All Oil Companies Are Not Alike. NYSE: DNR 2012 CO 2 Conference December 4, 2012
About Forward Looking Statements The data contained in this presentation that are not historical facts are forward-looking statements that involve a number of risks and uncertainties. Such statements may relate to, among other things, forecasted capital ependitures, drilling activity, acquisition and dispositions plans, development activities, timing of CO 2 injections and initial production response in tertiary flooding projects, estimated costs, 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, borrowing capacity, finding costs, rates of return, overall economics, net asset values, potential reserves and anticipated production growth rates in our CO 2 models, 2012, 2013 and future production and ependiture 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 on management s current plans and assumptions and are subject to a number of risks and uncertainties as further outlined in our most recent Form 10-K and Form 10-Q filed with the SEC. Therefore, the actual results may differ materially from the epectations, estimates or assumptions epressed 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 disclose in 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 by DeGolyer & MacNaughton, an independent petroleum engineering firm. In this presentation, we make reference to probable and possible reserves, some of which have been prepared by our independent engineers and some of which have been prepared by Denbury s internal staff of engineers. In this presentation, we also refer to estimates of original oil in place, resource potential or other descriptions of volumes 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 from including in filings with the SEC. These estimates, as well as the estimates of probable and possible reserves, are by their nature more speculative than estimates of proved reserves and are subject to greater uncertainties, and accordingly the likelihood of recovering those reserves is subject to substantially greater risk. 2
Corporate Overview
A Different Kind of Oil Company Unique Strategy Value Creation Proven Process Repeatable Growth Competitive Advantage Eco-friendly We Bring Old Oil Fields Back to Life We acquire mature oil fields and recover oil using carbon dioide (CO 2 ) Requires large sources of CO 2 near oil fields - We have both! Highest operating margins and capital efficiency in peer group (1) Within the net 5 years we anticipate our free cash flow growing while our CapE is declining More than 1 billion barrels of potential oil reserves CO 2 EOR is one of the most efficient tertiary oil recovery methods 30% compound annual growth rate (CAGR) in our EOR production since 1999 We have produced nearly 70 million barrels of oil from CO 2 EOR to date We anticipate a decade of low teens EOR production growth from eisting fields Relatively lower-risk We develop mature conventional oil fields Strategic CO 2 supply and own or operate over 1,000 miles of CO 2 pipeline Large inventory of mature oil fields well-suited for CO 2 EOR Top talent and technology Ability to use and store CO 2 captured from industrial facilities results in net carbon reduction By developing eisting oil fields, we are not disturbing new habitats (1) Please reference slides 16 and 17 for more information 4
Denbury at a Glance Total 3P Reserves (12/31/11) % Oil Production (3Q12) Total Net Debt (9/30/12) Total Daily Production BOE/d (3Q12) Proved PV-10 (12/31/11) $96.19 NYMEX Oil Price Market Cap (11/1/12) CO 2 3P Reserves (12/31/11) CO 2 Pipelines Controlled & Under Construction Credit Facility Availability (9/30/12) ~1.3 BBOE 93% $3.1 billion 72,776 $10.6 billion ~$6.1 billion ~16 Tcf ~1,000 miles ~$975 million Pro forma (1) ~1.1 BBOE ~93% (2) ~$2.0 billion ~59,725 (2) ~$10.6 billion (3) (1) Pro forma for recently announced Bakken sale and echange, 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, ecluding 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 eclude net cash flows from the first si months of 2012. 5
