Intrinsic value of Denbury Resources - DNR

Previous Close

$4.70

  Intrinsic Value

$0.41

stock screener

  Rating & Target

str. sell

-91%

Previous close

$4.70

 
Intrinsic value

$0.41

 
Up/down potential

-91%

 
Rating

str. sell

We calculate the intrinsic value of DNR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  15.80
  14.72
  13.75
  12.87
  12.09
  11.38
  10.74
  10.17
  9.65
  9.18
  8.77
  8.39
  8.05
  7.75
  7.47
  7.22
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.96
  5.86
  5.78
  5.70
  5.63
  5.57
  5.51
Revenue, $m
  1,309
  1,501
  1,708
  1,927
  2,160
  2,406
  2,664
  2,935
  3,219
  3,514
  3,822
  4,143
  4,476
  4,823
  5,183
  5,558
  5,947
  6,351
  6,772
  7,209
  7,664
  8,138
  8,632
  9,146
  9,682
  10,241
  10,825
  11,434
  12,070
  12,735
Variable operating expenses, $m
  3,163
  3,628
  4,127
  4,658
  5,221
  5,815
  6,440
  7,095
  7,779
  8,494
  9,238
  10,013
  10,819
  11,657
  12,528
  13,433
  14,374
  15,351
  16,368
  17,425
  18,525
  19,670
  20,863
  22,106
  23,401
  24,753
  26,163
  27,636
  29,174
  30,781
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,163
  3,628
  4,127
  4,658
  5,221
  5,815
  6,440
  7,095
  7,779
  8,494
  9,238
  10,013
  10,819
  11,657
  12,528
  13,433
  14,374
  15,351
  16,368
  17,425
  18,525
  19,670
  20,863
  22,106
  23,401
  24,753
  26,163
  27,636
  29,174
  30,781
Operating income, $m
  -1,854
  -2,127
  -2,420
  -2,731
  -3,061
  -3,409
  -3,776
  -4,159
  -4,561
  -4,980
  -5,416
  -5,870
  -6,343
  -6,834
  -7,345
  -7,875
  -8,427
  -9,000
  -9,596
  -10,216
  -10,860
  -11,532
  -12,231
  -12,960
  -13,719
  -14,512
  -15,339
  -16,202
  -17,103
  -18,046
EBITDA, $m
  -1,382
  -1,585
  -1,803
  -2,035
  -2,281
  -2,541
  -2,814
  -3,100
  -3,399
  -3,711
  -4,037
  -4,375
  -4,727
  -5,094
  -5,474
  -5,870
  -6,281
  -6,708
  -7,152
  -7,614
  -8,094
  -8,595
  -9,116
  -9,659
  -10,225
  -10,816
  -11,432
  -12,075
  -12,747
  -13,450
Interest expense (income), $m
  131
  167
  199
  234
  272
  312
  354
  399
  446
  496
  547
  601
  658
  716
  777
  840
  906
  974
  1,045
  1,119
  1,196
  1,276
  1,359
  1,445
  1,535
  1,629
  1,727
  1,829
  1,935
  2,047
  2,163
Earnings before tax, $m
  -2,021
  -2,326
  -2,654
  -3,003
  -3,373
  -3,764
  -4,175
  -4,606
  -5,056
  -5,527
  -6,017
  -6,528
  -7,059
  -7,611
  -8,185
  -8,781
  -9,401
  -10,045
  -10,715
  -11,411
  -12,136
  -12,891
  -13,676
  -14,495
  -15,348
  -16,239
  -17,168
  -18,137
  -19,150
  -20,208
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -2,021
  -2,326
  -2,654
  -3,003
  -3,373
  -3,764
  -4,175
  -4,606
  -5,056
  -5,527
  -6,017
  -6,528
  -7,059
  -7,611
  -8,185
  -8,781
  -9,401
  -10,045
  -10,715
  -11,411
  -12,136
  -12,891
  -13,676
  -14,495
  -15,348
  -16,239
  -17,168
  -18,137
  -19,150
  -20,208

