Denbury Resources Inc (DNR) saw its loss narrow to $24.59 million, or $0.06 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $2,244.13 million, or $6.41 a share. On an adjusted basis, net profit for the quarter was $1.26 million, when compared with $63.42 million in the last year period.
Revenue during the quarter dropped 16.34 percent to $253.98 million from $303.60 million in the previous year period. Gross margin for the quarter contracted 443 basis points over the previous year period to 57.72 percent.
Operating income for the quarter was $52.50 million, compared with an operating loss of $1,241.60 million in the previous year period.
Phil Rykhoek, Denbury’s chief executive officer, commented, “In the third quarter of 2016, we continued to execute on our plan of optimizing our business and reducing costs, preserving cash and liquidity and reducing leverage. Even though realized oil prices were in the low $40s for the third quarter of 2016, we generated positive cash flow and slightly positive adjusted net income. On a sequential basis, our adjusted cash flow and income decreased as the remaining portion of our most favorable hedges ended in the second quarter of 2016, which reduced our average realized price per barrel (including hedges) by approximately $10. Although our cash costs per barrel of oil equivalent (“BOE”) increased slightly this quarter as a result of lower production and the expense of repairs at Thompson Field following the weather-related flooding during the second quarter, many of the cost savings achieved throughout 2016 will be sustainable as oil prices improve and have become a permanent part of our business going forward.
Operating cash flow drops significantly
Denbury Resources Inc has generated cash of $159.36 million from operating activities during the nine month period, down 77.21 percent or $540.04 million, when compared with the last year period.
The company has spent $134.01 million cash to meet investing activities during the nine month period as against cash outgo of $427.54 million in the last year period.
The company has spent $24.89 million cash to carry out financing activities during the nine month period as against cash outgo of $282.80 million in the last year period.
Cash and cash equivalents stood at $3.27 million as on Sep. 30, 2016, down 73.20 percent or $8.94 million from $12.21 million on Sep. 30, 2015.
Working capital drops significantly
Denbury Resources Inc has witnessed a decline in the working capital over the last year. It stood at $3.27 million as at Sep. 30, 2016, down 95.29 percent or $66.22 million from $69.49 million on Sep. 30, 2015.
Days sales outstanding went down to 48 days for the quarter compared with 77 days for the same period last year.
Debt comes down
Denbury Resources Inc has recorded a decline in total debt over the last one year. It stood at $2,747.92 million as on Sep. 30, 2016, down 18.15 percent or $609.43 million from $3,357.35 million on Sep. 30, 2015. Total debt was 57.05 percent of total assets as on Sep. 30, 2016, compared with 45.65 percent on Sep. 30, 2015. Debt to equity ratio was at 3.24 as on Sep. 30, 2016, up from 1.57 as on Sep. 30, 2015.
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