Interactive 2009 Annual Report (PDF 7.56 MB) - Denbury Resources ...

12 Denbury Resources Inc. 2009 Annual ReportCoast. Bell Creek was originally unitized by Exxon with the intent to ultimatelyCO 2 flood the field. Due to low oil prices in the 1980’s, many of the wells in BellCreek were “pickled” and temporarily abandoned for future CO 2 EOR utilization.Encore began reactivating many of the “pickled” wells in 2008 with no failures.In addition to the reactivation program, Encore began injecting water into thefield in order to raise the reservoir pressure in anticipation of the arrival of CO 2 .Upon completion of the planned CO 2 pipeline system, CO 2 EOR operations will beinitiated at Bell Creek.The Cedar Creek Anticline covers a very large area in North Dakota andMontana. The Anticline is a series of oil units that produces from numerouscarbonate oil reservoirs. Initial development of the Anticline was conducted byShell Oil Company, which included primary production and ultimately waterflood operations. In the 1980’s, Shell was evaluating CO 2 EOR operations inmany places throughout the United States and initiated CO 2 EOR operations inWest Texas, Mississippi, Louisiana and Montana. They conducted a pilot projectat the Anticline in the South Pine Unit. The pilot project demonstrated that CO 2EOR operations would recover approximately 18% of the original oil in place,very similar to our expected recoveries in the Gulf Coast. Using a 16% recoveryfactor, we estimate that nearly 200 MMBbls of potential oil could be recoveredfrom the Anticline from CO 2 EOR operations. We are developing plans for thepipeline, field development and CO 2 sources and hope to initiate CO 2 EORoperations here in three to five years.Elk Basin is a 37 MMBbl oil field located in northwestern Wyoming.Elk Basin is another very large field that produces from multiple carbonatereservoirs. Reservoirs within the field have been successfully water flooded andthere is currently a flue gas injection project ongoing in one reservoir. Based ondimensionless modeling, CO 2 operations at Elk Basin look promising.Unconventional PlaysNear-term production and reserve growth will come primarily fromEncore’s unconventional plays. With nearly 300,000 net acres under lease in theBakken oil play in North Dakota, Encore possessed a top ten acreage position.The Bakken oil play has been developed over the past several years by