UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

2003 FORM 10-K
(Mark One)

[X] Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the fiscal year ended December 31, 2003

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the transition period from _________ to________

Commission file number 1-12935

DENBURY RESOURCES INC.
(Exact name of Registrant as specified in its charter)

Delaware 20-0467835
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

5100 Tennyson Parkway,
Suite 3000, Plano, TX 75024
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (972) 673-2000

Securities registered pursuant to Section 12(b) of the Act:

================================================================================
Title of Each Class Name of Each Exchange on Which Registered
- --------------------------------------------------------------------------------

Common Stock $.001 Par Value New York Stock Exchange
================================================================================

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No__

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). [X]

As of June 30, 2003, the aggregate market value of the registrant's Common
Stock held by non-affiliates was approximately $466,620,000.

The number of shares outstanding of the registrant's Common Stock as of
March 1, 2004, was 54,460,365.

DOCUMENTS INCORPORATED BY REFERENCE

Document Incorporated as to

1. Notice and Proxy Statement for the Annual Meeting of 1. Part III, Items 10, 11, 12, 13, 14
Shareholders to be held May 12, 2004.
2. Annual Report to Shareholders for the year 2. Part I, Item 1 and Part II, Items 5, 6,
ended December 31, 2003. 7, 7A, 8

Denbury Resources Inc.
2003 Annual Report on Form 10-K
Table of Contents

Item Page
- ---- ----
PART I

1. Business..................................................................... 3
2. Properties................................................................... 11
3. Legal Proceedings............................................................ 11
4. Submission of Matters to a Vote of Security Holders.......................... 11

PART II

5. Market for the Common Stock and Related Matters.............................. 11
6. Selected Financial Data...................................................... 12
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................................. 12
7A. Quantitative and Qualitative Disclosures About Market Risk................... 12
8. Financial Statements and Supplementary Data.................................. 12
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................................. 12
9A. Controls and Procedures...................................................... 12

PART III

10. Directors and Executive Officers of the Company.............................. 12
11. Executive Compensation ...................................................... 13
12. Security Ownership of Certain Beneficial Owners and Management............... 13
13. Certain Relationships and Related Transactions............................... 13
14. Principal Accountant Fees and Services....................................... 13

PART IV

15. Exhibits, Financial Statement Schedules and Reports on Form 8-K.............. 14
Signatures....................................................................16

Denbury Resources Inc.

PART I

Item 1. Business
- ----------------

Website Access to Reports

We make our annual report on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, and amendments to those reports, filed or furnished
pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934
available free of charge on or through our internet website, www.denbury.com, as
soon as reasonably practicable after we electronically file such material with,
or furnish it to, the SEC.

The Company

Denbury Resources Inc. is a Delaware corporation, organized under Delaware
General Corporation Law ("DGCL") engaged in the acquisition, development,
operation and exploration of oil and natural gas properties in the Gulf Coast
region of the United States, primarily in Louisiana, Mississippi and in the Gulf
of Mexico. Our corporate headquarters is located at 5100 Tennyson Parkway, Suite
3000, Plano, Texas 75024, and our phone number is 972-673-2000. At December 31,
2003, we had 374 employees, 249 of which were employed in field operations or at
the field offices. Our employee count does not include 200 employees of Genesis
Energy, Inc. as of December 31, 2003 as its employees exclusively carry out the
business activities of Genesis Energy, L.P., which we do not consolidate in our
financial statements (See Note 1 to the Consolidated Financial Statements).

Incorporation and Organization

Denbury was originally incorporated in Canada in 1951. In 1992, we acquired
all of the shares of a United States operating company, Denbury Management, Inc.
("DMI"), and subsequent to the merger we sold all of its Canadian assets. Since
that time, all of our operations have been in the United States.

In April 1999, our stockholders approved a move of our corporate domicile
from Canada to the United States as a Delaware corporation. Along with the move,
our wholly owned subsidiary, DMI, was merged into the new Delaware parent
company, Denbury Resources Inc. This move of domicile did not have any effect on
our operations or assets.

Effective December 29, 2003, Denbury Resources Inc. changed its corporate
structure to a holding company format. The purposes of creating the holding
company structure were to better reflect the operating practices and methods of
Denbury, to improve its economics, and to provide greater administrative and
operational flexibility. As part of this restructure, Denbury Resources Inc.
(predecessor entity) merged into a newly formed limited liability company, and
survived as, Denbury Onshore, LLC, a Delaware limited liability company and an
indirect subsidiary of the newly formed holding company, Denbury Holdings, Inc.
Denbury Holdings, Inc. subsequently assumed the name Denbury Resources Inc. (new
entity). The reorganization was structured as a tax free reorganization to
Denbury's stockholders and all outstanding capital stock of the original public
company was automatically converted into the identical number of and type of
shares of the new public holding company. Stockholders' ownership interests in
the business did not change as a result of the new structure and shares of the
Company remain publicly traded under the same symbol (DNR) on the New York Stock
Exchange. The new parent holding company is co-obligor (or guarantor, as
appropriate) regarding the payment of principal and interest on Denbury's
outstanding debt securities.

