The deal gives Denbury a 100% stake and 84.7% net revenue interest in the field located 18 miles west of Hastings Field that it is currently flooding with carbon dioxide, and the current terminus of the Green Pipeline which transports CO2 from the company’s source in Jackson Dome, Mississippi.
The company has financed the deal with $213m of cash received from its property sales earlier this year, and the remainder from borrowings under its revolving credit facility.
Following the acquisition, Denbury has forecasted an increase in its annual production estimate for 2012 by 1150 barrels of oil equivalent per day (boe/d).
The acquired oilfield has an estimated average production of 2,000 barrels of oil per day.
In May, Denbury Resources agreed to the deal under which the seller will receive a production payment which equates to a 5% net revenue interest when oil production exceeds 3,000 Bbls/d and the field is under CO2 flood.eb
Denbury Resources president and CEO Phil Rykhoek said Thompson field is in close proximity to the Green Pipeline which will allow it to be connected to this CO2 transportation system with a minimal level of pipeline infrastructure spending.
"The acquisition adds to our deep inventory of tertiary development projects in the Gulf Coast region that we plan to develop with our natural source of CO2 from Jackson Dome and anthropogenic CO2 sources in the region," he added.
"While we are still in the process of incorporating the field into our development plan, we anticipate first tertiary oil production will not occur prior to 2017."
