Denbury (DNRWW) 10-Q 10 Aug 09 2009 Q2 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
	6 Months Ended Jun. 30, 2009	Jul. 31, 2009	Dec. 31, 2008
Document And Company Information [Abstract]
Entity Registrant Name	DENBURY RESOURCES INC.
Entity Central Index Key	0000945764
Document Type	10-Q
Document Period End Date	2009-06-30
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$2,708,224,144
Entity Common Stock, Shares Outstanding		249,438,000

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets (USD $)
In Thousands	Jun. 30, 2009	Dec. 31, 2008
Current assets
Cash and cash equivalents	$59,959	$17,069
Accrued production receivable	101,325	67,805
Trade and other receivables, net of allowance of $407 and $377	60,798	80,579
Derivative assets	39,279	249,746
Total current assets	261,361	415,199
Oil and natural gas properties (using full cost accounting)
Proved	3,484,536	3,386,606
Unevaluated	192,727	235,403
CO2 properties, equipment and pipelines	1,283,135	899,542
Other	77,760	70,328
Less accumulated depletion, depreciation and impairment	(1,711,412)	(1,589,682)
Net property and equipment	3,326,746	3,002,197
Deposits on property under option or contract	0	48,917
Other assets	131,751	123,361
Goodwill	138,740	0
Total assets	3,858,598	3,589,674
Current liabilities
Accounts payable and accrued liabilities	195,904	202,633
Oil and gas production payable	76,259	85,833
Derivative liabilities	64,955	0
Deferred revenue - Genesis	4,070	4,070
Deferred tax liability	24,825	89,024
Current maturities of long-term debt	4,586	4,507
Total current liabilities	370,599	386,067
Long-term liabilities
Long-term debt - Genesis	250,653	251,047
Long-term debt	969,451	601,720
Asset retirement obligations	46,289	43,352
Deferred revenue - Genesis	17,959	19,957
Deferred tax liability	408,641	433,210
Derivative liabilities	21,372	0
Other	18,699	14,253
Total long-term liabilities	1,733,064	1,363,539
Stockholders' equity
Preferred stock, $.001 par value, 25,000,000 shares authorized, none issued and outstanding	0	0
Common stock, $.001 par value, 600,000,000 shares authorized; 249,597,135 and 248,005,874 shares issued at June 30, 2009 and December 31, 2008, respectively	249	248
Paid-in capital in excess of par	724,968	707,702
Retained earnings	1,034,038	1,139,575
Accumulated other comprehensive loss	(592)	(627)
Treasury stock, at cost, 247,680 and 446,287 shares at June 30, 2009 and December 31, 2008, respectively	(3,728)	(6,830)
Total stockholders' equity	1,754,935	1,840,068
Total liabilities and stockholders' equity	$3,858,598	$3,589,674

1_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data	Jun. 30, 2009	Dec. 31, 2008
Allowances for Trade and other receivable	$407	$377
Preferred stock, par value	0.001	0.001
Preferred stock, shares authorized (actual number)	25,000,000	25,000,000
Preferred stock, share issued	0	0
Preferred stock, share outstanding	0	0
Common stock, par value	0.001	0.001
Common stock, share authorized (actual number)	600,000,000	600,000,000
Common stock, share issued (actual number)	249,597,135	248,005,874
Treasury stock, shares (actual number)	247,680	446,287

