Denbury (DNRWW) 10-Q 9 Nov 09 2009 Q3 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
	9 Months Ended Sep. 30, 2009	Oct. 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	2009-09-30
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		249,823,000

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets (USD $)
In Thousands	Sep. 30, 2009	Dec. 31, 2008
Current assets
Cash and cash equivalents	$21,689	$17,069
Accrued production receivable	91,477	67,805
Trade and other receivables, net of allowance of $409 and $377	77,454	80,579
Derivative assets	17,900	249,746
Current deferred tax assets	5,637	0
Total current assets	214,157	415,199
Oil and natural gas properties (using full cost accounting)
Proved	3,468,060	3,386,606
Unevaluated	213,170	235,403
CO2 properties, equipment and pipelines	1,422,981	899,542
Other	80,015	70,328
Less accumulated depletion, depreciation and impairment	(1,763,902)	(1,589,682)
Net property and equipment	3,420,324	3,002,197
Deposits on property under option or contract	0	48,917
Other assets	52,343	43,357
Goodwill	138,830	0
Investment in Genesis	77,606	80,004
Total assets	3,903,260	3,589,674
Current liabilities
Accounts payable and accrued liabilities	188,420	202,633
Oil and gas production payable	86,038	85,833
Derivative liabilities	74,614	0
Deferred revenue - Genesis	4,070	4,070
Deferred tax liability	0	89,024
Current maturities of long-term debt	4,698	4,507
Total current liabilities	357,840	386,067
Long-term liabilities
Long-term debt - Genesis	250,681	251,047
Long-term debt	945,380	601,720
Asset retirement obligations	47,149	43,352
Deferred revenue - Genesis	16,796	19,957
Deferred tax liability	458,940	433,210
Derivative liabilities	12,496	0
Other	23,319	14,253
Total long-term liabilities	1,754,761	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; 250,082,892 and 248,005,874 shares issued at September 30, 2009 and December 31, 2008, respectively	250	248
Paid-in capital in excess of par	734,398	707,702
Retained earnings	1,060,923	1,139,575
Accumulated other comprehensive loss	(575)	(627)
Treasury stock, at cost, 278,986 and 446,287 shares at September 30, 2009 and December 31, 2008, respectively	(4,337)	(6,830)
Total stockholders' equity	1,790,659	1,840,068
Total liabilities and stockholders' equity	$3,903,260	$3,589,674

1_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data	Sep. 30, 2009	Dec. 31, 2008
Current assets
Allowances for Trade and other receivable	$409	$377
Stockholders' equity
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)	250,082,892	248,005,874
Treasury stock, shares (actual number)	278,986	446,287

2_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Revenues and other income
Oil, natural gas and related product sales	$221,321	$402,108	$600,942	$1,128,548
CO2 sales and transportation fees	3,659	3,471	9,708	9,705
Interest income and other	434	1,895	1,948	3,525
Total revenues	225,414	407,474	612,598	1,141,778
Expenses
Lease operating expenses	83,300	85,308	241,908	228,134
Production taxes and marketing expenses	8,555	17,104	24,294	50,978
Transportation expense - Genesis	1,906	2,231	6,143	5,623
CO2 operating expenses	1,047	1,240	3,442	2,836
General and administrative	24,038	15,005	79,828	45,821
Interest, net of amounts capitalized of $20,872, $6,713, $48,699, and $19,524, respectively	9,859	10,906	36,960	23,988
Depletion, depreciation and amortization	53,525	56,324	177,145	160,896
Commodity derivative expense (income)	3,757	(62,007)	177,061	43,591
Abandoned acquisition costs	0	30,426	0	30,426
Total expenses	185,987	156,537	746,781	592,293
Equity in net income of Genesis	1,835	2,780	5,802	3,796
Income (loss) before income taxes	41,262	253,717	(128,381)	553,281
Income tax provision (benefit)
Current income taxes	(6,160)	12,689	18,140	44,769
Deferred income taxes	20,537	83,480	(67,869)	163,909
Net income (loss)	$26,885	$157,548	($78,652)	$344,603
Net income (loss) per common share - basic	0.11	0.64	-0.32	1.41
Net income (loss) per common share - diluted	0.11	0.63	-0.32	1.36
Weighted average common shares outstanding
Basic	246,795	244,426	246,156	243,604
Diluted	252,189	251,831	246,156	252,708

3_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Statements of Operations (Parenthetical) (USD $)
In Thousands	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Expenses
Interest capitalized	$20,872	$6,713	$48,699	$19,524