Business Strategy

As part of our corporate strategy, we believe in the following fundamental
principles:

o remain focused in specific regions;

o acquire properties where we believe additional value can be created
through a combination of exploitation, development, exploration and
marketing;

Denbury Resources Inc.

o acquire properties that give us a majority working interest and
operational control or where we believe we can ultimately obtain it;

o maximize the value of our properties by increasing production and
reserves while reducing cost; and

o maintain a highly competitive team of experienced and incentivized
personnel.

Acquisitions

Information as to recent acquisitions by Denbury is set forth under Note 2,
"Acquisitions," to the Consolidated Financial Statements. Such information is
incorporated herein by reference.

Oil and Gas Operations

Information regarding selected operating data and a discussion of our
significant operating areas and the primary properties within those three areas
are set forth under "Selected Operating Data," appearing on pages 9 through 13
of the Annual Report to Shareholders and the Operations Sections appearing on
pages 17 through 30 of the Annual Report. Such information is incorporated
herein by reference.

Oil and Gas Acreage, Productive Wells, Drilling Activity

Information regarding oil and gas acreage, productive wells and drilling
activity are set forth under "Selected Operating Data," appearing on page 13 of
the Annual Report.

Title to Properties

Customarily in the oil and gas industry, only a perfunctory title
examination is conducted at the time properties believed to be suitable for
drilling operations are first acquired. Prior to commencement of drilling
operations, a thorough drill site title examination is normally conducted, and
curative work is performed with respect to significant defects. During
acquisitions, title reviews are performed on all properties; however, formal
title opinions are obtained on only the higher value properties. We believe that
we have good title to our oil and natural gas properties, some of which are
subject to minor encumbrances, easements and restrictions.

Production

Information 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" appearing on pages 43 through 46
of the Annual Report.

Geographic Segments

All of our operations are in the United States.

Significant Oil and Gas Purchasers and Product Marketing

Oil and gas sales are made on a day-to-day basis under short-term contracts
at the current area market price. The loss of any single purchaser would not be
expected to have a material adverse effect upon our operations; however, the
loss of a large single purchaser could potentially reduce the competition for
our oil and natural gas production, which in turn could negatively impact the
prices we receive. For the year ended December 31, 2003, we had two significant
purchasers that each accounted for more than 10% of our total oil and natural
gas revenues: Hunt Refining (15%) and Genesis Energy, L.P. (12%). For the year
ended December 31, 2002, two purchasers each accounted for 10% or more of our
oil and natural gas revenues: Hunt Refining (14%) and Genesis Energy, L.P.
(11%). For the year ended December 31, 2001, four purchasers each accounted for
10% or more of our oil and natural gas revenues: Conoco (14%), Hunt Refining
(13%), EOTT Energy (12%), and Dynegy (12%).

Denbury Resources Inc.

Our ability to market oil and natural gas depends on many factors beyond
our control, including the extent of domestic production and imports of oil and
gas, the proximity of our gas production to pipelines, the available capacity in
such pipelines, the demand for oil and natural gas, the effects of weather, and
the effects of state and federal regulation. Our production is primarily from
developed fields close to major pipelines or refineries and established
infrastructure. As a result, we have not experienced any difficulty to date in
finding a market for all of our production as it becomes available or in
transporting our production to those markets; however, there is no assurance
that we will always be able to market all of our production or obtain favorable
prices.

Oil Marketing

The quality of our crude oil varies by area as well as the corresponding
price received. In Heidelberg Field, our single largest field, and our other
Eastern Mississippi properties, our oil production is primarily light to medium
sour crude and sells at a significant discount to the NYMEX prices. In Western
Mississippi, our CO2 operations, and in Louisiana, our oil production is
primarily light sweet crude, which typically sells at a small discount or even
at a premium to NYMEX. For the year ended December 31, 2003, the discount for
our oil production from Heidelberg Field averaged $5.92 per Bbl and for our
Eastern Mississippi properties as a whole the discount averaged $5.50 per Bbl
relative to NYMEX oil prices. For Little Creek Field, the largest of our CO2
properties in Western Mississippi, we averaged a premium of $0.70 per Bbl over
NYMEX oil prices, and for our Western Mississippi properties and Louisiana
properties as a whole, we averaged a discount of $0.29 per Bbl relative to NYMEX
oil prices.

Natural Gas Marketing

Virtually all of our natural gas production is close to existing pipelines
and consequently, we generally have a variety of options to market our natural
gas. We sell the majority of our natural gas on one year contracts with prices
fluctuating month-to-month based on published pipeline indices with slight
premiums or discounts to the index.

Product Price Derivative Hedging Contracts

To reduce our exposure to fluctuations in the prices of oil and natural
gas, we currently and may in the future enter into hedging arrangements for a
portion of our oil and natural gas production. Hedging arrangements expose us to
risk of financial loss in some circumstances, including when:

o production is less than expected;

o the counter-party to the hedging contract defaults on its contract
obligations (as was the case with respect to our hedges placed in 2001
with an Enron subsidiary as counterparty, which resulted in our
suffering a loss); or

o there is a change in the expected differential between the underlying
price in the hedging agreement and actual prices received.

