Investors pushed Denbury Resources (NYSE:DNR) higher Wednesday after the oil and gas company said it plans to spend $115 million to acquire various CO2 reserves in the Rocky Mountain region of Wyoming.

The Dallas company is seeking a 42.5% non-operated working interest in the 9,700 acre Riley Ridge Federal Unit in southwestern Wyoming, and 33% CO2 rights in an additional 28,000 acres surrounding the area.

“This acquisition provides us with our second source of CO2 in the Rockies, a source with significant expansion potential,” said Denbury CEO Phil Rykhoek. “The beauty of this acquisition is that the anticipated natural gas and helium sales from this field are expected to cover the purchase price, giving us a low-cost option on the CO2 resources.”

Denbury estimates the acquired area to contain 185 billion cubic feet of natural gas, 6.6 Bcf of helium and approximately one trillion cubic feet of CO2. The adjoining acreage is estimated to have an additional one trillion cubic feet of CO2 reserves.

The commencement of first production of natural gas and helium from Riley Ridge is anticipated for late 2011.

Costs associated to the unit are expected to be approximately $24 million and $32 million in 2010 and 2011, respectively, which includes the costs of drilling an additional producing well and constructing processing facilities.

The company said it is unsure at this time whether it will build additional facilities at the Riley Ridge unit, as it continues to evaluate other potential sources of CO2 in the region.

The transaction, subject to customary conditions, and funded by Denbury via its existing credit facility, is expected to close in late October.