Texas-based Denbury Resources
Denbury posted net losses of $14.2 million in the first quarter, compared with the year-ago net income of $96.9 million. What primarily dented the company's results were noncash losses on the change of derivatives to the tune $172.3 million. These losses, of course, should not matter much since they do not represent actual cash outflow from the company.
What really matters
In fact, after discounting these unusual expenses, adjusted net income stood at $103.9 million -- a huge jump from the year-ago adjusted net income of $17.4 million. This does not look surprising given that production and sales have gone up substantially. Production this quarter averaged 63,603 barrels of oil equivalent per day (Boe/d), versus 53,125 Boe/d a year back. This translates to a healthy 20% growth.
Rival Continental Resources
For me, what really stands out is Denbury's expansion into the Bakken reserves. Having primary operations in Mississippi and Montana, an expansion into Bakken, like LINN Energy
Future growth in Denbury's core business will depend on how well the company exploits this shale play as Continental and Kodiak Oil & Gas
With five rigs currently operating in the Bakken, the company intends to add two more by the end of this year. Fools should take note of the increased activity going on in this region. Denbury seems to be doing well, and I'll closely watch how well the company manages to increase production.
Fool contributor Isac Simon does not own shares of any of the companies mentioned in this article. The Motley Fool owns shares of Denbury Resources. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.