The Zacks Analyst Blog Highlights:Embraer, Denbury Resources, ExxonMobil, ConocoPhillips and Clayton Williams Energy

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Feb 14, 2014, 09:30 ET

CHICAGO, Feb. 14, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Embraer SA (NYSE:ERJ-Free Report), Denbury Resources Inc. (NYSE:DNR-Free Report), ExxonMobil Corporation (NYSE:XOM-Free Report), ConocoPhillips (NYSE:COP-Free Report) and Clayton Williams Energy, Inc. (NYSE:CWEI-Free Report).

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Here are highlights from Thursday's Analyst Blog:

Embraer Sees Booming Demand in Asia-Pacific

Brazilian aircraft maker Embraer SA (NYSE:ERJ-Free Report) foresees a $70 billion growth opportunity over the next two decades in Asia-Pacific including China. The region is poised to take delivery of 1,500 new jets in the 70-130 seat segment over the said period. This will comprise almost 20% of the global demand in this segment. The Asia-Pacific region is believed to be the latest hunting ground for commercial aircraft manufacturers as encouraging demographic factors are driving unprecedented growth in the regional airline industry.

Embraer with an 80% plus stake in the 70-130 seat Asia Pacific market estimates that 65% of the projected new deliveries will aid in market growth while 35% will replace an ageing fleet. Since 2004 the company has delivered almost 150 E-Jets to 10 operators from 6 countries in the region.

Intra-regional liberalization supported by economic growth is expected to drive air transport demand by 6% annually by 2032. Embraer expects the Asia-Pacific region to gradually become the world's largest market for aircraft makers. This expansion is expected to come mostly from China and India where an emerging urban middle class is increasingly taking to air travel.

In a separate release, the company announced that it had signed a deal with U.S.-based Hawker Pacific Aerospace Inc. for maintenance and support services for its Legacy 500 and Legacy 450 executive jets in the Asia-Pacific region.

The Embraer E-Jet family is a series of narrow-body, medium-range, twin-engine jet airliners. Since 2004, Embraer holds a global market share of 51% of orders and 62% of deliveries in the 70 to 130-seat segment.

Embraer customers use these E-jets either as network carriers, as charter operators or as low cost and regional airlines. E-jets help the airlines in balancing demand with capacity, in substituting old and inefficient aircraft, and developing new markets at lower costs and greater efficiency.

Downcast Realizations Overshadow Denbury

Texas-based Denbury Resources Inc.'s (NYSE:DNR-Free Report) presented estimated reserves and preliminary production numbers for 2013 on Feb 11. However, a down trend in price realizations cast a dark shadow on investors' sentiment. As a result, the share price opened at $16.41 or up 0.7% on Feb 12 from the previous day's closing to finally settle at $16.35.

Denbury's average realized oil price was $93.00 per Bbl in the fourth quarter of 2013, compared to $105.91 per Bbl in the third quarter. This was partially offset by average realized natural gas price of $3.50 per Mcf in the fourth quarter, compared to $3.38 per Mcf in the third quarter.

Denbury Resources' total estimated proved oil and natural gas reserves at Dec 31, 2013 were 468 million barrels of oil equivalent (MMBOE), consisting of 387 million barrels of crude oil, condensate and natural gas liquids, and 81 MMBOE (or 490 billion cubic feet) of natural gas.

Denbury's aggregate proved reserves additions during 2013 were 85 MMBOE, representing a 330% reserves replacement-to-production ratio. The proved reserve additions consisted primarily of 34 MMBOE of reserves from tertiary development of Bell Creek Field and 42 MMBOE of reserves acquired in the Cedar Creek Anticline of Montana and North Dakota during 2013. These additions were offset by 26 MMBOE of production during the year.

Denbury expects 2013 capital expenditures to be $981 million for capital projects and $163 million for other capital costs. The company as of Feb 7 has acquired a total of approximately 58 million common shares under the program, or about 14% of its shares outstanding, at an average cost of $15.67 per share.

Denbury is the leading carbon dioxide Enhanced Oil Recovery company in the U.S. with a unique profile. Recently, the company closed the second and final phase of its previously announced divestiture program to ExxonMobil Corporation (NYSE:XOM-Free Report) and its wholly owned subsidiary, XTO Energy. The company plans to use most of the proceeds raised from its asset sale to work out a purchase deal with ConocoPhillips (NYSE:COP-Free Report).

Last month, Denbury inked an agreement with a wholly owned subsidiary of ConocoPhillips to purchase the producing property interests in Cedar Creek Anticline (CCA) for $1.05 billion in cash. The CAA acreage matches Denbury's existing portfolio. Also, recovery from these fields requires supply of carbon dioxide – a process in which Denbury excels in the Gulf of Mexico.

Plano, Texas-based Denbury Resources is a growing exploration and production company engaged in the acquisition, development, operation and exploration of oil and natural gas properties in the Gulf Coast and Rocky Mountain region of the U.S. It is the largest oil producer in Mississippi, with further properties in Louisiana, Alabama and Southeast Texas.

Denbury carries a Zacks #3 Rank (short-term Hold rating). However, there are better-ranked Zacks Rank #1 (Strong Buy) stocks in the oil and gas sector like Clayton Williams Energy, Inc. (NYSE:CWEI-Free Report) which are expected to outperform the market.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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