Denbury Resources Inc. has entered into an agreement to sell its Bakken assets in North Dakota and Montana to Exxon Mobil Corporation and its wholly owned subsidiary XTO Energy Inc. The companies will acquire 100% of Denbury’s Bakken shale assets, which consists of about 196,000 net acres with production in the second half of 2012 expected to be more than 15,000 oil equivalent barrels per day.
The acquisition increases ExxonMobil’s Bakken holding by about 50% to almost 600,000 acres which will give the company a strong presence in one of the major growth areas for U.S. onshore oil production. XTO Energy will operate the Bakken acreage.
Denbury will receive USD$1.6 billion in cash and acquire ExxonMobil’s interests in Webster field in Texas and the Hartzog Draw field in Wyoming. The interests currently produce approximately 3,600 net oil equivalent barrels per day of natural gas and liquids. The fields are ideal for carbon dioxide (CO2) flooding and are located in close proximity to Denbury’s existing or planned CO2 pipelines. Denbury has also agreed in principle to either purchase an interest in ExxonMobil’s LaBarge Field’s CO2 reserves in Wyoming or purchase incremental CO2 fro that field on conditions to be mutually agreed upon by both parties. The purchase of CO2 reserve interest would reduce the amount of cash that Denbury will receive.
Transactions are subject to satisfactory completion of customary title and environmental due diligence and customary closing conditions. Closing of the transactions is expected in the fourth quarter of 2012 and the sale price is subject to standard adjustments for revenues and asset costs from the effective date of July 1st, 2012 until the closing date.