Denbury Sells Working Interest in Texas Oil Fields
Denbury Resources Inc. has closed the previously-announced farm-down transaction with a subsidiary of Navitas Petroleum for the sale of half of its nearly 100% working interest position in four southeast Texas oil fields (Webster, Thompson, Manvel and East Hastings) for $50 million cash and a carried interest in 10 wells that will be drilled by Navitas.
Net cash to Denbury from the transaction is about $40 million.
Production associated with the working interests sold averaged 1,170 barrels of oil equivalent per day for the fourth quarter of 2019, and associated proved reserves were approximately 4.1 million barrels of oil as of December 31, 2019.
Last year the operator made headlines with the cancellation of its planned acquisition of Penn Virginia for $1.7 billion. While the deal would have given Denbury, which operates in the Gulf Coast and Rocky Mountain regions, a new core position in the Eagle Ford play, management cited difficult market conditions and opposition of certain Penn Virginia shareholders as reasons the transaction wasn’t expected to win majority approval.
Denbury is an independent oil and gas company with a significant emphasis on carbon dioxide enhanced oil recovery (CO2 EOR) operations. As of Dec. 31, 2018, it had 262.2 MMBOE of estimated proved oil and natural gas reserves, of which 97% is oil, according to the company.
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