4_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash flow from operating activities:
Net income (loss)	($78,652)	$344,603
Adjustments needed to reconcile to net cash flow provided by operations:
Depletion, depreciation and amortization	177,145	160,896
Deferred income taxes	(67,869)	163,909
Deferred revenue - Genesis	(3,161)	(3,383)
Stock-based compensation	25,450	10,979
Non-cash fair value derivative adjustments	323,510	(17,048)
Founder's retirement compensation	6,350	0
Other	5,601	(2,921)
Changes in assets and liabilities related to operations:
Accrued production receivable	(23,672)	(10,620)
Trade and other receivables	2,609	(46,330)
Other assets	(210)	188
Accounts payable and accrued liabilities	38,757	9,069
Oil and gas production payable	205	24,385
Other liabilities	371	(956)
Net cash provided by operating activities	406,434	632,771
Cash flow used for investing activities:
Oil and natural gas capital expenditures	(289,815)	(436,114)
Acquisitions of oil and natural gas properties	(197,534)	(4,262)
CO2 capital expenditures, including pipelines	(543,536)	(211,917)
Net purchases of other assets	(10,967)	(20,703)
Net proceeds from sales of oil and gas properties and equipment	303,450	48,948
Other	2,012	6,371
Net cash used for investing activities	(736,390)	(617,677)
Cash flow from financing activities:
Bank repayments	(606,000)	(222,000)
Bank borrowings	551,000	72,000
Income tax benefit from equity awards	2,713	17,362
Pipeline financing - Genesis	493	225,311
Issuance of subordinated debt	389,827	0
Issuance of common stock	10,595	11,687
Costs of debt financing	(10,080)	0
Other	(3,972)	(4,251)
Net cash provided by financing activities	334,576	100,109
Net increase in cash and cash equivalents	4,620	115,203
Cash and cash equivalents at beginning of period	17,069	60,107
Cash and cash equivalents at end of period	21,689	175,310
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	14,114	10,435
Cash paid (refunded) for income taxes	(4,894)	70,349
Interest capitalized	48,699	19,524
Increase (decrease) in liabilities for capital expenditures	($54,830)	$24,273

5_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Statements of Comprehensive Operations (USD $)
In Thousands	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Net income (loss)	$26,885	$157,548	($78,652)	$344,603
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 $-, $-, $- and $49, respectively	0	0	0	12
Interest rate lock derivative contracts reclassified to income, net of taxes of $11, $11, $32 and $573, respectively	17	16	52	934
Comprehensive income (loss)	$26,902	$157,564	($78,600)	$345,549

6_Unaudited Condensed Consolida

Unaudited Condensed Consolidated Statements of Comprehensive Operations (Parenthetical) (USD $)
In Thousands	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Other comprehensive income, net of income tax:
Tax for Change in fair value of interest rate lock derivative contracts designated as a hedge	$0	$0	$0	$49
Tax for Interest rate lock derivative contracts reclassified to income	$11	$11	$32	$573

Basis of Presentation

Basis of Presentation
	9 Months Ended Sep. 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 September30, 2009, the consolidated results of its operations for the three and nine month periods ended September30, 2009 and 2008 and cash flows for the nine months ended September30, 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 September30, 2009 through November9, 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 (loss)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 nine month periods ended September30, 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 nine month periods ended September30, 2009 and 2008: Three Months Ended Nine Months Ended September 30, September 30, In thousands 2009 2008 2009 2008 Weighted average common shares basic 246,795 244,426 246,156 243,604 Potentially dilutive securities: Stock options and SARs 4,006 6,035 7,439 Restricted stock 1,388 1,370

Acquisitions and Divestitures

Acquisitions and Divestitures
	9 Months Ended Sep. 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 final closing adjustments were completed during the three months ended September30, 2009. The final closing price, adjusted for interim net cash flows between the effective date and closing date of the acquisition (including minor purchase price adjustments), totaled $246.8million. 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 prior to December31, 2014 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 FASC Business Combinations topic. As such, we estimated the fair value of this property as of the acquisition date, as defined in the FASC is the date on which the acquirer obtains control of the acquiree, which for this acquisition is February2, 2009 (the closin

Asset Retirement Obligations

Asset Retirement Obligations
	9 Months Ended Sep. 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 nine months ended September30, 2009. Nine Months Ended In thousands September 30, 2009 Balance, beginning of period $ 45,064 Liabilities incurred and assumed during period 3,085 Revisions in estimated retirement obligations 1,640 Liabilities settled during period (2,930 ) Accretion expense 2,460 Sales (1,008 ) Balance, end of period $ 48,311 At September30, 2009 and December31, 2008, $1.2million and $1.7million, respectively, 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 nine month period ended September30, 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 $7.5million at September30, 2009 and $7.4 million at December31, 2008, respectively, 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
	9 Months Ended Sep. 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 September 30, December 31, In thousands 2009 2008 9.75% Senior Subordinated Notes due 2016 $ 426,350 $ Discount on Senior Subordinated Notes due 2016 (27,495 ) 7.5% Senior Subordinated Notes due 2015 300,000 300,000 Premium on Senior Subordinated Notes due 2015 535 599 7.5% Senior Subordinated Notes due 2013 225,000 225,000 Discount on Senior Subordinated Notes due 2013 (680 ) (826 ) NEJD financing Genesis 171,408 173,618 Free State financing Genesis 79,336 76,634 Senior bank loan 20,000 75,000 Capital lease obligations Genesis 3,978 4,544 Capital lease obligations 2,327 2,705 Total 1,200,759 857,274 Less current obligations 4,698 4,507 Long-term debt and capital lease obligations $ 1,196,061 $ 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 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 during the second quarter. 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 are allowed to gu

