ExxonMobil to increase production in US Bakken shale oil region

20 September 2012 14:51  [Source: ICIS news]

HOUSTON (ICIS)--ExxonMobil has struck a deal to increase its production acreage in the Bakken oil shale region in North Dakota and Montana, the US-based energy and petrochemicals major said on Thursday.

Under the deal, ExxonMobil and its subsidiary XTO Energy agreed to acquire Denbury Resource's Bakken shale assets.

The acquired assets consist of about 196,000 acres, with expected production in the second half of 2012 of more than 15,000 oil equivalent barrels per day, ExxonMobil said.

The agreement increases ExxonMobil’s holdings in the Bakken by about 50% to nearly 600,000 acres, giving the company a significant presence in one of the major US growth areas for onshore oil production, it said.

In exchange, Denbury will receive $1.6bn (€1.2bn) in cash, and it will acquire ExxonMobil’s interests in the Hartzog Draw field in Wyoming and the Webster field in Texas, which produce about 3,600 net oil equivalent bbl/day of natural gas and liquids (NGLs), ExxonMobil said.

In a separate statement, Denbury said that the two fields are ideal candidates for carbon dioxide (CO2) flooding, which is a process to improve oil recovery from reserves.

Denbury added that it also agreed in principle to either purchase an interest in the CO2 reserves in ExxonMobil's LaBarge Field in southwestern Wyoming or purchase incremental CO2 from that field. The purchase of an interest in the CO2 reserves would reduce the amount of cash to be received by Denbury, it added.

($1 = €0.77)

By: Stefan Baumgarten
+1 713 525 2653

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