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Shareholder Analyst Call – Denbury Resources Inc.

Denbury Resources Inc. · Nov 14, 2011 · 114 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Shareholder Analyst Call – Denbury Resources Inc. – slide 1
    Fall Analyst Meeting November 14, 2011 NYSE: DNR
  2. Shareholder Analyst Call – Denbury Resources Inc. – slide 2
    Corporate Overview
  3. Shareholder Analyst Call – Denbury Resources Inc. – slide 3
    Our People Are Our Greatest Asset Phil Rykhoek Mark Allen Bob Cornelius Craig McPherson President & CEO Sr. VP & CFO Sr. VP, CO2 Sr. VP, Production Operations Operations Dan Cole Brad Cox Greg Dover Ray Dubuisson John…
  4. Shareholder Analyst Call – Denbury Resources Inc. – slide 4
    A Different Kind of Oil Company Leading CO2 Enhanced Oil Recovery (EOR) Company in the U.S. with a Unique Profile Scale Top 10 U.S. oil producer(1) ; 9 billion enterprise value 33% compound annual growth rate (CAGR) in EOR…
  5. Shareholder Analyst Call – Denbury Resources Inc. – slide 5
    What is CO2 EOR & How Much Does It Recover Secure CO2 Supply Transport via Pipeline Inject into Oilfield EOR Delivers Almost as Much Production as Primary and Secondary Recovery(1) Tertiary Recovery Remaining (CO2 EOR) Oil…
  6. Shareholder Analyst Call – Denbury Resources Inc. – slide 6
    Our Two EOR Target Areas: Up to 10 Billion Barrels Recoverable with EOR Rockies Estimated 1.3 to 3.2 MT ND Billion Barrels Recoverable Greencore ID Pipeline SD Lost Cabin WY IL IN KY Existing CO2 Pipelines MS…
  7. Shareholder Analyst Call – Denbury Resources Inc. – slide 7
    More than a Billion Barrels of Oil Potential MMBOE 1,600 1,400 1,372 1,200 1,155 1,000 800 600 567 398 463 All Oil 400 338 359 269 208 200 229 193 73 All Gas - (3) 12/31/09 12/31/10 9/30/11 Proven Bakken Drilling EOR…
  8. Shareholder Analyst Call – Denbury Resources Inc. – slide 8
    Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Tinsley 5 Delhi 3 46 MMBbls 38 MMBbls Tinsley Summary Jackson Dome Proved 156 Delhi (2) Probable 334 Free State Pipeline Davis Quitman (2)…
  9. Shareholder Analyst Call – Denbury Resources Inc. – slide 9
    Control of CO2 Sources & Pipeline Infrastructure Provides a Strategic Advantage Cedar Creek Anticline 197 MMBbls(1) CO2 Sources MONTANA DGC Beulah Existing Anthropogenic (Man-made) Cedar Creek Anticline Proposed Coal to Gas or…
  10. Shareholder Analyst Call – Denbury Resources Inc. – slide 10
    Strong, Sustainable EOR Growth through 2020 140,000 Estimated EOR Production (Bbls/d) 120,000 120,000 100,000 100,000 80,000 60,000 40,000 Oyster Bayou Hastings 29,062 Bell Creek 20,000 Conroe Cedar Creek…
  11. Shareholder Analyst Call – Denbury Resources Inc. – slide 11
    Estimated EOR Peak Production Rates (as of 9/30/11) Estimated Peak Production Rate Produced Proved 3P First (Net MBOE/d) Expected Operating Area to date (1) Remaining Remaining(2) Production Peak…
  12. Shareholder Analyst Call – Denbury Resources Inc. – slide 12
    Investor FAQs Question: Does the CO2 EOR production adjustment in 2011 affect future recoveries of oil Will other fields have the same issues Answer: Our expectations of ultimate recovery from Heidelberg and Tinsley are unchanged. It…
  13. Shareholder Analyst Call – Denbury Resources Inc. – slide 13
