Denbury Resources Inc. announced that its total proved oil and natural gas reserves as of Dec. 31, 2009, were 207.5 million barrels of oil equivalent (MMBOE), consisting of 192.9 million barrels (MMBbls) of crude oil, condensate and natural gas liquids and 88 billion cubic feet (Bcf) (14.7 MMBOE) of natural gas. Adjusted for the sale of the company’s Barnett Shale properties, Denbury’s reserve quantities increased approximately 19 percent from similarly adjusted year-end 2008 estimates (174.2 MMBOE). The company also announced that its proved carbon dioxide (CO2) reserves were 6.3 trillion cubic feet (Tcf) at year-end 2009, a 12 percent increase over Denbury’s year-end 2008 CO2 reserves of 5.6 Tcf.
The independent reservoir engineering firm of DeGolyer and MacNaughton prepared Denbury’s year-end reserve report, including its proved CO2 reserve quantities, for the ninth consecutive year. Denbury’s year-end 2009 proved reserves are 93% oil, 62% are proved developed, and 65% of the year-end reserves are proved tertiary oil reserves.
Proved Reserves and Analysis
Denbury added 48.8 MMBOE of proved reserves during 2009 (before netting out 2009 production and property sales) replacing approximately 253 percent of its currently estimated 2009 production. The most significant reserve additions during 2009 were approximately 17.6 MMBbls added in the company’s tertiary oil operations, 18.4 MMBOE related to the acquisition of Conroe Field, 9.6 MMBOE related to the acquisition of Hastings Field and 4.2 MMBOE related to commodity price revisions. The company’s tertiary-related oil reserves added during the year were primarily at Cranfield Field (10.9 MMBbls) and Eucutta Field (2.5 MMBbls). Based on estimated fourth quarter 2009 production levels, the Company’s tertiary oil reserves have a 14.0 R/P ratio (reserve life in years based on current production levels). The company sold approximately 74.2 MMBOE of proved reserves during 2009 through the divestiture of its Barnett Shale natural gas properties.
The Company added incremental CO2 reserves of 940 Bcf during 2009 resulting in total proved CO2 reserves of 6.3 Tcf at Dec. 31, 2009, (on a working interest basis) after deducting estimated 2009 production of 249 Bcf. The reserves additions resulted from the drilling of one additional CO2 source well, expansion of an existing unit and upward revisions of prior estimates. During 2010, the company plans to drill three additional CO2 wells in the Jackson Dome area.
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