By OGJ editors
HOUSTON, May 9 -- Two independents estimate they might recover 39 to 54 million bbl of oil from Delhi field in northeastern Louisiana in a carbon dioxide enhanced oil recovery project that could cost $200 million or more.
Natural Gas Systems Inc., Houston, and Denbury Resources Inc., Dallas, did not specify a project start date but said they signed a definitive agreement for the project.
NGS operates the 13,636-acre, 12-mile long Holt Bryant Unit, which blankets Delhi field in Madison and Richland counties. NGS estimates the field's 190 million bbl of cumulative recovery since 1945 to be less than half the original oil in place in the targeted reservoirs.
NGS will sell Denbury Resources its 100% interest in the field and receive $50 million at closing. It will retain a 4.8% royalty interest in the unit and a 25% working interest in other depths. After the project generates $200 million of net cash flows before capital expenditures, NGS will regain a 25% working interest in the unit.
Denbury will contribute all development capital, technical expertise, and required amounts of proved reserves of CO2 to be injected.
The companies estimate potential recoverable volumes at 30-40 million net to Denbury and 9-14 million bbl net to NGS's interest.
The main EOR target is Cretaceous Tuscaloosa less than 3,500 ft deep. Denbury owns substantial CO2 reserves on the Jackson Dome in south-central Mississippi. It operates and is expanding a network of CO2 pipelines in the region.