    Management Initiatives Improving Corporate Culture Better defining expectations Implementing more responsibility and accountability at all levels Better Management of Resources Creating specialized groups planning, technical and…
  14. Shareholder Analyst Call – Denbury Resources Inc. – slide 14
    Other CO2 EOR considerations Look at Denbury History 55 million barrels produced-to-date Net upward adjustments to reserves-to-date Phase 1 CO2 EOR results (percentage of 3P estimates) 43% produced through 9/30/2011 48% of…
  15. Shareholder Analyst Call – Denbury Resources Inc. – slide 15
    Investor FAQs Question: Is production timing from CO2 EOR harder to forecast than other types of operations Answer: Yes, because there are multiple factors which influence the path and the speed which the CO2 travels through rock and…
  16. Shareholder Analyst Call – Denbury Resources Inc. – slide 16
    Forecasting considerations Look at accuracy over longer term periods Continued expansion of our portfolio will help smooth results Management initiatives should improve results Compensation tied to accuracy and meeting targets…
  17. Shareholder Analyst Call – Denbury Resources Inc. – slide 17
    Investor FAQs Question: With the high operating costs, what happens to EOR profitability in a lower price environment Answer: CO2 EOR is more economical at lower prices than prevalent oil shale plays today. 18
  18. Shareholder Analyst Call – Denbury Resources Inc. – slide 18
    CO2 EOR Superior Economics Major Plays' Breakeven Wellhead Price at 10% ROR(1) 70 62.86 59.30 59.67 60.41 60 55.78 57.01 53.31 53.83 54.77 51.22 50 47.50 40 30 20 10 0 CO2 Wattenburg Eagle Ford Wasatch Wolfbone NM…
  19. Shareholder Analyst Call – Denbury Resources Inc. – slide 19
    Investor FAQs Question: Why has the return on assets diminished over the last few years Answer: The primary reasons our ROA is not as high today: 1) As a result of the Encore acquisition, we have a significant portion of our assets…
  20. Shareholder Analyst Call – Denbury Resources Inc. – slide 20
    Adjusted Cash Flow 99.75 1,600 95.46 100 90 Adjusted Cash Flow (MM) (1) 1,400 79.51 72.45 80 1,200 NYMEX Oil Price 61.96 70 1,000 60 800 50 600 1,297 40 30 400 780 774 570 20 540 200 10 - (2) 0 YE…
  21. Shareholder Analyst Call – Denbury Resources Inc. – slide 21
    Investor FAQs Question: Can you reduce spending in an EOR play Can you adjust to a lower price environment Answer: Definitely. In fact, EOR will likely have less of an immediate reduction in production as a result of the reduced…
  22. Shareholder Analyst Call – Denbury Resources Inc. – slide 22
    Investor FAQs Question: It has been suggested that DNR needs to spend 600 million on pipelines in the next 12 months is that true Answer: No. Our projected 2012 spending for pipelines is approximately 335 million and includes…
  23. Shareholder Analyst Call – Denbury Resources Inc. – slide 23
    Investor FAQs Question: Why do we spend capital on pipelines instead of financing it through others Answer: Under GAAP, it is difficult to keep pipelines off our balance sheet. If it is on the balance sheet, then we want to use the…
  24. Shareholder Analyst Call – Denbury Resources Inc. – slide 24
    Investor FAQs Question: How do CO2 EOR economics compare with other plays Answer: As seen on the prior break-even economics slide, and the following slide comparing EOR to the Bakken, EOR has superior economics to other current oily…