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,172
  5,933
  6,749
  7,618
  8,539
  9,510
  10,532
  11,602
  12,722
  13,890
  15,108
  16,375
  17,693
  19,064
  20,488
  21,968
  23,506
  25,104
  26,766
  28,495
  30,294
  32,167
  34,117
  36,150
  38,269
  40,479
  42,785
  45,193
  47,708
  50,336
Adjusted assets (=assets-cash), $m
  5,172
  5,933
  6,749
  7,618
  8,539
  9,510
  10,532
  11,602
  12,722
  13,890
  15,108
  16,375
  17,693
  19,064
  20,488
  21,968
  23,506
  25,104
  26,766
  28,495
  30,294
  32,167
  34,117
  36,150
  38,269
  40,479
  42,785
  45,193
  47,708
  50,336
Revenue / Adjusted assets
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
Average production assets, $m
  4,723
  5,418
  6,162
  6,956
  7,796
  8,684
  9,616
  10,594
  11,616
  12,683
  13,794
  14,952
  16,155
  17,406
  18,707
  20,058
  21,462
  22,922
  24,440
  26,018
  27,661
  29,371
  31,152
  33,008
  34,942
  36,960
  39,066
  41,265
  43,561
  45,961
Working capital, $m
  -294
  -338
  -384
  -434
  -486
  -541
  -600
  -660
  -724
  -791
  -860
  -932
  -1,007
  -1,085
  -1,166
  -1,251
  -1,338
  -1,429
  -1,524
  -1,622
  -1,724
  -1,831
  -1,942
  -2,058
  -2,178
  -2,304
  -2,436
  -2,573
  -2,716
  -2,865
Total debt, $m
  3,683
  4,334
  5,032
  5,774
  6,562
  7,392
  8,265
  9,181
  10,138
  11,137
  12,178
  13,262
  14,389
  15,560
  16,778
  18,043
  19,358
  20,725
  22,146
  23,624
  25,163
  26,764
  28,431
  30,169
  31,981
  33,870
  35,842
  37,901
  40,052
  42,299
Total liabilities, $m
  4,422
  5,073
  5,771
  6,513
  7,301
  8,131
  9,004
  9,920
  10,877
  11,876
  12,917
  14,001
  15,128
  16,299
  17,517
  18,782
  20,097
  21,464
  22,885
  24,363
  25,902
  27,503
  29,170
  30,908
  32,720
  34,609
  36,581
  38,640
  40,791
  43,038
Total equity, $m
  750
  860
  979
  1,105
  1,238
  1,379
  1,527
  1,682
  1,845
  2,014
  2,191
  2,374
  2,566
  2,764
  2,971
  3,185
  3,408
  3,640
  3,881
  4,132
  4,393
  4,664
  4,947
  5,242
  5,549
  5,869
  6,204
  6,553
  6,918
  7,299
Total liabilities and equity, $m
  5,172
  5,933
  6,750
  7,618
  8,539
  9,510
  10,531
  11,602
  12,722
  13,890
  15,108
  16,375
  17,694
  19,063
  20,488
  21,967
  23,505
  25,104
  26,766
  28,495
  30,295
  32,167
  34,117
  36,150
  38,269
  40,478
  42,785
  45,193
  47,709
  50,337
Debt-to-equity ratio
  4.910
  5.040
  5.140
  5.230
  5.300
  5.360
  5.410
  5.460
  5.500
  5.530
  5.560
  5.590
  5.610
  5.630
  5.650
  5.660
  5.680
  5.690
  5.710
  5.720
  5.730
  5.740
  5.750
  5.760
  5.760
  5.770
  5.780
  5.780
  5.790
  5.800
Adjusted equity ratio
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2,021
  -2,326
  -2,654
  -3,003
  -3,373
  -3,764
  -4,175
  -4,606
  -5,056
  -5,527
  -6,017
  -6,528
  -7,059
  -7,611
  -8,185
  -8,781
  -9,401
  -10,045
  -10,715
  -11,411
  -12,136
  -12,891
  -13,676
  -14,495
  -15,348
  -16,239
  -17,168
  -18,137
  -19,150
  -20,208
Depreciation, amort., depletion, $m
  472
  542
  616
  696
  780
  868
  962
  1,059
  1,162
  1,268
  1,379
  1,495
  1,616
  1,741
  1,871
  2,006
  2,146
  2,292
  2,444
  2,602
  2,766
  2,937
  3,115
  3,301
  3,494
  3,696
  3,907
  4,126
  4,356
  4,596
Funds from operations, $m
  -1,548
  -1,784
  -2,037
  -2,307
  -2,593
  -2,895
  -3,213
  -3,546
  -3,895
  -4,259
  -4,638
  -5,033
  -5,444
  -5,871
  -6,314
  -6,776
  -7,255
  -7,753
  -8,271
  -8,810
  -9,370
  -9,954
  -10,561
  -11,194
  -11,854
  -12,543
  -13,261
  -14,011
  -14,794
  -15,612
Change in working capital, $m
  -40
  -43
  -46
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -69
  -72
  -75
  -78
  -81
  -84
  -88
  -91
  -95
  -98
  -102
  -107
  -111
  -116
  -121
  -126
  -131
  -137
  -143
  -150
Cash from operations, $m
  -1,508
  -1,741
  -1,991
  -2,258
  -2,541
  -2,840
  -3,155
  -3,485
  -3,831
  -4,192
  -4,569
  -4,961
  -5,369
  -5,793
  -6,233
  -6,691
  -7,167
  -7,662
  -8,176
  -8,711
  -9,268
  -9,847
  -10,450
  -11,079
  -11,734
  -12,417
  -13,130
  -13,874
  -14,651
  -15,463
Maintenance CAPEX, $m
  -408
  -472
  -542
  -616
  -696
  -780
  -868
  -962
  -1,059
  -1,162
  -1,268
  -1,379
  -1,495
  -1,616
  -1,741
  -1,871
  -2,006
  -2,146
  -2,292
  -2,444
  -2,602
  -2,766
  -2,937
  -3,115
  -3,301
  -3,494
  -3,696
  -3,907
  -4,126
  -4,356
New CAPEX, $m
  -645