2_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Revenues and other income
Oil, natural gas and related product sales	$211,552	$413,243	$379,621	$726,440
CO2 sales and transportation fees	2,884	3,383	6,049	6,234
Interest income and other	2,956	1,359	5,481	2,646
Total revenues	217,392	417,985	391,151	735,320
Expenses
Lease operating expenses	83,658	76,825	158,608	142,826
Production taxes and marketing expenses	8,739	18,688	15,739	33,874
Transportation expense - Genesis	2,045	1,842	4,237	3,392
CO2 operating expenses	1,095	453	2,395	1,596
General and administrative	33,135	14,811	55,790	30,816
Interest, net of amounts capitalized of $15,454, $5,545, $27,827, and $12,811, respectively	14,904	8,141	27,101	13,082
Depletion, depreciation and amortization	61,695	54,733	123,620	104,572
Commodity derivative expense	152,789	58,817	173,304	105,598
Total expenses	358,060	234,310	560,794	435,756
Income (loss) before income taxes	(140,668)	183,675	(169,643)	299,564
Income tax provision (benefit)
Current income taxes	24,127	10,844	24,300	32,080
Deferred income taxes	(77,555)	58,778	(88,406)	80,429
Net income (loss)	($87,240)	$114,053	($105,537)	$187,055
Net income (loss) per common share - basic	-0.35	0.47	-0.43	0.77
Net income (loss) per common share - diluted	-0.35	0.45	-0.43	0.74
Weighted average common shares outstanding
Basic	246,084	243,623	245,830	243,189
Diluted	246,084	252,401	245,830	252,603

3_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Statements of Operations (Parenthetical) (USD $)
In Thousands	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Interest capitalized	$15,454	$5,545	$27,827	$12,811

4_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Cash flow from operating activities:
Net income (loss)	($105,537)	$187,055
Adjustments needed to reconcile to net cash flow provided by operations:
Depletion, depreciation and amortization	123,620	104,572
Deferred income taxes	(88,406)	80,429
Deferred revenue - Genesis	(1,998)	(2,182)
Stock-based compensation	16,566	7,385
Non-cash fair value derivative adjustments	301,197	69,003
Founder's retirement compensation	6,350	0
Other	(428)	(396)
Changes in assets and liabilities related to operations:
Accrued production receivable	(33,520)	(44,359)
Trade and other receivables	18,897	(46,879)
Other assets	(21)	269
Accounts payable and accrued liabilities	33,026	(10,442)
Oil and gas production payable	(9,574)	27,065
Other liabilities	617	(1,191)
Net cash provided by operating activities	260,789	370,329
Cash flow used for investing activities:
Oil and natural gas capital expenditures	(215,978)	(303,654)
Acquisitions of oil and natural gas properties	(196,274)	(2,357)
Distributions from Genesis	5,115	2,725
CO2 capital expenditures, including pipelines	(399,406)	(110,198)
Net purchases of other assets	(8,312)	(16,931)
Net proceeds from sales of oil and gas properties and equipment	240,087	49,029
Other	(72)	(686)
Net cash used for investing activities	(574,840)	(382,072)
Cash flow from financing activities:
Bank repayments	(505,000)	(222,000)
Bank borrowings	475,000	72,000
Income tax benefit from equity awards	938	14,143
Pipeline financing - Genesis	171	225,248
Issuance of subordinated debt	389,827	0
Issuance of common stock	7,257	9,710
Costs of debt financing	(10,080)	0
Other	(1,172)	(456)
Net cash provided by financing activities	356,941	98,645
Net increase in cash and cash equivalents	42,890	86,902
Cash and cash equivalents at beginning of period	17,069	60,107
Cash and cash equivalents at end of period	59,959	147,009
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	5,837	10,186
Cash paid (refunded) for income taxes	(14,416)	58,629
Interest capitalized	27,827	12,811
Decrease in accrual for capital expenditures	($41,612)	($5,999)

5_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Statements of Comprehensive Operations (USD $)
In Thousands	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Net income (loss)	($87,240)	$114,053	($105,537)	$187,055
Other comprehensive income, net of income tax:
Change in fair value of interest rate lock derivative contracts designated as a hedge, net of tax of $301 and $49, respectively	0	492	0	12
Interest rate lock derivative contracts reclassified to income, net of taxes of $10, $551, $21 and $562, respectively	17	900	35	918
Comprehensive income (loss)	($87,223)	$115,445	($105,502)	$187,985

