Denbury plans CO2 injection in three fields

Nov. 28, 2005
Denbury Resources Inc., Dallas, plans to operate an enhanced oil recovery program in three oil fields in Mississippi and Alabama, the controlling working interest of which it has agreed to acquire for $250 million.

By OGJ editors
HOUSTON, Nov. 28 -- Denbury Resources Inc., Dallas, plans to operate an enhanced oil recovery program in three oil fields in Mississippi and Alabama, the controlling working interest of which it has agreed to acquire for $250 million.

The properties, all potential carbon dioxide tertiary flood candidates, include Tinsley field 40 miles northwest of Jackson, Miss.; Citronelle field in southwest Alabama; and the smaller South Cypress Creek field near Denbury's Eucutta field in eastern Mississippi. The acquisition is expected to close in late January.

The three fields, currently producing a total of 2,200 boe/d, have estimated conventional proved reserves of 14.3 million boe, with two-thirds attributable to Citronelle field, Denbury said.

Denbury CEO Gareth Roberts said Tinsley field, with over 660 million bbl of original oil in place, would become Phase III of Denbury's CO2 program.

The company expects to begin an initial $19 million tertiary development project at Tinsley field in 2006, with more-extensive development planned for 2007. Detailed engineering is under way, and a full development plan should be completed in early 2006, he said. CO2 will flow to Tinsley from the company's Jackson Dome area through an acquired 8-in. pipeline previously used for natural gas storage.

To transport CO2 to Citronelle field in Alabama, Denbury will add a 60-70 mile extension to its Free State CO2 pipeline under construction between Jackson Dome and Eucutta field. The Citronelle tertiary development timetable has not yet been determined.

South Cypress Creek likely will be developed after the initial development of Tinsley and Citronelle fields as an additional project for Denbury's Eastern Mississippi Phase II CO2 project.