Denbury Resources Inc. entered into an agreement with a Navitas Petroleum LP subsidiary to divest 50% of its working interest in four oil fields in southeast Texas for $50 million and a carried interest in 10 wells, which will be drilled by Navitas.
Denbury Resources will sell half of its working interest in Webster, Thompson, Manvel and East Hastings, according to a Dec. 23 news release. The company, which will remain the operator of the fields, plans to use the proceeds to fund its operations, enhance liquidity and reduce its debt.
Under the deal, Navitas will fund 100% of the capital needed for the drilling and completion of 10 wells across the fields. The wells are expected to be completed within 18 months after the deal's closing. Navitas will also have the chance to continue developing the fields for up to six separate extension periods, upon completion of the initial wells and if specific conditions are met.
Denbury said it will retain 100% ownership of its upcoming Webster Unit carbon dioxide enhanced oil recovery project, according to the release.
Closing of the transaction is scheduled in early March 2020, subject to customary closing conditions.
Denbury is an oil and natural gas company, which holds interests in various oil and as properties in Mississippi, Texas and Louisiana, among other locations.