6_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Statements of Comprehensive Operations (Parenthetical) (USD $)
In Thousands	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Tax for Change in fair value of interest rate lock derivative contracts designated as a hedge	$0	$301	$0	$49
Tax for Interest rate lock derivative contracts reclassified to income	$10	$551	$21	$562

Basis of Presentation

Basis of Presentation
	6 Months Ended Jun. 30, 2009 USD / shares
Basis of Presentation [Abstract]
Basis of Presentation	Note 1. Basis of Presentation Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of Denbury Resources Inc. and its subsidiaries have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. Unless indicated otherwise or the context requires, the terms we, our, us, Denbury or Company refer to Denbury Resources Inc. and its subsidiaries. These financial statements and the notes thereto should be read in conjunction with our Annual Report on Form 10-K for the year ended December31, 2008. Any capitalized terms used but not defined in these Notes to Unaudited Condensed Consolidated Financial Statements have the same meaning given to them in the Form 10-K. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end and the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal year. In managements opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments (of a normal recurring nature) necessary to present fairly the consolidated financial position of Denbury as of June30, 2009, the consolidated results of its operations for the three and six month periods ended June30, 2009 and 2008 and cash flows for the six months ended June 30, 2009 and 2008. Certain prior period items have been reclassified to make the classification consistent with the classification in the most recent quarter. We have evaluated events that occurred subsequent to June30, 2009 through August10, 2009, the financial statement issuance date. Net Income (Loss) Per Common Share Basic net income (loss)per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is calculated in the same manner but also considers the impact on net income and common shares for the potential dilution from stock options, stock appreciation rights (SARs), non-vested restricted stock and any other convertible securities outstanding. For the three and six month periods ended June30, 2009 and 2008, there were no adjustments to net income (loss)for purposes of calculating diluted net income (loss)per common share. The following is a reconciliation of the weighted average common shares used in the basic and diluted net income (loss)per common share calculations for the three and six month periods ended June30, 2009 and 2008. Three Months Ended Six Months Ended June 30, June 30, In thousands 2009 2008 2009 2008 Weighted average common shares basic 246,084 243,623 245,830 243,189 Potentially dilutive securities: Stock options and SARs 7,389 8,043 Restricted stock 1,389 1,371 Weighted average common s

Acquisitions and Divestitures

Acquisitions and Divestitures
	6 Months Ended Jun. 30, 2009 USD / shares
Acquisitions and Divestitures [Abstract]
Acquisitions and Divestitures	Note 2. Acquisitions and Divestitures Hastings Field Acquisition During November2006, we entered into an agreement with a subsidiary of Venoco, Inc., that gave us an option to purchase their interest in Hastings Field, a strategically significant potential tertiary flood candidate located near Houston, Texas. We exercised the purchase option prior to September2008, and closed the acquisition during February2009. As consideration for the option agreement, during 2006 through 2008, we made cash payments totaling $50million which we recorded as a deposit. The purchase price of approximately $196million, which was paid in cash, was determined as of January1, 2009 (the effective date) with closing on February2, 2009. The deposit plus purchase price, adjusted for interim net cash flows between the effective date and closing date of the acquisition (including minor purchase price adjustments), totaled approximately $248.2 million. Under the terms of the agreement, Venoco, Inc., the seller, retained a 2% override and a reversionary interest of approximately 25% following payout, as defined in the option agreement. The Hastings Field proved reserves were not included in the Companys year-end 2008 proved reserves. We plan to commence flooding the field with CO2 beginning in 2011, after completion of our Green Pipeline currently under construction and construction of field recycling facilities. Under the agreement, we are required to make aggregate net cumulative capital expenditures in this field of approximately $179million over the next six years cumulating as follows: $26.8million by December31, 2010, $71.5million by December31, 2011, $107.2million by December31, 2012, $142.9million by December31, 2013, and $178.7million by December31, 2014. If we fail to spend the required amounts by the due dates, we are required to make a cash payment equal to 10% of the cumulative shortfall at each applicable date. Further, we are committed to inject at least an average of 50 MMcf/day of CO2 (total of purchased and recycled) in the West Hastings Unit for the 90day period prior to January1, 2013. If such injections do not occur, we must either (1)relinquish our rights to initiate (or continue) tertiary operations and reassign to Venoco all assets previously purchased for the value of such assets at that time based upon the discounted value of the fields proved reserves using a 20% discount rate, or (2)make an additional payment of $20million in January2013, less any payments made for failure to meet the capital spending requirements as of December31, 2012, and a $30million payment for each subsequent year (less amounts paid for capital expenditure shortfalls) until the CO2 injection rate in the Hastings Field equals or exceeds the minimum required injection rate. This acquisition of Hastings Field qualifies as a business under SFAS No.141(R), Business Combinations. As such, we estimated the fair value of this property as of the acquisition date, as defined in SFAS No.141(R) to be the date on which the acquirer obtains control of the acquiree, which for this acquisition is February2, 2009 (the closing date). SFAS No.157, Fair Value Measur

