All Oil Companies Are Not Alike.                      Analyst Day PresentationNYSE: DNR                          November ...
About Forward Looking StatementsThe data contained in this presentation that are not historical facts are forward-looking ...
Corporate Overview
Proven Leadership Team                                                                                Promoted            ...
A Different Kind of Oil Company                               “We Bring Old Oil Fields Back to Life”         Unique       ...
Denbury at a Glance                                                                                                       ...
What is CO2 EOR & How Much Oil Does It Recover?             Secure CO2 Supply                                 Transport vi...
2012 AccomplishmentsSuccessful Execution●   Total and tertiary production expected to be at the upper end of estimated ran...
Bakken Sale and Asset ExchangeTransaction Terms● Sell/Exchange Bakken assets for:   ● $1.6 billion in cash proceeds (befor...
Uses of Increased LiquidityAcquisitions● Future potential CO2 EOR floods● Potential like-kind acquisitions, which could de...
Encore Acquisition was Highly Profitable                        Purchase price:                                           ...
Our Two CO2 EOR Target Areas:    Up to 10 Billion Barrels Recoverable with CO2 EOR                     Denbury Rockies Reg...
Gulf Coast Region: Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage          Summary(1)    ...
Rocky Mountain Region:Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage CO2 Sources         ...
More than a Billion Barrels of Oil Potential              1,200                                                           ...
Highest Operating Margin in the Peer Group (1)$/BOE  80          (4%)                                                     ...
Highest Capital Efficiency in Peer Group(1)                                  Adjusted 3-Year Finding & Development Cost ($...
CO2 EOR – Proven Value Creation        Investments – Inception-to-12/31/2011              ($) Billions        Gulf Coast E...
2013 Summary Guidance(1)            2013 Capital Budget – $1.0 Billion(2)                                                 ...
A Decade of CO2 EOR Production Growth(1)   Anticipating a Low Teens Average Annual Percentage Growth Rate                 ...
CO2 EOR – Proven Free Cash Flow Generator                                                  Cumulative Gulf Coast Tertiary ...
Estimated CO2 EOR Peak Production Rates                                                    Estimated Peak Production Rate ...
CO2 EOR Primer
Core Focus: CO2 EOR                   Secure CO2             Transport via                     Inject into            Capt...
CO2 EOR – A Brief History                                               Little Creek                   Denbury Acquires   ...
CO2 EOR is a Proven Process  Significant CO2 EOR Operators by Region                                                Signif...
Step 1: CO2 Sources & Capture              CO2 Sources               & Capture        ●   Denbury has its own natural sour...
Current U.S. CO2 Sources & Pipelines                                                         CO2 to Canada                ...
Step 2: CO2 Transportation                  CO2             Transportation                              ●   In the Gulf Co...
Major Denbury Pipelines                                     Rocky Mountain                                    Greencore Pi...
Step 3: CO2 Enhanced Oil Recovery & Storage              CO2 EOR              & Storage                           ●   CO2 ...
How much oil remains in an old oil field?   Sand Grain   with water                                                       ...
How do we measure oil saturation?• Logs (measurement of rock characteristics)   o Cased Hole & Open Hole• Cores (pieces of...
Define the size of the reservoir                   3.4 Miles3.2 Miles                Oyster Bayou                    Oyste...
Define target oil volume                  Oil               ProducedOriginal                               Reservoir Size ...
Will CO2 recover additional oil?     At Microscopic Level Depends on how well CO2      mixes with oil                     ...
Contacting oil with CO2Injector                                Producer              CO2                                  ...
How Much Oil Does CO2 Recover?                          CO2 EOR Delivers Almost as Much Production as                     ...
How do we predict oil rates?  CO2 Injection Rates drive the Speed of Oil Recovery         The more CO2 injected, the faste...
Actual Industry Recovery Curves                                  Range of                                  Recovery       ...
Actual Curves – Denbury Mature Fields                                        Range of                                     ...
How do we determine peak oil production rate?• Pace of capital development drives peak oil rate   • Number of patterns or ...
Oil Production Curves                        CO2 EOR Production                                             Tinsley       ...
How do we know if a CO2 flood is working?  Production Well Profile Log             Injection Profile Log                  ...
Is the CO2 working efficiently? Measure the efficiency of the CO2 injected - Oil recovery per MCF injected                ...
Is the CO2 working efficiently?Measure the efficiency of the CO2 Produced- Gas/Oil Ratio (GOR) gives indication of process...
Repeatable Process                               Variables we will continue                Size of                 Field  ...
Why is CO2 EOR our core focus?● High Confidence of Oil Target     Nearly 70 million barrels produced by Denbury to date  ...
Step 4: CO2 Strategy Benefits              CO2 Strategy               Benefits                             ●   After the C...
CO2 EOR – A Better Mousetrap                                      CO2 EOR                            Shale Plays   Proof o...
CO2 EOR Fields Overview
Strategy: Tertiary Operations● Safety & Environment● Operational excellence    Maximum production at optimum cost● Maximi...
2012 Highlights: Tertiary OperationsArea of Operation   Operational Highlight                    ● Booked initial reserves...
2013 Production Variables that influence 2013 EOR production ● Bell Creek     CO2 supply timing & volume from COP Lost Ca...
Gulf Coast Region
Gulf Coast Region: Active CO2 Floods                                      Tertiary Proved Reserves(1)                     ...
Gulf Coast Tertiary Oil Production                  40,000                                      Net Daily Tertiary Oil Pro...
Hastings Field                                                                                                            ...
