Production
Denbury's fourth quarter 2007 production averaged 32,691 Bbls/d and 106.1 MMcf/d, or 50,371 BOE/d, a 38% increase over fourth quarter 2006 production levels, and a 10% increase over the levels in the third quarter of 2007. Production from the Company's tertiary recovery operations was 17,428 Bbls/d in the fourth quarter, resulting in an annual average of 14,767 BOE/d, slightly above the Company's forecasted annual average of 14,750 Bbls/d. This compares to 10,028 BOE/d produced in the fourth quarter of 2006 and 16,101 BOE/d in the third quarter of 2007. Production increases from the Eastern Mississippi Phase II fields of Eucutta, Soso and Martinville, made up 4,352 BOE/d of the increase (59%) from the fourth quarter of 2006 levels, with the balance from Phase I fields other than Little Creek which is on a gradual decline. Included in the fourth quarter of 2007 production is 5,097 BOE/d of production relating to the Louisiana properties sold in late December 2007 and February 2008.
Production from the Barnett Shale averaged 76.4 MMcfe/d (12,729 BOE/d) during the fourth quarter of 2007, more than double the 35.4 MMcfe/d (5,893 BOE/d) average production during the fourth quarter of 2006, primarily as a result of drilling activity. Almost all of the increased production from the Barnett Shale in the fourth quarter of 2007 as compared to the third quarter of 2007 resulted from 2,469 Bbls/d of incremental natural gas liquid production from a majority of the Company's natural gas being processed at a new plant. Fourth quarter of 2007 production in Louisiana was 14% lower than prior fourth quarter levels, averaging 5,638 BOE/d as a result of normal declines and reduced activity pending the sale of these properties.
Reserves
Denbury added 40.2 MMBOE of proved reserves during 2007 (before netting out 2007 production and property sales) replacing approximately 250% of its 2007 estimated production, virtually all from internal organic growth. The most significant reserve additions during 2007 were approximately 12.7 MMBbls added in the Company's tertiary oil operations and approximately 137.0 Bcfe (22.8 MMBOE) in the Barnett Shale area near Fort Worth, Texas, both before netting out 2007 production. The Company's tertiary-related oil reserves added during the year were primarily at Soso and Martinville Fields, two Phase II fields in Eastern Mississippi which had significant production response during 2007. The Company sold approximately 3.7 MMBOE of proved reserves during 2007 (based on December 31, 2006 reserve quantities) related to its Louisiana natural gas properties.
During 2007, the Company increased its proved CO2 reserves from 5.5 Tcf at December 31, 2006 to 5.6 Tcf at December 31, 2007 (both volumes on a working interest basis), with approximately 180 Bcf of CO2 produced during 2007. The Company's estimated production capacity grew from approximately 470 MMcf/d at year-end 2006 to approximately 650 MMcf/d at year-end 2007, as during 2007 the Company focused on developing its proved reserves and production rates.
Total proved oil and natural gas reserves as of December 31, 2006 were 174.2 million barrels of oil equivalent (MMBOE), consisting of 126.1 million barrels (MMBbls) of crude oil, condensate and natural gas liquids and 288.8 billion cubic feet (Bcf) of natural gas. This year-end proved reserves total represents a 14% increase over Denbury's year-end proved reserve quantity estimates a year earlier. The Company also announced that its proved carbon dioxide (CO2) reserves were 5.5 Tcf at year-end 2006, a 19% increase over its proved CO2 reserve quantities at December 31, 2005.
Denbury added 35.0 MMBOE of proved reserves during 2006 (before netting out 2006 production) replacing over 260% of its 2006 estimated production, approximately 40% from acquisitions and 60% from internal organic growth.
Total proved oil and natural gas reserves as of December 31, 2005 were 152.6 million barrels of oil equivalent (MMBOE), consisting of 106.2 million barrels (MMBbls) of crude oil, condensate and natural gas liquids and 278.4 billion cubic feet (Bcf) of natural gas.
