The Company also announced the completion of its fourth CO2 well drilled during 2004, confirming the addition of an estimated 300 Bcf of CO2 reserves, resulting in an estimated total increase in CO2 reserves during 2004 of approximately 1.0 Tcf. This increase in CO2 reserves is sufficient to satisfy the projected CO2 requirements of Denbury's initial plans for tertiary recovery operations in Eastern Mississippi (phase II of Denbury's tertiary recovery operations). Phase II will initially consist of tertiary recovery operations at six oil fields in that region, but it is ultimately expected to expand to several other oil fields in the area, which would also be serviced by the new pipeline.
In conjunction with these plans, the Company has updated its development schedule and targeted oil production from tertiary recovery operations, reflecting Denbury's acceleration of both phase I and II of its tertiary operations as a result of the availability of additional capital generated by the sale of its offshore properties in July. The revised model projects a 28% compounded increase in oil production solely from tertiary recovery operations between 2003 and 2010, increasing from 4,670 BOE/d in 2003 to a projected 33,500 BOE/d in 2011. The model assumes that the first production from tertiary recovery operations in Eastern Mississippi will occur in 2007. Oil production from tertiary recovery operations for 2004 is expected to average just under 7,000 BOE/d, up from an average of 6,603 BOE/d during the second quarter of 2004.
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