Denbury Agrees to Acquire Rocky Mountain Properties for $1.05 Billion

Tue Jan 15, 2013 7:30am EST

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Builds on Leading Position in Cedar Creek Anticline

Announces Energy Conference Presentation and Fourth Quarter Results Conference Call

PLANO, Texas, Jan. 15, 2013 (GLOBE NEWSWIRE) -- Denbury Resources Inc. (NYSE:DNR) ("Denbury" or
the "Company") today announced that it has entered into an agreement to acquire producing property
interests in the Cedar Creek Anticline ("CCA") of Montana and North Dakota from a wholly-owned
subsidiary of ConocoPhillips for $1.05 billion cash. The assets to be purchased include additional
interests in certain of Denbury's existing operated fields in CCA along with operating interests
in other CCA fields.   

The acquisition is subject to satisfactory completion of customary title and environmental due
diligence, as well as the satisfaction of customary closing conditions. The acquisition is
expected to close near the end of the first quarter of 2013 with a January 1, 2013 effective date.
The purchase price is subject to standard adjustments for revenues and costs of the properties to
be acquired from the effective date to the closing date.

Denbury plans to fund the purchase out of the approximately $1.3 billion of cash received from its
Bakken sale and asset exchange with ExxonMobil completed in December 2012, $1.05 billion of which
was deposited in qualified trust accounts to allow for potential future asset purchases that would
qualify for like-kind exchange treatment. The utilization of federal tax rules on like-kind
exchanges for both the CCA properties to be acquired and the Rocky Mountain carbon dioxide ("CO2")
reserves acquired in the ExxonMobil exchange transaction is expected to allow Denbury to defer
more than $400 million of the $500 million of cash taxes originally estimated on the Bakken
transaction prior to completing the CO2 reserves acquisition and agreeing to acquire the CCA
properties.

Denbury estimates that at year-end 2012 the proved conventional (non-tertiary) reserves associated
with the CCA properties to be acquired were approximately 42 million barrels of oil equivalent of
which approximately 95% was oil and 4% natural gas liquids and 91% was proved developed producing.
Net to the acquired interest, Denbury estimates current average production from the to-be-acquired
properties at approximately 11,000 barrels of oil equivalent per day ("BOE/d"), of which 99% is
oil and natural gas liquids. Assuming the acquisition closes at the end of the first quarter of
2013, Denbury estimates that its full-year 2013 average daily production would increase by
approximately 7,700 BOE/d.

Transaction Highlights

* CCA is a major geological feature in eastern Montana and western North Dakota that extends for
approximately 126 miles in a northwest-southeast direction and ranges from two to six miles in
width. CCA is a series of producing oil units, each of which could be considered a field by
itself. Commercial quantities of oil were first discovered in the South Pine Unit of CCA in the
early 1950s. The original oil in place at all CCA fields, including those not owned by Denbury, is
estimated at over three billion barrels of oil.
* CCA produces from numerous reservoirs, although the primary reservoir is the Red River
formation, which is a series of carbonate reservoirs that have produced significant amounts of
oil. The gross producing interval at CCA is approximately 2,000 feet thick, and ranges in depth
from approximately 7,000 feet to 9,000 feet. The reservoir characteristics of CCA are similar in
many respects to oil fields successfully flooded with CO2 in the Permian Basin of West Texas and
Weyburn Field in the Canadian Williston Basin.
* CCA is located approximately 110 miles north of Denbury's Bell Creek Field, which the Company
plans to start flooding with CO2 in the first half of 2013, and the current terminus of the
recently completed Greencore Pipeline which will initially transport CO2 from Denbury's source in
central Wyoming. Denbury currently plans to extend the Greencore Pipeline both north and southwest
in order to deliver the CO2 necessary to flood its CCA fields.  
* Denbury is currently designing a CO2 development plan for its CCA assets, and will incorporate
the newly acquired CCA properties into these plans. The Company estimates that a CO2 flood of the
to-be-acquired properties could recover between 60 million and 80 million barrels of oil. As a
result, Denbury estimates a CO2 flood of its CCA assets, including the assets to be acquired,
could recover between 260 million to 280 million barrels of oil.

Management Comment

Phil Rykhoek, Denbury's President and CEO, commented, "This transaction, combined with the
recently completed ExxonMobil transaction, results in the trade of our Bakken assets for three
assets with significant oil production, proved reserves, cash flow and CO2 EOR potential, along
with additional CO2 reserves and a little bit of cash, all in a tax efficient manner.
Strategically, we are now purely focused on what we do best, CO2 enhanced oil recovery, which we
believe offers one of the lowest risk, and most compelling rates of return in the oil and gas
industry today.