Hastings Field: 2013E Program                     Continue CO2 EOR Development; CapEx: ~$90 MM ● Hastings                 ...
Oyster Bayou Field                                                                                                       N...
Oyster Bayou Field: 2013E Program                       Grow CO2 EOR Production; CapEx: ~$5 MM  ● Oyster Bayou      Produ...
Delhi Field                                                                                               5,000           ...
Delhi Field: 2013E Program                             Continue Field Development, CapEx: ~$40 MM  ● Production: Growth  ...
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Fall Analyst Presentation

  1. 1. All Oil Companies Are Not Alike. Analyst Day PresentationNYSE: DNR November 2012
  2. 2. About Forward Looking StatementsThe data contained in this presentation that are not historical facts are forward-looking statements that involve a number of risks anduncertainties. Such statements may relate to, among other things, forecasted capital expenditures, drilling activity, acquisition anddispositions plans, development activities, timing of CO2 injections and initial production response in tertiary flooding projects, estimatedcosts, production rates and volumes or forecasts thereof, hydrocarbon reserve quantities and values, CO 2 reserves, helium reserves,potential reserves from tertiary operations, future hydrocarbon prices or assumptions, liquidity, cash flows, availability of capital, borrowingcapacity, finding costs, rates of return, overall economics, net asset values, potential reserves and anticipated production growth rates inour CO2 models, 2012, 2013 and future production and expenditure estimates, and availability and cost of equipment and services.These forward-looking statements are generally accompanied by words such as “estimated”, “preliminary”, “projected”, “potential”,“anticipated”, “forecasted” or other words that convey the uncertainty of future events or outcomes. These statements are based onmanagement’s current plans and assumptions and are subject to a number of risks and uncertainties as further outlined in our mostrecent Form 10-K and Form 10-Q filed with the SEC. Therefore, the actual results may differ materially from the expectations, estimatesor assumptions expressed in or implied by any forward-looking statement made by or on behalf of the Company.Cautionary Note to U.S. Investors – Current SEC rules regarding oil and gas reserve information allow oil and gas companies to disclosein filings with the SEC not only proved reserves, but also probable and possible reserves that meet the SEC’s definitions of such terms.We disclose only proved reserves in our filings with the SEC. Denbury’s proved reserves as of December 31, 2011 were estimated byDeGolyer & MacNaughton, an independent petroleum engineering firm. In this presentation, we make reference to probable and possiblereserves, some of which have been prepared by our independent engineers and some of which have been prepared by Denbury’s internalstaff of engineers. In this presentation, we also refer to estimates of original oil in place, resource “potential” or other descriptions ofvolumes potentially recoverable, which in addition to reserves generally classifiable as probable and possible (2P and 3P reserves),include estimates of reserves that do not rise to the standards for possible reserves, and which SEC guidelines strictly prohibit us fromincluding in filings with the SEC. These estimates, as well as the estimates of probable and possible reserves, are by their nature morespeculative than estimates of proved reserves and are subject to greater uncertainties, and accordingly the likelihood of recovering thosereserves is subject to substantially greater risk. 2
  3. 3. Corporate Overview
  4. 4. Proven Leadership Team Promoted Promoted Phil Rykhoek Mark Allen Craig McPherson Bob Cornelius Charlie Gibson President & CEO Sr. VP, CFO and Sr. VP & COO Sr. VP, CO2 Sr. VP, Planning, Treasurer Operations Technology & Bus. Dev. New Hire Retiring – 1Q13 New Hire Jim Matthews Dan Cole Greg Dover Matt Elmer John Filiatrault VP, General Counsel VP, Marketing and VP, Operations VP, West Region VP, CO2 Supply & and Secretary Business Development Excellence Pipeline Operations New Hire Steve McLaurin Jeff Marcel Alan Rhoades Barry Schneider Whitney Shelley Phil Webb VP & Chief VP, Drilling and EOR VP & Chief VP, North Region VP and Chief VP, East Region Information Officer Facilities Engineering/ Accounting Officer Human Relations Construction Officer 4
