CWEI Clayton Williams Energy, Inc.

Oil & gas exploration and production (E&P) company, Denbury Resources Inc. (DNR) said that it has increased the offering of its senior subordinated notes to $1.25 billion from $1.1 billion announced earlier in the day. The company also stated that the notes, due May 2022, are priced at 100% of principal value and carry an interest rate of 5.5%. Denbury expects the offering to close on Apr 30.

The company said that the funds generated from this offering would be used to buy back the 2020 due, 81/4% senior subordinated notes, the cash tender offer for which was announced earlier on the same day. Denbury intends to purchase all of the outstanding notes worth $996.3 million.

Denbury further added that if it fails to repurchase all the outstanding notes under the tender offer, it would utilize the net proceeds to redeem the remaining of the 2020 notes. Denbury would use the remaining funds to lower its debt levels under its bank credit facility and for other corporate purposes.

Plano, TX-based Denbury is a growing E&P company engaged in the acquisition, development, operation, and exploration of oil and natural gas properties in the Gulf Coast and Rocky Mountain regions of the U.S. It is the largest oil producer in Mississippi, with further properties in Louisiana, Alabama and Southeast Texas.
 
Denbury has a strong financial position, low-risk investments and an active divestment policy that works in its favor. However, with the company reporting poor numbers last quarter due to weak realizations and higher expenses, we remain cautious on the upcoming earnings.

Denbury currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider better-ranked players in the E&P industry like Miller Energy Resources, Inc. (MILL), Abraxas Petroleum Corp. (AXAS) and Clayton Williams Energy, Inc. (CWEI). While Miller Energy sports a Zacks Rank #1 (Strong Buy), Abraxas and Clayton Williams hold a Zacks Rank #2 (Buy).

 
ABRAXAS PETE/NV (AXAS): Free Stock Analysis Report
 
WILLIAMS(C)ENGY (CWEI): Free Stock Analysis Report
 
DENBURY RES INC (DNR): Free Stock Analysis Report
 
MILLER ENERGY (MILL): Free Stock Analysis Report
 
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