By Dallas Business Journal

Denbury Resources Inc. (NYSE: DNR) said Monday that it believes the company is undervalued and is therefore initiating a repurchase program for up to $500 million of common stock.

Denbury, an independent oil and gas company based in Plano, has about 402 million common shares outstanding, the company said. Its total market capitalization was about $4.6 billion based on Fridayâ¿¿s closing price of $11.50.

Denbury Chief Executive Officer Phil Rykhoek said itâ¿¿s a prime opportunity for the company to initiate a stock repurchase program.

⿿In our opinion the company is undervalued, as it is trading at a significant discount to the net asset value of its proved oil and natural gas reserves, and we believe there is significant incremental value in the company's future reserve potential that is not being appropriately valued in the current market,⿝ Rykhoek said in a news release.

Denbury plans to fund its share repurchase program with a combination of cash flow from operations and borrowings on the company's $1.6 billion bank credit facility, under which $110 million was outstanding on Friday, the company said in its news release.

The program has no pre-established ending date, and may be suspended or discontinued at any time.

⿿To the extent that we repurchase stock, we plan to reduce our 2012 capital expenditures by a commensurate amount in order to maintain our strong balance sheet,⿝ Rykhoek said. ⿿We intend for any stock repurchases to be accretive to our production per share, even after consideration of any adjustment to 2012 production that would result from reduced 2012 capital expenditures."

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