Interactive 2009 Annual Report (PDF 7.56 MB) - Denbury Resources ...

Denbury Resources Inc. 2009 Annual Report 27we must either have an oil production response fromCO 2 injections or the field must be analogous to anotherproducing tertiary oil field in the same area.The main features of our CO 2 EOR program are lowcost reserve additions and steady production growth.We estimate that in addition to our 135 MMBbls ofproved oil reserves from CO 2 EOR operations, our ninephases contain 368 MMBbls of potential reserves fora total of approximately 503 MMBbls in the Gulf Coastregion. We estimate that proved CO 2 reserves at JacksonDome are nearly sufficient to recover these proved andpotential oil reserves. Our business model provides forthe development of these additional potential CO 2 EORreserves over the next several years, and we expect ourtertiary oil production to increase over that period of timeby an average of 10% to 20% per year. This forecast isdependent, however, on our capability to invest capitaldollars in our projects which is highly dependent on thelevel of commodity prices.We believe thatwe offer industrialemitters themost practicaland economicalway to sequesterCO 2, as we canpermanentlystore the CO 2undergroundin depletedoil reservoirs.Anthropogenic CO 2 VolumesOur strategy is to augment our natural CO 2 volumeswith anthropogenic volumes from power plants or otherindustrial plants. As we discussed earlier, our ability todo this is largely dependent on the construction of newgasification facilities, or CO 2 capture facilities at existingsites. The timing of this construction is uncertain, but weanticipate that it is at least three or four years away. Thistiming could be ideal for us, as it would allow us to expandour CO 2 EOR operations beyond our current phases.We believe that we offer industrial emitters the mostpractical and economical way to sequester CO 2 , as we canpermanently store the CO 2 underground in depleted oil