Last Monday, six insiders of independent oil and natural gas company, Denbury Resources (DNR, Financial) reported purchasing a combined amount of about 7,000 shares, soon after the company announced its second phase completion to sell its Bakken assets in North Dakota and Montana to Exxon Mobil Corp. (XOM, Financial).
The slew of purchases, perhaps driven by a new wave of company confidence, were made three years after the company’s last reported insider purchase, which was by Director Michael B. Decker on June 2009, a 1,000-share addition to his then 23,555-share holding. After Decker’s transaction, the rest of Denbury’s insider activity comprised of sells up until the six that were reported on the last day of 2012.
The breakdown of the recent purchases is as follows:
All transactions were made at an average price of $16.12.
Announced last September, Plano, Texas-based Denbury originally anticipated $1.6 billion in cash from its Bakken sales, which Denbury intended to use to pursue additional oil fields in the Gulf Coast or Rocky Mountain regions, as well as to fund capital expenditures and/or to repay outstanding debt.
As part of the deal, Denbury agreed “in principle” to either purchase an interest or incremental CO2 in ExxonMobil’s CO2 reserves from its southwestern Wyoming LaBarge field, which would reduce the amount of cash that Denbury would receive.
The turnout, months later, was ExxonMobil paying $1.3 billion in cash (including closing adjustments) in December for all of Denbury’s Bakken area assets. In turn, Denbury acquired operating interests in ExxonMobil’s Webster Field in Texas and Hartzog Draw Field in Wyoming for the purpose of CO2-enhanced oil recovery.
CEO Rykhoek commented on the transaction in Denbury’s third quarter financial report:
“The Bakken transaction will sharpen our focus on our highly profitable CO2 EOR strategy and provides us with two additional oil fields in close proximity to our existing infrastructure that are well suited for CO2 EOR. Our large inventory of CO2 EOR projects provides us with excellent visibility on relatively lower risk, long-term production growth, while our strong balance sheet and expected cash proceeds from the Bakken transaction give us a very high degree of financial flexibility.”
Market capitalized at $6.49 billion, Denbury remains the largest combined oil and natural gas operator in Mississippi and Montana, and owns the largest reserves of CO2 used for tertiary oil recovery east of the Mississippi River. It also holds significant acreage in the Rocky Mountain and the Gulf Coast regions.
Gurus George Soros and RS Investment Management hold 1.1 percent and 4.72 percent of Denbury’s outstanding shares, respectively.
The company’s 10-Year Financials suggest that Denbury’s revenue has been booming for at least 10 years, with an annual growth rate of 16.4 percent for the timeframe. In five years, it grew at a rate of 10.3 percent, and in the past 12 months, its revenue grew by 14.3 percent.
In the last three years, the company has increased in market value by 7.29 percent.
Its stock is currently trading at $16.65. It has three stars in Business Predictability, 5 in Financial Strength and 7 in Profitability and Growth.
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The slew of purchases, perhaps driven by a new wave of company confidence, were made three years after the company’s last reported insider purchase, which was by Director Michael B. Decker on June 2009, a 1,000-share addition to his then 23,555-share holding. After Decker’s transaction, the rest of Denbury’s insider activity comprised of sells up until the six that were reported on the last day of 2012.
The breakdown of the recent purchases is as follows:
- CEO Phil Rykhoek bought 1,694 shares, which places his total holding at 672,568 shares.
- Sr. Vice President and CFO Mark C. Allen bought 1,149 shares, placing his total holding at 520,091 shares.
- Sr. Vice President of CO2 Operations, Robert L. Cornelius bought 1,149 shares, placing his holding at 268,341 shares.
- Newly promoted Senior Vice President of Planning, Technology and Business Development, Charlie Gibson bought 815 shares, placing his total holding at 145,671 shares.
- Newly promoted Senior Vice President and COO Craig McPherson bought 1,222 shares, which places his total holding at 103,468 shares.
- Vice President and Chief Accounting Officer, Alan Rhoades purchased 726 shares, which places his total holding at 87,491 shares.
All transactions were made at an average price of $16.12.
Announced last September, Plano, Texas-based Denbury originally anticipated $1.6 billion in cash from its Bakken sales, which Denbury intended to use to pursue additional oil fields in the Gulf Coast or Rocky Mountain regions, as well as to fund capital expenditures and/or to repay outstanding debt.
As part of the deal, Denbury agreed “in principle” to either purchase an interest or incremental CO2 in ExxonMobil’s CO2 reserves from its southwestern Wyoming LaBarge field, which would reduce the amount of cash that Denbury would receive.
The turnout, months later, was ExxonMobil paying $1.3 billion in cash (including closing adjustments) in December for all of Denbury’s Bakken area assets. In turn, Denbury acquired operating interests in ExxonMobil’s Webster Field in Texas and Hartzog Draw Field in Wyoming for the purpose of CO2-enhanced oil recovery.
CEO Rykhoek commented on the transaction in Denbury’s third quarter financial report:
“The Bakken transaction will sharpen our focus on our highly profitable CO2 EOR strategy and provides us with two additional oil fields in close proximity to our existing infrastructure that are well suited for CO2 EOR. Our large inventory of CO2 EOR projects provides us with excellent visibility on relatively lower risk, long-term production growth, while our strong balance sheet and expected cash proceeds from the Bakken transaction give us a very high degree of financial flexibility.”
Market capitalized at $6.49 billion, Denbury remains the largest combined oil and natural gas operator in Mississippi and Montana, and owns the largest reserves of CO2 used for tertiary oil recovery east of the Mississippi River. It also holds significant acreage in the Rocky Mountain and the Gulf Coast regions.
Gurus George Soros and RS Investment Management hold 1.1 percent and 4.72 percent of Denbury’s outstanding shares, respectively.
The company’s 10-Year Financials suggest that Denbury’s revenue has been booming for at least 10 years, with an annual growth rate of 16.4 percent for the timeframe. In five years, it grew at a rate of 10.3 percent, and in the past 12 months, its revenue grew by 14.3 percent.
In the last three years, the company has increased in market value by 7.29 percent.
Its stock is currently trading at $16.65. It has three stars in Business Predictability, 5 in Financial Strength and 7 in Profitability and Growth.
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Premium Membership is needed for full access GuruFocus Insider Activity. GuruFocus’ long list of Premium Membership perks provides many opportunities to follow your favorite Gurus and stocks more closely. If you are not a Premium Member yet, we invite you to take advantage of our limited-time offer of 15% off our normal Premium Membership rate. Click on GuruFocus Member Discount now!