  25. Shareholder Analyst Call – Denbury Resources Inc. – slide 25
    Compelling Economics(1) EOR Bakken 575,000 BOE / Well Gulf Coast 9.0 Million / Well Model Averages 20% Royalty NYMEX oil price 90.00 90.00 Finding & development cost: Field 9.00 19.50 Infrastructure 4.50 --- Total capital per…
  26. Shareholder Analyst Call – Denbury Resources Inc. – slide 26
    Complementary Production Profiles Projected Production Profile with Same Capital Spending Capital Spending per Year Based on EOR Spending Pattern 12,000 Year MM Gulf Coast EOR Field 1 83 2 83 Bakken 3 60 10,000 4 60 5 68 6 52…
  27. Shareholder Analyst Call – Denbury Resources Inc. – slide 27
    Low Finding Costs relative to Peers Three-Year Drillbit F&D Cost with Revisions per BOE 25.00 20.00 GHS 100 Co. Average /BOE 15.00 14.94 10.00 5.00 0.00 CLR DNR NBL NFX PXD Peer FST XEC WLL Median Data Source:…
  28. Shareholder Analyst Call – Denbury Resources Inc. – slide 28
    Investor FAQs Question: Are we buying stock to hide other issues Answer: No, DNR stock was simply trading at such a low value to proved reserves NAV, that at the time we announced our repurchase program, we believed that buying our…
  29. Shareholder Analyst Call – Denbury Resources Inc. – slide 29
    Valuation Metrics 9/30/11 Stock Price/YE10 SEC PV-10 250% 215% 200% 142% 150% 124% 120% 120% 118% Peer Average 103% 125% 100% 79% 54% 50% 0% CLR NFX XEC PXD Peer NBL WLL DNR FST Median Data Source: Company SEC filings…
  30. Shareholder Analyst Call – Denbury Resources Inc. – slide 30
    Investor FAQs Question: What is your 2012 production and capital guidance Why are you using a range now Answer: Using a range is common in the industry and also illustrates the difficulty in predicting the exact timing of…
  31. Shareholder Analyst Call – Denbury Resources Inc. – slide 31
    2012 Summary Guidance 2012 Capital Budget 1.35 Billion(1) 2012 Production Estimate All Other 140MM 2011E 2012E 2012E Tertiary Floods Operating area growth (BOEPD) (BOEPD) 365MM Bakken 33,000- Tertiary Oil Fields 31,000…
  32. Shareholder Analyst Call – Denbury Resources Inc. – slide 32
    Investor FAQs Question: Why is 2012 EOR production less than previously indicated Answer: Heidelberg conformance challenges have reduced the pace at which we can direct CO2 into the multiple oil-rich target zones. This extends the…
  33. Shareholder Analyst Call – Denbury Resources Inc. – slide 33
    2012 Capital and Production Guidance Variables that could influence 2012 production Tinsley Pace of response to CO2 injection Potential issue with old P&Ad wells Heidelberg New East Heidelberg flood performance Conformance work…
  34. Shareholder Analyst Call – Denbury Resources Inc. – slide 34
    Investor FAQs Question: What are you going to do with the Bakken Answer: We plan to continue our development of the Bakken. However, we would still consider a trade for another future CO2 EOR property. Other options likely depend on…
  35. Shareholder Analyst Call – Denbury Resources Inc. – slide 35
    Investor FAQs Question: How is Denbury different than other E&P companies Answer: We have a significant strategic advantage CO2 EOR is a repeatable and sustainable process CO2 EOR is profitable at lower prices The spending and…
  36. Shareholder Analyst Call – Denbury Resources Inc. – slide 36
    Summary You should have DNR in your P rtfolio 37
