Denbury Resources Scraps Merger With Eagle Ford Producer Penn Virginia

Denbury Resources and Penn Virginia mutually agreed to terminate their merger after the $1.7 billion cash-and-stock transaction faced difficult market conditions and shareholder opposition.

Denbury Resources Scraps Merger With Eagle Ford Producer Penn Virginia

Denbury will continue to pursue EOR opportunities in the Eagle Ford Shale—although likely not another company takeout, says analysts with Capital One Securities Inc. (Source: Shutterstock.com)

[Editor's note: This story was updated at 8:11 a.m. CST March 22.]

Denbury Resources Inc. and Penn Virginia Corp. mutually agreed to terminate their merger agreement due to difficult market conditions and shareholder opposition, the companies said separately on March 21.

The companies had entered the agreement in late October for Denbury to acquire the Houston-based operator in the Eagle Ford Shale in a cash-and-stock transaction valued at about $1.7 billion, which included associated debt. Neither company is required to bay a breakup fee as a result of the terminated merger agreement, according to analysts with Capital One Securities Inc. in a March 22 report.

Denbury, a Plano, Texas-based company focused on CO₂ EOR, currently operates in the Gulf Coast and Rocky Mountain regions. The acquisition of Penn Virginia was set to add a new core area to its portfolio in the oil window of the Eagle Ford Shale, which Denbury CEO Chris Kendall had called in October a “defining moment for Denbury.”

Already have an account? Log In

Sign up for FREE access to view this article now!

Unlock Free Access

Emily Patsy

Emily Patsy is the senior managing editor for Hart Energy’s Digital News Group. She's responsible for the daily news flow and also manages the A&D Watch and Energy Pulse weekly newsletters.