2012 Accomplishments Successful Eecution Total and tertiary production epected to be at the upper end of estimated ranges Adjusted cash flow from operations epected to be at the upper end of estimated range Capital ependitures 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 million Start-up of Hastings and Oyster Bayou CO2 floods Oil production from the fields eceeded 4,300 barrels per day in 3Q12 Booked combined tertiary reserves of nearly 60 million barrels Transformational Bakken transaction Sharpens our focus on our highly profitable CO 2 EOR strategy Adds to our large inventory of CO 2 EOR projects and etends total tertiary peak production Further strengthens liquidity Adds to our eisting CO 2 supply in the Rockies 6
Bakken Sale and Asset Echange Transaction Terms Sell/Echange Bakken assets for: $1.6 billion in cash proceeds (before closing adjustments and taes) Operating interest in Webster Field (SE Teas) Operating interest in Hartzog Draw Field (NE Wyoming) Epected to close around the end of November, with a 7/1/2012 effective date Separately, we have agreed in principle to either purchase incremental CO 2 from XOM s LaBarge Field or purchase an interest in the CO 2 reserves from that field The purchase of an interest in CO 2 reserves would reduce the amount of cash received by Denbury 7
Uses of Increased Liquidity Acquisitions Future potential CO 2 EOR floods Potential like-kind acquisitions, which could decrease ta leakage Stock 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 stock Debt Reduction 8
Our Two CO 2 EOR Target Areas: Up to 10 Billion Barrels Recoverable with CO 2 EOR Denbury Rockies Region 261 Million 3P CO 2 EOR Barrels MT ND Estimated 1.3 to 3.2 Billion Barrels Recoverable ID Greencore Pipeline Lost Cabin WY SD Hartzog Draw Field IL IN KY Eisting Denbury CO 2 Pipelines Denbury owned Fields With CO 2 EOR Potential Eisting or Proposed CO 2 Source Owned or Contracted Other CO 2 Sources Source: DOE 2005 and 2006 reports. Note: 3P 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, based on a variety of recovery factors, includes recently announced acquisition of Hartzog Draw and Webster fields. See slide 9 for transaction details. Denbury Gulf Coast Region 594 Million 3P CO 2 EOR Barrels Webster Field TX Green Pipeline Delta Pipeline Jackson Sonat MS Dome Pipeline LA MS NEJD Pipeline Free State Pipeline Estimated 3.4 to 7.5 Billion Barrels Recoverable 9
Gulf Coast Region: Control of CO 2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Summary (1) Proved 202 Potential (2) 392 Produced-to-Date 64 Total MMBbls (2) (2) 658 Houston Area Hastings 60-80 MMBbls Webster (3) 60-75 MMBbls Thompson 30-60 MMBbls Other 10-20 MMBbls 160-235 MMBbls Conroe Conroe 130 MMBbls Delhi 36 MMBbls Mature Area 178 MMBbls Green Pipeline Delhi Lake St. John Delta Pipeline Cranfield Tinsley Sonat MS Pipeline Brookhaven Smithdale Lockhart Crossing Mallalieu Olive NEJD CO2 Pipeline Little Creek McComb Martinville Jackson Dome Free State Pipeline Davis Quitman Summerland Tinsley 46 MMBbls Sandersville Soso Heidelberg Eucutta Cypress Creek Yellow Creek Heidelberg 44 MMBbls Citronelle Donaldsonville Thompson Webster Fig Ridge Oyster Bayou Hastings Oyster Bayou 20-30 MMBbls Cumulative Production 15-50 MMBoe 50 100 MMBoe > 100 MMBoe Denbury Owned Fields Current CO 2 Floods Denbury Owned Fields Future CO 2 Floods Fields Owned by Others CO 2 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, epected to close around the end of Nov. 2012. See slide 9 for transaction details. 10