  37. Shareholder Analyst Call – Denbury Resources Inc. – slide 37
    Tertiary Operations Overview
  38. Shareholder Analyst Call – Denbury Resources Inc. – slide 38
    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…
  39. Shareholder Analyst Call – Denbury Resources Inc. – slide 39
    2011 Highlights: Tertiary Operations Area of Operation Operational Highlight Delhi Field Produced 1,000,000th Bbl of CO2 EOR crude oil 250% production growth since Jan. 1, 2011 Successful expansion of CO2 patterns Oyster Bayou…
  40. Shareholder Analyst Call – Denbury Resources Inc. – slide 40
    CO2 EOR Generalized Type Curve Plateau Production Rate Incline (Yrs) Plateau (Yrs) Decline (Yrs) Large Fields 6 6.5 30 Average Fields 4.5 5.5 25 Small Fields 4 5 20 41
  41. Shareholder Analyst Call – Denbury Resources Inc. – slide 41
    Capital Spending Range for CO2 Floods 100 90 80 % of Total Capital 70 60 50 40 30 20 10 0 1 2 3 4 5 Year 42
  42. Shareholder Analyst Call – Denbury Resources Inc. – slide 42
    Gulf Coast Region(1) Tinsley Summary 5 Delhi 3 46 MMBbls 38 MMBbls Tinsley Jackson Proved 156 Dome Probable 334 (2) Delhi Free State Pipeline Davis Produced-to-Date (2) 55 Quitman Heidelberg Total (2) 545 4 31 MMBbls Lake…
  43. Shareholder Analyst Call – Denbury Resources Inc. – slide 43
    Gulf Coast Tertiary Oil Production 35,000 Net Daily Tertiary Oil Production 30,000 25,000 Net BOPD 20,000 15,000 10,000 5,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 44
  44. Shareholder Analyst Call – Denbury Resources Inc. – slide 44
    Phase 1 Free State Pipeline Net Daily Tertiary Oil Production 14,000 12,000 Sonat MS Pipeline 10,000 Brookhaven Net BOPD Mallalieu 8,000 Olive Little 6,000 Smithdale Creek McComb MISSISSIPPI 4,000 2,000 0 2001…
  45. Shareholder Analyst Call – Denbury Resources Inc. – slide 45
    Phase 1 Net Daily Tertiary Oil Production by Field 14,000 13,000 Mallalieu Area Total Brookhaven 12,000 McComb Area 11,000 LCU Area 10,000 Lockhart Crossing Total 9,000 8,000 Net BOPD 7,000 6,000 Mallalieu…
  46. Shareholder Analyst Call – Denbury Resources Inc. – slide 46
    Phase 1: 2012E Program Mature CO2 floods; Modest Production Decline; CapEx: 24 MM Mallalieu Production: Decline CapEx: 3MM (Drill 1 Water Curtain Well to Increase Efficiency) Brookhaven Production: Modest Decline CapEx: 10MM…
  47. Shareholder Analyst Call – Denbury Resources Inc. – slide 47
    Phase 2 Net Daily Tertiary Oil Production 12,000 10,000 Jackson Dome 8,000 Net BOPD 6,000 Free State Pipeline 4,000 Heidelberg Martinville 2,000 0 Soso Eucutta 2004 2005 2006 2007 2008 2009 2010 2011 Tertiary…
  48. Shareholder Analyst Call – Denbury Resources Inc. – slide 48
    Phase 2 Net Daily Tertiary Oil Production by Field 11,000 Eucutta, East 10,000 Martinville 9,000 Soso Total Heidelberg 8,000 Total 7,000 6,000 Net BOPD 5,000 4,000 Eucutta Heidelberg 3,000 Soso 2,000 1,000…
  49. Shareholder Analyst Call – Denbury Resources Inc. – slide 49
    Phase 2: 2012E Program Grow Heidelberg, CapEx: 83 MM Heidelberg Production: Modest Growth East CapEx: 47MM (Expand with 2 Additional Patterns) West CapEx: 15MM (Conformance Work) Eucutta Production: Slight Decline CapEx: 6MM…
  50. Shareholder Analyst Call – Denbury Resources Inc. – slide 50
    Phase 3 Tinsley Field Net Daily Tertiary Oil Production 8,000 Tinsley Jackson 6,000 Dome Net BOPD Phase 3 4,000 Tinsley 2,000 0 2007 2008 2009 2010 2011 Sonat MS Pipeline Tertiary Reserves & Investment(1)…
