Denbury (DNRWW) 8-K Unaudited Pro forma Condensed Consolidated Statements of Operations and Balance Sheet to Reflect Sale of Barnett Shale Assets

Exhibit 99.1

Unaudited Pro forma Condensed Consolidated Statements of Operations
and Balance Sheet to Reflect Sale of Barnett Shale Assets

     The following unaudited pro forma condensed consolidated balance sheet and statements of operations give effect to the following transactions:

     May 2009 Sale of 60% of Denbury’s Barnett Shale Natural Gas Assets. In May 2009, Denbury Resources Inc. (“Denbury”) entered into an agreement to sell 60% of its Barnett Shale natural gas assets to Talon Oil and Gas LLC (“Talon”), a privately held company, for $270 million (before closing adjustments). The effective date under the agreement was June 1, 2009, and consequently operating net revenues after June 1, net of capital expenditures, along with any other purchase price adjustments, were adjustments to the selling price. In June 2009, Denbury completed approximately three-quarters of the sale and closed the remaining portion of the sale in July 2009. Net proceeds of the sale were $259.8 million (after closing adjustments and net of $8.1 million paid on natural gas swaps transferred in the sale). Denbury used the net proceeds from the sale to repay bank debt. Denbury did not record a gain or loss on the sale in accordance with the full cost method of accounting.

     December 2009 Sale of Remaining 40% of our Barnett Shale Natural Gas Assets.In December 2009, Denbury closed the sale of its remaining 40% interest in Barnett Shale natural gas assets to Talon for $210 million (before closing adjustments). The effective date under the agreement was December 1, 2009. The proceeds of this sale were used to reduce outstanding bank debt. Denbury does not expect to record a gain or loss on the sale in accordance with the full cost method of accounting. Further, the sale was structured as a deferred like-kind exchange in conjunction with its December 2009 purchase of Conroe Field in order to defer most of the tax impacts of the sale.

     The unaudited pro forma condensed consolidated balance sheet which follows gives effect to the sale of 40% of Denbury’s Barnett Shale natural gas assets as if the sale occurred on September 30, 2009. The effect of the May 2009 sale of 60% of its Barnett Shale natural gas assets is included in its historical condensed consolidated balance sheet as of September 30, 2009 as the sale occurred prior to September 30, 2009.

     The unaudited pro forma condensed consolidated statements of operations which follow include the effect of the sale of 60%, and subsequent sale of 40%, of Denbury’s Barnett Shale natural gas assets as if each sale occurred on January 1, 2008.

Unaudited Pro Forma Condensed Consolidated
Balance Sheet as of September 30, 2009

	Denbury			Pro Forma				Denbury
	Historical			Adjustments				Pro Forma
				(In thousands)
Assets:
Cash and cash equivalents	$	21,689		$	190,000		(a)	$	211,689
Trade, accrued production and other receivables, net		168,931			—				168,931
Derivative assets		17,900			—				17,900
Current deferred tax assets		5,637			—				5,637
		214,157			190,000				404,157
Oil and natural gas properties
Proved		3,468,060			(210,000	)	(a)		3,258,060
Unevaluated		213,170			—				213,170
CO2 properties, equipment and pipelines		1,422,981			—				1,422,981
Other		80,015			—				80,015
Less accumulated depreciation, depletion and amortization		(1,763,902	)		—				(1,763,902	)
Net property and equipment		3,420,324			(210,000	)			3,210,324
Goodwill		138,830			—				138,830
Other assets		52,343			—				52,343
Investment in Genesis		77,606			—				77,606
Total assets	$	3,903,260		$	(20,000	)		$	3,883,260
Liabilities and Equity:
Accounts payable and accrued liabilities	$	188,420		$	—			$	188,420
Oil and gas production payable		86,038			—				86,038
Derivative liabilities		74,614			—				74,614
Deferred revenue — Genesis		4,070			—				4,070
Current maturities of long-term debt		4,698			—				4,698
Total current liabilities		357,840			—				357,840
Long-term debt — Genesis		250,681			—				250,681
Long-term debt		945,380			(20,000	)	(a)		925,380
Asset retirement obligations		47,149			—				47,149
Deferred revenue — Genesis		16,796			—				16,796
Deferred tax liability		458,940			—				458,940
Derivative liabilities		12,496			—				12,496
Other		23,319			—				23,319
Total long-term liabilities		1,754,761			(20,000	)			1,734,761
Equity		1,790,659			—				1,790,659
Total liabilities and equity	$	3,903,260		$	(20,000	)		$	3,883,260

Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the Nine Months Ended September 30, 2009