In addition, these hedging arrangements may limit the benefit we would
receive from increases in the prices for oil and natural gas. Information as to
these activities is set forth under "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Market Risk Management,"
appearing on pages 51 through 52 of the Annual Report and in Note 9, "Derivative
Hedging Contracts," to the Consolidated Financial Statements. Such information
is incorporated herein by reference.

Denbury Resources Inc.

Operating Environment Risk Factors

Oil and Natural Gas Price Volatility

Our future financial condition, results of operations and the carrying
value of our oil and natural gas properties depends primarily upon the prices we
receive for our oil and natural gas production. Oil and natural gas prices
historically have been volatile and likely will continue to be volatile in the
future, especially given current world geopolitical conditions. Our cash flow
from operations is highly dependent on the prices that we receive for oil and
natural gas. This price volatility also affects the amount of our cash flow
available for capital expenditures and our ability to borrow money or raise
additional capital. The amount we can borrow or have outstanding under our bank
credit facility is subject to semi-annual redeterminations. In the short-term,
our production is relatively balanced between oil and natural gas, but
long-term, oil prices are likely to affect us more than natural gas prices
because approximately 71% of our reserves are oil. The prices for oil and
natural gas are subject to a variety of additional factors that are beyond our
control. These factors include:

o the level of consumer demand for oil and natural gas;

o the domestic and foreign supply of oil and natural gas;

o the ability of the members of the Organization of Petroleum Exporting
Countries to agree to and maintain oil price and production controls;

o the price of foreign oil and natural gas;

o domestic governmental regulations and taxes;

o the price and availability of alternative fuel sources;

o weather conditions;

o market uncertainty;

o political conditions in oil and natural gas producing regions,
including the Middle East; and

o worldwide economic conditions.

These factors and the volatility of the energy markets generally make it
extremely difficult to predict future oil and natural gas price movements with
any certainty. Also, oil and natural gas prices do not necessarily move in
tandem. Declines in oil and natural gas prices would not only reduce revenue,
but could reduce the amount of oil and natural gas that we can produce
economically and, as a result, could have a material adverse effect upon our
financial condition, results of operations, oil and natural gas reserves and the
carrying values of our oil and natural gas properties. If the oil and natural
gas industry experiences significant price declines, we may, among other things,
be unable to meet our financial obligations or make planned expenditures.

Since the end of 1998, oil prices have gone from near historic low prices
to higher prices not experienced for over ten years. At the end of 1998, NYMEX
oil prices were at historic lows of approximately $12.00 per Bbl, but during
1999 and 2000 NYMEX oil prices increased to an average of approximately $19.30
and $30.25 per Bbl, respectively. During 2001, NYMEX oil prices declined to an
average of approximately $26.00 per Bbl and were at $19.84 per Bbl at the end of
2001. In 2002, NYMEX oil prices increased to average approximately $26.10 per
Bbl and ended the year at $31.20 per Bbl. Throughout 2003, NYMEX oil prices
remained at these higher prices, averaging approximately $31.00 per Bbl and
ending the year at $32.52 per Bbl.

Natural gas prices have experienced even more volatility over the same five
year period. During 1999 natural gas prices averaged approximately $2.35 per Mcf
and increased to an average of approximately $4.05 per Mcf during 2001,

Denbury Resources Inc.

primarily due to low storage levels. At December 31, 2000, NYMEX natural gas
prices were almost $10.00 per Mcf but declined steadily during 2001 as supplies
of natural gas increased. As of year-end 2001, natural gas prices declined to
$2.57 per Mcf. For 2002 and 2003, natural gas prices generally increased,
averaging approximately $3.35 and $5.45 per Mcf, respectively, and ending 2002
at $4.79 per Mcf, and ending 2003 at $6.19 per Mcf.

Oil and Natural Gas Drilling and Producing Operations

Drilling activities are subject to many risks, including the risk that no
commercially productive reservoirs will be discovered. There can be no assurance
that new wells drilled by us will be productive or that we will recover all or
any portion of our investment in such wells. Drilling for oil and natural gas
may involve unprofitable efforts, not only from dry wells but also from wells
that are productive but do not produce sufficient net reserves to return a
profit after deducting drilling, operating and other costs. The seismic data and
other technologies used by us do not provide conclusive knowledge, prior to
drilling a well, that oil or natural gas is present or may be produced
economically. The cost of drilling, completing and operating a well is often
uncertain, and cost factors can adversely affect the economics of a project.
Further, our drilling operations may be curtailed, delayed or canceled as a
result of numerous factors, including:

o unexpected drilling conditions;

o title problems;

o pressure or irregularities in formations;

o equipment failures or accidents;

o adverse weather conditions;

o compliance with environmental and other governmental requirements; and

o cost of, or shortages or delays in the availability of, drilling rigs,
equipment and services.

Our operations are subject to all the risks normally incident to the
operation and development of oil and natural gas properties and the drilling of
oil and natural gas wells, including encountering well blowouts, cratering and
explosions, pipe failure, fires, formations with abnormal pressures,
uncontrollable flows of oil, natural gas, brine or well fluids, release of
contaminants into the environment and other environmental hazards and risks.