  -695
  -745
  -793
  -841
  -887
  -933
  -978
  -1,022
  -1,067
  -1,112
  -1,157
  -1,204
  -1,251
  -1,300
  -1,351
  -1,404
  -1,460
  -1,518
  -1,579
  -1,643
  -1,710
  -1,781
  -1,856
  -1,935
  -2,018
  -2,106
  -2,199
  -2,296
  -2,400
Cash from investing activities, $m
  -1,053
  -1,167
  -1,287
  -1,409
  -1,537
  -1,667
  -1,801
  -1,940
  -2,081
  -2,229
  -2,380
  -2,536
  -2,699
  -2,867
  -3,041
  -3,222
  -3,410
  -3,606
  -3,810
  -4,023
  -4,245
  -4,476
  -4,718
  -4,971
  -5,236
  -5,512
  -5,802
  -6,106
  -6,422
  -6,756
Free cash flow, $m
  -2,561
  -2,908
  -3,278
  -3,667
  -4,077
  -4,507
  -4,956
  -5,425
  -5,913
  -6,421
  -6,949
  -7,497
  -8,067
  -8,659
  -9,274
  -9,913
  -10,577
  -11,268
  -11,986
  -12,734
  -13,512
  -14,323
  -15,168
  -16,050
  -16,969
  -17,929
  -18,932
  -19,979
  -21,074
  -22,219
Issuance/(repayment) of debt, $m
  599
  651
  697
  743
  787
  831
  873
  915
  957
  999
  1,041
  1,084
  1,127
  1,172
  1,218
  1,265
  1,315
  1,367
  1,421
  1,478
  1,538
  1,601
  1,668
  1,738
  1,812
  1,890
  1,972
  2,059
  2,150
  2,247
Issuance/(repurchase) of shares, $m
  2,123
  2,436
  2,772
  3,129
  3,506
  3,905
  4,323
  4,761
  5,219
  5,696
  6,194
  6,712
  7,250
  7,810
  8,392
  8,996
  9,624
  10,277
  10,956
  11,662
  12,397
  13,162
  13,959
  14,790
  15,656
  16,559
  17,502
  18,486
  19,515
  20,590
Cash from financing (excl. dividends), $m  
  2,722
  3,087
  3,469
  3,872
  4,293
  4,736
  5,196
  5,676
  6,176
  6,695
  7,235
  7,796
  8,377
  8,982
  9,610
  10,261
  10,939
  11,644
  12,377
  13,140
  13,935
  14,763
  15,627
  16,528
  17,468
  18,449
  19,474
  20,545
  21,665
  22,837
Total cash flow (excl. dividends), $m
  161
  179
  192
  204
  217
  228
  240
  252
  263
  275
  286
  298
  310
  322
  335
  348
  362
  376
  391
  407
  423
  440
  459
  478
  498
  520
  542
  566
  591
  618
Retained Cash Flow (-), $m
  -2,123
  -2,436
  -2,772
  -3,129
  -3,506
  -3,905
  -4,323
  -4,761
  -5,219
  -5,696
  -6,194
  -6,712
  -7,250
  -7,810
  -8,392
  -8,996
  -9,624
  -10,277
  -10,956
  -11,662
  -12,397
  -13,162
  -13,959
  -14,790
  -15,656
  -16,559
  -17,502
  -18,486
  -19,515
  -20,590
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  15
  17
  20
  22
  25
  28
  31
  35
  38
  42
  46
  50
  54
  58
  63
  67
  72
  77
  83
  88
  94
  100
  106
  112
  119
  126
  133
  141
  149
  157
Cash available for distribution, $m
  -1,962
  -2,257
  -2,580
  -2,924
  -3,290
  -3,676
  -4,083
  -4,509
  -4,956
  -5,422
  -5,908
  -6,414
  -6,940
  -7,488
  -8,057
  -8,648
  -9,262
  -9,901
  -10,565
  -11,256
  -11,974
  -12,722
  -13,500
  -14,312
  -15,157
  -16,039
  -16,960
  -17,920
  -18,923
  -19,972
Discount rate, %
  12.30
  12.92
  13.56
  14.24
  14.95
  15.70
  16.48
  17.31
  18.17
  19.08
  20.04
  21.04
  22.09
  23.19
  24.35
  25.57
  26.85
  28.19
  29.60
  31.08
  32.64
  34.27
  35.98
  37.78
  39.67
  41.65
  43.73
  45.92
  48.22
  50.63
PV of cash for distribution, $m
  -1,747
  -1,771
  -1,762
  -1,717
  -1,639
  -1,533
  -1,403
  -1,257
  -1,103
  -946
  -793
  -649
  -518
  -404
  -306
  -226
  -162
  -113
  -77
  -50
  -32
  -19
  -11
  -7
  -4
  -2
  -1
  0
  0
  0
Current shareholders' claim on cash, %
  46.4
  21.6
  10.1
  4.8
  2.2
  1.1
  0.5
  0.2
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Denbury Resources Inc. is an independent oil and natural gas company. The Company's operations are focused in two operating areas: the Gulf Coast and Rocky Mountain regions. Its properties with proved and producing reserves in the Gulf Coast region are situated in Mississippi, Texas, Louisiana and Alabama, and in the Rocky Mountain region are situated in Montana, North Dakota and Wyoming. It had an estimated proved oil and natural gas reserves of 254.5 million barrels of oil equivalent (MMBOE) as of December 31, 2016. Its primary Gulf Coast carbon dioxide (CO2) source is Jackson Dome, which is located near Jackson, Mississippi. Its mature group of properties includes the initial CO2 field, Little Creek, and other fields, including Brookhaven, Cranfield, Eucutta, Lockhart Crossing, Mallalieu and Soso fields. Its LaBarge Field is located in southwestern Wyoming. Its Riley Ridge Federal Unit is located in southwestern Wyoming and produces gas from the same LaBarge Field.

