Denbury oil output climbs with Bell Creek start-up

Denbury Resources Inc., Plano, Tex., reported record oil production in the quarter ended June 30 and said it foresees lower output in the third quarter before total and tertiary production resume their sequential growth in the fourth quarter.

Production averaged 74,052 b/d of oil equivalent in the quarter, 94% oil, and oil production averaged 69,895 b/d, 17% above the first quarter and 4% higher than the year-ago quarter.

During the quarter Denbury added 350 bcf of estimated proved carbon dioxide reserves in Jackson Dome field in Mississippi, representing 6% of the field’s estimated yearend 2012 proved CO2 reserves or about 1 year of output at the field’s current rate.

Denbury started tertiary oil production at giant Bell Creek field in Montana after the quarter’s end and slightly ahead of schedule. It is the company’s first tertiary oil production in the Rocky Mountain region.

A production decline at giant Delhi field in northeast Louisiana is expected to offset production gains realized at Bell Creek in the third quarter, Denbury said.

A release of a mixture of CO2, saltwater, natural gas, and a small percentage of oil was discovered and reported in Delhi field in June 2013. Denbury immediately took remedial action to stop the release and contain and recover well fluids in the affected area.

The company believes the origin of the release to be one or more wells in the affected area of the field that had been previously plugged and abandoned. Denbury has recorded $70 million of lease operating expenses related to the release in the second quarter results. The amount is Denbury’s minimum estimate of remediation expenses and may be adjusted.

Denbury estimates that one third to two thirds of its minimum estimate may be recoverable from insurance but has not reached any agreement with its insurance carriers.

Tertiary oil production at Delhi field began declining late in the second quarter due to the various remediation measures taken, which included ceasing injection of CO2 into the affected area in order to reduce that area’s operating pressure.

Based on Denbury’s current understanding of the cause of the release and current expectations relative to remediation, the company anticipates resuming CO2 injection into the impacted area in the fourth quarter of 2013 after which it expects oil production to recover gradually.

Second quarter tertiary oil production was up 10% or 3,544 b/d from the year ago quarter and 305 b/d less than this year’s first quarter. The year-on-year gain stemmed from Delhi, Hastings, and Oyster Bayou fields. The quarter-to-quarter decline was due to the Delhi release and normal declines in mature tertiary fields offset by increases at Oyster Bayou and Heidelberg fields.

Related Articles

US Forest Service takes no stance on fracturing in national forest

12/12/2014

The US Forest Service has dropped a proposal that would have banned hydraulic fracturing in the George Washington National Forest.

Weak crude prices could threaten Bakken production growth

12/12/2014 Bakken shale production set another record in August, but weakening crude prices and flaring reduction efforts threatened to temper production grow...

BHI: US rig count forced down by large losses in Texas

12/12/2014 Forced down by large losses in Texas and specifically the Permian basin, the US drilling rig count plummeted 27 units to settle at 1,893 rigs worki...

Husky reports start of steam operations at Sunrise oil sands project

12/12/2014

Husky Energy, Calgary, reported the start of steam operations at the in situ Sunrise Oil Sands Project in northeastern Alberta.

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

Independent assessment hikes Husky heavy oil resources

12/12/2014 Husky Energy Inc., Calgary, says an independent assessment increases its heavy oil resources in the Lloydminster region of Alberta and Saskatchewan.

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Stone drills successful Utica exploration well

12/10/2014 Stone Energy Corp., Lafayette, La., reported that its Pribble 6HU well in Wetzel County, W.Va., flowed from a 3,605-ft lateral at 30 MMcfd during t...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected