Denbury Resources Inc. has picked up almost all of the working interests in the West Mallalieu and Olive Fields located in southwestern Mississippi and another 14,000 acres in the Barnett Shale gas play in Texas, acquisitions expected to bring the Dallas-based company opportunities for oil and natural gas reserves and production growth.

The acquisition of the Barnett Shale gas play in the Fort Worth Basin is part of Denbury’s plan to create a new strategic operating area. The basin now has more than 20 rigs drilling for natural gas, and wells there typically have slow decline rates. Denbury is in the process of drilling its first well with plans to drill three to four more this year.

Typical Barnett Shale wells are drilled on 320-acre spacing with potential to reduce spacing to 80 acres. Historical initial rates of production range from 0.5 MMcf/d to 1 MMcf/d, declining to between 100-200 Mcf/d. Denbury is operator and has an average 75% working interest on the acreage.

Already the largest oil and natural gas operator in Mississippi, the two Mississippi fields cost Denbury approximately $3.8 million. The independent plans to expand its tertiary carbon dioxide injection operations there, and already has CO2 operations at its second largest field, Little Creek Field, about five miles away. Denbury expects to recover approximately 8 MM bbl from West Mallalieu, with most booked as proved reserves by year-end.

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