In accordance with industry practice, we maintain insurance against some,
but not all, of the risks described above in an amount we believe is adequate.
However, the nature of these risks is such that some liabilities could exceed
our policy limits, or, as in the case of environmental fines and penalties,
cannot be insured. We could incur significant costs, related to these risks,
that could have a material adverse effect on our results of operations and
financial condition.

Use of Carbon Dioxide in Tertiary Recovery Operations

The crude oil production from our tertiary recovery projects depends on
having access to sufficient amounts of carbon dioxide. Our ability to produce
this oil would be hindered if our supply of carbon dioxide were limited due to
problems with our current CO2 producing wells and facilities, including
compression equipment, or catastrophic pipeline failure. Our anticipated future
production is also dependent on our ability to increase the production volumes
of CO2. If our crude oil production were to decline, it could have a material
adverse effect on our financial condition and results of operations. Our CO2
tertiary recovery projects require a significant amount of electricity to
operate the facilities. If these costs were to increase significantly, it could
have a material adverse effect upon the profitability of these operations.

Denbury Resources Inc.

Future Performance and Acquisitions

Unless we can successfully replace the reserves that we produce, our
reserves will decline, resulting eventually in a decrease in oil and natural gas
production and lower revenues and cash flows from operations. We have
historically replaced reserves through both drilling and acquisitions. In the
future we may not be able to continue to replace reserves at acceptable costs.
The business of exploring for, developing or acquiring reserves is capital
intensive. We may not be able to make the necessary capital investment to
maintain or expand our oil and natural gas reserves if our cash flows from
operations are reduced, due to lower oil or natural gas prices or otherwise, or
if external sources of capital become limited or unavailable. Further, the
process of using CO2 for tertiary recovery and the related infrastructure
requires significant capital investment, often one to two years prior to any
resulting production and cash flows from these projects, heightening potential
capital constraints. If we do not continue to make significant capital
expenditures, or if outside capital resources become limited, we may not be able
to maintain our growth rate. In addition, our drilling activities are subject to
numerous risks, including the risk that no commercially productive oil or
natural gas reserves will be encountered. Exploratory drilling involves more
risk than development drilling because exploratory drilling is designed to test
formations for which proved reserves have not been discovered.

We are continually identifying and evaluating acquisition opportunities and
we have successfully completed acquisitions throughout our history. Estimating
the reserves and forecasted production from acquired properties is inherently
difficult and may result in our inability to achieve or maintain targeted
production levels. In that case, our ability to realize the total economic
benefit from the acquisition may be reduced or eliminated. There can be no
assurance that we will successfully consummate any future acquisitions or that
such acquisitions of oil and natural gas properties will contain economically
recoverable reserves or that any future acquisition will be profitably
integrated into our operations.

Competition and Markets

We face competition from other oil and natural gas companies in all aspects
of its business, including acquisition of producing properties and oil and gas
leases, marketing of oil and gas, and obtaining goods, services and labor. Many
of our competitors have substantially larger financial and other resources.
Factors that affect our ability to acquire producing properties include
available funds, available information about prospective properties and our
standards established for minimum projected return on investment. Gathering
systems are the only practical method for the intermediate transportation of
natural gas. Therefore, competition for natural gas delivery is presented by
other pipelines and gas gathering systems. Competition is also presented by
alternative fuel sources, including heating oil and other fossil fuels. Because
of the long-lived, high margin nature of our oil and gas reserves and
management's experience and expertise in exploiting these reserves, we believe
that we are effective in competing in the market.

The demand for qualified and experienced field personnel to drill wells and
conduct field operations, geologists, geophysicists, engineers and other
professionals in the oil and natural gas industry can fluctuate significantly,
often in correlation with oil and natural gas prices, causing periodic
shortages. There have also been shortages of drilling rigs and other equipment,
as demand for rigs and equipment has increased along with the number of wells
being drilled. These factors also cause significant increases in costs for
equipment, services and personnel. Higher oil and natural gas prices generally
stimulate increased demand and result in increased prices for drilling rigs,
crews and associated supplies, equipment and services. We cannot be certain when
we will experience these issues and these types of shortages or price increases
could significantly decrease our profit margin, cash flow and operating results
or restrict our ability to drill those wells and conduct those operations that
we currently have planned and budgeted.

Federal and State Regulations

Numerous federal and state laws and regulations govern the oil and gas
industry. These laws and regulations are often changed in response to changes in
the political or economic environment. Compliance with this evolving regulatory
burden is often difficult and costly, and substantial penalties may be incurred
for noncompliance. The following section describes some specific laws and
regulations that may affect us. We cannot predict the impact of these or future
legislative or regulatory initiatives.

Denbury Resources Inc.

Management believes that we are in substantial compliance with all laws and
regulations applicable to our operations and that continued compliance with
existing requirements will not have a material adverse impact on us. The future
annual capital costs of complying with the regulations applicable to our
operations is uncertain and will be governed by several factors, including
future changes to regulatory requirements. However, management does not
currently anticipate that future compliance will have a materially adverse
effect on our consolidated financial position or results of operations.