Asset Retirement Obligations

Asset Retirement Obligations
	6 Months Ended Jun. 30, 2009 USD / shares
Asset Retirement Obligations [Abstract]
Asset Retirement Obligations	Note 3. Asset Retirement Obligations In general, our future asset retirement obligations relate to future costs associated with plugging and abandonment of our oil, natural gas and CO2 wells, removal of equipment and facilities from leased acreage and land restoration. The fair value of a liability for an asset retirement is recorded in the period in which it is incurred, discounted to its present value using our credit adjusted risk-free interest rate, and a corresponding amount capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted each period, and the capitalized cost is depreciated over the useful life of the related asset. The following table summarizes the changes in our asset retirement obligations for the six months ended June30, 2009. Six Months Ended In thousands June 30, 2009 Balance, beginning of period $ 45,064 Liabilities incurred and assumed during period 2,638 Revisions in estimated retirement obligations 857 Liabilities settled during period (1,511 ) Accretion expense 1,637 Sales (838 ) Balance, end of period $ 47,847 At June30, 2009, $1.6million of our asset retirement obligation was classified in Accounts payable and accrued liabilities under current liabilities in our Unaudited Condensed Consolidated Balance Sheets. Liabilities incurred during the six month period ended June30, 2009 are primarily related to the Hastings Field acquisition and sales during the period are primarily related to the Barnett Shale natural gas assets (see Note 2, Acquisitions and Divestitures). We hold cash and liquid investments in escrow accounts that are legally restricted for certain of our asset retirement obligations. The balances of these escrow accounts were $7.4million at both June30, 2009 and December31, 2008 and are included in Other assets in our Unaudited Condensed Consolidated Balance Sheets.