	Denbury			Pro Forma				Denbury
	Historical			Adjustments				Pro Forma
	(In thousands)
Revenues and other income
Oil, natural gas and related product sales	$	600,942		$	(62,830	)	(b)	$	538,112
CO2 sales and transportation fees		9,708			—				9,708
Interest income and other		1,948			—				1,948
Total revenues		612,598			(62,830	)			549,768
Expenses
Lease operating expenses		241,908			(13,767	)	(c)		228,141
Production taxes and marketing expenses		24,294			(4,348	)	(c)		19,946
Transportation expense — Genesis		6,143			—				6,143
CO2 operating expenses		3,442			—				3,442
General and administrative		79,828			—				79,828
Interest, net of amounts capitalized		36,960			(2,865	)	(d)		34,095
Depletion, depreciation and amortization		177,145			(13,870	)	(c)		163,275
Commodity derivative expense		177,061			—				177,061
Total expenses		746,781			(34,850	)			711,931
Equity in net income of Genesis		5,802			—				5,802
Loss before income taxes		(128,381	)		(27,980	)			(156,361	)
Income tax benefit		(49,729	)		(10,633	)	(e)		(60,362	)
Net loss	$	(78,652	)	$	(17,347	)		$	(95,999	)
Net loss per common share — basic	$	(0.32	)					$	(0.39	)
Net loss per common share — diluted	$	(0.32	)					$	(0.39	)
Weighted average common shares outstanding
Basic		246,156							246,156
Diluted		246,156							246,156

Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the Year Ended December 31, 2008

								Denbury
	Denbury			Pro Forma				Historical
	Historical			Adjustments				Pro Forma
	(In thousands)
Revenues and other income
Oil, natural gas and related product sales	$	1,347,010		$	(234,861	)	(b)	$	1,112,149
CO2 sales and transportation fees		13,858			—				13,858
Interest income and other		4,834			—				4,834
Total revenues		1,365,702			(234,861	)			1,130,841
Expenses
Lease operating expense		307,550			(24,041	)	(c)		283,509
Production taxes and marketing expenses		55,770			(12,626	)	(c)		43,144
Transportation expense — Genesis		7,982			—				7,982
CO2 operating expenses		4,216			—				4,216
General and administrative		60,374			—				60,374
Interest, net of amounts capitalized		32,596			(3,593	)	(d)		29,003
Depletion, depreciation and amortization		221,792			(44,252	)	(c)		177,540
Commodity derivative income		(200,053	)		—				(200,053	)
Abandoned acquisition cost		30,601			—				30,601
Write-down of oil and natural gas properties		226,000			—				226,000
Total expenses		746,828			(84,512	)			662,316
Equity in net income of Genesis		5,354			—				5,354
Income before income taxes		624,228			(150,349	)			473,879
Income tax provision		235,832			(57,133	)	(e)		178,699
Net income	$	388,396		$	(93,216	)		$	295,180
Net income per common share — basic	$	1.59						$	1.21
Net income per common share — diluted	$	1.54						$	1.17
Weighted average common shares outstanding
Basic		243,935							243,935
Diluted		252,530							252,530

(a)	Represents the increase in cash of $190 million, reduction in debt of $20 million and reduction in oil and natural gas properties of $210 million resulting from the sale of the remaining 40% of Denbury’s Barnett Shale natural gas assets. The Company’s bank debt outstanding as of September 30, 2009 was $20 million. As such, the pro forma adjustment reflects the pay down of $20 million of bank debt. The Company incurred additional debt in December 2009 and utilized the $210 million in proceeds to pay down bank debt in December 2009.
(b)	Represents the decrease in revenues from the sale of oil and natural gas resulting from the disposal of Denbury’s Barnett Shale natural gas assets.
(c)	Represents the reduction in lease operating expense, production expenses and depletion attributable to the disposal of Denbury’s Barnett Shale natural gas assets. Denbury’s estimated pro forma oil and natural gas depletion rate was $13.16 per BOE for the nine months ended September 30, 2009 and $12.03 per BOE for the year ended December 31, 2008. Denbury’s historical oil and natural gas depletion rate is $11.44 for the nine months ended September 30, 2009 and $11.55 for the year ended December 31, 2008.
(d)	Denbury utilized the proceeds from the sale of 60% of its interest in its Barnett Shale natural gas assets to repay a portion of its credit facility. The adjustment to interest expense reflects the reduction in interest expense as if the repayment occurred on January 1, 2008. Denbury used the proceeds from the sale of the remaining 40% of its interest in its Barnett Shale natural gas assets to reduce outstanding bank debt.
(e)	Represents the income tax effect of the pro forma adjustments at Denbury’s approximate statutory tax rate of 38%.