Denbury Resources (NYSE: DNR) CEO Chris Kendall is well aware of what oil stock investors want these days. He noted on the second-quarter call that investors are demanding oil companies "operate sustainable businesses that can return capital to shareholders." To do so, Denbury needs to generate enough cash to grow production with plenty left over to pay dividends and repurchase shares.
He further noted that Denbury "is in a strong position to meet shareholder demands for return of capital." That's because its business focuses on operating assets that have "been able to consistently and reliably generate free cash." Unfortunately, instead of returning this money to shareholders, Denbury has been using it to repay debt. That won't change anytime soon since it plans to "continue to prioritize debt reduction through the use of free cash in the near future," according to Kendall. The company has no choice because it has $2.5 billion of debt that it needs to address sooner rather than later given that all of it will mature over the next few years.
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