Notes Payable and Long Term Ind

Notes Payable and Long Term Indebtedness
	6 Months Ended Jun. 30, 2009 USD / shares
Notes Payable And Long Term Indebtedness [Abstract]
Notes Payable and Long-term Indebtedness	Note 4. Notes Payable and Long-Term Indebtedness June 30, December 31, In thousands 2009 2008 9.75% Senior Subordinated Notes due 2016 $ 426,350 $ Discount on Senior Subordinated Notes due 2016 (28,566 ) 7.5% Senior Subordinated Notes due 2015 300,000 300,000 Premium on Senior Subordinated Notes due 2015 556 599 7.5% Senior Subordinated Notes due 2013 225,000 225,000 Discount on Senior Subordinated Notes due 2013 (728 ) (826 ) NEJD financing Genesis 172,163 173,618 Free State financing Genesis 78,260 76,634 Senior bank loan 45,000 75,000 Capital lease obligations Genesis 4,171 4,544 Capital lease obligations 2,484 2,705 Total 1,224,690 857,274 Less current obligations 4,586 4,507 Long-term debt and capital lease obligations $ 1,220,104 $ 852,767 Issuance of 9.75% Senior Subordinated Notes due 2016 On February13, 2009, we issued $420million of 9.75% Senior Subordinated Notes due 2016 (2016 Notes). The 2016 Notes, which carry a coupon rate of 9.75%, were sold at a discount (92.816% of par), which equates to an effective yield to maturity of approximately 11.25%. The net proceeds of $381.4million were used to repay most of our then-outstanding borrowings under our bank credit facility, which increased from the December31, 2008 balance, primarily associated with the funding of the Hastings Field acquisition (see Note 2, Acquisitions and Divestitures). In conjunction with this debt offering we amended our bank credit facility in early February2009, which, among other things, allowed us to issue these senior subordinated notes. In June2009, we issued an additional $6.35million of the 2016 Notes to our founder, Gareth Roberts, as part of a Founders Retirement Agreement. In connection with this issuance, we recorded compensation expense of $6.35million in General and administrative expense in our Unaudited Condensed Consolidated Statement of Operations for the three and six months ended June30, 2009. The 2016 Notes mature on March1, 2016, and interest on the 2016 Notes is payable March 1 and September 1 of each year beginning on September1, 2009. We may redeem the 2016 Notes in whole or in part at our option beginning March1, 2013, at the following redemption prices: 104.875% after March1, 2013, 102.4375% after March1, 2014, and 100%, after March1, 2015. In addition, we may at our option, redeem up to an aggregate of 35% of the 2016 Notes before March1, 2012 at a price of 109.75%. The indenture contains certain restrictions on our ability to incur additional debt, pay dividends on our common stock, make investments, create liens on our assets, engage in transactions with our affiliates, transfer or sell assets, consolidate or merge, or sell substantially all of our assets. The 2016 Notes are not subject to any sinking fund requirements. All of our significant subsidiaries fully and unconditionally guarantee this debt. Senior Bank Loan To clarify that Denbury entities

Related Party Transactions Gene

Related Party Transactions Genesis
	6 Months Ended Jun. 30, 2009 USD / shares
Related Party Transactions [Abstract]
Related Party Transactions - Genesis	Note 5. Related Party Transactions Genesis Interest in and Transactions with Genesis Denburys subsidiary, Genesis Energy, LLC, is the general partner of, and together with Denburys other subsidiaries, owns an aggregate 12% interest in Genesis Energy, L.P. (Genesis), a publicly traded master limited partnership. Genesis business is focused on the mid-stream segment of the oil and natural gas industry in the Gulf Coast area of the United States, and its activities include gathering, marketing and transportation of crude oil and natural gas, refinery services, wholesale marketing of CO2, and supply and logistic services. We account for our 12% ownership in Genesis under the equity method of accounting as we have significant influence over the limited partnership; however, our control is limited under the limited partnership agreement and therefore we do not consolidate Genesis. Our investment in Genesis is included in Other assets in our Unaudited Condensed Consolidated Balance Sheets. Denbury received cash distributions from Genesis of $5.1million and $2.8million during the six months ended June30, 2009 and 2008, respectively. We also received $0.1million during both the six months ended June30, 2009 and 2008 as directors fees for certain officers of Denbury that are board members of Genesis. There are no guarantees by Denbury or any of its other subsidiaries of the debt of Genesis or of Genesis Energy, LLC. At June30, 2009, the balance of our equity investment in Genesis was $78.9million. Based on quoted market values of Genesis publicly traded limited partnership units at June30, 2009, the estimated market value of our publicly traded common units of Genesis was approximately $51.2 million. Since the general partner units we hold are not publicly traded, there is not a readily available market value for these units. Due to the capital market conditions during the latter part of 2008 and in 2009, we have reviewed the value of our investment in Genesis as of June30, 2009 for impairment. Based upon this review, which considered the current and future expected cash flows of Genesis, we do not believe the investment balance is impaired. Incentive Compensation Agreement In late December2008, our subsidiary, Genesis Energy, LLC, entered into agreements with three members of Genesis management, for the purpose of providing them incentive compensation, which agreements make them Class B Members in Genesis Energy, LLC. The compensation agreements provide Genesis management with the ability to earn up to an approximate aggregate 17% interest in the incentive distributions that Genesis Energy, LLC receives (commencing in 2009) from Genesis. The percentage interest in the incentive distribution earned in any given period can vary based upon the Cash Available Before Reserves (CABR) per unit as generated by Genesis (excluding any transactions between Genesis and the Company) over each of the three individuals base amount of CABR per unit as stated in their compensation agreement, subject to vesting and other requirements. As the amount of CABR per unit increases, the members share of the incentive distributions increases, up to a

