Industrial Development Foundation officials say the expansion ofa carbon dioxide operation represents up to a $40 millioninvestment in Lincoln County and the potential for some newjobs.

Denbury Resources Inc. (DNR), an independent oil and natural gascompany engaged in acquisition, development and explorationactivities, is investing $20 million to construct an 18,000-squarefoot facility in the Mallalieu Field in Lincoln County, saidChandler Russ, Brookhaven-Lincoln County Chamber of Commerceexecutive vice-president.

There are also plans to invest an additional $20 million in theBrookhaven Field beginning in 2005, Russ said. Additionally, thecompany is expanding operations in the Little Creek Field thatspans Lincoln and Pike counties.

When completed, DNR’s activity has the potential to create asmany as 50 new jobs.

Russ said IDF and chamber officials are grateful for the newinvestment and jobs. He said the expansion will be a welcomeaddition to the area’s industrial community.

“We are excited to have worked with Denbury Resources Inc. andacquiring their investment in these local fields, and that theychose Brookhaven-Lincoln County to operate their state of the artfacility,” Russ said. “DNR looked at numerous options in theirinvestment portfolio and decided that the Brookhaven area was anexcellent location for investment that will in turn provide returnsto their shareholders.”

Mark Worthey, senior vice-president of operations for Denbury,said the company plans to spend $40-$50 million a year re-enteringold fields, conducting exploration and recovery activities inLincoln, Pike and Amite counties.

“In those three counties, it should be that much for the nextsix or seven years,” Worthey said. “We think we can get productionup substantially in the area.”

A date for ground-breaking ceremony will be announced in thefuture, Russ said.

DNR’s expansion plan includes creating a CO2 re-injection andprocessing facility.

Carbon dioxide (CO2) injection is one of the most efficienttertiary recovery mechanisms for producing crude oil. However, itsapplication requires large quantities of CO2, and therefore its usehas been restricted to isolated areas where large quantities of CO2are available.

Worthey said Mississippi is in a “unique situation” with its oiland the availability of CO2 reserves.

“It’s a perfect marriage of the two,” Worthey said.

Currently, Worthey said, Mississippi produces 45,000 to 50,000barrels of oil a day. Of that, 6,000 is produced through CO2flooding activities.

“It’s a significant amount of the oil produced in the state,”said Worthey, who speculated that the total could be as much as 35percent in five years.

The CO2 acts as a type of solvent for the oil, removing it fromthe formation and allowing the oil to be recovered along with theCO2 as it is produced.

For example, in a typical oil field, between 40 percent and 50percent of the oil in place can be extracted by primary andsecondary (waterflooding) recovery. An additional amount of oil (17percent at Little Creek) can be recovered by injecting CO2 intocertain wells and then recovering the additional oil and the CO2from other wells.

Denbury is the largest oil and gas producer in the state andholds significant production, reserves and acreage in easternMississippi as well as western Mississippi. The company has been inMississippi since February 1990, and its oil activities account forhalf of every barrel produced in the state, Worthey said.

Denbury also has significant production, reserves and acreageonshore in Louisiana and offshore in the Gulf of Mexico.