Denbury Resources Inc. Compression in CO2 Enhanced Recovery February 10, 2011 NYSE: DNR

Denbury Resources Inc. Compression in CO2 Enhanced Recovery February 10, 2011 NYSE: DNR

Denbury Overview CO2 Compression History Engineering Issues Typical Denbury Packages Summary Denbury Resources Inc. 2

Cautionary Note on Forward-Looking Statements Certain statements in this presentation may constitute "forward-looking statements" within the meaning of Federal securities laws. The events and circumstances referred to in forward-looking statements are subject to numerous risks and uncertainties that are detailed in Denbury's filings with the Securities and Exchange Commission, including its most recent reports on Forms 10-K and 8-K. Investors and securities holders are urged to consider closely the disclosure in our Annual Report on Form 10-K, available free of charge on our internet site (www.denbury.com). You can also obtain this form from the SEC on the SEC s internet site (www.sec.gov) or by calling 1-800-SEC-0330. These risks and uncertainties are incorporated by this reference as though fully set forth herein and these events and circumstances may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. All written and oral forward-looking statements attributable to Denbury or persons acting on its behalf are expressly qualified in their entirety by such factors. For further information contact: DENBURY RESOURCES INC. Phil Rykhoek, Chief Executive Officer, 972-673-2000 Mark Allen, Sr. VP and Chief Financial Officer, 972-673-2000 Laurie Burkes, Investor Relations Manager, 972-673-2166 Denbury Resources Inc. 3

Rockies 227 Million Barrels MT ND Total Denbury 3P Inventory 735 Million Barrels ID Greencore Pipeline Lost Cabin SD WY IL IN KY Existing CO 2 Pipelines CO 2 Pipelines Under Development Rocky Mountain Fields With EOR Potential Existing Anthropogenic CO 2 Sources Proposed Coal to Gas or Liquids CO 2 Source Owned or Contracted TX Green Pipeline Delta Pipeline Sonat MS Pipeline LA Gulf Coast 508 Million Barrels MS Jackson Dome Free State Pipeline Note: 3P total reserves as of 9/30/10, based on a variety of recovery factors. 4 Denbury Resources Inc. 4

Top 5 Oil producer (1) Leading CO2 EOR Company- Active in the Gulf Coast and Rocky Mountains Largest producer in Mississippi and Montana 13 Producing EOR Floods. 2 in Construction 1.3 Billion BBLS of Reserves (2). 92 % Oil (2). Approximately 11.6 TCF of CO2 3P Reserves 835 Miles of CO2 Pipelines Approximately $10 B Enterprise Value Total production 3Q10 (2) - 63,194 BOE/D (1) Source: IHS Energy, Pro forma 2009 Production including Denbury, Encore and ENP. Excludes GOM and Alaska. Excludes NGLs. (2) Pro forma for sold or soon-to-be sold properties. Excluding ENP Reserves. Denbury Resources Inc. 5

Rockies ID MT Greencore Pipeline Lost Cabin SD ND Estimated 1.3 to 3.2 Billion Barrels Recoverable WY IL IN KY Source: DOE 2005 and 2006 reports. Gulf Coast TX Green Pipeline Delta Pipeline Sonat MS Pipeline LA MS Jackson Dome Free State Pipeline Estimated 3.4 to 7.5 Billion Barrels Recoverable 6 Denbury Resources Inc. 6

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Denbury started CO2 EOR with the acquisition of the Little Creek Field in SWMS in 1999. Continued with the acquisition of the W. Mallalieu and Olive Fields and NEJD Pipeline and Jackson Dome in 2000. Originally developed by Shell Oil in the 1980 s The acquisitions included 9 compressors including 3- CB KM2, 4 - DR RDS and 2-DR HHE VG2 acquired by Shell. Facility expansion started with W. Mallalieu in 2002. Denbury Resources Inc. 8

From 2002 to 2004 Denbury acquired 9 compressors through a typical bid process. As a small company there was mixed response from vendors and several no bids. In 2004, the Denbury growth plans suggested that 150 additional compressors would be needed over 10 years at 15-20 units per year. Multiple options for a new business plan were evaluated. Goals: Predictable pricing Predictable delivery Repeatable standards Denbury Resources Inc. 9