Rocky Mountain Region: Control of CO 2 Sources & Pipeline Infrastructure Provides a Strategic Advantage CO 2 Sources Eisting or Proposed CO 2 Source Owned or Contracted Other CO 2 Sources MONTANA Cedar Creek Anticline 200 MMBbls (1) Cedar Creek Anticline DGC Beulah Bell Creek 30 MMBbls (1) NORTH DAKOTA Elk Basin Bell Creek Riley Ridge (2) 415 BCF Nat Gas 12.0 BCF Helium 2.2 TCF CO 2 Lost Cabin (COP) Greencore Pipeline 232 Miles Hartzog Draw 20-30 MMBbls (3) SOUTH DAKOTA WYOMING Cumulative Production Shute Creek (XOM) Riley Ridge (DNR) Eisting CO2 Pipeline DKRW Grieve Field 6 MMBbls (1) 15-50 MMBoe 50 100 MMBoe > 100 MMBoe Denbury Owned Fields Current CO 2 Floods Denbury Owned Fields Future CO 2 Floods Fields Owned by Others CO 2 EOR Candidates (1) Probable and possible tertiary reserve estimates as of 6/30/2012, based on a variety of recovery factors. (2) Proved reserves as of 12/31/11 (3) Acquisition announced Sept. 2012, epected to close around the end of Nov. 2012. See slide 9 for transaction details. Pipelines Denbury Pipelines in Process Denbury Proposed Pipelines Pipelines Owned by Others 11
Highest Operating Margin in the Peer Group (1) $/BOE (4%) (7%) (15%) (15%) (14%) (11%) (21%) (11%) (18%) (18%) (17%) (33%) (2) (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 epenses, marketing/transportation epenses, and production and ad valorem taes (2) Pro-forma for recently announced Bakken asset sale. See slide 9 for transaction details 12
2013 Summary Guidance (1) 2013 Capital Budget $1.0 Billion (2) 2013 Production Estimate Operating area 2012E (3) (BOE/d) 2013E (BOE/d) 2013E Growth CO 2 Sources $200MM All Other $150 MM Tertiary Floods $540MM Tertiary Oil Fields 34,500 36,500-39,500 Non-Tertiary Oil Fields 21,800 24,500 Total Estimated Production 56,300 61,000-64,000 6-14% 8-14% CO 2 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) Ecludes capitalized eploration, 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 echange. (4) Total stock purchased since October 2011 is 18.7 million shares at $14.47 per share. 13
A Decade of CO 2 EOR Production Growth (1) Anticipating a Low Teens Average Annual Percentage Growth Rate CO 2 EOR 2013E Cap-E Epected Peak CO 2 EOR Cap-E Growing Production After 2016 Growing Wedge of Free Cash Flow Declining Cap-E CO 2 EOR 2022E Cap-E 100,000 34,500 (1) 2013 and future forecasted capital ependitures and production may differ materially from actual results. See slide 2 for full disclosure of forward-looking statements. 14
CO 2 EOR Proven Free Cash Flow Generator First Year of Free Cash Flow Free Cash Flow Projected to Double in the net 5 years +/- $1.7 Billion (1) Calculated from actual historical operating cash flow (revenues less operating epenses) less capital ependitures and currently projected operating income and capital ependitures in 2012 and beyond using a flat $90 NYMEX crude oil price. Includes Jackson Dome and Pipeline ependitures in Gulf Coast, and also includes recently announced acquisition of Webster. See slide 2 for full disclosure of forward-looking statements. 15
Estimated CO 2 EOR Peak Production Rates Operating Area First Production Estimated Peak Production Rate (Net MBOE/d) < 5 5-10 10-15 15-20 > 20 Epected Peak Year Produced to date (1) (MMBOE) Proved Remaining (1) (MMBOE) Potential Remaining (2) (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 --- --- 45 Epected 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. 16
