Thursday, Denbury Resources Inc. (DNR) said it signed an agreement with a privately owned company to buy a 91.4% interest in Conroe Field, a potential tertiary flood north of Houston, Texas, for $600 million, plus an additional potential consideration if oil prices exceed $121 per barrel during the next three years. The transaction is expected to close early October 2008 subject to normal title, environmental and other due diligence.
The oil and natural gas company said it plans to temporarily fund the acquisition of the field 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.
Under the agreement, the seller would receive an additional $7.2 million per dollar increase in the oil futures price above $121 per barrel with a maximum total incremental consideration of $125 million.
The company would buy 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%. The company has internally estimated, on a preliminary basis, that the Conroe Unit has an estimated net reserve potential from CO2 tertiary recovery of approximately 130 million barrels of oil equivalent depending on the ultimate recovery factor.
The company would be required to build a pipeline to transport CO2 to the field, preliminarily estimated to cover approximately 80 miles, as an extension of the Green pipeline.
The company said it would spend an additional $750 million to $1.0 billion to develop the Conroe Unit as a tertiary flood.
The company noted that the Conroe assets were currently producing around 2,500 BOE/d net to the company's acquired interest.
DNR is currently trading up 3.05% at $26.35 on the New York Stock Exchange.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.