"We estimate that CO2 flooding these newly acquired and to-be-acquired properties (Hartzog Draw
Field, Webster Field, and CCA properties) will allow us to recover a combined estimated 140
million to 185 million barrels of otherwise stranded oil. Also, these assets currently produce
almost as much oil equivalent as our divested Bakken area assets while generating substantially
more free cash flow. Our interests in CCA make up our largest oil property in the Rocky Mountain
region and are a key strategic reason we acquired Encore in 2010 to expand our successful enhanced
oil recovery strategy to a new region. The acquisition of additional assets in CCA should allow us
to benefit from economies of scale and to leverage our technical knowledge and planned CO2
transportation infrastructure. 

"On a separate note, we believe our common stock remains undervalued and, with our improved
liquidity position, we intend to continue to execute our repurchase program. Through January 11,
2013, we had repurchased approximately 20 million shares since we announced the Bakken transaction
in September 2012 to bring our total purchases under the program since its inception in October
2011 to approximately 34 million shares at an average cost of $15 per share, or $507 million.
Repurchases to date under the program effectively improve our per-share metrics by about 8.5%
through reduction of our outstanding shares. Approximately $265 million of additional repurchases
remain currently authorized under our repurchase program."

Presentation and Fourth Quarter 2012 Results Conference Call

Denbury plans to post an updated corporate presentation to its website, www.denbury.com
http://www.globenewswire.com/newsroom/ctr?d=10018129&l=12&a=www.denbury.com&u=http%3A%2F%2Fwww.denbury.com
, this morning that includes additional details on the CCA acquisition, which presentation will be
available on such website for approximately three weeks after posting.  In addition, the Company
plans to announce its estimated year-end 2012 proved oil and natural gas reserves, estimated
average annual daily oil and natural gas production rate for 2012, and estimated 2012 capital
expenditures in a news release on or about Monday, February 4, 2013. Also, Phil Rykhoek, Denbury's
President and CEO, will be presenting at the Credit Suisse Energy Summit on Wednesday, February 6,
2013, at 7:30 A.M. (Mountain) in Vail, Colorado.  Denbury plans to post the slides for the
presentation to its website on February 5, and such presentation will be webcast live and
otherwise be available on Denbury's website for approximately 30 days thereafter.

Denbury will host a conference call to review and discuss fourth quarter 2012 financial and
operating results on Thursday, February 21, 2013 at 10:00 A.M. (Central). Results will be released
before the market opens on the day of the conference call and the full text of the news release
will be available on the Company's website. Individuals who would like to participate should dial
the applicable dial-in number listed below ten minutes before the scheduled start time and provide
the confirmation number referenced below to the operator.

 What: Fourth Quarter 2012 Results Conference Call  
 Date: Thursday, February 21, 2013                  
 Time: 10:00 A.M. (Central) / 11:00 A.M. (Eastern)  
 Dial-in number: 800.230.1096                       
 International dial-in number: 612.332.0725         
 Confirmation number: 260589                        


To access a live audio webcast of the conference call, please visit the investor relations section
of the Company's website. The call will be archived on the website for at least 30 days, and a
telephonic replay will be accessible for one month, after the call by dialing 800.475.6701 or
320.365.3844 and entering confirmation number 260588.

Denbury Resources Inc. is a growing independent oil and natural gas company. The Company is the
largest combined oil and natural gas operator in both Mississippi and Montana, owns the largest
reserves of CO2 used for tertiary oil recovery east of the Mississippi River, and holds
significant operating acreage in the Rocky Mountain and Gulf Coast regions. The Company's goal is
to increase the value of acquired properties through a combination of exploitation, drilling and
proven engineering extraction practices, with its most significant emphasis relating to tertiary
oil recovery operations. For more information about Denbury, please visit www.denbury.com
http://www.globenewswire.com/newsroom/ctr?d=10018129&l=15&a=www.denbury.com&u=http%3A%2F%2Fwww.denbury.com
.

The Denbury Resources Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=11385
http://www.globenewswire.com/newsroom/ctr?d=10018129&l=16&u=http%3A%2F%2Fwww.globenewswire.com%2Fnewsroom%2Fprs%2F%3Fpkgid%3D11385


This news release contains forward-looking statements that involve risks and uncertainties
including estimated oil equivalent reserves or reserves potential, original oil in place, future
volumes recoverable with a CO2 flood, daily production volumes of the acquired assets, tax
payments on property sale proceeds, and other risks and uncertainties detailed in the Company's
filings with the Securities and Exchange Commission, including Denbury's most recent reports on
Form 10-K and Form 10-Q. These risks and uncertainties are incorporated by this reference as
though fully set forth herein. 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. The estimates of potential
reserves in this news release, comprised of proved, probable and possible reserves based on the
most recent drilling and technical data available to the Company, are more speculative than
estimates of proved reserves and are subject to greater uncertainties, and accordingly the
likelihood of recovering these reserves is subject to substantially greater risk.

CONTACT: Phil Rykhoek, President and CEO
         972.673.2000
         Mark Allen, Senior Vice President and CFO
         972.673.2000
         Jack Collins, Executive Director, Investor Relations
         972.673.2028

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