SECARB Plant Barry to Citronelle

Research Experience in Carbon Sequestration June 8, 2012

NYSE: DNR

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Our Company
Denbury Resources Inc. (NYSE: DNR):
A growing independent oil and gas company Approximately 1309 employees (578 in Plano,731 in the field) The largest oil and natural gas operator in Mississippi and Montana Owns the largest reserves of CO2 used for tertiary oil recovery east of the
Mississippi River

Holds significant operating acreage in the Rockies, Mid-Continent and Gulf

Coast

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Areas of Operations: 2 Target Areas

Rockies
MT
Greencore Pipeline Lost Cabin

ND

ID

SD

Rockies Pipelines Source: Riley Ridge Greencore Line

Bell Creek (C) (EOY) Cedar Creek Anticline (TBC)

WY

IL IN

Anadarko Line
Grieve (TBC)

KY

Gulf Coast Pipelines Source: Jackson Dome NEJD Line

Brookhaven Mallalieu Little Creek McComb Smithdale Cranfield Lockhart Crossing

MS

Existing CO2 Pipelines CO2 Pipelines Under Development Rocky Mountain Fields With EOR Potential Existing Anthropogenic CO2 Sources Proposed Coal to Gas or Liquids CO2 Source Owned or Contracted

Gulf Coast
TX

Delta Pipeline Sonat MS Pipeline

Jackson Dome
NEJD Pipeline

Free State Line

Free State Pipeline

LA
Green Pipeline

Martinville Soso Eucutta Heidelberg

Delta Line
Tinsley Delhi

Green Line
Oyster Bayou Hastings Seabreeze Conroe (TBC) Thompson (TBC)

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Denbury Study Partnerships

East Region Cranfield Adams & Franklin Counties, MS Large Scale CO2 Injection MVA BEG / SECARB Citronelle Mobile County, AL CO2 Injection Pilot UAB / UA / AA&M / UNCC Sequestering CO2 in a Saline Reservoir EPRI / SSEB / SECARB West Region West Hastings Brazoria County, TX Anthropogenic CO2 Injection for EOR MVA BEG / GCCC Delhi Richland Parish, LA Geophysical Mapping CSM North Region Bell Creek Powder River County, MT MVA Program PCOR / EERC / UND

MVA (Monitoring, Verification, Accounting)

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Citronelle Field Basic Facts

Citronelle Field located in & around

the City of Citronelle Approx. 1 hour north of Mobile, AL Field is comprised of 3 active units: Main, East & Southeast There are 423 wells in the 3 Denbury operated units 168 active producers 62 active injectors 7 SWD wells 93 TA/TP wells 88 plugged 5 SECARB Denbury took over operations on Feb. 1, 2006 from Merit Energy

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Citronelle Geological Field Summary

Field discovered 1955 Discovery Well: Zach Brooks Drilling #1 Donovan (Unit Well A-25-5) Producing formations:
Upper Donovan Sands (Rodessa) Lower Donovan Sands (Sligo)

Current Well Spacing: 40 acres Original GOR = 244 cft/bbl in Rodessa and 104 cft/bbl in Sligo Oil Gravity (43-45 degrees API) Water flood June 1961 to present Cumulative Production approximately 165 MMBO
(Estimated Primary cum production approximately 52 MMBO) Estimated OOIP between 300-500 MMBO

Structure is a salt-cored, un-faulted, ovate anticline with NW-SE trending axis.

Regional structural dip is generally to the south. Reservoir seal for Rodessa is Ferry Lake Anhydrite Reservoir seal for Sligo is Pine Island Shale

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Citronelle Geological Field Summary

Productive Area approximately 33 square miles 53 productive sandstones have been identified. 481 wells on the structure Currently 168 active producers and 62 active water injectors Daily production averages approximately 1,580 BOPD (gross) with approximately 9,700 BWPD and water injection approximately the same as water produced. (Apr 2012 avg thru 4/9)

Depositional Model

Tidal Channel / Tidal Flat / Estuarine Environment Brackish water; semi-arid climate; pedogenic features Abundant bioturbation (even within channel deposits) Modern-day analogy = Indus Delta

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SECARB Phase III Anthropogenic Test - Schedule

Project Schedule and Milestones
The CO2 capture unit at Alabama Powers (Southern Co.) Plant Barry became operational in 3Q 2011. A newly built 12 mile CO2 pipeline from Plant Barry to the Citronelle Dome completed in 4Q 2011. A characterization well was drilled in 1Q 2011 to confirmed geology. Injection wells were drilled in 4Q 2011. 100 to 300 thousand metric tons of CO2 will be injected into a saline formation over 2 to 3 years beginning in 2Q 2012. 3 years of post-injection monitoring.

