Denbury Soars as CEO Says Buyout Offer Release 'Fraudulent'

Denbury Resources says an earlier press release that mentioned a buyout offer wasn't released by the oil and natural gas company.
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Denbury Resources  (DNR) - Get Report CEO Chris Kendall said Monday an earlier press release that mentioned a buyout offer wasn't released by the oil and natural gas company.

Shares of the Plano, Texas, company were soaring 46.7% to 33 cents a share in premarket trading.

Kendall told Bloomberg in a telephone interview that the press release appears to be “completely fraudulent."

When asked if the company had received a buyout offer, Kendall said the "company will release a statement soon."

Like other oil companies, Denbury has suffered during the coronavirus pandemic as air travel has plummeted and oil prices have dropped to unprecedented levels.

The drop in oil prices was sparked in part by the coronavirus pandemic and shutdown of economic activity globally, though augmented by a price war between Russia and Saudi Arabia that fueled one of the biggest supply guts in history.

Earlier this month, Moody's Investors Service downgraded Denbury Resources' Probability of Default Rating (PDR) to Ca-PD from Caa2-PD.

"The downgrade of Denbury's CFR to Ca following the missed interest payment due on June 30th reflects Moody's expectation the company will default on its debt obligations and the debt holders' recovery rate will be low," Moody's said at the time. "Moody's believes Denbury has an untenable capital structure as a result of the high leverage, limited options to refinance debt and a large interest expense burden." 

In other oil sector news, Chevron  (CVX) - Get Report  said Monday it will buy Noble Energy  (NBL) - Get Report for $5 billion in stock in what marks the biggest oil-patch tie-up since the coronavirus pandemic took hold.