Denbury Resources Suspends Dividend In Face Of Falling Oil Prices

Denbury Resources Inc. said on Monday it was suspending its quarterly dividend starting in the fourth quarter, as the oil and natural gas company looks to maintain financial flexibility amid falling oil prices. Denbury said it will pay the third-quarter dividend of 6.25 cents a share on Sept. 29. The company said the dividend suspension will free up $22 million a quarter, to be used to pay down debt, increase capital spending or buy back stock. Denbury said it was reinstating its share repurchase program, which was suspended in November 2014 and had $222 million remaining. "Although our oil commodity hedges and proactive reduction in capital spending have buffered us to a large degree from this oil price downturn, the benefit from our hedges will begin to diminish in the fourth quarter of 2015," said Chief Executive Phil Rykhoek. "We expect to reinstate a dividend in the future, but the timeline for doing so is uncertain and will likely be highly dependent on oil prices." The stock, which was still inactive in premarket trade, has tumbled 64% year to date, while the S&P 500 has lost 4.9%.