FINANCIAL RATIOS  of  Denbury Resources (DNR)

Valuation Ratios
P/E Ratio -1.9
Price to Sales 1.9
Price to Book 4
Price to Tangible Book
Price to Cash Flow 8.6
Price to Free Cash Flow -55.1
Growth Rates
Sales Growth Rate -22.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -55%
Cap. Spend. - 3 Yr. Gr. Rate -27.4%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 621.8%
Total Debt to Equity 639.5%
Interest Coverage -11
Management Effectiveness
Return On Assets -17.6%
Ret/ On Assets - 3 Yr. Avg. -19.2%
Return On Total Capital -24.4%
Ret/ On T. Cap. - 3 Yr. Avg. -26.8%
Return On Equity -113.7%
Return On Equity - 3 Yr. Avg. -76.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 104.6%
Gross Margin - 3 Yr. Avg. 103.6%
EBITDA Margin -55.6%
EBITDA Margin - 3 Yr. Avg. -143.5%
Operating Margin -129.8%
Oper. Margin - 3 Yr. Avg. -201.7%
Pre-Tax Margin -155.7%
Pre-Tax Margin - 3 Yr. Avg. -205.5%
Net Profit Margin -100%
Net Profit Margin - 3 Yr. Avg. -140.8%
Effective Tax Rate 35.8%
Eff/ Tax Rate - 3 Yr. Avg. 34.8%
Payout Ratio 0%

