18 <strong>Denbury</strong> <strong>Resources</strong> Inc. <strong>2009</strong> <strong>Annual</strong> <strong>Report</strong>Oil and Gas Acreage, Productive Wells, and Drilling ActivityIn the data below, “gross” represents the total acres or wells in which we own a working interest and “net” representsthe gross acres or wells multiplied by <strong>Denbury</strong>’s working interest percentage. For the wells that produce both oil andgas, the well is typically classified as an oil or natural gas well based on the ratio of oil to gas production.Oil and Gas AcreageThe following table sets forth <strong>Denbury</strong>’s acreage position at December 31, <strong>2009</strong>:Developed Undeveloped TotalGross Net Gross Net Gross NetMississippi 153,691 110,200 248,814 33,371 402,505 143,571Louisiana 36,029 34,322 4,570 3,891 40,599 38,213Texas 41,227 38,853 5,964 2,553 47,191 41,406Alabama 19,893 15,397 69,206 12,351 89,099 27,748Other 6,853 816 16,543 3,036 23,396 3,852Total 257,693 199,588 345,097 55,202 602,790 254,790<strong>Denbury</strong>’s net undeveloped acreage that is subject to expiration over the next three years, if not renewed, isapproximately 10% in 2010, 54% in 2011 and 6% in 2012.Productive WellsThe following table sets forth our gross and net productive oil and natural gas wells at December 31, <strong>2009</strong>:Producing NaturalProducing Oil Wells Gas Wells TotalGross Net Gross Net Gross NetOperated Wells:Mississippi 689 664.4 216 197.8 905 862.2Louisiana 34 26.3 9 9.0 43 35.3Texas 248 231.2 38 34.5 286 265.7Alabama 170 135.9 5 3.1 175 139.0Total 1,141 1,057.8 268 244.4 1,409 1,302.2Non-Operated Wells:Mississippi 36 2.2 230 3.8 266 6.0Louisiana — — 1 — 1 —Texas 6 6.0 — — 6 6.0Alabama — — 3 0.7 3 0.7Other 32 0.6 — — 32 0.6Total 74 8.8 234 4.5 308 13.3Total Wells:Mississippi 725 666.6 446 201.6 1,171 868.2Louisiana 34 26.3 10 9.0 44 35.3Texas 254 237.2 38 34.5 292 271.7Alabama 170 135.9 8 3.8 178 139.7Other 32 0.6 — — 32 0.6Total 1,215 1,066.6 502 248.9 1,717 1,315.5Form 10-K Part I
<strong>Denbury</strong> <strong>Resources</strong> Inc. <strong>2009</strong> <strong>Annual</strong> <strong>Report</strong> 19Drilling ActivityThe following table sets forth the results of our drilling activities over the last three years:Year Ended December 31,<strong>2009</strong> 2008 2007Gross Net Gross Net Gross NetExploratory Wells: (1)Productive (2) 1 1.0 — — 9 6.2Non-productive (3) — — 1 1.0 4 3.4Development Wells: (1)Productive (2) 23 16.6 102 98.3 101 96.8Non-productive (3)(4) — — 1 0.7 — —Total 24 17.6 104 100.0 114 106.4(1) An exploratory well is a well drilled either in search of a new, as yet undiscovered, oil and natural gas reservoir or to greatly extend the known limits of a previouslydiscovered reservoir. A development well is a well drilled within the presently proved productive area of an oil or natural gas reservoir, as indicated by reasonableinterpretation of available data, with the objective of completing in that reservoir.(2) A productive well is an exploratory or development well found to be capable of producing either oil or natural gas in sufficient quantities to justify completion as anoil or natural gas well.(3) A nonproductive well is an exploratory or development well that is not a producing well.(4) During <strong>2009</strong>, 2008 and 2007 an additional 20, 33 and 23, wells, respectively, were drilled for water or CO 2 injection purposes.Production and Unit PricesInformation regarding average production rates, unit sale prices and unit costs per BOE are set forth under“Management’s Discussion and Analysis of Financial Condition and Results of Operations – Operating Results”included herein.Title to PropertiesCustomarily in the oil and natural gas industry, only a perfunctory title examination is conducted at the time propertiesbelieved to be suitable for drilling operations are first acquired. Prior to commencement of drilling operations, athorough drill site title examination is normally conducted, and curative work is performed with respect to significantdefects. During acquisitions, title reviews are performed on all properties; however, formal title opinions are obtainedon only the higher value properties. We believe that we have good title to our oil and natural gas properties, some ofwhich are subject to minor encumbrances, easements and restrictions.Geographic SegmentsAll of our operations are in the United States.Significant Oil and Gas Purchasers and Product MarketingOil and gas sales are made on a day-to-day basis under short-term contracts at the current area market price. Theloss of any single purchaser would not be expected to have a material adverse effect upon our operations; however, theloss of a large single purchaser could potentially reduce the competition for our oil and natural gas production, which inturn could negatively impact the prices we receive. For the year ended December 31, <strong>2009</strong>, two purchasers accountedfor 10% or more of our oil and natural gas revenues: Marathon Petroleum Company LLC (52%) and Hunt Crude OilSupply Co. (21%). For the year ended December 31, 2008, we had three significant purchasers that each accounted for10% or more of our oil and natural gas revenues: Marathon Petroleum Company LLC (49%), Hunt Crude Oil Supply Co.(20%) and Crosstex Energy Field Services Inc. (14%). For the year ended December 31, 2007, three purchasers eachaccounted for 10% or more of our oil and natural gas revenues: Marathon Petroleum Company LLC (43%), Hunt CrudeOil Supply Co. (19%) and Crosstex Energy Field Services Inc. (16%).Our ability to market oil and natural gas depends on many factors beyond our control, including the extent ofdomestic production and imports of oil and gas, the proximity of our gas production to pipelines, the available capacityin such pipelines, the demand for oil and natural gas, the effects of weather, and the effects of state and federalForm 10-K Part I
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