Denbury up on deal with ConocoPhillips

[dan_s]

ConocoPhillips sold about 86,000 acres straddling Montana and North Dakota to Denbury for $1.05 billion.

Net production in the areas sold averaged 13,000 barrels of oil equivalent last year, ConocoPhillips said in a statement. The sale does not include ConocoPhillips’s assets in the Bakken formation, which sits across Canada’s Saskatchewan and Montana and North Dakota.

Plano, Texas-based Denbury had recently sold its Bakken assets to Exxon Mobil Corp. for $1.3 billion. It said it would partly fund the ConocoPhillips purchase with that money, and the transaction also allows for a deferment of more than $400 million in taxes on the Exxon deal.

In addition to the tax deferment, the deal “gives [Denbury] additional liquidity with which it can continue to execute its share repurchase program,” analysts at Simmons said in a note to clients Tuesday.