Denbury Completes LA Property Sale
Denbury Resources entered into an agreement to sell its Louisiana natural gas assets in October 2007 to a privately held company for approximately $180 million (before closing adjustments) plus any amounts received in the future from a net profits interest. In late December 2007, the Company closed on approximately 70% of that sale with net proceeds of approximately $115.4 million, and closed on the remaining 30% on February 20, 2008, with net proceeds at the second closing of approximately $48.9 million. The operating net revenue, net of capital expenditures, between the August 1, 2007 effective date and the respective closing dates were adjustments to the purchase price, along with other minor closing adjustments. The potential net profits interest relates to a well in the South Chauvin field and is only earned if operating income from that well exceeds certain levels, which the Company believes could potentially increase the ultimate sales price by up to 10%.
Production attributable to the sold properties averaged approximately 30.6 MMcfe/d (82% natural gas) during the fourth quarter of 2007, representing approximately 10% of the Company's total fourth quarter production and approximately 4% of its total proved reserve quantities as of December 31, 2006.
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