  5. 5. A Different Kind of Oil Company “We Bring Old Oil Fields Back to Life” Unique • We acquire mature oil fields and recover oil using carbon dioxide (CO2) Strategy • Requires large sources of CO2 near oil fields - We have both! Value • Highest operating margins and capital efficiency in peer group(1) • Within the next 5 years we anticipate our free cash flow growing while our Creation CapEx is declining • More than 1 billion barrels of potential oil reserves Proven • CO2 EOR is one of the most efficient tertiary oil recovery methods Process • 30% compound annual growth rate (CAGR) in our EOR production since 1999 • We have produced nearly 70 million barrels of oil from CO2 EOR to date Repeatable • We anticipate a decade of low teens EOR production growth from existing fields Growth • Relatively lower-risk – We develop mature conventional oil fields Competitive • Strategic CO2 supply and own or operate over 1,000 miles of CO2 pipeline Advantage • Large inventory of mature oil fields well-suited for CO2 EOR • Top talent and technology • Ability to use and store CO2 captured from industrial facilities results in net Eco-friendly carbon reduction • By developing existing oil fields, we are not disturbing new habitats(1) Please reference slides 16 and 17 for more information 5
  6. 6. Denbury at a Glance Pro forma(1) Total 3P Reserves (12/31/11) ~1.3 BBOE ~1.1 BBOE % Oil Production (3Q12) 93% ~93%(2) Total Net Debt (9/30/12) $3.1 billion ~$2.0 billion Total Daily Production – BOE/d (3Q12) 72,776 ~59,725(2) Proved PV-10 (12/31/11) $96.19 NYMEX Oil Price $10.6 billion ~$10.6 billion(3) Market Cap (11/1/12) ~$6.1 billion CO2 3P Reserves (12/31/11) ~16 Tcf CO2 Pipelines Controlled & Under Construction ~1,000 miles Credit Facility Availability (9/30/12) ~$975 million(1) Pro forma for recently announced Bakken sale and exchange, includes Hartzog Draw and Webster.(2) Pro forma production adjusts for production sold and includes roughly 3,600 BOE/d from recently announced acquisition of Hartzog Draw and Webster.(3) PV-10 value at 12/31/11 pro forma for recently announced Bakken sale, excluding Bakken at 12/31/11 and including previously disclosed PV-10 value for Oyster Bayou and Hastings reserves at 6/30/2012 using a $95.67 NYMEX oil price for Oyster Bayou and Hastings. Does not include PV-10 value for Thompson, Hartzog Draw or Webster, nor does it exclude net cash flows from the first six months of 2012. 6
  7. 7. What is CO2 EOR & How Much Oil Does It Recover? Secure CO2 Supply Transport via Pipeline Inject into Oilfield CO2 EOR Delivers Almost as Much Production as Primary and Secondary Recovery(1) Tertiary Recovery Remaining (CO2 EOR) Oil ~17% Secondary Recovery (waterfloods) Primary ~18% Recovery(1) Recovery of Original Oil in Place based on history at Little Creek Field. ~20% 7
  8. 8. 2012 AccomplishmentsSuccessful Execution● Total and tertiary production expected to be at the upper end of estimated ranges● Adjusted cash flow from operations expected to be at the upper end of estimated range● Capital expenditures projected to be in-line with budgeted levels● Acquired Thompson Field in June 2012 for $366 million● Divested non-core assets for combined net proceeds of $294 millionStart-up of Hastings and Oyster Bayou CO2 floods● Oil production from the fields exceeded 4,300 barrels per day in 3Q12● Booked combined tertiary reserves of nearly 60 million barrelsTransformational Bakken transaction● Sharpens our focus on our highly profitable CO2 EOR strategy● Adds to our large inventory of CO2 EOR projects and extends total tertiary peak production● Further strengthens liquidity● Adds to our existing CO2 supply in the Rockies 8
  9. 9. Bakken Sale and Asset ExchangeTransaction Terms● Sell/Exchange Bakken assets for: ● $1.6 billion in cash proceeds (before closing adjustments and taxes) ● Operating interest in Webster Field (SE Texas) ● Operating interest in Hartzog Draw Field (NE Wyoming)● Expected to close around the end of November, with a 7/1/2012 effective date● Separately, we have agreed in principle to either purchase incremental CO2 from XOM’s LaBarge Field or purchase an interest in the CO2 reserves from that field● The purchase of an interest in CO2 reserves would reduce the amount of cash received by Denbury 9
  10. 10. Uses of Increased LiquidityAcquisitions● Future potential CO2 EOR floods● Potential like-kind acquisitions, which could decrease tax leakageStock Repurchase Program● Recent bank amendment permits an additional $930 million of stock repurchases o ~$270 million purchased as of 11/11/12, or nearly 5% of shares outstanding at 9/30/11● As of 11/11/12, we are authorized by the Board to repurchase up to an additional $500 million of stockDebt Reduction 10
  11. 11. Encore Acquisition was Highly Profitable Purchase price: (Billions) Equity $2.8 Debt assumed 1.0 (1) Total value $3.8 Value: (Estimated values at $96.19/Bbl – 12/31/11 SEC Pricing) Proved reserves at 12/31/11 $1.7 (2) Value received or anticipated from sold properties ~3.6 (3) Net cash flow from 3/9/10 to 12/31/11 0.4 Total ~$5.7 Additional potential: CO2 EOR potential 230 MMBOE (4)(1) Excludes consolidated ENP debt and minority interest in ENP.(2) Excludes sold properties, and ENP reserves.(3) Includes ~$2 billion of estimated value of Bakken sale.(4) Includes CO2 EOR potential at Bell Creek and CCA. 11
