Denbury will buy the remaining 57.5% interest in the Riley Ridge Field from Cimarex Energy for $191 million. The deal provides Denbury with much needed CO2 that will be used to develop mature oil fields that are ripe for enhanced oil recovery (EOR) in the Rocky Mountains.
“The total purchase price is estimated at $191 million assuming full payout of purchase price contingencies, plus capital incurred between April 1, 2011, the effective date of the purchase, and closing. The acquisition is expected to close in late July and is subject to satisfactory completion of customary due diligence review.”"Phil Rykhoek, CEO of Denbury, commented on the transaction, saying: ‘This acquisition combined with our contracts for CO2 from third parties, provides us with the necessary volumes of CO2 to develop our current Rocky Mountain CO2 EOR projects, plus additional volumes which can be used for future projects. With this acquisition, we will control this strategic asset, our ‘Jackson Dome’ of the Rockies. In one sense, Riley Ridge is even better than Jackson Dome as the projected methane and helium sales should pay for its development and the cost to extract and compress the CO2.’ “
Read the full news release at denbury.com