Denbury -- 4Q20 Corporate Presentation

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

A reader who appears to take investing a whole more seriously than I do, and who has been investing as long as I have -- four or five decades -- has been following Denbury for quite some time. I think that reader owned Denbury at one time, but says he no longer holds any shares in Denbury. 

Recently that reader suggested I take a look at the most recent Denbury presentation because of the huge amount of information that was presented. A pdf will download.

After looking a the presentation, my not-ready-for-prime-time reply:

1. Denbury is mentioned often as the best (almost only) player in this niche (CO2 EOR) + CCUS.

2. A couple of years ago, it appeared to be too early -- this niche had not caught on.

3. P/E is N/A (negative earnings); no dividend. But chart looks very, very good for a long term investor.

4. Market cap at $3.5 billion is exactly the right price as a takeover target.

5. Every E&P company out there (XOM, COP, CVX) feeling the pressure of carbon offsets, ESG, "green energy" must be looking at DEN as a possible takeover.

6. When you first told me about DEN several years ago I was not interested. I thought DEN was "before its time." But now I'm thinking, any day we could hear an announcement that a company like XOM, CVX, COP (market cap $260 billion, $200 billion, $80 billion, respectively) will acquire DEN (market cap, $3.5 billion).

7. One could argue that DEN is in the mature area of the Bakken (eastern Montana) and that the rest of the Bakken is nowhere near ready for CO2 EOR but strategically it might make sense for XOM (with XTO in the Bakken) or COP (with BR in the Bakken).

8. So, for Sophia with a really long time horizon, DEN might be a good place to start accumulating shares.

I'll ask Sophia when I pick her up from TutorTime later this afternoon her thoughts on this. She'll probably defer to Corky. 

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.