Applying carbon dioxide to enhance oil production from conventional wells is nothing new, but it has set Plano, Texas-based Denbury Resources apart from the rest of its ilk. Not that other E&Ps don’t employ this technique in aging or depleted wells (a wink and a nod to Occidental Petroleum—the largest to do so in the Permian). But unlike any of those, Denbury’s core strategy is CO2 EOR. And their E&P strategy just happens to focus on employing this technology on the company’s owned oil and gas operations. As well as putting in place the midstream infrastructure to ensure carbon dioxide gets piped where it’s needed–which is anywhere Denbury is.
Denbury Resources is a company engaged in hydrocarbon exploration. It is organized in Delaware and headquartered in Plano, Texas. The company extracts petroleum via enhanced oil recovery, which utilizes carbon dioxide to extract petroleum from fields that have been previously exploited.
In the haze and craze of horizontal drilling and hydraulic fracking, Denbury has kept to its guns to focus on what it does best—applying carbon dioxide enhanced oil recovery technology on the oil and gas assets it owns. The company is long recognized as an expert at CO2 EOR, and it’s served them well. Since its birth, Denbury acquired one of the largest CO2 platforms in the country for $4.5 billion, snatched up aging oilfields in hot basins, and extracted an impressive amount of oil using a technology the company continues to evolve. Not exactly the recipe of most of today’s E&P strategies, but one that certainly appears to work for Denbury.
Denbury this week announced it now will build a 105-mile pipeline to flow carbon dioxide to old oilfields along the Montana-North Dakota border. There, CO2 will be injected into the wells to unlock or displace trapped shale rock, offering as much as 10-25% of oil recovery. Denbury’s latest announcement joins several other similar projects, from the likes of Hess Corp. and Exxon’s XTO Energy, which are now in the queue for CO2 EOR in the Bakken and Three Forks. The company’s existing Greencore Pipeline, which sources CO2 from ExxonMobil’s LaBarge Field, flows the gas via interconnects from Wyo., to Mont. In the Gulf Coast region, Denbury also owns the area’s only significant naturally occurring source of CO2 to help recover additional oil from its mature oilfield assets in Texas, La., and Miss., along with at least two other CO2 pipelines. The company’s combined EOR operations during 3Q yielded production of 56,441 BOED.
Question is: Can Denbury’s core strategy or evolving technology apply to fracked wells? Seems the company is working on that, too.
What do you think?