  12. 12. Our Two CO2 EOR Target Areas: Up to 10 Billion Barrels Recoverable with CO2 EOR Denbury Rockies Region 261 Million 3P CO2 EOR Barrels Estimated 1.3 to 3.2 MT ND Billion Barrels Recoverable Greencore ID Pipeline SD Lost Cabin Hartzog Draw Field WY IL IN KY Existing Denbury CO2 Pipelines Denbury Gulf Coast Region Denbury owned Fields With CO2 EOR Potential Existing or Proposed CO2 Source 594 Million 3P CO2 EOR Barrels Owned or Contracted MS Delta Pipeline Jackson Other CO2 Sources Dome Sonat MS Free State Webster Field Pipeline Pipeline LASource: DOE 2005 and 2006 reports. TX GreenNote: 3P tertiary oil reserves based on year-end 12/31/11 SEC proved Pipeline reserves rolled forward through 6/30/12 for production, incremental Estimated 3.4 to 7.5 proved reserves for Hastings and Oyster Bayou and Bakken development, based on a variety of recovery factors, includes recently Billion Barrels announced acquisition of Hartzog Draw and Webster fields. See slide Recoverable 9 for transaction details. 12
  13. 13. Gulf Coast Region: Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Summary(1) Tinsley Delhi 46 MMBblsProved 202 36 MMBbls Tinsley JacksonPotential (2) 392 DomeProduced-to-Date 64 Delhi Free State Pipeline Davis QuitmanTotal MMBbls (2) (2) 658 Martinville Heidelberg Sandersville Lake Sonat Summerland Soso Eucutta Cypress Creek St. John Yellow Creek MS Pipeline Brookhaven Houston Area Cranfield Mallalieu Hastings 60 - 80 MMBbls Conroe Olive Smithdale Little Creek Citronelle Webster(3) 60 - 75 MMBbls 130 MMBbls McComb Mature Area Thompson 30 - 60 MMBbls Other 10 - 20 MMBbls 178 MMBbls Heidelberg 160 - 235 MMBbls Green Pipeline 44 MMBbls Lockhart Crossing Conroe Donaldsonville Fig Ridge Webster Oyster Thompson Bayou Hastings Cumulative Production 15 - 50 MMBoe Oyster Bayou 50 – 100 MMBoe > 100 MMBoe 20 - 30 MMBbls Denbury Owned Fields – Current CO2 Floods Denbury Owned Fields – Future CO2 Floods Fields Owned by Others – CO2 EOR Candidates(1) Proved plus potential (probable and possible) tertiary oil reserves based on year-end 12/31/11 SEC proved reserves rolled forward through 6/30/12 for production, incremental proved reserves for Hastings and Oyster Bayou and Bakken development. Produced-to-Date is cumulative tertiary production through 6/30/12.(2) Using mid-points of range, includes recently announced acquisition of Webster field.(3) Acquisition announced Sept. 2012, expected to close around the end of Nov. 2012. See slide 9 for transaction details. 13
  14. 14. Rocky Mountain Region:Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage CO2 Sources Cedar Creek Anticline 200 MMBbls(1) Existing or Proposed CO2 Source Owned or Contracted MONTANA DGC Beulah Other CO2 Sources Cedar Creek Anticline NORTH DAKOTA Bell Creek 30 MMBbls(1) Elk Basin Bell Creek Riley Ridge(2) Hartzog Draw 415 BCF Nat Gas Greencore Pipeline 232 Miles 20 - 30 MMBbls(3) 12.0 BCF Helium SOUTH DAKOTA 2.2 TCF CO2 Lost Cabin (COP) WYOMING Cumulative Production 15 - 50 MMBoe Riley Ridge (DNR) 50 – 100 MMBoe > 100 MMBoe Shute Creek (XOM) Denbury Owned Fields – Current CO2 Floods Existing CO2 DKRW Grieve Field Denbury Owned Fields – Future CO2 Floods Pipeline 6 MMBbls(1) Fields Owned by Others – CO2 EOR Candidates Pipelines Denbury Pipelines in Process(1) Probable and possible tertiary reserve estimates as of 6/30/2012, based on a variety of recovery factors. Denbury Proposed Pipelines(2) Proved reserves as of 12/31/11 Pipelines Owned by Others(3) Acquisition announced Sept. 2012, expected to close around the end of Nov. 2012. See slide 9 for transaction details. 14
  15. 15. More than a Billion Barrels of Oil Potential 1,200 46 93 ..... .....1,116 560 90% 1,000 ..... 100% 100% Natural Oil 100% Oil Oil Gas 800 MMBOE 600 516 462 417 400 77% 81% Oil ..... 84% Oil Oil 200 0 12/31/11 6/30/12 6/30/12 +CO2 EOR +Webster/ +Riley =Total (3) Proven Proven Estimated Potential Hartzog Ridge Potential (1) (3) Reserves Reserves Pro-Forma CO2 EOR Natural Gas Proven Potential (3) Reserves(2)(1) Based on year-end 12/31/11 SEC proved reserves rolled forward through 6/30/12 for production, assets purchased and sold, incremental proved reserves for Hastings and Oyster Bayou and Bakken development.(2) Based on year-end 12/31/11 SEC proved reserves rolled forward for production, assets purchased and sold, incremental proved reserves for Hastings and Oyster Bayou and Bakken development. Estimated pro-forma for Bakken sale and asset exchange, see slide 9 for transaction details.(3) Estimates based on internal calculations, refer to slide 2 for full disclosure of forward-looking statements. 15