2012 Highlights: Tertiary Operations Area of Operation Hastings Oyster Bayou Tinsley Heidelberg CO 2 Thompson Webster Hartzog Draw Operational Highlight Booked initial reserves of ~43 MMBbls Strong initial production 2,794 BOPD in 3Q 2012 Booked initial reserves of ~14 MMBbls Encouraging early reservoir response 1,540 BOPD in 3Q 2012 Completed remediation work Production growth Conformance challenges addressed Acquired new field; 30-60 MMBOE 3P CO 2 EOR Reserves Pending acquisition of new field; 60-75 MMBOE 3P CO 2 EOR Reserves Pending acquisition of new field; 20-30 MMBOE 3P CO 2 EOR Reserves 17
2013 Production Variables that influence 2013 EOR production Bell Creek CO 2 supply timing & volume from COP Lost Cabin Pace of response to CO 2 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 Delhi Pace of oil response to CO 2 injection Response timing of newly developed areas Date of reversionary interest 18
Gulf Coast Tertiary Oil Production Net Daily Tertiary Oil Production 19
Rocky Mountain Region: Future CO 2 Floods CO 2 Sources Eisting or Proposed CO 2 Source Owned or Contracted Other CO 2 Sources MONTANA Cedar Creek Anticline Cedar Creek Anticline DGC Beulah Bell Creek NORTH DAKOTA Elk Basin Bell Creek Greencore Pipeline 232 Miles Hartzog Draw (1) SOUTH DAKOTA Lost Cabin (COP) WYOMING Cumulative Production Shute Creek (XOM) Riley Ridge (DNR) Eisting CO2 Pipeline DKRW Grieve Field 15-50 MMBoe 50 100 MMBoe > 100 MMBoe Denbury Owned Fields Current CO 2 Floods Denbury Owned Fields Future CO 2 Floods Fields Owned by Others CO 2 EOR Candidates 1) Acquisition announced Sept. 2012, epected to close around the end of Nov. 2012. See slide 9 for transaction details. Pipelines Denbury Pipelines in Process Denbury Proposed Pipelines Pipelines Owned by Others 20
Bell Creek Field Start CO 2 EOR Production! Bell Creek Development Phases Net Daily Conventional Oil Production 9 2021 16 Miles 12 Miles 1 2013 8 2020 3 2015 2 2013 6 2018 5 2017 4 2016 7 2019 Denbury Operated 4 Miles Start CO 2 Injection/EOR Production Production: Decline 1H13, Grow ~3Q13 CapE: ~$100 MM Install compression/facilities Continue field development CO 2 Injection starts 2013 CO 2 EOR oil production response ~ 3Q 2013 21
Cedar Creek Anticline Improve Waterflood & Prepare for CO 2 Injection in 2017 Conventional Production: ~ Flat 1H13, Modest Growth 3Q CapE : ~ $115 MM Improve waterfloods w/ well & facility work Recompletions Additional science for EOR Optimizing CO 2 EOR Development Plan Possibility of doing a pilot in 2014 Net Daily Conventional Oil Production 80mi Denbury Operated ~150k Acres 3mi 22
Hartzog Draw Field Northeastern Wyoming Acquisition epected to close around the end of November 2012 83% WI in oil production; 67% WI in CBM gas ~370 million barrels of Original Oil in Place, with estimated ultimate potential net recovery by CO 2 EOR of 20-30 million barrels of oil Requires ~12 mile CO 2 pipeline from Greencore pipeline Currently producing ~2,600 boe/day net (52% oil) Conventional (non-tertiary) reserves ~7 million boe 2013 CapE - $13MM Currently anticipate starting CO 2 flood in 2016 Hartzog Draw 12 miles from Greencore Pipeline Bell Creek Field Greencore Pipeline Lost Cabin 23
Rockies Region: Planned Pipeline Infrastructure CO 2 Sources Eisting Anthropogenic (Man-made) Eisting or Proposed CO 2 Source Owned or Contracted MONTANA Cedar Creek Anticline 200 MMBbls (1) Cedar Creek Anticline DGC Beulah Bell Creek 30 MMBbls (1) NORTH DAKOTA Elk Basin Bell Creek Riley Ridge (2) 415 BCF Nat Gas 12.0 BCF Helium 2.2 TCF CO 2 Lost Cabin (COP) Planned Interconnect (2013) Greencore Pipeline 232 Miles Hartzog Draw 20-30 MMBbls (3) SOUTH DAKOTA WYOMING Cumulative Production Shute Creek (XOM) Riley Ridge (DNR) Eisting CO2 Pipeline DKRW Grieve Field 6 MMBbls (1) 15-50 MMBoe 50 100 MMBoe > 100 MMBoe Denbury Owned Fields Current CO 2 Floods Denbury Owned Fields Future CO 2 Floods Fields Owned by Others CO 2 EOR Candidates 1) Probable and possible tertiary reserve estimates as of 6/30/2012, based on a variety of recovery factors. 2) Proved reserves as of 12/31/11 3) Acquisition announced Sept. 2012, epected to close around the end of Nov. 2012. See slide 9 for transaction details. Pipelines Denbury Pipelines in Process Denbury Proposed Pipelines Pipelines Owned by Others 24
