first quarter of 2013.
Higher expenses, including seasonally higher general and administrative expenses combined with higher interest expenses and a higher tax rate, resulted in lower earnings at Denbury Resources. The company's adjusted cash flow from operations also slipped sequentially. Denbury Resources reported adjusted cash flow from operations of $289 million, which is $6 million less than it produced last quarter. However, this would have been higher except Denbury Resources recorded a $13 million income tax benefit last quarter relating to the start-up of its gas processing plan.
While the company's earnings and cash flow slipped there were a number of positive developments this past quarter. The company's production rose by 3%, while lease operating expenses fell. Production was driven by setting a new record for enhanced oil production as that segment averaged 39,892 barrels per day. Increased production at several fields in the Gulf Coast region along with continued positive response to carbon dioxide from the Bell Creek field pushed tertiary production higher. In addition to that, conventional production also edged higher due to development work across several fields as well as increased natural gas sales from its new processing plant.
Overall, Denbury Resources is off to a "positive start" according to a statement from CEO Phil Rykhoek in the company's earnings press release. He also noted that one of the company's primary targets this year is to reduce costs throughout the organization. That should lead to increased cash flow, which the company plans on using to increase its dividend with a goal of more than doubling it by late next year.