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Related Party Transactions
6 Months Ended
Jun. 30, 2012
Related Party Transactions [Abstract]  
Related Party Transactions

Note 7. Related Party

 

During the three and six months ended June 30, 2012, we purchased $4.0 million and $5.2 million, respectively of oil produced by a privately-held entity of which a member of our Board of Directors serves as chairman of the board. The oil purchased under this agreement is related to the non-core assets in central and southern Mississippi and in southern Louisiana (see further discussion in Note 2, Acquisitions and Divestitures) sold to this same entity in February 2012. The oil purchased under this agreement is part of a typical commercial transaction that would be entered into with a third party and is later blended with other oil and sold by Denbury to an unrelated third party. The purchase of oil is classified as “Marketing expenses” and the subsequent sale is classified as “Interest income and other income” on the accompanying Unaudited Condensed Consolidated Statements of Operations. We are under no continuing obligation to purchase oil under this agreement.

 

In addition, during the first and second quarters of 2012, we entered into a sublease of a portion of our former corporate headquarters with the same privately-held entity. The sublease provides for payment of $2.5 million in lease rentals to us over the lease term, which expires on July 31, 2016. During the three and six months ended June 30, 2012, we recorded $172 thousand and $199 thousand, respectively, in lease income related to the new sublease arrangement, which is classified as “Interest income and other income” in the Unaudited Condensed Consolidated Statements of Operations.