  16. 16. Highest Operating Margin in the Peer Group (1)$/BOE 80 (4%) 1Q12 70 (7%) 2Q12 (15%) (15%) 60 (14%) 50 (11%) 40 (21%) (11%) (18%) (18%) 30 (17%) 20 (33%) 10 0 DNR DNR Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H Peer I Peer J (2) Pro-Forma(1) Data derived from SEC filings, 3 months ended 3/31/12 and 6/30/12, respectively and includes CLR, CXO, FST, NBL, NFX, PXD, RRC, SM, WLL, and XEC. Calculated as revenues less lease operating expenses, marketing/transportation expenses, and production and ad valorem taxes(2) Pro-forma for recently announced Bakken asset sale. See slide 9 for transaction details 16
  17. 17. Highest Capital Efficiency in Peer Group(1) Adjusted 3-Year Finding & Development Cost ($/BOE)(2) $30.00 $26.90 $25.53 $24.54 $25.00 $24.24 $23.58 $22.69 $21.74 $20.83 $20.45 $20.00 $16.75 $16.38 $15.00 $12.80 $10.00 $5.00 $0.00 Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H Peer I DNR(3) DNR Pro Peer J Forma(3) Adjusted Capital Efficiency Ratio 450% 400% 383% 366% 350% TTM EBITDA(4) Efficiency 293% = 300% 261% 256% 253% Adj. F&D Ratio 250% 212% 200% 163% 156% 155% 150% 126% 115% 107% 100% 50% 0% DNR Pro DNR Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H Peer I Peer J Peer K Forma(1) Peer Group includes CLR, CXO, FST, NBL, NFX, PXD, RRC, SD, SM, WLL, XEC(2) Three years ended 12/31/2011, which includes Encore Acquisition in 2010. Calculated as total capital expenditures divided by net reserve additions, including changes in future development costs and change in unevaluated properties.(3) Includes 3 year average DD&A for CO2 properties of $0.83 per BOE(4) Trailing twelve months EBITDA ended 6/30/2012. 17
  18. 18. CO2 EOR – Proven Value Creation Investments – Inception-to-12/31/2011 ($) Billions Gulf Coast EOR Fields $2.7 Gulf Coast CO2 Sources & Pipelines 1.9 Less Undeveloped: EOR Fields 0.6 CO2 Pipelines 1.0 (1.6) Net Investment-to-Date – Proved Properties 3.0 Inception-to-Date Net Revenues 3.1 Net Cash flow 0.1 PV10 of proved EOR at 12/31/11 5.7 Value Created $5.8 18
  19. 19. 2013 Summary Guidance(1) 2013 Capital Budget – $1.0 Billion(2) 2013 Production Estimate 2012E(3) 2013E 2013E Operating area (BOE/d) (BOE/d) Growth All Other Tertiary Oil Fields 34,500 36,500- 6-14% $150 MM 39,500 Tertiary Floods Non-Tertiary Oil Fields 21,800 24,500 $540MM CO2 Sources Total Estimated 61,000- $200MM 56,300 8-14% Production 64,000 CO2 Pipelines $110MM Stock re-purchased to date increases production per share ~5%(4) Up to $500 million of additional stock repurchases authorized(1) See slide 2 for full disclosure of forward-looking statements.(2) Excludes capitalized exploration, capitalized interest and capitalized pre-production EOR startup costs, estimated at $125 million.(3) Using mid-point of guidance estimates. Adjusted for divestitures completed in 2012 and recently announced Bakken sale and exchange.(4) Total stock purchased since October 2011 is 18.7 million shares at $14.47 per share. 19
  20. 20. A Decade of CO2 EOR Production Growth(1) Anticipating a Low Teens Average Annual Percentage Growth Rate 140,000 1,400 Estimated CO2 EOR Capital Budget ($MM) Estimated CO2 EOR Production (MBbls/d) 120,000 Expected Peak 1,200 CO2 EOR Cap-Ex 100,000 100,000 1,000 After 2016 – Growing Wedge of Free 80,000 CO2 EOR 2013E Cash Flow 800 Cap-Ex CO2 EOR 60,000 600 2022E Cap-Ex 40,000 400 34,500 ● Bell Creek ● Conroe 20,000 ● Webster ● Cedar Creek Anticline 200 ● Hartzog Draw ● Thompson 0 0 2012E 2014 2016 2018 2020 2022E(1) 2013 and future forecasted capital expenditures and production may differ materially from actual results. See slide 2 for full disclosure of forward-looking statements. 20
  21. 21. CO2 EOR – Proven Free Cash Flow Generator Cumulative Gulf Coast Tertiary Free Cash Flows(1) +/- $1.7 Billion Cumulative Free Cash Flow ($MM) First Year of Free Cash Flow 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E(1) Calculated from actual historical operating cash flow (revenues less operating expenses) less capital expenditures and currently projected operating income and capital expenditures in 2012 and beyond using a flat $90 NYMEX crude oil price. Includes Jackson Dome and Pipeline expenditures in Gulf Coast, and also includes recently announced acquisition of Webster. See slide 2 for full disclosure of forward-looking statements. 21
  22. 22. Estimated CO2 EOR Peak Production Rates Estimated Peak Production Rate Produced Proved Potential First (Net MBOE/d) Expected Operating Area to date(1) Remaining(1) Remaining(2) Production Peak Year <5 5-10 10-15 15-20 > 20 (MMBOE) (MMBOE) (MMBOE) Mature Area 1999 2010 52 56 70 Tinsley 2008 2012-14 7 30 9 Heidelberg 2009 2018-20 2 30 12 Delhi 2010 2015-17 2 26 8 Oyster Bayou 2012 2015-17 <1 14 11 Hastings 2012 2018-20 <1 46 24 Bell Creek 2013 2019-21 --- --- 30 Webster 2015 2022-25 --- --- 68 Hartzog Draw 2016 2021-23 --- --- 25 Conroe 2017 2033-35 --- --- 130 Cedar Creek Anticline 2017 2023-27 --- --- 200 Thompson 2019 2025-27 --- --- 45Expected year of first tertiary production.1) Tertiary oil production as of 6/30/2012, and reserves as of 12/31/11 rolled forward to 6/30/2012.2) Based on internal estimates of reserve recovery, using mid-points of ranges. 22
