Denbury to buy remaining Riley Ridge stake

By OGJ editors
HOUSTON, July 1 -- Denbury Resources Inc. agreed to acquire the 57.5% working interest it does not already own in the Riley Ridge Federal Unit in southwestern Wyoming and 33% working interest in an adjoining 28,000 acres of mineral leases from Cimerex Energy Co. for $191 million.

The acquisition, subject to completion of due diligence review, is expected to close in late July.

Denbury of Plano, Tex., will become the operator of both Riley Ridge Unit and the adjoining land in LaBarge field. Cimerex is based in Denver.

Estimated proved reserves net to the Riley Ridge Federal Unit interest being acquired are 250 bcf of gas, 8.9 bcf of helium, and 1.4 tcf of carbon dioxide.

The 28,000 acres is estimated to contain additional probable reserves of 250-300 bcf of gas, 9.5-11.5 bcf of helium, and 1-1.2 tcf of CO₂, net to the interest to be acquired.

Total estimated proved and probable CO₂ reserves in the Riley Ridge Unit and adjoining acreage is 6.1 tcf, of which Denbury’s interest will be 4.5 tcf after closing.

Current operations include completion of producing wells and completion of the construction of natural gas and helium processing facilities.

The full well stream is 65% CO₂, 19% natural gas, 5% hydrogen sulfide, 0.6% helium. The rest involves other gases.

Denbury’s operational plans are to reinject CO₂ and H₂S into the producing formation until a planned CO₂ pipeline can be built to the field.