DNR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DNR stock intrinsic value calculation we used $1130 million for the last fiscal year's total revenue generated by Denbury Resources. The default revenue input number comes from 2017 income statement of Denbury Resources. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DNR stock valuation model: a) initial revenue growth rate of 15.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 12.3%, whose default value for DNR is calculated based on our internal credit rating of Denbury Resources, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Denbury Resources.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DNR stock the variable cost ratio is equal to 241.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for DNR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Denbury Resources.

Corporate tax rate of 27% is the nominal tax rate for Denbury Resources. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DNR stock is equal to 1.3%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DNR are equal to 360.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Denbury Resources operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DNR is equal to -22.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $648 million for Denbury Resources - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 391 million for Denbury Resources is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Denbury Resources at the current share price and the inputted number of shares is $1.8 billion.

RELATED COMPANIES Price Int.Val. Rating
QEP QEP Resources 9.77 3.94  str.sell
COP ConocoPhillips 72.15 83.34  buy
XOM Exxon Mobil 78.31 100.36  buy
CRZO Carrizo Oil&Ga 24.32 1.27  str.sell
GEL Genesis Energy 23.15 16.99  hold
PQ PetroQuest Ene 0.580 87.03  str.buy
HUSA Houston Americ 0.240 0.03  str.sell
EPM Evolution Petr 10.15 39.44  str.buy

COMPANY NEWS

▶ Denbury Resources Inc. to Host Earnings Call   [Aug-07-18 09:00AM  ACCESSWIRE]
▶ Denbury Resources: 2Q Earnings Snapshot   [06:37AM  Associated Press]
▶ Denbury Reports Second Quarter 2018 Results   [06:30AM  GlobeNewswire]
▶ This Is a Good Time to Be Producing Oil   [09:00AM  TheStreet.com]
▶ Penny Stocks to Watch for August 2018   [Jul-31-18 01:37PM  Investopedia]
▶ Saudi Oil Minister Rattles Market   [May-25-18 02:58PM  TheStreet.com]
▶ 4 Stocks to Buy (and 6 to Avoid) as Oil Hits $80 a Barrel   [May-17-18 05:00PM  TheStreet.com]
▶ Venezuela Is Key Factor in Oil Surge   [03:00PM  TheStreet.com]
▶ Denbury Resources: 1Q Earnings Snapshot   [06:39AM  Associated Press]
▶ Why Lagging Energy Companies Are Opportunities   [Apr-12-18 04:44PM  TheStreet.com]
▶ Lagging Energy Companies Are Opportunities   [03:09PM  TheStreet.com]
▶ Why Oil Stocks Are Red-Hot Today   [Apr-10-18 04:10PM  Motley Fool]
▶ 3 Stocks That Have Doubled and Still Have Room to Grow   [Mar-24-18 11:21AM  Motley Fool]
▶ Trump's Budget Gives These Oil Stocks an Extra Boost   [Feb-24-18 10:41AM  Motley Fool]
▶ Why Denbury Resources Inc.'s Stock Is Rallying Today   [Feb-22-18 04:16PM  Motley Fool]
▶ Denbury Resources tops Street 4Q forecasts   [06:49AM  Associated Press]
▶ For Oil Prices, We Are in the Middle of a Perfect Storm   [Jan-25-18 10:00AM  TheStreet.com]
▶ US Crude Oil Production Fell and Boosted Oil Futures   [Jan-11-18 10:35AM  Market Realist]
▶ 5 Best Stocks to Buy Ahead of Q4 Earnings Season   [Jan-10-18 01:15PM  InvestorPlace]
▶ Denbury Announces Results of Exchange Offers   [Jan-08-18 06:30AM  GlobeNewswire]
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.