  23. 23. CO2 EOR Primer
  24. 24. Core Focus: CO2 EOR Secure CO2 Transport via Inject into Capture & Supply Pipeline Oilfield Store CO2 CO2 EOR Process Sources of CO2 Infrastructure CO2 EOR Captured/ Natural & Carbon Steel Pipeline Reservoir Stored CO2 Anthropogenic Dry CO2 Positive for US energy (Man-made) Dense Phase (>1200 psi) Requirements Adequate Depth (> +/-3000’) security, the Confining Geologic Seals environment and the Reserve Potential economy Rock Characteristics 24
  25. 25. CO2 EOR – A Brief History Little Creek Denbury Acquires 1973 Little Creek Field 1st Patent on CO2 EOR 1999 1st Commercial Technology Jackson Dome CO2 EOR Flood Rangely 1952 Salt Creek Mississippi SACROC Colorado Wyoming 1964 1972 1986 2004 1950 1960 1970 1980 1990 2000 2010 Field Test Wasson (DU) Sheep Mtn In Mead Permian Basin Colorado Strawn Field 1971 1983 Lost Soldier Permian Basin Wyoming 1964 Seminole 1989 Permian BasinBravo DomeNew Mexico 1983 1916McElmo Dome Permian Basin – West Texas Growth and Expansion Colorado 1944 Rocky Mountain Growth and Expansion Gulf Coast Growth and Expansion 25
  26. 26. CO2 EOR is a Proven Process Significant CO2 EOR Operators by Region Significant CO2 Suppliers by RegionGulf Coast Region Gulf Coast Region• Denbury Resources • Jackson Dome, MS (Denbury Resources)Permian Basin Region Permian Basin Region• Occidental • Kinder Morgan • Bravo Dome, NM (Kinder Morgan, Occidental) • McElmo Dome, CO (ExxonMobil, Kinder Morgan)• Whiting • Sheep Mountain, CO (ExxonMobil, Occidental)Rockies Region Rockies Region• Denbury Resources • Anadarko • Riley Ridge, WY (Denbury Resources)Canada • LaBarge, WY (ExxonMobil) • Lost Cabin, WY (ConocoPhillips)• Cenovus • Apache Canada • Dakota Gasification – Anthropogenic (Cenovus, Apache) 300 CO2 EOR Oil Production by Region Gulf Coast/Other DGC 250 Mid-Continent Lost Riley Ridge Cabin 200 Rocky MountainsMBbls/d & LaBarge Permian Basin 150 McElmo Dome Bravo Dome 100 Jackson Dome 50 Significant CO2 Source - 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 26
  27. 27. Step 1: CO2 Sources & Capture CO2 Sources & Capture ● Denbury has its own natural source of CO2 at Jackson Dome in Mississippi and plans to capture man-made volumes from power plants or industrial sources. ● Denbury owns 100% working interest in Riley Ridge in Wyoming, a source of CO2 for Denbury’s Rocky Mountains operations. ● CO2 capture occurs when natural or man-made CO2 is purified and dried for transportation to oil fields. 27
  28. 28. Current U.S. CO2 Sources & Pipelines CO2 to Canada Great Plains Coal Lost Cabin Gasification Antrim Plant Gas Plant LeBarge Sheep McElmo Mountain Dome Ridgeway CO2 Bravo Ammonia Discovery Dome Plant Jackson Dome Sources of CO2 Supply for EOR in US(1) Gas 6,000 Plants Hydrocarbon 5,000 Conversion with 4,000 CO2 Capture Legend MMcf/D 3,000 Natural Gas Existing Natural CO2 Sources Processing 2,000 Existing Anthropogenic Sources 1,000 Natural Sources Anthropogenic Under Construction 0 2000 2010 2015E Existing/Future EOR Fields(1) DiPietro P. & Balash P. (2011). A Note on Sources of CO2 Supply for Enhanced Oil Recovery Operations, NETL. 28
  29. 29. Step 2: CO2 Transportation CO2 Transportation ● In the Gulf Coast region, Denbury currently operates or controls over 860 miles of CO2 pipelines and plans to construct another pipeline to Conroe Field ● In the Rockies region, Denbury will finish constructing a 232-mile CO2 pipeline in December 2012 ● Denbury will own, operate, or control ~1,650 miles of CO2 pipeline once current plans are fully developed. 29
  30. 30. Major Denbury Pipelines Rocky Mountain Greencore Pipeline Initial 232 miles Expected completion in December 2012 Gulf Coast Green Pipeline 325 miles Completed in December 2010 30
  31. 31. Step 3: CO2 Enhanced Oil Recovery & Storage CO2 EOR & Storage ● CO2 EOR operations have demonstrated the ability to recover significant amounts of additional oil, and also provide a method to store man-made volumes of CO2 in depleted oil reservoirs 31
  32. 32. How much oil remains in an old oil field? Sand Grain with water Remaining coating Oil Isolated oil droplets CO2 At Microscopic Level Initial Discovery After Primary After Secondary After Tertiary Conditions Recovery Recovery Recovery (Waterflooding) (CO2 EOR) Oil Saturation Oil Saturation Oil Saturation Oil Saturation ~70% ~50% ~30% ~15% 32
  33. 33. How do we measure oil saturation?• Logs (measurement of rock characteristics) o Cased Hole & Open Hole• Cores (pieces of oil filled rock) o Special Core studies 33
  34. 34. Define the size of the reservoir 3.4 Miles3.2 Miles Oyster Bayou Oyster Bayou Structural Surface of E-W A-A*Section of 3-D Top A1 Porosity Model A mature oil field has a lot of wells, which provides detailed knowledge of reservoir size 34
