Nov. 14--Carbon dioxide puts the fizz in soft drinks. Denbury Resources, a Plano-based oil producer, relies on carbon dioxide to add fizz to its bottom line.

Denbury made headlines recently with its agreement to buy Encore Acquisition Co., a Fort Worth-based energy company, in a deal valued at $4.5 billion.

The purchase, subject to approval of the companies' shareholders, is the biggest U.S. oil and gas acquisition announced this year. Denbury is expected to offer jobs to many of Encore's 425 employees.

Denbury, like Encore, is somewhat of a contrarian in putting its primary emphasis on production of oil rather than natural gas. Denbury has further carved out a special niche by putting an extraordinarily strong focus on using carbon dioxide to enhance petroleum recovery in older "legacy" oil fields that have a long life but declining production.

The process is known as tertiary recovery because it typically follows a secondary recovery method, such as water flooding, that is used to boost production after conventional, primary recovery methods.

Most of Denbury's petroleum production comes from tertiary recovery.

Oil focus

About 80 percent of Denbury's production, and two-thirds of Encore's, is oil. The combination "should make us one of the leading oil-focused companies in the U.S.," Denbury CEO Phil Rykhoek ("rye-cook") told the Star-Telegram in a telephone interview Wednesday.

The two companies -- which have similar production levels -- have combined oil and natural gas output equivalent to nearly 86,000 barrels of oil per day (including production from Encore Energy Partners L.P., an affiliate of Encore Acquisition).

For Denbury, the primary lure of acquiring Encore is its older fields in Montana and Wyoming that are solid candidates for large CO{-2} injections, or floods, that would enhance oil recovery, Rykhoek said.

Encore's holdings in the large Williston Basin, including extensive acreage in the hot Bakken Shale oil play in western North Dakota, were "probably the second-biggest reason" for Denbury's wanting to acquire the company, Rykhoek said. Encore is successfully drilling in the Bakken and Three Forks-Sanish geological formations, which may yield substantial quantities of oil from two separate zones on each lease.

"We like the Bakken," Rykhoek said. "It's oil-focused. â??.â??.â??.â?? It has good economics at today's [oil] prices."

CO{-2} emphasis

Encore had already begun moving toward more CO{-2} injection. In October, it estimated that it could recover 264 million barrels of oil from CO{-2} flooding.