Regulation of Natural Gas and Oil Exploration and Production

Our operations are subject to various types of regulation at the federal,
state and local levels. Such regulation includes requiring permits for drilling
wells, maintaining bonding requirements in order to drill or operate wells and
regulating the location of wells, the method of drilling and casing wells, the
surface use and restoration of properties upon which wells are drilled, the
plugging and abandoning of wells and the disposal of fluids used in connection
with operations. Our operations are also subject to various conservation laws
and regulations. These include the regulation of the size of drilling and
spacing units or proration units and the density of wells which may be drilled
in those units and the unitization or pooling of oil and gas properties. In
addition, state conservation laws establish maximum rates of production from oil
and gas wells, generally prohibit the venting or flaring of gas and impose
certain requirements regarding the ratability of production. The effect of these
regulations may limit the amount of oil and gas we can produce from its wells
and may limit the number of wells or the locations at which we can drill. The
regulatory burden on the oil and gas industry increases our costs of doing
business and, consequently, affects its profitability.

Federal Regulation of Sales Prices and Transportation

The transportation and certain sales of natural gas in interstate commerce
are heavily regulated by agencies of the U.S. federal government and are
affected by the availability, terms and cost of transportation. In particular,
the price and terms of access to pipeline transportation are subject to
extensive U.S. federal and state regulation. The Federal Energy Regulatory
Commission ("FERC") is continually proposing and implementing new rules and
regulations affecting the natural gas industry. The stated purpose of many of
these regulatory changes is to promote competition among the various sectors of
the natural gas industry. The ultimate impact of the complex rules and
regulations issued by FERC cannot be predicted. Some of FERC's proposals may,
however, adversely affect the availability and reliability of interruptible
transportation service on interstate pipelines. While our sales of crude oil,
condensate and natural gas liquids are not currently subject to FERC regulation,
our ability to transport and sell such products is dependent on certain
pipelines whose rates, terms and conditions of service are subject to FERC
regulation. Additional proposals and proceedings that might affect the natural
gas industry are considered from time to time by Congress, FERC, state
regulatory bodies and the courts. We cannot predict when or if any such
proposals might become effective and their effect, if any, on our operations.
Historically, the natural gas industry has been heavily regulated; therefore,
there is no assurance that the less stringent regulatory approach recently
pursued by FERC, Congress and the states will continue indefinitely into the
future.

Natural Gas Gathering Regulations

State regulation of natural gas gathering facilities generally includes
various safety, environmental and, in some circumstances, nondiscriminatory-take
requirements. Although such regulation has not generally been affirmatively
applied by state agencies, natural gas gathering may receive greater regulatory
scrutiny in the future.

Federal, State or Indian Leases

Our operations on federal, state or Indian oil and gas leases are subject
to numerous restrictions, including nondiscrimination statutes. Such operations
must be conducted pursuant to certain on-site security regulations and other
permits and authorizations issued by the Bureau of Land Management, Minerals
Management Service ("MMS") and other agencies.

Denbury Resources Inc.

Environmental Regulations

Public interest in the protection of the environment has increased
dramatically in recent years. In addition, over the last two years we have
acquired significant assets offshore in the Gulf of Mexico which are regulated
by the MMS. Our oil and natural gas production and saltwater disposal operations
and our processing, handling and disposal of hazardous materials, such as
hydrocarbons and naturally occurring radioactive materials are subject to
stringent regulation. We could incur significant costs, including cleanup costs
resulting from a release of hazardous material, third-party claims for property
damage and personal injuries fines and sanctions, as a result of any violations
or liabilities under environmental or other laws. Changes in or more stringent
enforcement of environmental laws could also result in additional operating
costs and capital expenditures.

Various federal, state and local laws regulating the discharge of materials
into the environment, or otherwise relating to the protection of the
environment, directly impact oil and gas exploration, development and production
operations, and consequently may impact the Company's operations and costs.
These regulations include, among others, (i) regulations by the EPA and various
state agencies regarding approved methods of disposal for certain hazardous and
nonhazardous wastes; (ii) the Comprehensive Environmental Response,
Compensation, and Liability Act, Federal Resource Conservation and Recovery Act
and analogous state laws which regulate the removal or remediation of previously
disposed wastes (including wastes disposed of or released by prior owners or
operators), property contamination (including groundwater contamination), and
remedial plugging operations to prevent future contamination; (iii) the Clean
Air Act and comparable state and local requirements which may result in the
gradual imposition of certain pollution control requirements with respect to air
emissions from the operations of the Company; (iv) the Oil Pollution Act of 1990
which contains numerous requirements relating to the prevention of and response
to oil spills into waters of the United States; (v) the Resource Conservation
and Recovery Act which is the principal federal statute governing the treatment,
storage and disposal of hazardous wastes; and (vi) state regulations and
statutes governing the handling, treatment, storage and disposal of naturally
occurring radioactive material ("NORM").

Management believes that we are in substantial compliance with applicable
environmental laws and regulations. To date, we have not expended any material
amounts to comply with such regulations, and management does not currently
anticipate that future compliance will have a materially adverse effect on our
consolidated financial position or results of operations.