Related Party Transactions Gene

Related Party Transactions Genesis
	9 Months Ended Sep. 30, 2009 USD / shares
Related Party Transactions Genesis [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. Denbury received cash distributions from Genesis of $8.2million and $4.9million during the nine months ended September 30, 2009 and 2008, respectively. We also received $0.2million and $0.1million during the nine months ended September30, 2009 and 2008, respectively, 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. 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 ClassB 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 maximum aggregate 17% in any given period. The amount payable under the award in the event of an employee termination is the present value of the members share of forecasted incentive distributions assuming the then current level of distributions continue into perpetuity. The award agreement dictates that the members share of future incentive distributions be discounted back to the payment date using a discount rate equal to the current distribution yield of market comparable general partners of master limited partnerships. The awards vest 25% on each anniversary grant date. The awards are mandatorily redeemable upon termination of employment or change in control and require the membership interests of the holders of the awards to be redeemed for cash (or in certain circumstances Genesis limited part

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities
	9 Months Ended Sep. 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 (income) 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, in the fall of 2008 we entered into oil derivative contracts for 2009 in order to protect our liquidity in the event that commodity prices continued to decline. Since that time, we have entered into oil and natural gas commodity contracts each quarter for a portion of our forecasted production in the following year. We have entered into these contracts to provide us a more predictable cash flow for the following year to protect our capital investment program in that subsequent year. At September30, 2009, our oil and natural gas derivative contracts were recorded at their fair value, which was a net liability of $69.2million. 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 (income) included in our Unaudited Condensed Consolidated Statements of Operations: Three Months Ended Nine Months Ended September 30, September 30, In thousands 2009 2008 2009 2008 Receipt (payment)on settlements of derivative contracts oil $ 18,527 $ (11,186 ) $ 146,365 $ (30,709 ) Receipt (payment)on settlements of derivative contracts gas (12,886 ) (30,005 ) Fair value adjustments to derivative contracts income (expense) (22,284 ) 86,079 (323,426 ) 17,123 Commodity derivative income (expense) $ (3,757 ) $ 62,007 $ (177,061 ) $ (43,591 ) Fair Value of Crude Oil Derivative Contracts Not Classified as Hedging Instruments: Estimated Fair Value NYMEX Contract Prices Per Bbl Asset (Liability) Collar Prices September 3

Fair Value Measurements

Fair Value Measurements
	9 Months Ended Sep. 30, 2009 USD / shares
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 7. Fair Value Measurements 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. The FASC 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 are as follows: Level 1 Quoted prices in active markets for identical assets or liabilities as of the reporting date. During 2008 and the first nine months of 2009, 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. We have measured nonperformance risk based upon credit default swaps or credit spreads. At September30, 2009 and December31, 2008, the fair value of our oil and natural gas derivative contracts was reduced by $2.8million and $3.7million, respectively, 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 fair value on a recurring

Condensed Consolidating Financi

Condensed Consolidating Financial Information
	9 Months Ended Sep. 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 September 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 $ 454,421 $ 211,151 $ 18,440 $ (469,855 ) $ 214,157 Property and equipment 3,278,493 141,831 3,420,324 Investment in subsidiaries (equity method) 1,296,596 24,315 1,294,644 (2,537,949 ) 77,606 Other assets 747,676 180,361 2,555 (739,419 ) 191,173 Total assets $ 2,498,693 $ 3,694,320 $ 1,457,470 $ (3,747,223 ) $ 3,903,260 Liabilities and Stockholders Equity Current liabilities $ 8,644 $ 668,979 $ 150,072 $ (469,855 ) $ 357,840 Long-term liabilities 699,390 1,783,988 10,802 (739,419 ) 1,754,761 Stockholders equity 1,790,659 1,241,353 1,296,596 (2,537,949 ) 1,790,659 Total liabilities and stockholders equity $ 2,498,693 $ 3,694,320 $ 1,457,470 $ (3,747,223 ) $ 3,903,260 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 24,901 1,368,759 (2,685,003 ) 80,004 Other assets 312,239 89,471 899 (310,335 ) 92,274

Subsequent Event

Subsequent Event
	9 Months Ended Sep. 30, 2009 USD / shares
Subsequent Event [Abstract]
Subsequent Event	Note 9. Subsequent Event On October31, 2009, the Company entered into a definitive merger agreement pursuant to which the Company will acquire Encore Acquisition Company (NYSE: EAC) (Encore). Under the terms of the definitive agreement, Encore stockholders will receive $50.00 per share for each share of Encore common stock, comprised of $15.00 in cash and $35.00 in Denbury common stock subject to both an election feature and a collar mechanism on the stock portion of the consideration. Consummation of the merger is subject to customary conditions. See Managements Discussion and Analysis of Financial Condition and Results of Operations Overview - Definitive Merger Agreement to Acquire Encore Acquisition Company for further details on the terms of this agreement.