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities
	6 Months Ended Jun. 30, 2009 USD / shares
Derivative Instruments and Hedging Activities [Abstract]
Derivative Instruments and Hedging Activities	Note 6. Derivative Instruments and Hedging Activities Oil and Natural Gas Derivative Contracts We do not apply hedge accounting treatment to our oil and natural gas derivative contracts and therefore the changes in the fair values of these instruments are recognized in income in the period of change. These fair value changes, along with the cash settlements of expired contracts are shown under Commodity derivative expense in our Unaudited Condensed Consolidated Statements of Operations. From time to time, we enter into various oil and natural gas derivative contracts to provide an economic hedge of our exposure to commodity price risk associated with anticipated future oil and natural gas production. We do not hold or issue derivative financial instruments for trading purposes. These contracts have consisted of price floors, collars and fixed price swaps. As a result of the recent economic conditions, and in order to protect our liquidity in the event that commodity prices decline, during early October2008 we purchased oil derivative contracts for 2009 with a floor price of $75 per Bbl and a ceiling price of $115 per Bbl for total consideration of $15.5million. In March2009, we entered into crude oil swap contracts covering 25,000 Bbls/d for the first quarter of 2010 at a weighted average price of $51.85 per barrel, and crude oil collar contracts covering 25,000 Bbls/d for the second quarter of 2010 with a weighted average floor price of $50.00 per Bbl and a weighted average ceiling price of $74.60 per Bbl. Also during March2009, we entered into natural gas derivative swap contracts covering 55,000 MMBtu/d for 2010 at a weighted average price of $5.66 per MMBtu, and 40,000 MMBtu/d for 2011 at a weighted average price of $6.21 per MMBtu. In May2009, we entered into crude oil collar contracts covering 25,000 Bbls/d for the third quarter of 2010 with a weighted average floor price of $57.50 per Bbl and a weighted average ceiling price of $80.34 per Bbl. In conjunction with the sale of our Barnett Shale assets (see Note 2, Acquisitions and Divestitures), we transferred a portion of our 2010 and 2011 natural gas derivative swap contracts to the purchaser, Talon Oil and Gas LLC. At June30, 2009, we retained natural gas derivative swap contracts covering 42,000 MMBtu/d for 2010 at an average price of $5.67 per MMBtu and 29,000 MMBtu/d for 2011 at a weighted average price of $6.23 per MMBtu. At June30, 2009, our oil and natural gas derivative contracts were recorded at their fair value, which was a net liability of $47.0million. All of the mark-to-market valuations used for our oil and natural gas derivatives are provided by external sources and are based on prices that are actively quoted. We manage and control market and counterparty credit risk through established internal control procedures that are reviewed on an ongoing basis. We attempt to minimize credit risk exposure to counterparties through formal credit policies, monitoring procedures and diversification. All of our derivative contracts are with parties that are lenders under our Senior Bank Loan. The following is a summary of Commodity derivative expense include

Fair Value Measurements

Fair Value Measurements
	6 Months Ended Jun. 30, 2009 USD / shares
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 7. Fair Value Measurements As defined in SFAS No.157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. We are able to classify fair value balances based on the observability of those inputs. SFAS No.157 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the fair value hierarchy defined by SFAS No.157 are as follows: Level 1 Quoted prices in active markets for identical assets or liabilities as of the reporting date. During 2008 we had no level 1 recurring measurements. Level 2 Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange-traded oil and natural gas derivatives such as over-the-counter swaps. We have included an estimate of nonperformance risk in the fair value measurement of our oil and natural gas derivative contracts as required by SFAS No.157. We have measured nonperformance risk based upon credit default swaps or credit spreads. At both June30, 2009 and December31, 2008, the fair value of our oil and natural gas derivative contracts was reduced by $3.7million for estimated nonperformance risk. Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in managements best estimate of fair value. The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fai

