Energy Prospectus

I want to be clear that I only removed DNR from the Sweet 16 because it no longer has the goal of increasing production by more than 10% per year. That is one of the thresholds for being in the Sweet 16, which is all about growth. DNR is rock solid and my Fair Value Estimate is $29/share. My valuation will probably go up after I see their year-end reserve report. DNR is one of my own "Core Holdings".
I really like what they announced today. BTW at our luncheon in Dallas, I recommended to Phil that they hedge using more SWAPS, which removes a lot of commodity price risk. - Dan

January 3, 2014 – Denbury Resources Inc. (NYSE: DNR) ("Denbury" or the
"Company") today announced that its Board of Directors has approved an increase of $250 million to
the Company’s authorized share repurchase program, leaving $422 million of authorized repurchases
remaining as of December 31, 2013. The increase raises the total amount authorized under the
program since it commenced in October 2011 to $1.162 billion, of which Denbury has spent $740
million as of December 31, 2013, to acquire a total of approximately 48 million common shares, or
about 12% of shares outstanding at September 30, 2011, at an average cost of $15.55 per share. Of
the total amount spent on repurchases, $78 million was spent in the fourth quarter of 2013 to acquire
approximately five million common shares at an average cost of $16.22 per share. There is no set
expiration date for the program and no requirement that the entire authorized amount be used.

Commodity Hedge Update
Denbury also announced it has converted all of its 2014 oil derivative contracts to fixed price
swaps from collars. The Company’s 2014 fixed price oil swaps now cover 58,000 barrels of oil
production per day, or approximately 80% of estimated 2014 average daily oil production, at average
NYMEX prices of approximately $93.50 per barrel (“Bbl”) for the first half of 2014 and approximately
$92.50 per Bbl for the second half of 2014. The Company’s 2014 oil hedges were previously all
costless collars with NYMEX price floors of $80 per Bbl and average NYMEX price ceilings of
approximately $102 per Bbl in the first half of 2014 and approximately $98 per Bbl in the second half
of 2014. No cash was paid or received to convert the hedge contracts. The conversion significantly
tightens the estimated range of Denbury’s anticipated cash flow from operations in 2014 from the
range previously provided in Denbury’s November 2013 analyst day presentation which was based on
estimated average 2014 NYMEX oil prices of between $85 per Bbl and $95 per Bbl. The Company
has also added natural gas hedges to its hedge portfolio and is considering adding hedge positions
that extend beyond its typical duration of 18-to-24 months. Additional information on Denbury’s
commodity hedges will be available in an updated corporate presentation which will be posted to the
Company’s website today.

From Zachs Energy Research on Jan. 6:

Denbury Resources Inc. (DNR) announced an increase of $250 million to its authorized share repurchase program, leaving $422 million of authorized repurchases remaining as of Dec 31, 2013. The increase raises the total amount authorized under the program since it commenced in Oct 2011 to $1.162 billion.

Of the total, Denbury has spent $740 million as of Dec 31, 2013, to acquire a total of approximately 48 million common shares, or about 12% of shares outstanding at Sep 30, 2011, at an average cost of $15.55 per share. Of the total amount spent on repurchases, $78 million was spent in the fourth quarter to acquire approximately five million common shares at an average cost of $16.22 per share.

Denbury has a relatively low-risk business model as it produces oil by applying tertiary recovery techniques to mature fields. Tertiary operations remain the company’s principal focus. The company’s production from tertiary operations averaged 37,513 barrels per day in the third quarter, which represents a 7.8% increase year over year. Contributions from continued field development and expansion of facilities in Delhi, Hastings, Heidelberg and Oyster Bayou fields led to the increase.

Denbury Resources remains on track to continue its growth momentum. The company, driven by higher contribution from its core tertiary operation, is steadily yielding more. As the company’s production is fairly oil weighted, we view strong earnings and cash flow visibility in the future.