Denbury to sell Haynesville, East Texas gas assets
Denbury Resources Inc. plans to sell its Haynesville and East Texas natural gas assets for $217.5 million to an unidentified private oil and gas company.
By OGJ editors
HOUSTON, Oct. 13 -- Denbury Resources Inc. plans to sell its Haynesville and East Texas natural gas assets for $217.5 million to an unidentified private oil and gas company.
The sale is expected to close within 45 days, subject to due diligence and satisfaction of closing conditions. Denbury said the properties being sold produced 34 MMcfd of gas equivalent during the second quarter.
To reduce its taxable gain on the sale, Denbury plans to use a like-kind-exchange with the Haynesville-East Texas assets and the previously announced acquisition of the Riley Ridge federal exploratory unit in southwestern Wyoming (OGJ Online, Sept. 23, 2010).
A like-kind exchange allows for the sale of an asset and purchase of another asset. Denbury agreed to acquire a 42.5% nonoperated working interest in the Riley Ridge unit for $115 million. The transaction includes 33% of the carbon dioxide rights in 28,000 acres adjoining the Riley Ridge unit. The Riley Ridge unit and the adjoining acreage are in LaBarge field. Closing, subject to due diligence, is expected by Oct. 31.
The Riley Ridge acquisition contains estimated proved reserves of 185 bcf of natural gas, 6.6 bcf of helium, and 1 tcf of carbon dioxide, net to the interest being acquired. The additional adjoining acreage is estimated to contain an additional 1 tcf of probable CO2 reserves, net to the same interest.