Denbury Resources: The Sale Of Some Texas Assets

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About: Denbury Resources Inc. (DNR)
by: Elephant Analytics
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Summary

Denbury sold 50% of its working interest in four Texas oil field for $42 million in net proceeds, plus a carried interest in 10 wells to be drilled by Navitas.

The net sale price is around $40,000 per flowing barrel or around 6x estimated cash flow.

This appears to be higher cost production, so the multiple to EBITDAX appears a bit favorable compared to Denbury's overall valuation.

Transaction accounts for less than 2% of Denbury's production and closer to 1% of its EBITDAX.

Combined with positive cash flow at $60 oil, Denbury will have a decent amount of cash to do further debt repurchases and save up for its 2021 maturities.

Denbury Resources (NYSE:DNR) sold half of its working interest in four oil fields for $42 million in net proceeds. This appears to be for a relatively decent multiple of cash flow. Combined with