Denbury pumps cash into projects

Petroleum News

Exploration and production independent Denbury Resources increased its capital spending budget by $11 million to $154.2 million, the company said Oct. 2. But Denbury indicated it would have to use the cash to pay down debt to its $300 million target by year-end, if needed.

Dallas-based Denbury said it also filed a shelf registration that would allow the company to offer up to $150 million in stock and other securities, at least some of which presumably could be applied against debt. It replaced a shelf registration filed by the company in March 2001, which had about $97 million of unused availability.

Denbury said it plans to use the additional $11 million in capital spending largely for its tertiary recovery properties in Mississippi and for additional work in the Gulf of Mexico.

Meanwhile, the company said it completed its second well in the North Lirette Field onshore Louisiana, a follow up to a discovery well Denbury announced in August. The two wells have proven reserves net to Denbury of about 8.9 billion cubic feet of gas, Denbury said. The initial well is currently producing a net 8 million cubic feet of gas and 75 barrels of liquids per day. The second well is producing a net 9.6 million cubic feet per day of gas and 125 barrels of liquids per day.

The company said a successful well in the Brazos A-21 Field offshore Texas has total reserves of 4.8 bcf of gas. The well encountered nine productive reservoirs and than additional wells are planned.