Estimated Net Quantities of Proved Oil and Gas Reserves and Present Value of
Estimated Future Net Revenues

Estimates of net proved oil and gas reserves as of December 31, 2003, 2002
and 2001 have been prepared by DeGolyer and MacNaughton, independent petroleum
engineers located in Dallas, Texas. See Note 12, "Supplemental Oil and Natural
Gas Disclosures," to the Consolidated Financial Statements and pages 9 and 10 of
the Annual Report for disclosure of reserve data. Such information is
incorporated herein by reference.

There are numerous uncertainties inherent in estimating quantities of
proved oil and natural gas reserves and their values, including many factors
beyond our control. The reserve data included herein represents only estimates.
Reserve engineering is a subjective process of estimating underground
accumulations of oil and natural gas that cannot be measured in an exact manner.
The accuracy of any reserve estimate is a function of the quality of available
geological, geophysical, engineering and economic data, the precision of the
engineering and judgment. As a result, estimates of different engineers often
vary. The estimates of reserves, future cash flows and present value are based
on various assumptions, including those prescribed by the SEC relating to oil
and natural gas prices, drilling and operating expenses, capital expenditures,
taxes and availability of funds, and are inherently imprecise. Actual future
production, cash flows, taxes, development expenditures, operating expenses and
quantities of recoverable oil and natural gas reserves may vary substantially
from our estimates. Such variations may be significant and could materially
affect estimated quantities and the present value of our proved reserves. Also,
the use of a 10% discount factor for reporting purposes may not necessarily
represent the most appropriate discount factor, given actual interest rates and
risks to which Denbury or the oil and natural gas industry in general are
subject.

Denbury Resources Inc.

You should not assume that the present values referred to herein represent
the current market value of our estimated oil and natural gas reserves. In
accordance with requirements of the SEC, the estimates of present values are
based on prices and costs as of the date of the estimates. Actual future prices
and costs may be materially higher or lower than the prices and cost as of the
date of the estimate.

At December 31, 2003, approximately 39% of our estimated proved reserves
are undeveloped. Recovery of undeveloped reserves requires significant capital
expenditures and may require successful drilling operations. The reserve data
assumes that we can and will make these expenditures and conduct these
operations successfully, but these assumptions may not be accurate, and this may
not occur.

Quantities of proved reserves are estimated based on economic conditions,
including oil and natural gas prices in existence at the date of assessment. Our
reserves and future cash flows may be subject to revisions based upon changes in
economic conditions, including oil and natural gas prices, as well as due to
production results, results of future development, operating and development
costs and other factors. Downward revisions of our reserves could have an
adverse affect on its financial condition and operating results.

Item 2. Properties
- -------------------

See Item 1. Business - "Oil and Gas Operations." We also have various
operating leases for rental of office space, office and field equipment, and
vehicles. See Note "Off-Balance Sheet Arrangements-Commitments and Obligations"
in Management's Discussion and Analysis of Financial Condition and 10,
"Commitments and Contingencies," to the Consolidated Financial Statements for
the future minimum rental payments. Such information is incorporated herein by
reference.

Item 3. Legal Proceedings
- --------------------------

In the opinion of management, there are no material pending legal
proceedings in the ordinary course of business to which Denbury or any of our
subsidiaries is a party or of which any of their property is the subject.
However, due to the nature of its business, certain legal or administrative
proceedings arise from time to time in the ordinary course of its business. See
Note 10, "Commitments and Contingencies," to the Consolidated Financial
Statements for further disclosure regarding legal proceedings and contingencies.
Such information is incorporated herein by reference.

Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------

No matters were submitted for a vote of security holders during the fourth
quarter of 2003.

PART II

Item 5. Market for the Common Stock and Related Matters
- --------------------------------------------------------

Information as to the markets in which Denbury's common stock is traded,
the quarterly high and low prices for such stock during the last two years, the
restriction on the payment of dividends with respect to the common stock, and
the approximate number of stockholders of record at March 1, 2004, is set forth
under "Common Stock Trading Summary" appearing on page 86 of the Annual Report.
Such information is incorporated herein by reference.

As of March 1, 2004, affiliates of the Texas Pacific Group beneficially own
approximately 17% of the Company's outstanding common stock and their
representatives hold three of eight seats on Denbury's Board of Directors. As a
result of its ownership and provisions of our certificate of incorporation and
bylaws, the Texas Pacific Group has historically had the effective ability to
elect all our directors and to control our business and affairs, including
decisions with respect to the acquisition or disposition of assets, the future
issuance of our common stock or other securities, dividend policy and decisions
with respect to our drilling, operating and acquisition expenditure plans. While
the Texas Pacific Group owns less than 50% of our outstanding common stock, they
still are our largest single stockholder and still control such a large portion
of our stock that their effective control will not be significantly diminished.
Since our certificate of incorporation requires a two-thirds majority vote by
the board of directors on most significant transactions, such as significant
asset purchases and sales, issuances of equity and debt, changes in the board of
directors and other matters, assuming that representatives of the Texas

Denbury Resources Inc.

Pacific Group continue to hold over one-third of the board seats as they
currently do, they will still be able to veto any decisions on these matters
solely by themselves.