  51. Shareholder Analyst Call – Denbury Resources Inc. – slide 51
    Phase 3 Tinsley Field: 2012E Program Continue Field Development, CapEx: 51 MM Tinsley Field Production: Flat Q1/Q212 Grow Q312 CapEx: 51MM (Add 4 Patterns, Expand Facility, P&A Old Wells) Tinsley Unit 13,160 Acres 52
  52. Shareholder Analyst Call – Denbury Resources Inc. – slide 52
    Phase 4: Cranfield & Lake St. John Net Daily Tertiary Oil Production 1,400 1,200 1,000 Net BOPD Jackson Dome 800 600 400 Free State Pipeline 200 Phase 4 0 2009 2010 2011 Lake Sonat St. John MS Pipeline…
  53. Shareholder Analyst Call – Denbury Resources Inc. – slide 53
    Phase 4: Cranfield 2012E Program Continue Field Development, CapEx: 9 MM Cranfield Production: Modest Growth CapEx: 9MM (Develop 3 Patterns) Phase 2 2008 Phase 1 2007 Phase 3 Phase 9 2009 2016 Former Gas Cap Phase 8 2012…
  54. Shareholder Analyst Call – Denbury Resources Inc. – slide 54
    Phase 5 Delhi Field 4,000 Net Daily Tertiary Oil Production Phase 5 Delhi 3,000 Jackson Net BOPD Dome 2,000 Delhi Free State Pipeline 1,000 0 2010 2011 2012 Sonat MS Pipeline Tertiary Reserves &…
  55. Shareholder Analyst Call – Denbury Resources Inc. – slide 55
    Phase 5 Delhi Field: 2012E Program Continue Field Development, CapEx: 64 MM Delhi Production: Growth CapEx: 64MM (Develop 3 Patterns, Construct Additional Facilities: Test Site, Additional Recycle Capacity) 2012 Activity Pilot…
  56. Shareholder Analyst Call – Denbury Resources Inc. – slide 56
    Phase 6 Citronelle Field Net Daily Conventional Oil Production 1,400 Jackson Dome 1,200 1,000 800 BOPD Free State Pipeline 600 400 200 0 2006 2007 2008 2009 2010 2011 Phase 6 Citronelle Project Timing Remains…
  57. Shareholder Analyst Call – Denbury Resources Inc. – slide 57
    Phase 7 Hastings Area TEXAS LOUISIANA Net Daily Conventional Oil Production 3,500 3,000 2,500 Net BOPD 2,000 Green Pipeline 1,500 1,000 Phase 7 500 Hastings Area 0 2009 2010 2011 Hastings Gillock 58
  58. Shareholder Analyst Call – Denbury Resources Inc. – slide 58
    Phase 7 Hastings Area: 2012E Program Start Tertiary Production; CapEx: 66 MM 3.5 miles Hastings Production: Begins early Q112; Growth CapEx: 66MM (Develop 11 Additional Patterns, Expand Facilities: Construct Test Site and Expand…
  59. Shareholder Analyst Call – Denbury Resources Inc. – slide 59
    Phase 8 Oyster Bayou Area TEXAS LOUISIANA Net Daily Conventional Oil Production 120 100 80 Oyster Bayou Net BOPD Shut In 60 Phase 8 Green Pipeline Oyster Bayou 40 20 0 2007 2008 2009 2010 2011 Oyster…
  60. Shareholder Analyst Call – Denbury Resources Inc. – slide 60
    Phase 8 Oyster Bayou Field: 2012E Program Start Tertiary Production; CapEx: 35 MM Oyster Bayou Production: Begin Tertiary Production Q112; Growth CapEx: 35MM (Complete 2 Patterns, 8 Producers and Expand Facilities: Recycle…
  61. Shareholder Analyst Call – Denbury Resources Inc. – slide 61
    Phase 9 Conroe Field TEXAS LOUISIANA Net Daily Conventional Oil Production 3,000 2,500 Phase 9 Conroe Field 2,000 Net BOPD Green Pipeline 1,500 1,000 Conroe 500 0 2009 2010 2011 62
  62. Shareholder Analyst Call – Denbury Resources Inc. – slide 62
    Phase 9 Conroe Field: 2012E Program Prepare for CO2 Injection in 2015; CapEx: 7 MM Conroe Conventional Production: Slow Decline CapEx: 7MM (Design CO2 Flood, Obtain ROW for Pipeline) 7.2 MILES 18,829 acres 5.9 MILES 63
