Energy prices have been volatile, and so too have the prices of energy production companies. However, not all energy production companies are the same, and the risks and market fear is overblown in some cases. For example, we believe energy production company Denbury Resources (DNR) offers a unique investment opportunity, particularly through the high current yield (+9%) and significant price appreciation potential (+40%) of its 2021 bonds, which mature in just under two years, thereby offering a 27% yield to maturity.
This article reviews the company, the causes of the discounted bond price,