said Wednesday that it obtained an option to purchase an interest in Hastings Field, a potential tertiary flood oil field, between Nov. 1, 2008 and Nov. 1, 2009.
The Plano, Texas-based company estimates the reserves at the field, located near Houston, at the equivalent of 50 to 90 million barrels of oil.
On exercising the option, Denbury has committed to capital expenditures of about $175 million over the subsequent five years. The company estimates development costs at $400 to $600 million. Additionally, $225 to $250 million is estimated for a CO2 pipeline from the field to Donaldsonville, La., where the company has a CO2 terminal.
The agreement requires an upfront payment of $37.5 million on closing, and additional payments totaling $12.5 million over the next two years. The purchase price will be determined at the time exercising the option, the company added.
This story was created through a joint venture between TheStreet.com and IRIS.