Denbury To Buy Oil Developer Encore For $2.64B
DALLAS (AP) ¿ Oil and gas developer Denbury Resources Inc. said Sunday it will pay $2.64 billion in cash and stock to purchase Encore Acquisition Co., in a move to become one of the largest independent oil exploration and production companies in North America.
Encore shareholders will receive $50 for each share held, including $15 in cash and $35 in stock. The purchase price represents a 35 percent premium to the stock's closing price Friday.
Based on Encore's 52.8 million common shares outstanding at July 31, the acquisition is valued at about $2.64 billion. Denbury also plans to assume more than $1 billion in Encore debt and will take over Encore's minority stake in Fort Worth, Texas-based Encore Energy Partners LP, valued at nearly a half billion dollars. In total, the companies are estimating the deal is worth $4.5 billion.
Denbury operates mainly in Mississippi, and holds interests in the Barnett Shale region near Fort Worth, Texas, and properties onshore in Louisiana, Alabama and Southeast Texas. It owns hefty reserves of carbon dioxide, which Denbury injects into older oil wells to boost oil production, a method known as tertiary production. Fort Worth, Texas-based Encore buys and develops oil and natural gas reserves from onshore fields in the United States.
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