Denbury Resources to Release Request for Proposals from EPC Vendors for Belle Creek CO2 Flood Development

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Researched by Industrial Info Resources (Sugar Land, Texas)--Denbury Resources Incorporated (NYSE:DNR) (Plano, Texas) is expected to begin selecting an engineering, procurement and construction company to develop its Belle Creek CO2 project near Billings, Montana, sometime during the fourth quarter of 2010. It is expected that Denbury will release a blanket request for proposals from companies interested in developing the Belle Creek field in the next few months. The proposed project involves converting an existing 1,500-barrel-per-day (BBL/d) crude oil production field, which is currently experiencing declining production volumes, into a CO2 flood enhanced oil recovery scheme that could reach a peak production of more than 7,000 BBL/d after several years of CO2 injection.

The project will involve the construction of a processing plant with a capacity of 50 million standard cubic feet per day of CO2 recycling, and recompression for field reinjection. The plant will be constructed in two phases, each with a capacity of 50 million standard cubic feet per day, with the first phase most likely going into construction during 2011. Denbury will install two 4,500-horsepower electric drive compression packages to support each phase of the new facility. The Belle Creek production field covers approximately 21,000 acres and holds an estimated 30 million barrels of recoverable reserves, utilizing CO2 as an enhanced oil-recovery method. Denbury plans to re-enter, rework and drill a total of 50 to 70 wells, then place them into crude oil production, CO2 injection, or in support roles during the first phase of field work.

Although there are no exact figures that have been published by Denbury, the first phase of the Belle Creek CO2 project is expected to carry a capital cost of more than $130 million. The Belle Creek field is one of three possible major CO2 flood projects that Denbury obtained from its purchase of Encore Acquisition Company. The other two fields are in the early study phases and are scheduled for development and conversion to CO2 flood during the next five years. All three fields combined added a total of 264 million barrels of recoverable crude oil through CO2 sequestration to Danbury's books.

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