With the sale, could the company face the challenging credit environment?
Oil and gas exploration and production company Venoco has sold its Hastings complex to Denbury Resources for aggregate proceeds of $201 million.
According to the company, the aggregate purchase price of $201 million includes approximately $4.9 million for the sale of certain surface land, oilfield equipment and other assets, scheduled to close later. Venoco retains a 2% override and a reversionary interest of approximately 25% following payout, as defined in the option agreement.
The oil company said that, production from the Hastings complex averaged approximately 2,500 barrels of oil equivalent per day (boe/d) during 2008, net to the interest sold, with conventional proven reserves of approximately 7.7 million barrels of oil equivalent (mmboe) using year-end 2008 SEC prices. The oil company’s year-end 2007 reserves for the Hastings complex were 14.4mmboe.
Under terms of the option agreement, Denbury is obligated to take certain actions to complete a CO2 flood of the Hastings complex. Denbury has indicated that it does not plan to commence the CO2 flood until 2011, after completion of its Green (CO2) pipeline currently under construction. Venoco does not currently have any reserves booked to the CO2 flood or its reversionary interest.
Venoco is an independent energy company primarily engaged in the acquisition, exploitation and development of oil and natural gas properties in California and Texas. Venoco operates three offshore platforms in the Santa Barbara Channel, has non-operated interests in three other platforms, operates four onshore properties in Southern California, has extensive operations in Northern California’s Sacramento Basin and operates fifteen fields in Texas.