Denbury to Acquire Wyoming CO2 Enhanced Oil Recovery (EOR) Fields
Denbury Inc. announced the acquisition of nearly 100% working interest in the Big Sand Draw and Beaver Creek oil fields for $12 million. The fields, located in Wyoming, have a net production of approximately 2,800 BOE per day and net proved reserves estimated at 13.7 MMBOE. The acquisition aligns with Denbury’s CO2 EOR-focused strategy and is expected to increase CO2 usage by nearly 400,000 tons annually. The deal includes potential contingent payments tied to oil prices and is scheduled to close in the first quarter of 2021.
- Acquisition enhances Denbury's CO2 EOR-focused strategy.
- Estimated 13.7 MMBOE of net proved reserves, including 5.5 MMBOE of undeveloped reserves.
- Increases annual CO2 usage by nearly 400,000 tons.
- Contingent payments of $4 million depend on WTI oil prices averaging at least $50 per barrel in 2021 and 2022.
- Acquisition subject to customary closing conditions, introducing potential delays.
Bolt-on Acquisition in Key Operating Area Supports CO2 EOR-Focused Strategy
PLANO, Texas, Dec. 29, 2020 (GLOBE NEWSWIRE) -- Denbury Inc. (NYSE: DEN) (“Denbury” or the “Company”) today announced that it has entered into an agreement with a subsidiary of Devon Energy Corporation to acquire a nearly
Net production from the acquired fields was approximately 2,800 barrels of oil equivalent (“BOE”) per day for the third quarter of 2020, of which approximately
Chris Kendall, Denbury’s President and CEO, commented, "Big Sand Draw and Beaver Creek are exciting additions to Denbury’s Rocky Mountain region footprint, and we believe they are an ideal operational fit for Denbury’s differentiated CO2 EOR-focused strategy. Importantly, by utilizing
The purchase agreement provides for two contingent cash payments of
ABOUT THE BIG SAND DRAW AND BEAVER CREEK OIL FIELDS
The Big Sand Draw oil field was discovered in 1918 and the CO2 flood was initiated in 2014. The Beaver Creek oil field was discovered in 1938 and the CO2 flood was initiated in 2008. The CO2 used to flood both fields is supplied from ExxonMobil’s Shute Creek gas processing plant in southwestern Wyoming, where Denbury owns a one-third overriding royalty interest in all captured CO2.
ABOUT DENBURY
Denbury is an independent oil and natural gas company with operations focused in two key operating areas: the Gulf Coast and Rocky Mountain regions. The Company’s goal is to increase the value of its properties through a combination of exploitation, drilling and proven engineering extraction practices, with the most significant emphasis relating to CO2 enhanced oil recovery operations. For more information about Denbury, please visit www.denbury.com.
This press release, other than historical financial information, contains forward-looking statements that involve risks and uncertainties including estimates of oil and natural gas reserves of the acquired assets and estimated costs to develop proved undeveloped reserves, and other risks and uncertainties detailed in the Company’s filings with the Securities and Exchange Commission, including Denbury’s most recent reports on Form 10-K and Form 10-Q. These risks and uncertainties are incorporated by this reference as though fully set forth herein. These statements are based on engineering, geological, financial and operating assumptions that management believes are reasonable based on currently available information; however, management’s assumptions and the Company’s future performance are both subject to a wide range of business risks, and there is no assurance that these goals and projections can or will be met. Actual results may vary materially. In addition, any forward-looking statements represent the Company’s estimates only as of today and should not be relied upon as representing its estimates as of any future date. Denbury assumes no obligation to update its forward-looking statements.
FAQ
What is the significance of Denbury's acquisition of the Big Sand Draw and Beaver Creek oil fields?
What is the purchase price for the Big Sand Draw and Beaver Creek oil fields?
When is the acquisition of the Big Sand Draw and Beaver Creek oil fields expected to close?
What are the estimated reserves from the acquired oil fields?