Secure CO 2 Supply to Support Rocky Mountain Growth LaBarge Field Estimated Field Size: 750 Square Miles Estimated 100 TCF of CO 2 Recoverable Riley Ridge Denbury Operated 100% WI in 9,700 acre Riley Ridge Federal Unit 33% WI in ~28,000 acre Horseshoe Unit Shute Creek XOM Operated XOM has agreed in principle to either: o Sell up to 33% interest in CO 2 reserves or o Increase volume of CO 2 it will sell to Denbury under an eisting sales contract Based on XOM s current plant capacity and availability, either option would allow for the delivery of up to 115 MMcf/d of CO 2 Riley Ridge (1) 415 BCF Nat Gas 12.0 BCF Helium 2.2 TCF CO 2 Composition of Produced Gas Stream: ~65% CO 2 ; ~19% Natural Gas; ~5% Hydrogen Sulfide; <1% Helium, and other gasses Shute Creek 1) Proved reserves as of 12/31/2011 25
Rocky Mountain CO 2 Supply Anthropogenic CO 2 Suppliers COP Lost Cabin (Central Wyoming) (Q1 2013) XOM Shute Creek (SW Wyoming) (1) (Q3 2013) DKRW Medicine Bow (SE Wyoming) (+/- 2017) DNR Riley Ridge Unit - LaBarge (SW Wyoming) (2017) MMCFD +/- 50 +/- 115 +/- 100 +/- 130 (2) Note: Forecast based on internal management estimates. Actual results may vary. (1)Grieve Field Contract Potential for up to 115 MMCFPD with recently announced XOM transaction, a portion of contract is interruptible. (2)Initial capacity, potential to increase to +/- 260MMCFD by 2022 26
Rocky Mountain CO 2 Sources: 2013 Planned Activity Epect to Invest $77 Million primarily engineering, permitting, ROW Riley Ridge ($40 million) Complete facility by mid-2q13 o Repair/replace materials fit for corrosive service o Complete safety start-up review in 2Q13 Proposed drilling two wells (1 producer, 1 injector) Order incremental rotating equipment Other CO 2 Activities ($37 million) Pipeline infrastructure from DKRW, Riley Ridge Facility Interconnect pipelines - Greencore and Anadarko CCA Pipeline begin routing & engineering Hartzog Draw Lateral begin routing & engineering 27
Greencore Pipeline Rocky Mountains Greencore Pipeline (Lost Cabin, WY to Bell Creek, MT) 232-mile pipeline route, Estimated $275 to $325 Million Pipeline construction is on-time and on-budget Construction Phases: 1 st : Aug Dec 2011 2 nd : Aug Late 2012 Start-up / Commissioning: Dec 2012 28
IN SUMMARY: A Different Kind of Oil Company Leading CO 2 Enhanced Oil Recovery (EOR) Company in the U.S. with a Unique Profile Significant strategic advantage in CO 2 EOR Well defined and focused long-term growth strategy Highest operating margin and capital efficiency in peer group Substantial free cash flow generation from CO 2 EOR after upfront investment in infrastructure CO 2 EOR provides high degree of capital fleibility Low stock price relative to net asset value 29
A Decade of CO 2 EOR Production Growth (1) Anticipating a Low Teens Average Annual Percentage Growth Rate CO 2 EOR 2013E Cap-E Epected Peak CO 2 EOR Cap-E Growing Production After 2016 Growing Wedge of Free Cash Flow Declining Cap-E CO 2 EOR 2022E Cap-E 100,000 34,500 (1) 2013 and future forecasted capital ependitures and production may differ materially from actual results. See slide 2 for full disclosure of forward-looking statements. 30
Corporate Information Corporate Headquarters Denbury Resources Inc. 5320 Legacy Drive Plano, Teas 75024 Ph: (972) 673-2000 Fa: (972) 673-2150 denbury.com Contact Information Barry Schneider VP, North Region (972) 673-2154 barry.schneider@denbury.com Jack Collins Eecutive Director, Investor Relations (972) 673-2028 jack.collins@denbury.com 31