  63. Shareholder Analyst Call – Denbury Resources Inc. – slide 63
    Rockies Region Cedar Creek Anticline CO2 Sources 197 MMBbls(1) Existing Anthropogenic (Man-made) MONTANA DGC Beulah Proposed Coal to Gas or Liquids Cedar Creek Anticline Current or Proposed CO2 Source Many Star Owned or…
  64. Shareholder Analyst Call – Denbury Resources Inc. – slide 64
    Bell Creek Field: 2012E Program Prepare for EOR in 2013; CapEx: 18 MM Bell Creek Conventional Production: Modest Decline CapEx: 18MM (Make Tie-In to Greencore Pipeline, Finish Well Work and Flow Line Installations, Shoot 3-D…
  65. Shareholder Analyst Call – Denbury Resources Inc. – slide 65
    Grieve Field: 2012E Program 65% WI; Operator of 2,300 Acre Unit; CO2 & Transportation Contracts Grieve Field First CO2 Injection Q312 Production: Current: 10 BOP/d; First EOR Production: 1H14 CapEx: 39MM (Install 3 Mile Pipeline to…
  66. Shareholder Analyst Call – Denbury Resources Inc. – slide 66
    Cedar Creek Anticline Prepare for CO2 Injection in 2017 Cedar Creek Anticline First CO2 Injection 2017 CO2 Source from Riley Ridge and/or DKRW Pilot Test Net Daily Conventional Oil Production 12,000 10,000 8,000 Net…
  67. Shareholder Analyst Call – Denbury Resources Inc. – slide 67
    Strong, Sustainable EOR Growth through 2020 140,000 Estimated EOR Production (Bbls/d) 120,000 120,000 100,000 100,000 80,000 60,000 40,000 Oyster Bayou Hastings 29,062 Bell Creek 20,000 Conroe Cedar Creek…
  68. Shareholder Analyst Call – Denbury Resources Inc. – slide 68
    Tools Used to Improve Production Performance Injection Profiles Identifies sands or intervals not completely swept by CO2 WAG (Water Alternating Gas) Used to improve CO2 sweep efficiency Production Profiles Identifies…
  69. Shareholder Analyst Call – Denbury Resources Inc. – slide 69
    Tools Used to Improve Production Performance Injection Profile Modifications (Tool Box) Water Alternating Gas (WAG) Sand Plugs Polymer Squeezes Cement Plugs Cement Squeeze Retrievable Plugs Selective Perforations / Limited Entry…
  70. Shareholder Analyst Call – Denbury Resources Inc. – slide 70
    Injection Profile Log & Conformance Work West Heidelberg Unit 6-10 6 Injection Profiles Injection Profile 02/15/11 Injection Profile 06/23/11 10 MMCFIPD 1650 psig 2.2 MMCFIPD 1950 psig After: 80% of CO2 distributed into 7 zones.…
  71. Shareholder Analyst Call – Denbury Resources Inc. – slide 71
    WAG Response Little Creek Unit Ph 3 WAG Performance Little Creek Unit - Phase 3 WAG Response 1,000 10,000 WAG Wedge Current 150 BOPD 171 MBO 8/1/2009 11/7/2011 0.98 % of OIP Additional Recovery (so far) Recovery will be 17%…
  72. Shareholder Analyst Call – Denbury Resources Inc. – slide 72
    How We Monitor Cumulative Oil Production 73
  73. Shareholder Analyst Call – Denbury Resources Inc. – slide 73
    Bakken Overview
  74. Shareholder Analyst Call – Denbury Resources Inc. – slide 74
    Bakken Area Bakken Divide County Burke County Renville Bottineau County County Nesson Anticline NE Foothills 200,000 Net Acres (excl. Almond) Williams County 300 MMBOE of Total Potential (excl. Almond) 3Q11 Production: 9,976…
  75. Shareholder Analyst Call – Denbury Resources Inc. – slide 75
