Denbury Resources Inc. (NYSE:DNR) will purchase land in Montana and North Dakota from ConocoPhillips (NYSE:COP) to increase its Rocky Mountain presence. The deal is worth $1.05 billion, and it is expected to close in the current quarter. In a statement released today, Denbury Resources Inc. (NYSE:DNR) said it will use cash it raised in December from selling off assets to Exxon Mobil Corporation (NYSE:XOM).
The statement also said Denbury is looking to the purchase of these oil fields as a possible tax deferment worth $400 million. As Bloomberg reports, the company was able to increase its production during 2012 by using carbon dioxide to make it easier for crude oil to flow out of the oilfields. A company spokesperson told Bloomberg that they intend to use this method to reverse the 7 to 9 percent production decline ConocoPhillips (NYSE:COP) has experienced while working those oilfields.
Denbury expects to gain about 11,000 barrels’ worth of production each day through the purchase of the oilfields, which will help to offset the 12,500 barrels it lost by selling assets to Exxon Mobil Corporation (NYSE:XOM) last month. Shares of Denbury Resources Inc. (NYSE:DNR) are responding to news of the sale, rising 4 percent in early afternoon trades.
Shares of ConocoPhillips (NYSE:COP) gained .5 percent. A spokesperson for ConocoPhillips said they expect the sale of the oilfields to Denbury to add $120 million to their results for the fourth quarter. Data compiled by Bloomberg indicates that ConocoPhillips has sold about $12.5 billion worth of assets last year in its efforts to restructure, like selling off assets and spinning off its refineries.