May 11 - 17, 2007
Dallas Business Journal
Bill Hethcock
Staff Writer
Plano growth on tap for Denbury
Barnett Shale driller to put up new building at Legacy, add up to 350 employees
Booming production in the Barnett Shale is fueling an expansion in a Plano-based oil and gas company at Legacy business park.
Denbury Resources Inc. will add as many as 350 employees and expand its corporate headquarters in a building Koll Development Co. will build.
In 1999, Denbury leased about 50,000 square feet in a four-story building on Tennyson Parkway west of Preston Road. By last year, the growing company occupied the entire 100,00-square-foot building.
Denbury has extended its initial lease and has hired Dallas-based Koll to develop a three-story, 102,000-square-foot building and a parking garage on 5 acres next to the original building.
About 350 employees eventually will be housed in the new building, which Denbury will lease from Koll. Denbury now employs about 200 in Plano and about 600 nationwide. The new jobs will be highly paid positions such as geologists, engineers, geophysicists and managers, a Denbury representative said.
The build-to-suit will be Kolls eighth project in Legacy, for a total of more than 1.3 million square feet, Koll CEO Steve Van Amburgh said. Other Koll projects include other corporate homes for Intuit Inc. and Rent-a-Center Inc.
"We love those tenants that need new corporate homes," Van Amburgh said. "We seem to understand them. We listen to them carefully and we build what they want so it's a true build-to-suit for them."
Earthwork will start in late May after a ceremonial groundbreaking May17, Van Amburgh said. The building shell is slated for completion in December, with move-in set for the second quarter of 2008.
Van Amburgh declined to disclose the construction cost because the project is out for bid. He also declined to release the budgeted cost because the scope of the project has changed, he said. For example, Koll is strongly considering making the building LEED-certified, a system implemented by the U.S. Green Building Council to rate energy efficiency and sustainability.
Rils Christensen with Transwestern and Jeff Ellerman with The Staubach Co. represented Denbury Resources in negotiating the lease renewal and build-to-suit.
"This is a large transaction," Christensen said. "The combination of these two deals, at 200,000 square feet, is one of the biggest one-two punches the area has seen in a long time."
The expansion is the largest in Legacy since Koll built a 170,000-square-foot corporate campus for Rent-a-Center last year, Christensen said.
Economic incentives are expected to be part of the Denbury package, but details remain under negotiation and have not been approved by the Plano City Council, said Elaine Hamm, the Plano Economic Development Council's director for business retention and expansion.
"We are thrilled that Denbury is growing and expanding their business here in Plano," she said. "They're a very prominent business and we're especially pleased that they will remain here and continue to grow here."
Gensler Architects has been named architect of the project and Furstenwerth Bagley Design will handle the interior design.
Increased Production
The new building will form an L-shape with the existing building and open into a plaza, said David Botello, director with Gensler Architects. The old and new wings will be linked by a glass connector.
"Part of the design objective is to create more of a campus atmosphere," he said. "The new architecture will compliment the existing building in respect to material colors, glass colors and the articulation of the windows. The new building is somewhat more streamlined and contemporary with respect to the old one."
Denbury officials did not return phone calls by press time requesting more specifics about the types of jobs that will be created or when those jobs will be phased in.
Denbury (NYSE: DNR) on May 3 announced record quarterly production for the first quarter of 2007, averaging an 8% increase over production levels overall in the first quarter of 2006. Significant increases in the company's tertiary oil production and Texas Barnett Shale natural gas production offset production declines in Louisiana, according to company reports.
Production for the quarter was 38,305 barrels of oil equivalent per day, compared with 35,454 BOE/d in the first quarter of 2006.
Denbury owns more than 74,700 acres of leases in the Barnett Shale area, which stretches north and west of Fort Worth. The exploration and production company acquired the acreage in 2001 and did only limited development until 2005. As of Dec. 31, 2006, Denbury had about 252.4 billion cubic feet of natural gas equivalent (Bcfe) of proved reserves in the Barnett Shale area valued at about $243.5 million.
During 2006, Denbury drilled 46 horizontal wells, significantly increasing its Barnett Shale production. Average production from the Barnett Shale increased to 6,989 BOE/d in the first quarter of 2007, up from 3,953 BOE/d for the first quarter of 2006 and 5,925 BOE/d in the fourth quarter of 2006.
Denbury expects its Barnett Shale production to grow significantly during 2007 as it drills 35 to 40 more horizontal wells, all of which are scheduled for Parker County, according to company statements. Denbury drilled 12 wells in the first quarter of 2007.
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