    Bakken Area: 2012 Planned Activity Expect to Invest 350 Million Net Drill 34 operated wells Entering 2012 with 6 operated drilling rigs and planning to exit 2012 with 3 operated drilling rigs Majority in Cherry/Camp/Indian Hill…
  76. Shareholder Analyst Call – Denbury Resources Inc. – slide 76
    Bakken Area: Operational Advancements Drilling Time Spud to Rig Release Second Quarter: 40 Days Third Quarter: 33 Days Completions Second Quarter Average IP: 1,496 gross BOE/d Third Quarter Average IP: 2,197 gross BOE/d…
  77. Shareholder Analyst Call – Denbury Resources Inc. – slide 77
    Bakken Area Production Zones Approx. Net Productive Zone Estimated Acreage Area MB Sanish Wells/DSU (1,000s) Charlson 6 15 Murphy Creek 6 18 Bear Creek 6 10 Cherry 6 66 Lone Butte 6 9 Camp/Indian Hills 6 16 Almond x x 0…
  78. Shareholder Analyst Call – Denbury Resources Inc. – slide 78
    Most Recent Operated Bakken Well Activity 30-Day 60-Day 90-Day Avg.(2) Avg.(2) Avg.(2) Unit Frac IP Completed Well Area Formation IP (1) Acres Stages W. I. Date (BOE/d) (BOE/d) (BOE/d) Loomer 34-4 NWH Cherry Bakken 2,574 674 467 508…
  79. Shareholder Analyst Call – Denbury Resources Inc. – slide 79
    Most Recent Bakken Well Activity Frac Unit Frac Completing Area Formation Date 30-Day Avg. Acreage Stages W. I. Sorenson 31-28SWH Cherry Bakken 10/2011 N/A 1,280 26 68% Satter 31-1 SWH Cherry TFS 11/2011 N/A 1,280 26 84% Bergem 44-28…
  80. Shareholder Analyst Call – Denbury Resources Inc. – slide 80
    CO2 Sources & Pipelines
  81. Shareholder Analyst Call – Denbury Resources Inc. – slide 81
    Jackson Dome Area Gross CO2 Production Gross Daily CO2 Production Proved Reserves 6.8 TCF 1.20 (9/30/2011) 1.00 Lone Pine Field Current Rate : +/- 1.06 Bcf/d as of 11/1/11 0.80 BCFPD Deliverability: 1.2 Bcf/d CO2 0.60…
  82. Shareholder Analyst Call – Denbury Resources Inc. – slide 82
    Jackson Dome Area: 2012 Planned Activity Expect to Spend 83 Million Net Wellwork Facilities & Pipelines Drill and complete 2 DEV wells, Gluckstadt 1 Step-out at Gluckstadt 300 MMCFD Dehy for Gluckstadt wells Anderson 25-16 1 1st…
  83. Shareholder Analyst Call – Denbury Resources Inc. – slide 83
    Existing Gulf Coast CO2 Supply 2,500 Possible 2,000 2 Tcf Probable 1,500 2.8 Tcf MMCFPD CO2 Recycle 1,000 3.5 Tcf (Proved Only) Jackson Dome Anthropogenic Supply 500 Proved 6.8 Tcf 165 MMCFPD (as of…
  84. Shareholder Analyst Call – Denbury Resources Inc. – slide 84
    Riley Ridge Unit Proposed Greencore Pipeline 232 Miles 100% WI in 9,700 Acre Riley Ridge Federal Unit 33% WI in +/- 28,000 Acre Horseshoe Unit (67% interest in CO2 rights) 85
  85. Shareholder Analyst Call – Denbury Resources Inc. – slide 85
    Rocky Mountain CO2 Sources: 2012 Planned Activity Expect to Invest 283 Million Net Lost Cabin (49 million) Compression Facility & Piping Dehydration Facility Greencore Pipeline (135 million) Construct 118 miles of 20 pipeline…
  86. Shareholder Analyst Call – Denbury Resources Inc. – slide 86
    Greencore Pipeline Rocky Mountains Greencore Pipeline (Lost Cabin, WY to Bell Creek, MT) 232-mile pipeline route, Estimated 275 to 325 Million 87
  87. Shareholder Analyst Call – Denbury Resources Inc. – slide 87
    Greencore Pipeline Rocky Mountains Construction Phases: 1st: Aug Dec 2011 2nd: Aug Late 2012 Constructing Start-up / 118 miles Commissioning: during 2011 Late 2012 88
  88. Shareholder Analyst Call – Denbury Resources Inc. – slide 88
