Two Denbury Resources crude oil tanks on fire in Louisiana

Reuters News
Posted: May 03, 2013 10:49 AM

By Robert Gibbons and Anna Louie Sussman

NEW YORK (Reuters) - Two crude oil storage tanks were on fire Friday at a Denbury Resources Inc facility in Denham Springs, Louisiana, after an explosion in one of the tanks on Thursday night, according to company, state and parish officials.

The fire prompted the evacuation of 30 homes in the area, according to the Governor's Office of Homeland Security & Emergency Preparedness.

There were no injuries resulting from the fires in the two tanks that have a capacity of 2,000 barrels (84,000 gallons) and the initial fire which started around 10:30 p.m. CDT on Thursday (0330 GMT Friday), Jack Collins, executive director, investor relations, at Plano, Texas-based Denbury, said in an email.

The cause of the fire is not yet known, "although there were thunderstorms in the area when it began," said Collins, who added that Denbury was working with local emergency response officials in the Livingston Parish area to determine the best course of action.

All the fluid was either inside the tanks or within the containment area around the tanks, Mark Harrell, director of the Livingston Parish Office of Homeland Security and Emergency Preparedness said.

Harrell said the fires pose no threat to refineries in the Baton Rouge area, none of which are in Livingston Parish.

The state's Office of Homeland Security & Emergency Preparedness was informed at approximately 10:55 p.m. CDT on Thursday, Mike Steele, communications director at the office, said on Friday.

Steele said heat from the blaze prevented the application of foam to put out the fire, and that water was being used to cool down the tanks and allow the foam to be used.

Denbury's Collins said the tanks contained oil produced from the Denbury-operated Lockhart Crossing oil field and was being transported to the tanks via a pipeline that has been shut-in.

Denbury's Lockhart Crossing production is about 1,100 barrels per day (bpd) and the output from the field has not been interrupted by the incident, Collins said, adding that the tanks are not in the immediate vicinity of the field.

Denbury is an independent oil and gas company with operations in the U.S. Rocky Mountain and Gulf Coast regions.

The company is the largest oil and natural gas producer in both Mississippi and Montana, according to the company's website, and had total proved reserves of 462 million barrels of oil equivalent at year-end 2011.

Denbury on Thursday announced adjusted net income (non-GAAP)of $123 million for the first quarter of 2013, or $0.33 per diluted share.

(Editing by Nick Zieminski and Andrew Hay)