Item 6. Selected Financial Data
- --------------------------------

Selected Financial Data for Denbury for each of the last five years are set
forth under "Financial Highlights" appearing on page 2 of the Annual Report. All
such information is incorporated herein by reference.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
- --------------------------------------------------------------------------------

Information as to Denbury's financial condition, changes in financial
condition and results of operations and other matters is set forth in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," appearing on pages 33 through 55 of the Annual Report and is
incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
- -------------------------------------------------------------------

The information required by Item 7A is set forth under "Market Risk
Management" in "Management's Discussion and Analysis of Financial Condition and
Results of Operations," appearing on pages 51 through 52 of the Annual Report
and is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data
- ---------------------------------------------------

Denbury's consolidated financial statements, accounting policy disclosures,
notes to financial statements, business segment information, unaudited quarterly
information and independent auditors' report are presented on pages 56 through
86 of the Annual Report. All such information is incorporated herein by
reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
- --------------------------------------------------------------------------------

None.

Item 9A. Controls and Procedures
- --------------------------------

We maintain disclosure controls and procedures and internal controls
designed to ensure that information required to be disclosed in our filings
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms. Our chief executive officer and chief financial
officer have evaluated our disclosure controls and procedures as of the end of
the period covered by this annual report on Form 10-K and have determined that
such disclosure controls and procedures are effective in all material respects
in providing to them on a timely basis material information required to be
disclosed in this annual report.

There have been no changes in internal controls over financial reporting
during the period covered by this annual report on Form 10-K that have
materially affected, or are reasonably likely to materially affect, Denbury's
internal controls over financial reporting.

PART III

Item 10. Directors and Executive Officers of the Company
- --------------------------------------------------------

Directors of the Company

Information as to the names, ages, positions and offices with Denbury,
terms of office, periods of service, business experience during the past five
years and certain other directorships held by each director or person nominated
to become

Denbury Resources Inc.

a director of Denbury will be set forth in the "Election of Directors" segment
of the Proxy Statement ("Proxy Statement") for the Annual Meeting of
Shareholders to be held May 12, 2004, ("Annual Meeting") and is incorporated
herein by reference.

Executive Officers of the Company

Information concerning the executive officers of Denbury will be set forth
in the "Management" section of the Proxy Statement for the Annual Meeting and is
incorporated herein by reference.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 and the rules
thereunder require the Company's executive officers and directors, and persons
who beneficially own more than ten percent (10%) of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and exchanges and to
furnish the Company with copies. Based solely on its review of the copies of
such forms received by it, or written representations from such persons, the
Company is not aware of any person who failed to file any reports required by
Section 16(a) to be filed for fiscal 2003.

Code of Ethics

We have adopted a Code of Ethics for Senior Financial Officers and
Principal Executive Officer. This Code of Ethics, including any amendments or
waivers, is posted on our website at www.denbury.com.

Item 11. Executive Compensation
- -------------------------------

Information concerning remuneration received by Denbury's executive
officers and directors will be presented under the caption "Statement of
Executive Compensation" in the Proxy Statement for the Annual Meeting and is
incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------

Information as to Denbury's common stock that may be issued under our
equity compensation plans, which plans have been approved by shareholders, and
the number of shares of Denbury's common stock beneficially owned as of March 1,
2004, by each of its directors and nominees for director, its five most highly
compensated executive officers and its directors and executive officers as a
group will be presented under the captions "Equity Compensation Plan
Information" and "Security Ownership of Certain Beneficial Owners and
Management" in the Proxy Statement for the Annual Meeting and is incorporated
herein by reference.

Item 13. Certain Relationships and Related Transactions
- -------------------------------------------------------

Information on related transactions will be presented under the caption
"Compensation Committee Interlocks and Insider Participation" and "Interests of
Insiders in Material Transactions" in the Proxy Statement for the Annual Meeting
and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services
- -----------------------------------------------

Information required to be presented on principal accountant fees and
services will be presented under the caption "Relationship with Independent
Accountants" in the Proxy Statement for the Annual Meeting and is incorporated
herein by reference.

Denbury Resources Inc.

PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
- ------------------------------------------------------------------------

(a) Financial Statements and Schedules. Financial statements and schedules
filed as a part of this report are presented on pages 33 through 86 of the
Annual Report and are incorporated herein by reference.

Exhibits. The following exhibits are filed as a part of this report.

Exhibit No. Exhibit
----------- -------

2(a) Agreement and Plan of Merger to Form Holding Company, dated as of December 22, 2003, but effective
December 29, 2003 at 9:00 a.m. EST, by and among the Registrant, the Predecessor and
Denbury Onshore, LLC (incorporated by reference as Exhibit 2.1 of the Registrant's Form 8-K filed
December 29, 2003).

2(b) Agreement and Plan of Merger and Reorganization, by and among Denbury Resources Inc., Denbury
Offshore, Inc., and Matrix Oil & Gas, Inc., and its shareholders, as of June 4, 2001 (incorporated by
reference as Exhibit 2 of the Registrant's Current Report on Form 8-K, dated June 15, 2001).