    Rockies Region: Planned Pipeline Infrastructure CO2 Sources Cedar Creek Anticline 197 MMBbls(1) Existing Anthropogenic (Man-made) Proposed Coal to Gas or Liquids MONTANA DGC Beulah CO2 Source Owned or Contracted Cedar Creek…
  89. Shareholder Analyst Call – Denbury Resources Inc. – slide 89
    Conroe Pipeline Lateral (off of Green Pipeline) Estimated Total Cost of 165 - 190 Million Over a 4-Year Period Preliminary Timetable 2011-2013 Select route, engineering, acquire right-of-way and regulatory permits 2014…
  90. Shareholder Analyst Call – Denbury Resources Inc. – slide 90
    Anthropogenic CO2 Sources
  91. Shareholder Analyst Call – Denbury Resources Inc. – slide 91
    Potential Carbon Gasification Projects Denbury purchase contracts (contingent on plants being completed) Initial production expected +/- 4 years after construction begins (not before 2015) Gulf Coast Sources (0.29 to 0.44/Mcf 60 Oil)…
  92. Shareholder Analyst Call – Denbury Resources Inc. – slide 92
    Rockies Anthropogenic CO2 Rocky Mountain Purchase Contracts MMCFD COP Lost Cabin (Central Wyoming) (Q1 2013) Currently Under +/- 50 Construction XOM LaBarge (SW Wyoming) (1) (Q3 2012) +/- 50 DKRW Medicine Bow (SE Wyoming) (2) (+/-…
  93. Shareholder Analyst Call – Denbury Resources Inc. – slide 93
    Tuscaloosa Marine Shale 150,000 Gross Acres 105,000 acres in Joint Venture (Denbury WI: 15%) 45,000 Acres under existing CO2 EOR Fields Joint Venture Partner will carry Denbury in one completion, one new drill, and lease…
  94. Shareholder Analyst Call – Denbury Resources Inc. – slide 94
    Financial Overview
  95. Shareholder Analyst Call – Denbury Resources Inc. – slide 95
    Strong Financial Position 1.5 billion availability under Debt to Capitalization credit facility on 9/30/11 (9/30/11) 33% Debt Unused Credit 100% Facility 1.6 billion borrowing base + (9/30/11) Cash 24 million Net debt of…
  96. Shareholder Analyst Call – Denbury Resources Inc. – slide 96
    Capital Structure (MM) 9/30/11 Cash 24 Bank credit facility 110 9.500% Sr. Sub Notes due 2016 238 9.750% Sr. Sub Notes due 2016 407 8.250% Sr. Sub Notes due 2020 996 6.375% Sr. Sub Notes due 2021 400 Other Encore Sr. Sub Notes 4…
  97. Shareholder Analyst Call – Denbury Resources Inc. – slide 97
    2012 Capital Budget 2012 Capital Budget 1.35 Billion(1) All Other 140MM Tertiary Floods 365MM Bakken 350MM CO2 Pipelines CO2 Sources 335MM 160MM + Assumed Stock Repurchase Program 250MM (1) Excludes capitalized interest…
  98. Shareholder Analyst Call – Denbury Resources Inc. – slide 98
    Sources & Uses 2012E Sources of Cash (MM) Estimated Cash flow from operations 90-95 NYMEX oil 1,200 - 1,400 Estimated Asset sales 150 - 300 Total Estimated Sources 1,350 - 1,700 2012E Uses of Cash (MM) Capital budget 1,350…
  99. Shareholder Analyst Call – Denbury Resources Inc. – slide 99
    Production by Area (BOE/d) Pro forma Expected Operating area 1Q11 2Q11 3Q11 2011E 2012E 2010(1) Growth Tertiary Oil Fields 29,062 30,825 30,771 31,091 31,000 33,000 - 36,000 6-16% Mississippi Non-CO2 Floods 8,012 7,586 7,333 7,193…
  100. Shareholder Analyst Call – Denbury Resources Inc. – slide 100
    Financial Results (non-GAAP reconciliations) 3 Mos. Ended 3 Mos. Ended 9 Mos. Ended 6/30/11 9/30/11 9/30/11 Net income attributable to Denbury stockholders (GAAP measure) 259,246 275,670 520,726 Non-cash fair value adjustments on…

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