  35. 35. Define target oil volume Oil ProducedOriginal Reservoir Size Oil In Remaining Place Oil Volume Oil Saturation Original Oil in Place – Oil Produced = Size of Reservoir x Current Oil Saturation = Remaining Oil Volume Remaining Oil Volume Using two proven methodologies provides us with a high degree of confidence with a relatively small range of outcomes. 35
  36. 36. Will CO2 recover additional oil? At Microscopic Level Depends on how well CO2 mixes with oil % Oil RecoveryComposition of oil, pressureand temperature of reservoir Estimated MMP to occur @ 2400 psig determine mixing characteristics Recovery = the % of oil recoveredMinimal Miscibility Pressure (MMP) = pressure where CO2 & oil mix together completely 36
  37. 37. Contacting oil with CO2Injector Producer CO2 Volumetric Sweep Efficiency is the volume of rock contacted by CO2 The greater the volume of reservoir contacted by CO2, the greater the oil recovery (larger the volumetric sweep efficiency) Historical waterflood performance is a predictor of sweep efficiency 37
  38. 38. How Much Oil Does CO2 Recover? CO2 EOR Delivers Almost as Much Production as Primary or Secondary Recovery(1) Tertiary Remaining Oil Recovery (CO2 EOR) ~17% Secondary Recovery (waterfloods) Primary ~18% Recovery ~20% Volumetric Sweep x Displacement Efficiency(2) = Recovery(1) Recovery of Original Oil in Place based on history at Little Creek Field.(2) % of oil displaced when contacted by CO2, which is influenced by MMP and rock heterogeneity. 38
  39. 39. How do we predict oil rates? CO2 Injection Rates drive the Speed of Oil Recovery The more CO2 injected, the faster the oil comes out 39
  40. 40. Actual Industry Recovery Curves Range of Recovery 10%-18% 40
  41. 41. Actual Curves – Denbury Mature Fields Range of Recovery 11%-20+% 41
  42. 42. How do we determine peak oil production rate?• Pace of capital development drives peak oil rate • Number of patterns or well activities • Pattern performance becomes additive 2012 Activity Tinsley 42
  43. 43. Oil Production Curves CO2 EOR Production Tinsley Eucutta Soso Delhi 43
  44. 44. How do we know if a CO2 flood is working? Production Well Profile Log Injection Profile Log A-4 CO2 Injection A-4L A-5 Injecting 26.5 MMCFD @ 1600 psi 21 perforations 44
  45. 45. Is the CO2 working efficiently? Measure the efficiency of the CO2 injected - Oil recovery per MCF injected 45
  46. 46. Is the CO2 working efficiently?Measure the efficiency of the CO2 Produced- Gas/Oil Ratio (GOR) gives indication of processing efficiency 46
  47. 47. Repeatable Process Variables we will continue Size of Field to encounter as we expand operating areas Tools, Character Process, Field of Rock Equipment, Locations Technical Knowledge Constants that make the process successful and repeatable 47
  48. 48. Why is CO2 EOR our core focus?● High Confidence of Oil Target  Nearly 70 million barrels produced by Denbury to date  Net upward adjustments to reserves-to-date● CO2 Flooding Recovers Oil (CO2 ♥’s Crude Oil)  First CO2 EOR production was in 1972  Over 1.5 billion barrels produced to date in the US(1)  Current estimated production in the US is ~284 MBbls/d(2)● A Very Repeatable Process with a lot of Running Room  Up to 10 Billion Barrels Recoverable with CO2 EOR in our two operating areas  Over 800 Million Barrels of CO2 EOR potential in our portfolio today(1) Oil & Gas Journal, Dec. 7, 2009(2) Oil & Gas Journal, July 2, 2012 48
  49. 49. Step 4: CO2 Strategy Benefits CO2 Strategy Benefits ● After the CO2 EOR process is completed, the CO2 is stored in the geological formation that trapped the oil originally ● Oil production in these domestic fields enriches the local economy, royalty owners and Denbury shareholders while reducing the need for imported oil 49
  50. 50. CO2 EOR – A Better Mousetrap CO2 EOR Shale Plays Proof of New Basin None $$$$$ Competition for Services Minor Heavy Known Oil Target Yes No Tighter range of outcomes early Wider range of outcomes early in Predictable Type Curve in play. Learning applicable to play. Range declines with analogous fields learning curve Precise Timing of Use type curve once established More Difficult Production Response (2-3 years) $ Profit / $ Invested Higher Lower – “Treadmill” % Crude Nearly 100% Lower – variable by basin None until clear production Book surrounding PUD’s after Reserve Booking response; incremental adds drilling well follow Existing oil fields store CO2 with a Large footprint with large Environmental Impact minimal footprint and little use of amounts of water and chemicals natural resources used for fracturing wells Lower Finding & Development Higher Finding & Development Total Costs costs; Higher Operating Costs costs; Lower Operating Costs 50
  51. 51. CO2 EOR Fields Overview
  52. 52. Strategy: Tertiary Operations● Safety & Environment● Operational excellence  Maximum production at optimum cost● Maximize oil recovery from reservoir● Convert resources to producing reserves  Project execution excellence  Long-term production growth● People: Expertise in all aspects of CO2 lifecycle● Improve returns on investment  Optimize life-cycle costs  New ideas/technology 52