3(a) Restated Certificate of Incorporation of Denbury Resources Inc. filed with the Delaware Secretary
of State on December 29, 2003 (incorporated by reference as Exhibit 3.1 of the Registrant's Form 8-K
filed December 29, 2003).

3(b) Bylaws of Denbury Resources Inc., a Delaware corporation, adopted December 29, 2003
(incorporated by reference as Exhibit 3.2 of the Registrant's Form 8-K filed December 29, 2003).

4(a) Indenture for $225 million of 7.5% Senior Subordinated Notes due 2013 among Denbury Resources
Inc., certain of its subsidiaries and JP Morgan Chase Bank as trustee, dated March 25, 2003
(incorporated by reference from Exhibit 4(a) to the Registration Statement No. 333-105233-04 on
Form S-4, dated May 14, 2003).

4(b) First Supplemental Indenture for $225 million of 7.5% Senior Subordinated Notes due 2013 dated
as of December 29, 2003, among Denbury Resources Inc., certain of its subsidiaries, and the JP
Morgan Chase Bank, as trustee (incorporated by reference as Exhibit 4.1 of the Registrant's Form 8-K
dated December 29, 2003).

10(a)* Fourth Amended and Restated Credit Agreement, dated December 30, 2003 between the Company
and Bank One, as Administrative Agent, and the financial institutions listed on Schedule 2.1 therein.

10(b)** Denbury Resources Inc. Amended and Restated Stock Option Plan (incorporated by reference as
Exhibit 99 of our Registration Statement No. 333-106253 on Form S-8, dated June 18, 2003).

10(c)** Denbury Resources Inc. Stock Purchase Plan (incorporated by reference as Exhibit 4(g) of the
Registrant's Registration Statement on Form S-8, No. 333-1006, dated February 2, 1996, with
amendments incorporated by reference as exhibits of the Registrant's Registration Statements on
Forms S-8, No. 333-70485, dated January 12, 1999, No. 333-39218, dated June 13, 2000 and
No. 333-90398, dated June 13, 2002).

10(d)** Form of indemnification agreement between Denbury Resources Inc. and its officers and directors
(incorporated by reference as Exhibit 10 of the Registrant's Form 10-Q for the quarter ended June 30,
1999).

Denbury Resources Inc.

Exhibit No. Exhibit
----------- -------

10(e)** Denbury Resources Inc. Directors Compensation Plan (incorporated by reference as Exhibit 4 of the
Registrant's Registration Statement on Form S-8, No. 333-39172, dated June 13, 2000 and amended
March 2, 2001).

10(f)** Denbury Resources Severance Protection Plan, dated December 6, 2001 (incorporated by reference
as Exhibit 10(f) of the Registrant's Form 10-K for the year ended December 31, 2000).

13* Annual Report to Shareholders.

21* List of Subsidiaries of Denbury Resources Inc.

23(a)* Consent of Deloitte & Touche LLP.

23(b)* Consent of DeGolyer and MacNaughton.

31(a)* Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31(b)* Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32* Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

99* The summary of DeGolyer and MacNaughton's Report as of December 31, 2003, on oil and gas
reserves (SEC Case) dated March 9, 2004.

* Filed herewith.
** Compensation arrangements.

(b) Reports on Form 8-K.

On November 3, 2003 we filed a Form 8-K, which included our press release
on our third quarter earnings.

On December 19, 2003 we filed a Form 8-K, which announced that Denbury and
TPG entered into an underwriting agreement, pursuant to which TPG would sell 8
million shares of Denbury's common stock. Denbury did not receive any proceeds
from this transaction.

On December 29, 2003 we filed a Form 8-K, which announced that Denbury had
completed an internal reorganization to a holding-company-organizational
structure.

Denbury Resources Inc.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Denbury Resources Inc. has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

DENBURY RESOURCES INC.

March 10, 2004 /s/ Phil Rykhoek
-----------------------------------------------
Phil Rykhoek
Sr. Vice President and Chief Financial Officer

March 10, 2004 /s/ Mark C. Allen
-----------------------------------------------
Mark C. Allen
Vice President and Chief Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Denbury
Resources Inc. and in the capacities and on the dates indicated.

March 10, 2004 /s/ Gareth Roberts
-----------------------------------------------
Gareth Roberts
Director, President and Chief Executive Officer
(Principal Executive Officer)

March 10, 2004 /s/ Phil Rykhoek
-----------------------------------------------
Phil Rykhoek
Sr. Vice President and Chief Financial Officer
(Principal Financial Officer)

March 10, 2004 /s/ Mark C. Allen
-----------------------------------------------
Mark C. Allen
Vice President and Chief Accounting Officer
(Principal Accounting Officer)

March 10, 2004 /s/ Wieland F. Wettstein
-----------------------------------------------
Wieland F. Wettstein
Director

March 10, 2004 /s/ David I. Heather
-----------------------------------------------
David I. Heather
Director

March 10, 2004 /s/ Carrie A. Wheeler
-----------------------------------------------
Carrie A. Wheeler
Director

March 10, 2004 /s/ David B. Miller
-----------------------------------------------
David B. Miller
Director