Denbury Resources to acquire Encore for $4.5 billion
03 Nov 2009
US oil and natural gas company Denbury Resources Inc (Denbury) agreed to buy Encore Acquisition Company (Encore), an acquirer and developer of oil and gas reserves, for approximately $4.5 billion, aiming to position the company as one of the largest crude oil-focused, North American exploration and production companies.
The transaction value includes assumption of Encore's debt of approximately $1.3 billion and $400 million worth minority interest in Encore Energy Partners LP.
Under the terms of the agreement, shareholders of Encore will get $50 for each share of Encore, comprising $15 in cash and $35 in Denbury common stock.
Texas-based Denbury is a growing oil and gas company and the largest operator in Mississippi. The company owns the largest reserves of carbon dioxide (CO2) used for tertiary oil recovery east of Mississippi river and holds interests in the Barnett Shale play in Texas and other properties.
Encore, which is also Texas-based, is engaged in the acquisition and development of oil and natural gas reserves from onshore fields in the US. Since 1998, Encore has acquired high-quality assets and grown through drilling, waterflood, and tertiary projects. Encore's properties are located in the Rockies, the Mid-Continent, and the Permian Basin.
The acquisition will create one of the largest CO2 enhanced oil recovery (EOR) platforms diversified across the Gulf Coast and Rocky Mountain regions. The combined companies will have over 500 million barrels of oil equivalents (MMBOE) recoverable with CO2 tertiary operations.
