Thursday, May 5, 2011

Denbury Announces TMS Joint Venture

Denbury provided an update in their earnings conference call today.

Q1-2011 Results Earnings Call - Key Comments:
"We acquired approximately 200,000 acres of leases in Mississippi and Louisiana with short lease expirations through our Encore acquisition. Encore has spent a conservative amount of capital and time testing the Tuscaloosa marine shale, which resulted and the only Tuscaloosa marine shales with continuous production to date. Given our planned activity in our CO2 EOR operations in the Bakken and the relatively short period of time before leases were going to expire, we decided to seek a joint venture partner to continue testing the Tuscaloosa marine shale. We have entered into an agreement with a joint venture partner covering approximately 100,000 acres of the Tuscaloosa marine shale acreage that had not yet expired. Under this agreement, the joint venture partner provided immediate capital to extend expiring leases, has a right to elect to complete a well that was never completed, drill and complete one additional well, and to carry us in additional leak -- lease acquisitions until such time as an agreed-upon amount of capital is invested. After the joint venture partner has expended the agreed-upon capital by completing the one well, drilling an additional well and/or acquiring additional leases, Denbury will have the opportunity to participate for 15% working interest in all future drilling on a unit-by-unit election. Prior to the expenditures of the agreed-upon capital, Denbury will be carried for a 15% interest in all operations or lease acquisitions. This transaction does not include Denbury's Tuscaloosa marine shale interest under any of our existing CO2 properties in Southwest Mississippi or Louisiana. And with that, I'll turn it over to Bob to talk about operations."

Press Release:
The well referenced above "to be completed" is very likely the Encore Board of Education 1H.  The well was drilled in August, 2008, but was never completed.  It was drilled to a measured depth of 15230 with a lateral length of 3814'.

This map depicts an approximation of Encore's original lease position in the TMS.  Much of the acreage has expired.

An Approximation of Encore's original acreage position.


2 comments:

  1. Any idea who the joint venture partner is?

    ReplyDelete
  2. Not at this point. I'm sure that it will be announced in the coming months.

    ReplyDelete