  53. 53. 2012 Highlights: Tertiary OperationsArea of Operation Operational Highlight ● Booked initial reserves of ~43 MMBblsHastings ● Strong initial production ● 2,794 BOPD in 3Q 2012 ● Booked initial reserves of ~14 MMBblsOyster Bayou ● Encouraging early reservoir response ● 1,540 BOPD in 3Q 2012 ● Completed remediation workTinsley ● Production growthHeidelberg CO2 ● Conformance challenges addressedThompson ● Acquired new field; 30-60 MMBOE 3P CO2 EOR ReservesWebster ● Pending acquisition of new field; 60-75 MMBOE 3P CO2 EOR ReservesHartzog Draw ● Pending acquisition of new field; 20-30 MMBOE 3P CO2 EOR Reserves 53
  54. 54. 2013 Production Variables that influence 2013 EOR production ● Bell Creek  CO2 supply timing & volume from COP Lost Cabin  Pace of response to CO2 injection ● Heidelberg  New East Heidelberg flood performance (peak prod. rate per well) ● Hastings  Pace of oil response in downdip patterns  Response to added compression ● Oyster Bayou  Pace of oil response to CO2 injection ● Delhi  Response timing of newly developed areas  Date of reversionary interest 54
  55. 55. Gulf Coast Region
  56. 56. Gulf Coast Region: Active CO2 Floods Tertiary Proved Reserves(1) Tinsley 250 Delhi Proved Reserves (MMBbls) Tinsley Hastings Jackson 200 Dome Oyster Bayou 150 Delhi Delhi Free State Pipeline Davis Tinsley (2) Quitman Heidelberg Martinville 100 Heidelberg Sandersville Lake Sonat Summerland Soso Cypress Creek Eucutta Yellow Creek MS Pipeline St. John Mature Fields 50 Brookhaven Cranfield Mallalieu LOUISIANA Olive Citronelle Little Creek - Smithdale McComb 99 00 01 02 03 04 05 06 07 08 09 10 11 12E Mature Fields TEXAS Heidelberg Green Pipeline Lockhart Crossing Conroe Donaldsonville Fig Ridge Oyster Thompson Bayou Hastings Hastings Area Oyster Bayou Cumulative Production 15 - 50 MMBoe 50 – 100 MMBoe > 100 MMBoe Denbury Owned Fields Fields Owned by Others – CO2 EOR Candidates1) Proved reserves as of December 31st of each respective year, with the exception of 2012, which is an internal estimate as of 6/30/2012. 56
  57. 57. Gulf Coast Tertiary Oil Production 40,000 Net Daily Tertiary Oil Production 35,000 30,000 25,000 Net BOPD 20,000 15,000 10,000 5,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 57
  58. 58. Hastings Field Net Daily Oil Production 3,500 3,000 2,500 TEXAS LOUISIANA Net BOPD 2,000 1,500 1,000 ─ Conventional Oil Production 500 ─ Tertiary Oil Production Green Pipeline 0 2009 2010 2011 2012 Hastings Tertiary Reserves & Investment(1) 6/30/12 Proved Cumulative PV-10 2P&3P Hastings Reserves Reserves Investment Proved Reserves Produced Remaining Recovered Value Remaining (MMBOE) (MMBOE) ($MM) ($MM) (MMBOE) <1 46 ($334) $1,005 24(1) Data as of 6/30/12, unless otherwise noted; Prices at 6/30/12 were $95.67 / $3.19 58
  59. 59. Hastings Field: 2013E Program Continue CO2 EOR Development; CapEx: ~$90 MM ● Hastings 3.5 miles  Production: Growth   CapEx: ~$90MM ● Finish developing Fault Blk “A”, begin wellwork and injection into Fault Blk “B” & “C” ● Drill ~16 wells ● Add compression: Q4 2012; Q3 2013 Fault Block A 2009-2013 4.5 Miles Fault Blocks B&C 2013-2014 Fault Blocks D-M 2014-2019 4,420 Acres 59
  60. 60. Oyster Bayou Field Net Daily Tertiary Oil Production 1,800 1,600 1,400 1,200 TEXAS LOUISIANA Net BOPD 1,000 800 600 400 200 Green Pipeline 0 Oyster Bayou Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Tertiary Reserves & Investment(1) 3/31/12 Proved Cumulative PV-10 2P&3P Reserves Reserves Investment Proved Reserves Oyster Bayou Produced Remaining Recovered Value Remaining (MMBOE) (MMBOE) ($MM) ($MM) (MMBOE) <1 14 ($172) $510 11(1) Data as of 6/30/12, unless otherwise noted; Prices at 3/31/12 were $98.15 / $3.76 60
  61. 61. Oyster Bayou Field: 2013E Program Grow CO2 EOR Production; CapEx: ~$5 MM ● Oyster Bayou  Production: Growth throughout 2013   CapEx: ~$5MM ● Increase CO2 injection and water disposal 3.4 Miles 3.2 Miles 3,912 Acres 61
  62. 62. Delhi Field 5,000 Net Daily Tertiary Oil Production Delhi 4,000 Jackson Net BOPD Dome 3,000 Delhi 2,000 Free State Pipeline 1,000 0 2010 2011 2012 2013 Sonat MS Pipeline Tertiary Reserves & Investment(1) 12/31/11 Proved Cumulative PV-10 2P&3P Reserves Reserves Investment Proved Reserves Produced Remaining Recovered Value Remaining (MMBOE) (MMBOE) ($MM) ($MM) (MMBOE) 2 26 ($177) $1,020 8(1) Data as of 6/30/12, unless otherwise noted; SEC prices at 12/31/11 were $96.19 / $4.163 62
  63. 63. Delhi Field: 2013E Program Continue Field Development, CapEx: ~$40 MM ● Production: Growth  until reversionary interest reached in ~late 2013  Net Revenue Interest (NRI) changes from ~76% to ~57% ● Impact is ~ 1,000 – 1,500 BOPD when NRI changes ● CapEx: ~$40 MM  Pattern optimization ● (Facility expansion, Drill ~ 15 wells) 2012 Activity Pilot Area 2011 Activity 2010 Activity 2013 Activity 63

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