Denbury to Acquire Encore in a $4.5 Billion Transaction

DALLAS--(Business Wire)--
Denbury Resources Inc. (NYSE: DNR) ("Denbury") and Encore Acquisition Company
(NYSE: EAC) ("Encore") today jointly announced that they have entered into a
definitive merger agreement pursuant to which Denbury will acquire Encore in a
transaction valued at approximately $4.5 billion, including the assumption of
debt and the value of the minority interest in Encore Energy Partners LP
(NYSE:ENP). The combined company will continue to be known as Denbury Resources
Inc. (the "Company") and will be headquartered in Plano, Texas.

Under the definitive agreement, Encore stockholders will receive $50.00 per
share for each share of Encore common stock, comprised of $15.00 in cash and
$35.00 in Denbury common stock subject to both an election feature and a collar
mechanism on the stock portion of the consideration.

The transaction positions the Company as one of the largest crude oil-focused,
independent North American exploration and production companies. The acquisition
will also create one of the largest CO2 enhanced oil recovery ("EOR") platforms
diversified across the Gulf Coast and Rocky Mountain regions, complemented by
ownership and control of the Jackson Dome CO2 source in Mississippi and CO2
sequestration contracts secured with anthropogenic sources in the Gulf Coast,
Midwest and Rockies. The combined companies will have over 500 MMBOE of
additional potential barrels recoverable with CO2 tertiary operations. The
longer lead-time of CO2 project development in the Rockies is ideally matched
with a strong growth profile from low-risk development of unconventional
resource plays in the Bakken oil shale in North Dakota and the Haynesville shale
in North Louisiana. Encore has one of the larger acreage positions in the
prolific Bakken oil shale with over 300,000 net acres.

"Encore is an excellent fit with Denbury`s CO2 EOR program," said Phil Rykhoek,
Chief Executive Officer of Denbury. "Encore has built an enviable asset
portfolio in the Rockies, anchored by mature legacy crude oil assets, and our
combined size and scale of operations will allow us to undertake significantly
larger CO2 projects in the Gulf Coast and the Rockies. This combination will
also further enhance Denbury`s position as the natural buyer and owner of mature
oil properties in our core regions and the partner of choice for CO2 emitters
looking to reduce their carbon footprint. With the addition of the Encore
properties, we more than double our current inventory of oil reserves
recoverable with CO2, and greatly expand our future growth potential with a
second new core EOR area in the Rockies that has significant future expansion
opportunities. The anticipated EOR production from the Encore properties will
fit nicely into our overall EOR program, providing production growth in 2015 and
beyond, about the time when we anticipate nearing the production peak of our
existing EOR field inventory. In addition, the growth potential from Encore`s
Bakken shale oil play further enhances its value and provides short-term
production growth and cash flow as we develop the longer term EOR program. The
transaction is expected to be meaningfully accretive to Denbury on a cash flow
basis, between 8% and 18% depending on the ultimate number of Denbury shares
issued, and the combined size, scale and access to capital will benefit both
groups of stockholders."

Jonny Brumley, Chief Executive Officer of Encore, stated, "The combined
companies have a unique blend of large oil fields with huge upside potential.
The large reserve and production base will increase the operational and
financial flexibility allowing for more efficient development of the assets of
both of our companies. We have been impressed by the amount of progress Denbury
has made in building a world-class enhanced oil recovery business. Denbury has
the experience and expertise to effectively capture the full value of Encore`s
EOR inventory and the combined entities will provide the necessary size and
scale to develop and fully recognize that potential. The transaction recognizes
the value Encore has created for its stockholders and positions the combined
company to deliver above average value creation for both sets of stockholders
going forward. Encore has a dedicated group of employees that have worked hard
and built a company to be proud of."

Denbury is currently in the process of setting its 2010 capital budget. The
budget will be focused on high-grading the combined company`s best projects,
while at the same time maintaining the Company`s strong financial and liquidity
positions. Denbury anticipates announcing the combined 2010 capital budget at
its upcoming analyst meeting on November 12th and November 13th.

