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

Denbury Resources Inc. 2009 Annual Report 5Dear Shareholders:Proved ReservesMMBOEDenbury had an exciting year in 2009. We weatheredthe economic storms of the last 12 to 18 months withoutincident, thanks to our strong balance sheet, and seizedthe opportunity to branch out by making three strategicacquisitions, which we believe will transform our future.During the year, we bought two large oil fields in our GulfCoast region, which have significant future enhanced oilrecovery (“EOR”) potential, Hastings and Conroe Fields,either of which by itself would have made 2009 a success.We went beyond the Gulf Coast and branched out into a newcore operating area with the purchase of Encore AcquisitionCompany, expanding our CO 2 EOR expertise to the RockyMountains. This acquisition, at the time of the agreement,nearly doubled our inventory of potential oil reservesrecoverable with CO 2 EOR, making us one of the largestoil-focused independents in North America.Let me briefly review our history before we discuss 2009and beyond.Our RootsDenbury was originally founded in 1990 as an “acquireand exploit” oil and natural gas company that also included asizeable oil and gas exploration effort. During the late 1990’s,the idea of enhanced oil recovery with CO 2 was discussed,but as we had no experience in implementing or operatinga CO 2 EOR project, we were uncertain how to begin. In 1999,an opportunity arose to acquire an existing CO 2 EOR flood,Little Creek Field, at a cost of approximately $12 million.This was a relatively low-risk project and we knew it wouldallow us an opportunity to gain valuable CO 2 EOR experience.The purchase of Little Creek Field started us on the pathto becoming one of the premier CO 2 EOR companies in thecountry. We subsequently purchased the CO 2 reserves atJackson Dome, the CO 2 pipeline that serviced Little Creek2007194.8 MMBOE2008250.5 MMBOE2009207.5 MMBOENatural GasOil59.8135.071.4179.114.6192.9