The closing is expected in early October 2008 and is subject to normal title, environmental and other due diligence. The company plans to temporarily fund the acquisition with bank debt by seeking an increase in its bank credit line, but intends to ultimately seek more permanent financing which may include other debt financing or the sale of its Barnett Shale properties in north Texas.
The company will purchase the seller’s interest in the Conroe Field unit and other interest in the Conroe Field, excluding a retained working interest of approximately 2.8%. Denbury will obtain a total working interest of approximately 91.4% in the unit.
Gareth Roberts, CEO of Denbury, said: This agreement provides for a significant strategic addition for Denbury, the largest potential tertiary flood we have acquired to date. This will significantly expand our area of operations and growth opportunities in the Texas Gulf Coast region and allow us to more completely utilize the green pipeline that is in progress.
