UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 6, 2011
DENBURY RESOURCES INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation or organization)
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1-12935
(Commission File Number)
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20-0467835
(I.R.S. Employer
Identification No.) |
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5320 Legacy Drive
Plano, Texas
(Address of principal executive offices)
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75024
(Zip code) |
Registrants telephone number, including area code: (972) 673-2000
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Section 7 Regulation FD Disclosure
Item 7.01. Regulation FD Disclosure
As announced by Elk Petroleum Ltd (ASX: ELK) (Elk) on May 9, 2011 in Australia, Denbury Onshore
LLC has signed an agreement with a subsidiary of Elk to acquire a 65% working interest in Grieve
Field, a planned CO2 EOR Project located in Natrona County, Wyoming. Denbury will serve
as operator and invest the first $28.5 million of capital and operating costs in Phase 1. In Phase
2, Denbury may fund, at Elks option, Elks 35% share of the next $34.3 million of capital and
operating costs, with Denbury recouping its Phase 2 expenditures (plus interest) out of Elks 35%
working interest share of production from the project. Elk has the right, at its discretion, to
elect to fund its share of Phase 2 expenditures. All future costs beyond Phase 2 will be borne by
the each company in proportion to its respective working interests.
Denbury will own and construct the CO2 recycling facility and the necessary 3-mile
pipeline to deliver CO2 from an existing CO2 pipeline to the Grieve Field.
Upon completion of the construction of the pipeline and CO2 recycling facility, Denbury
will charge Grieve Field a monthly lease fee and all routine operating costs associated with the
pipeline and recycling facility for the life of the project. Denbury estimates that the Grieve
CO2 EOR project has potential for recovery of approximately 12 million barrels
(MMBbls) of gross oil, or 6.4 MMBbls net to Denburys net revenue interest. In the event the
project recovers greater than 12 MMBbls of oil, gross, Denbury will assign Elk an additional 1.3%
of net revenue interest in the project.
Denbury expects to close the transaction within 30 days following customary due diligence,
finalization of the necessary lease agreements associated with the pipeline, and recycling facility
and customary consents and approvals for transactions of this nature.
Cautionary Statements Concerning Forward-Looking Information
The statements contained in this Current Report on Form 8-K that are not historical facts are
forward-looking statements, as that term is defined in Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, that involve a
number of risks and uncertainties. Such forward-looking statements may be or may concern, among
other things, estimates of potential recoverable reserves, development activities, and the ability
to obtain and transport CO2. Such forward-looking statements generally are accompanied
by words such as estimate, expect, or other words that convey the uncertainty of future events
or outcomes. Such forward-looking statements are subject to a number of risks and uncertainties
that could significantly affect current plans, anticipated actions, and the timing of such actions.
As a consequence, future results may differ materially from expectations, estimates or assumptions
expressed in or implied by any forward-looking statements made herein.