Denbury Announces Closing of First Phase of Bakken Sale and Asset Exchange
PLANO, Texas, Dec. 3, 2012 (GLOBE NEWSWIRE) -- Denbury Resources Inc. (NYSE:DNR) ("Denbury" or the "Company") today announced the closing of the first phase of its previously announced Bakken sale and asset exchange with Exxon Mobil Corporation and its wholly-owned subsidiary XTO Energy Inc. (collectively, "ExxonMobil"). In the first of two closings, ExxonMobil paid cash of approximately $1.3 billion (which includes preliminary closing adjustments) and transferred to Denbury ExxonMobil's operating interests in Webster Field in Texas and Hartzog Draw Field in Wyoming.
For the second phase closing, which is expected to take place prior to year-end, Denbury retained approximately 17.5% of its pre-closing interest in Bakken area assets, and ExxonMobil withheld $350 million of cash consideration for such Bakken area assets. The parties continue to work to finalize an agreement and documentation pursuant to which Denbury will receive an interest in the CO2 reserves in ExxonMobil's LaBarge Field in Wyoming in exchange for the retained Bakken interests, together with any necessary cash adjustments. Barring this exchange taking place in the second phase closing as expected, Denbury would sell its retained 17.5% Bakken area interest to ExxonMobil for the $350 million of cash which has been withheld.
Denbury continues to pursue using a portion of the cash proceeds from the first phase closing to purchase interests in additional oil fields in the Gulf Coast or Rocky Mountain regions that are well suited for CO2 enhanced oil recovery which would qualify for like-kind exchange treatment for federal income tax purposes. Accordingly, a substantial amount of the cash paid in the first phase closing is being held in qualified trust accounts to fund any future potential asset purchases.
Denbury Resources Inc. is a growing independent oil and natural gas company. The Company is the largest combined oil and natural gas operator in both Mississippi and Montana, owns the largest reserves of CO2 used for tertiary oil recovery east of the Mississippi River, and holds significant operating acreage in the Rocky Mountain and Gulf Coast regions. The Company's goal is to increase the value of acquired properties through a combination of exploitation, drilling and proven engineering extraction practices, with its most significant emphasis relating to tertiary oil recovery operations. For more information about Denbury, please visit www.denbury.com.
The Denbury Resources Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11385
This press release contains forward-looking statements that involve risks and uncertainties including those related to potential future asset acquisitions, 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.
CONTACT: Phil Rykhoek, President and CEO, 972.673.2000 Mark Allen, Senior Vice President and CFO, 972.673.2000 Jack Collins, Executive Director, Investor Relations, 972.673.2028
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