Condensed Consolidating Financi

Condensed Consolidating Financial Information
	6 Months Ended Jun. 30, 2009 USD / shares
Condensed Consolidating Financial Information [Abstract]
Condensed Consolidating Financial Information	Note 8. Condensed Consolidating Financial Information Our subordinated debt is fully and unconditionally guaranteed jointly and severally by all of Denbury Resources Inc.s subsidiaries other than minor subsidiaries, except that with respect to our $225million of 7.5% Senior Subordinated Notes due 2013, Denbury Resources Inc. and Denbury Onshore, LLC are co-obligors. Except as noted in the foregoing sentence, Denbury Resources Inc. is the sole issuer and Denbury Onshore, LLC is a subsidiary guarantor. The results of our equity interest in Genesis are reflected through the equity method by one of our subsidiaries, Denbury Gathering Marketing. Each subsidiary guarantor and the subsidiary co-obligor are 100% owned, directly or indirectly, by Denbury Resources Inc. The following is condensed consolidating financial information for Denbury Resources Inc., Denbury Onshore, LLC, and subsidiary guarantors: Condensed Consolidating Balance Sheets June 30, 2009 Denbury Denbury Resources Inc. Onshore, LLC Denbury (Parent and Co- (Issuer and Co- Guarantor Resources Inc. In thousands Obligor) Obligor) Subsidiaries Eliminations Consolidated Assets Current assets $ 453,561 $ 256,901 $ 17,236 $ (466,337 ) $ 261,361 Property and equipment 3,215,096 111,650 3,326,746 Investment in subsidiaries (equity method) 1,268,178 1,212,347 (2,480,525 ) Other assets 747,393 204,921 56,205 (738,028 ) 270,491 Total assets $ 2,469,132 $ 3,676,918 $ 1,397,438 $ (3,684,890 ) $ 3,858,598 Liabilities and Stockholders Equity Current liabilities $ 15,857 $ 698,317 $ 122,762 $ (466,337 ) $ 370,599 Long-term liabilities 698,340 1,766,254 6,498 (738,028 ) 1,733,064 Stockholders equity 1,754,935 1,212,347 1,268,178 (2,480,525 ) 1,754,935 Total liabilities and stockholders equity $ 2,469,132 $ 3,676,918 $ 1,397,438 $ (3,684,890 ) $ 3,858,598 December 31, 2008 Denbury Denbury Resources Inc. Onshore, LLC Denbury (Parent and Co- (Issuer and Co- Guarantor Resources Inc. In thousands Obligor) Obligor) Subsidiaries Eliminations Consolidated Assets Current assets $ 458,051 $ 408,940 $ 14,992 $ (466,784 ) $ 415,199 Property and equipment 2,973,947 28,250 3,002,197 Investment in subsidiaries (equity method) 1,371,347 1,313,656 (2,685,003 ) Other assets 312,239 114,372 56,002 (310,335 ) 172,278

Subsequent Event

Subsequent Event
	6 Months Ended Jun. 30, 2009 USD / shares
Subsequent Event [Abstract]
Subsequent Event	Note 9. Subsequent Event On July15, 2009, we closed the remaining balance of the sale of 60% of our Barnett Shale natural gas assets (see Note 2, Acquisitions and Divestitures). Net proceeds from the second closing were approximately $62.3million, bringing total net proceeds of the sale to approximately $259.8million (after closing adjustments and net of $8.1million for natural gas swaps transferred in the sale). We did not record any gain or loss on the sale in accordance with the full cost method of accounting.