Plano-based Denbury to sell 60% of its Barnett Shale assets for $270 million

by PegNews wire

FORT WORTH — Denbury Resources Inc. announced that today it has entered into an agreement to sell 60% of its Barnett Shale natural gas assets for $270 million, to Talon Oil & Gas LLC, a privately held company. The sale is expected to close in late June and is subject to satisfactory completion of customary due diligence and closing conditions.

Gareth Roberts, President and Chief Executive Officer, stated, “This sale further enables us to concentrate our investment and management focus on our tertiary operations where we have lower risk, virtually no competition in our areas of operation and higher profitability. We plan to use these funds to increase our 2010 tertiary related spending beyond what we could accomplish using only cash flow. We believe we can make a good rate of return in our tertiary program at current oil prices and we are more optimistic about near-term oil prices than natural gas prices, prompting us to direct our focus on our core tertiary oil assets. In addition to the benefits derived from accelerating our tertiary program and the anticipated production growth that we expect to follow, these proceeds will give us both greater liquidity and flexibility in case of further decreases in commodity prices and an unused bank credit line if an attractive acquisition opportunity becomes available. We remain enthusiastic about our future.”

Denbury Resources Inc. is an independent oil and natural gas company. The company is the largest oil and natural gas operator in Mississippi, owns the largest reserves of CO2 used for tertiary oil recovery east of the Mississippi River, and holds significant operating acreage in the Barnett Shale play near Fort Worth, Texas, onshore Louisiana and Alabama, and properties in Southeast Texas.

Source: Denbury Resources