PLANO, Texas, Dec. 23, 2019 (GLOBE NEWSWIRE) -- Denbury Resources Inc. (NYSE: DNR) (“Denbury” or the “Company”) today announced that it has entered into a definitive agreement with a subsidiary of Navitas Petroleum (TASE: NVPT.L, “Navitas”) to sell half of its nearly 100% working interest position in four southeast Texas oil fields (consisting of Webster, Thompson, Manvel and East Hastings), for $50 million cash and a carried interest in ten wells to be drilled by Navitas. The sale is expected to close by early March 2020 and is subject to customary closing conditions. The Company anticipates using the sale proceeds to fund operations, enhance liquidity and/or reduce debt.
TRANSACTION HIGHLIGHTS
Production associated with the working interests to be sold averaged approximately 1,050 barrels of oil equivalent per day for the first nine months of 2019, and proved reserves for the working interests to be sold were approximately 3.7 million barrels of oil as of December 31, 2018. Estimated net cash to Denbury from the sale is $42 million after adjusting for interim cash flow from the properties between the January 1, 2019 effective date and the estimated early March 2020 closing date. Denbury retains the right to 100% of the proceeds from surface acreage sales at Webster Field.
MANAGEMENT COMMENT
Chris Kendall, Denbury’s President and CEO, said, “This transaction provides a significant opportunity to expand the value of our portfolio and highlights the premium value of our oil-rich conventional assets. Through partnering with the experienced Navitas team, we expect to accelerate conventional exploitation of unproven oil resources across these fields, while providing Denbury additional flexibility for our 2020 capital plans and debt reduction efforts.”
ABOUT DENBURY RESOURCES
Denbury is an independent oil and natural gas company with operations focused in two key operating areas: the Gulf Coast and Rocky Mountain regions. The Company’s goal is to increase the value of its properties through a combination of exploitation, drilling and proven engineering extraction practices, with the most significant emphasis relating to carbon dioxide enhanced oil recovery (CO2 EOR) operations. For more information about Denbury, please visit www.denbury.com.
This press release, other than historical financial information, contains forward-looking statements that involve risks and uncertainties, including estimates of oil reserves, and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission, including Denbury's most recent reports on Form 10-K and Form 10-Q. These risks and uncertainties are incorporated by this reference as though fully set forth herein. These statements are based on engineering, geological, financial and operating assumptions that management believes are reasonable based on currently available information; however, management's assumptions and the Company's future performance are both subject to a wide range of business risks, and there is no assurance that these goals and projections can or will be met. Actual results may vary materially.