In 2005 an alliance was formed with American Warrior, Dresser Rand and Converteam EM to supply compression. Formally on June 30, 2006. To date the East Region has purchased 50 compressors under the alliance and the West and North Regions have purchased 26 compressors for a total of 76 compressors. In line with the original plan Benefits of the alliance. Reduced cost Bid and engineering cycles Early definition of schedule Competitive pricing. Base loading Commonality of parts and Standardization. Common support crews Continuous product improvement. Optimization. Lessons learned process. Proactive improvements. Improved business process based on long term trust. Denbury Resources Inc. 10

Dresser Rand HHE VG2 2 Dresser Rand RDS Dresser Rand 7HOS4 Dresser Rand 6HOS4 Dresser Rand 5HOS2 Dresser Rand 6HOS2 Dresser Rand 7HOS2 Dresser Rand 7 HOSS6 Ariel JGC4 Ariel JGH2 Cooper Bessmer KM2 Denbury Resources Inc. 11

Dresser Rand Ariel Cooper Bessmer Denbury Resources Inc. 12

CO2 Properties CO2 is miscible in oil Good for EOR Bad for elastomers. Preferred - Peroxide cured buna, urethane and teflon - 90 durometer Bad for compressor lubrication. Preferred -Mineral Oil (Conoco RNO460) or Synthetic Oil (Summit NGL-888) Reduced compressor speed to maintain lubrication CO2 is a small molecule Good for EOR Will find a leak where other materials can t CO2 and Water = Carbonic Acid Material selection is important if free water is present. CO2 has the density of oil at higher pressure Impact on rod load. Denbury Resources Inc. 13

Reservoirs are highly permeable sandstone. Very little pressure drop from the injector to the producer Flowing tubing pressures are higher than other EOR regions Denbury prefers straight CO2 injection. Contributes to high flowing tubing pressure. H2S isn t produced with the oil. Suctions pressures range from 700-900 psi. Discharge pressures range from 2000 to 3150 psi. Second stage is in the supercritical region. Compressor or pump? Corrosion impact mitigated by under-saturation. Denbury Resources Inc. 14

45-50 lbs./ cu. ft at discharge after cooling to 130 degrees Can be pumped above critical pressure and temperature Denbury Resources Inc. 15

Dresser Rand RDS2 1400 psi suction 2900 psi Discharge 5.5 in. stroke 3.81 in. bore 27 MMSCF/D 1000 HP Denbury Resources Inc. 16

Wood Group ESP 70 Stage TJ9000 Pump 27 MMSCF/D 600 HP 1400 psi suction 2900 psi discharge Denbury Resources Inc. 17

Under-saturation used in lieu of dehydration for carbonic acid corrosion control Denbury Resources Inc. 18

15 in stroke 327 rpm 2 stage 10.5 in 1 st stage 6.5 in 2 nd stage 40 MMSCF/D 2400 HP 800 psi suction 3150 psi discharge Denbury Resources Inc. 19

7 Stroke 514 RPM 2 Stage 40 MMSCF/D Capacity 9 1 st Stage 5.75 2 nd Stage 2400 HP 800 psi suction 3150 psi discharge Denbury Resources Inc. 20

7 Stroke 4650 HP 600 rpm 400 psi suction 2200 psi discharge 6 throw 50 MMCF/D Capacity At 700 psi suction capacity increases to 96 MMCF/D at Heidelberg and Tinsley 11.5 1 st stage 7.5 2 nd stage Denbury Resources Inc. 21

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CO2 requires slower speed operation Longer stroke with speeds from 514 600 rpm on a typical high speed machine. HOS or HOSS Better for lubrication Requires larger cylinders and valves. Better for CO2 service due to density. Results in higher rod load. Needs to be managed. At 900 rpm, the piston rings travel 82,125 miles per year. At 514 rpm the same piston travels 59,694 miles per year. Preventative maintenance procedures need to be followed. Minor inspections at 5000 hrs- 10,000 hr. Cylinder and valves Major inspection at 15,000 to 20,000 hrs. Overall Beta analysis. Oil analysis and history. Good alignment will save future cost CO2 can carry more contaminates due to higher density. Vane pack design Filtration or centrifugal separation Vibration is more of a concern due the higher density of CO2 Heavier skids and foundations More off skid clamping. Need to measure vibration after installation Denbury Resources Inc. 23