Terms of the Transaction

In calculating the exchange ratio range for the collar mechanism, the Denbury
common stock was initially valued at $15.10 per share. The collar mechanism is
limited to a 12% upward or downward movement in the Denbury share price. The
final number of Denbury shares to be issued will be adjusted based on the volume
weighted average price of Denbury common stock for a 20 day trading period
ending on the second day prior to closing. Based on this mechanism, if Denbury
stock trades between $13.29 and $16.91, the Encore stockholders will receive
between 2.0698 and 2.6336 shares of Denbury common stock for each of their
shares of Encore common stock, but not higher or lower than these share amounts
if Denbury common stock trades outside this range. Encore stockholders will also
have an option to receive all stock or all cash, subject to a proration feature
such that the overall mix of consideration is 70% Denbury common stock and 30%
cash.

Denbury intends to finance this transaction with a combination of equity and
debt. In connection with the transaction, Denbury has received a commitment
letter for an underwritten financing from J.P. Morgan for a new $1.6 billion
bank revolving credit facility and a $1.25 billion bridge financing to
subordinated debt facility. The new debt financing will be used to fund the cash
portion of the consideration, potentially retire and replace $825 million of
Encore`s outstanding subordinated notes, all of which have a change of control
put option at 101%, replace Encore`s existing bank facility which has
approximately $180 million currently drawn and outstanding, and to pay other
fees and expenses. Denbury expects to issue between 115 million and 146 million
shares of common stock to fund the equity portion of the merger consideration.
During 2010, Denbury intends to sell non-core oil and gas properties of the
combined companies in order to reduce its overall debt levels incurred as part
of the acquisition, with targeted sales proceeds of at least $500 million.
Denbury will own the general partner interest of Encore Energy Partners and
approximately 21 million limited partner units. The Company may decide to sell
certain properties to Encore Energy Partners as a means to reduce the Company`s
debt. The new combined company will have a vast inventory of long-life oil
fields that could be excellent candidates for asset drop-downs.

The Boards of Directors of both companies have unanimously approved the merger
agreement, and each will recommend approval of the transaction to its respective
stockholders. Completion of the transaction is subject to the approval of both
Denbury and Encore stockholders, regulatory approvals and other customary
conditions. Post closing, it is anticipated that Denbury stockholders will own
between 63% and 68% of the combined company and the Encore stockholders will own
between 32% and 37% of the combined company. The transaction is expected to
close in the first quarter of 2010 and Denbury`s board and senior management
will remain unchanged.

J.P. Morgan Securities Inc. acted as exclusive financial advisor to Denbury and
Barclay`s Capital Inc. acted as exclusive financial advisor to Encore. Baker &
Hostetler LLP acted as legal counsel to Denbury and Baker Botts L.L.P. as legal
counsel to Encore.

Conference Call

The public is invited to listen to the Company`s conference call set for Monday,
November 2, 2009 at 10:00 A.M. CST. The call will be broadcast live over the
Internet at our web site: www.denbury.com. If you are unable to participate
during the live broadcast, the call will be archived on our website for
approximately 30 days and will also be available for playback for one week by
dialing 877-344-7529 or 412-317-0088, passcode 431832. Transaction overview
slides presented during the conference call will be available on the Denbury
website (www.denbury.com). The senior management from Denbury and Jonny Brumley,
CEO of Encore, will host the call.

Denbury Resources Inc. (www.denbury.com) is a growing independent oil and
natural gas company. The Company is the largest oil and natural gas operator in
Mississippi, owns the largest reserves of CO2 used for tertiary oil recovery
east of the Mississippi River, and holds interests in the Barnett Shale play
near Fort Worth, Texas, and properties onshore in Louisiana, Alabama and
Southeast Texas. The Company`s goal is to increase the value of acquired
properties through tertiary recovery operations, combined with a combination of
exploitation, drilling and proven engineering extraction practices.

Encore Acquisition Company (www.encoreacq.com) is engaged in the acquisition and
development of oil and natural gas reserves from onshore fields in the United
States. Since 1998, Encore has acquired producing properties with proven
reserves and leasehold acreage and grown the production and proven reserves by
drilling, exploring, reengineering or expanding existing waterflood projects,
and applying tertiary recovery techniques.

