A Great Deal for Denbury Resources
Sep 21st 2012 9:17PM
Updated Sep 21st 2012 9:22PM
The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.
Denbury Resources and ExxonMobil, two companies that John and David own in their real-money portfolio, cut a deal for some properties. Denbury's core business is flooding older oilfields with CO2 in order to extract oil left behind. It's the second largest tertiary oil recovery company behind Occidental Petroleum. ExxonMobil is in a better position to compete in the Bakken with Continental Resources and Kodiak Oil and Gas in that area. David thinks this is a great deal for Denbury from a strategic standpoint. This keeps Denbury focused on its strengths. Management says it will use the proceeds to pay down debt and repurchase shares. At these prices, and with those prospects, John and David are likely to be buying right alongside management.
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The article A Great Deal for Denbury Resources originally appeared on Fool.com.David Meier has no positions in the stocks mentioned above. John Reeves has no positions in the stocks mentioned above. The Motley Fool owns shares of Denbury Resources and ExxonMobil. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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