Denbury Resources has entered into a definitive agreement with privately held Petro Harvester Oil and Gas to sell certain non-core assets primarily located in central and southern Mississippi and in southern Louisiana for $155 million. The sale is subject to customary closing conditions and is expected to close by late February. Denbury anticipates using the sale proceeds to partially pay down its credit facility.
Proved reserves for the assets being sold were approximately 6.2 million barrels of oil equivalent as of December 31, 2010 and were 93 percent oil and 54 percent proved developed producing and 46 percent proved developed non-producing. These reserve estimates reflected SEC NYMEX oil prices at the time of $79.43 per barrel. Denbury's previously issued 2012 annual production guidance assumed daily production from the properties of approximately 1,400 barrels of oil equivalent per day. This estimated production was entirely from proved developed producing reserves. The Company continues to market its non-operated interest in the Greater Aneth oil field in Utah and therefore anticipates additional proceeds from asset sales in 2012.
Phil Rykhoek, Denbury's President and CEO, said, "With the announcement of a portion of our non-core asset sales and the earlier than expected start of oil production at our Oyster Bayou tertiary CO2 flood, 2012 is off to a solid start. The sale demonstrates execution on a portion of our 2012 plan, which we project will allow us to fund our previously announced $1.35 billion capital investment program and stock repurchases without incurring significant incremental debt."
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