NEW YORK (TheStreet) -- If OPEC is calling for oil prices to remain below $100 for the next decade, investors should look for emerging opportunities within the oil sector to capture long-term value in an industry more focused on operational efficiency. Such an opportunity is Denbury Resources (DNR) , which is a market leader in the extraction process known as carbon dioxide enhanced oil recovery or simply CO2 EOR.
Despite oil prices significantly rallying since the start of the year, there really hasn't been much positive focus on the benefits of CO2 EOR. That will soon change, however, and that will be music to the ears of shareholders of Denbury, especially with a greater U.S. focus to lower carbon emissions on the heels of President Obama's Quadrennial Energy Review.
Denbury shares, which trade around $7.50, are down 8.6% for the year to date compared with the S&P 500, up 2%. They are down 57% for the past 52 weeks while the S&P is up nearly 11%.
Since Denbury is committed to the production of oil and gas by way of CO2 EOR, its assets tend to have a longer lifespan than those typically associated with many shale players that often see production from their wells peak more quickly. This gives Denbury more stable earnings, something that may attract investors looking for less risky exposure to the unpredictable price environment of today's oil market.
In addition, this may be why companies such as NRG Energy (NRG) created its Petra Nova CO2 EOR venture and Blackstone Group (BX) entered the space last fall through its $700 million investment in start-up Windy Cove. Even French oil giant Total (TOT) recently showed interest in the extraction process by holding high-level training on CO2 EOR. Clearly this CO2 EOR process is gaining much credibility with major players looking to enter the market.