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ConocoPhillips (COP) To Sell Rocky Mountain Properties For $1.05B To Denbury Resources (DNR)

 January 15, 2013 07:59 AM

(By Balachander) ConocoPhillips (NYSE: COP) had agreed to sell its properties in the Cedar Creek Anticline (CCA), a series of producing oil units, for $1.05 billion to Denbury Resources Inc. (NYSE: DNR).

Houston, Texas-based ConocoPhillips said the sale will allow the company to focus its investments in North Dakota and Montana on its significant Bakken unconventional position.

The assets to be sold include additional interests in certain of Denbury's existing operated fields in CCA along with operating interests in other CCA fields.

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ConocoPhillips said 2012 net production from these properties averaged 13 thousand barrels of oil equivalent per day through November.

Denbury estimates that the proved conventional reserves associated with the CCA properties to be acquired were roughly 42 million barrels of oil equivalent at year-end 2012.

"Our interests in CCA make up our largest oil property in the Rocky Mountain region and are a key strategic reason we acquired Encore in 2010 to expand our successful enhanced oil recovery strategy to a new region," Denbury said.

Assuming the acquisition closes at the end of the first quarter of 2013, Denbury estimates that its average daily production would increase by around 7,700 BOE/d for full-year 2013.

ConocoPhillips expects earnings benefit of roughly $120 million after-tax in the final three months of 2012.

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The deal is expected to be completed in the first quarter of 2013.

COP shares, which have been trading in the 52-week range of $50.62 to $78.29, closed Monday's regular trading at $58.47. Denbury shares ended previous trading at $16.88.

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