ExxonMobil have agreed to buy Denbury Resources Inc's stakes in the Bakken shale formation for $1.6 billion, in a deal that will see their holdings in the area increase to nearly 600,000 acres.
Exxon will acquire roughly 196,000 acres which are predicted to provide around 15,000 barrels of oil equivalent per day during the second half of this year. The $1.6 billion price tag may not seem much, but that is because assets in the Bakken are cheaper than normal, due to the lack of infrastructure in the area which makes transporting the crude to major markets very difficult. Big oil companies generally invest in the area because they have deep enough pockets to survive a few years of low profits, waiting for pipelines and adequate infrastructure to be installed throughout the area.
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Denbury have announced that they will use the money to invest in oil fields in the Gulf Coast, or around the Rocky Mountain regions. They also received Exxon's operating interests in the Webster field in Texas, and the Hartzog field in Wyoming.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More