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CO2 Pipeline Right-of-Way

Approx. 12 mi (19 km) to the SE Citronelle Unit
in Citronelle Oil Field

Right-of-Way 1 mi (2 km) inside Plant Barry property > 8 mi (13 km) along existing power corridor 2 mi (3 km) undisturbed forested land Permanent cleared width 20 ft (6 m) Temporary construction width 40 ft (12 m) Right-of-Way habitat 9 mi (14.5 km) of forested and commerical

timber land 3 mi (5 km) of emergent, shrub and forested wetlands Endangered Gopher Tortoise habitat
110 burrows in or adjacent to construction area

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CO2 Pipeline and Measurement Design

Applicable regulatory standard: US
Depart of Transportation, 49 CFR Part 195 Transportation of Hazardous Liquids by Pipeline Welding - API 1104 & B31.3 (plant section) 4-inch (10 cm) pipe diameter X42/52 carbon steel pipe MOP 2,220 psig (flange limitation) Normal operating pressure: 1,500 psig (10.3 MPa) maximum Buried average of 5 ft (1.5 m) with surface re-vegetation and erosion control

Handling pipe for horizontal directional drill

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CO2 Pipeline Design and Construction

Directional drilled 18 sections of the pipeline
under roads, utilities, railroad tracks, tortoise colonies, and wetlands. (30 to 60 ft deep) Trenched remaining sections Corrosion protection Fusion Bond Epoxy coated pipe Jeep pipe for coating damage; manually coat joint welds and scratches Impressed current cathodic protection AC mitigation for overhead powerlines using copper wire ACVG survey after construction to check again for coating damage Caliper tool run to check for dents caused by rock or equipment

Workers dressing welded pipe joints

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CO2 Pipeline and Measurement Design

Denbury pipeline purity requirement

is: > 97% dry CO2 at 115F (46C) < 0.5% inerts (incl. N2 & argon) < 30 lb water per 1MMSCF < 20 ppm H2S Impurities affect and sometimes amplify pipe fracture toughness requirements Hydrogen & Nitrogen problematic Toughness requirements for this project met by standard X42 pipe. Other projects require added wall thickness, modified pipe chemistry and/or crack arrestor installation.

Custody meter station and building

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CO2 Pipeline and Measurement Commissioning

Pipeline was commissioned March 8, 2012 At custody meter station there is the capability of
taking samples of CO2 stream. Samples will be taken periodically for permits and GHG reporting. Sample obtained for Class V injection permit showed 99.6% pure CO2. Major impurities were Nitrogen (2700 ppm)
Line was filled with N2 to pressure test line then swept with CO2 prior to commissioning Lab impurity?

Oxygen + Argon (880 ppm).

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CO2 Pipeline and Measurement Design

CO2 Specific Design Requirements Valve seals Accepted: Nylon,

peroxide cured Buna N (HBNR-90/95), ethylene propylene rubber (EPDM) Valve packing Teflon Low temperature materials for valves used for blowdown service only. Mainline valve station similar to natural gas with blowdowns for maintenance.

Mainline valve station & CP test station

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CO2 Pipeline and Measurement Design

CO2 measured with senior orifice
meter and gas chromatograph Custody measurement meets AGA Report #3, Parts 1 & 2 Accuracy and mechanical issues with turbine, Coriolis, & ultrasonic meters Turbine CO2 is dry damages moving parts. CO2 viscocity range can be problematic Coriolis Accuracy not as good as orifice Ultrasonic CO2 absorbs and distorts signal Communication using SCADA and satellite. Check meter installed for pipeline leak detection and verification of injected volumes

Check meter station and building at Denbury Citronelle Field

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CO2 Pipeline and Measurement Design

CO2 Booster Pump Designed & fabricated by Wood Group
(GE) 130 stages (impellers) 44 ft long 4 suction 3 discharge 300 HP electric motor 3570 rpm w/ variable speed drive Pneumatic shut downs (2), pneumatic control valves (2), manual shut down valves (2), vibration shut down switch (1), manual blowdown valves (2), discharge check valve (1) Inlet pressure 1300 psi outlet pressure 3200 psi Variable speed drive with recycle valve for near 100% turndown Max rate approx. 14 MMCFD CO2 Satellite link for communication 2 pressure transmitters & 2 temperature transmitters Stand alone air compressor system to operate valves & controls

Horizontal Injection Pump @ D-9-7 #2 Wellsite

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