Forward-Looking Statements

This press release contains "forward-looking statements" that involve
significant risks and uncertainties. All statements other than statements of
historical fact are statements that could be deemed forward−looking statements,
including: statements regarding reserve quantities; recoverable oil; the
efficacy of CO2 tertiary operations; future growth potential; the number of
Denbury common shares to be issued in the merger; the anticipated timing of
filings and approvals relating to the transaction; the expected timing of the
completion of the transaction; the ability to complete the transaction
considering the various closing conditions; financing plans (including the terms
thereof and performance of lenders under new credit facilities); expected cash
flow accretion; the level of, and target proceeds from asset sales; any other
statements of expectation or belief; and any statements of assumptions
underlying any of the foregoing. Investors and security holders are cautioned
not to place undue reliance on these forward-looking statements. Actual results
could differ materially from those currently anticipated due to a number of
risks and uncertainties. Risks and uncertainties that could cause results to
differ from expectations include: the possibility that one or more closing
conditions for the transaction may not be satisfied or waived, including the
failure to obtain the requisite approval of either Denbury`s or Encore`s
stockholders, the failure of Denbury to obtain the requisite financing to fund
the cash portion of the transaction or the possibility that a governmental
entity may prohibit, delay or refuse to grant approval for the consummation of
the transaction; the effects of disruption from the transaction making it more
difficult to maintain relationships with employees, business partners or
governmental entities; other business effects, including the effects of
industry, economic or political conditions outside of the control of Denbury or
Encore; and other risks and uncertainties detailed in Denbury`s and Encore`s
filings with the Securities and Exchange Commission, including Denbury`s and
Encore`s most recent reports on Form 10-K and Form 10-Q. These statements are
based on engineering, geological, financial and operating assumptions that
management believes are reasonable based on currently available information;
however, management's assumptions and the Company`s future performance are both
subject to a wide range of business risks, and there is no assurance that these
goals and projections can or will be met. Actual results may vary materially.

Information on Reserves

The SEC permits oil and gas companies, in their filings with the SEC, to
disclose only proved reserves that a company has demonstrated by actual
production or conclusive formation tests to be economically and legally
producible under existing economic and operating conditions. This release uses
certain terms, such as potential recoverable barrels, probable reserves and
possible reserves, that the SEC`s guidelines strictly prohibit us from including
in filings with the SEC. 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.

Additional Information

In connection with the transaction, Denbury and Encore will file a joint proxy
statement/prospectus and other documents with the Securities and Exchange
Commission ("SEC"). Investors and security holders are urged to carefully read
the definitive joint proxy statement/prospectus when it becomes available
because it will contain important information regarding Denbury, Encore and the
transaction.

A definitive joint proxy statement/prospectus will be sent to stockholders of
Denbury and Encore seeking their approval of the transaction. Investors and
security holders may obtain a free copy of the definitive joint proxy
statement/prospectus (when available) and other documents filed by Denbury and
Encore with the SEC at the SEC`s website, www.sec.gov. The definitive joint
proxy statement/prospectus (when available) and such other documents relating to
Denbury may also be obtained free-of-charge by directing a request to Denbury,
Attn: Investor Relations, 5100 Tennyson Parkway, Suite 1200, Plano, Texas 75024,
or from Denbury`s website, www.denbury.com. The definitive joint proxy
statement/prospectus (when available) and such other documents relating to
Encore may also be obtained free-of-charge by directing a request to Encore,
Attn: Bob Reeves, 777 Main Street, Suite 1400, Fort Worth, Texas 76102, or from
Encore`s website, www.encoreacq.com.

Denbury, Encore and their respective directors and executive officers may, under
the rules of the SEC, be deemed to be "participants" in the solicitation of
proxies in connection with the proposed transaction. Information concerning the
interests of the persons who may be "participants" in the solicitation will be
set forth in the joint proxy statement/prospectus when it becomes available.

Denbury Resources Inc.
Phil Rykhoek, 972-673-2000
Chief Executive Officer
or
Mark Allen, 972-673-2000
Sr. VP and Chief Financial Officer
www.denbury.com
Encore Acquisition Company
Bob Reeves, 817-339-0918
Chief Financial Officer
rcreeves@encoreacq.com
or
Kim Weimer, 817-339-0886
Investor Relations
kweimer@encoreacq.com

Copyright Business Wire 2009