Denbury Resources Inc.
DNR ("Denbury" or the "Company") today announced the closing of the
first phase of its previously announced Bakken sale and asset exchange with
Exxon Mobil Corporation and its wholly-owned subsidiary XTO Energy Inc.
(collectively, "ExxonMobil"). In the first of two closings, ExxonMobil paid
cash of approximately $1.3 billion (which includes preliminary closing
adjustments) and transferred to Denbury ExxonMobil's operating interests in
Webster Field in Texas and Hartzog Draw Field in Wyoming.
For the second phase closing, which is expected to take place prior to
year-end, Denbury retained approximately 17.5% of its pre-closing interest in
Bakken area assets, and ExxonMobil withheld $350 million of cash consideration
for such Bakken area assets. The parties continue to work to finalize an
agreement and documentation pursuant to which Denbury will receive an interest
in the CO[2] reserves in ExxonMobil's LaBarge Field in Wyoming in exchange for
the retained Bakken interests, together with any necessary cash adjustments.
Barring this exchange taking place in the second phase closing as expected,
Denbury would sell its retained 17.5% Bakken area interest to ExxonMobil for
the $350 million of cash which has been withheld.
Denbury continues to pursue using a portion of the cash proceeds from the
first phase closing to purchase interests in additional oil fields in the Gulf
Coast or Rocky Mountain regions that are well suited for CO[2] enhanced oil
recovery which would qualify for like-kind exchange treatment for federal
income tax purposes. Accordingly, a substantial amount of the cash paid in the
first phase closing is being held in qualified trust accounts to fund any
future potential asset purchases.
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