Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]

Fair value hierarchy of financial assets and liabilities

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 basis as of the periods indicated:

			Fair Value Measurements Using:
					Significant
			Quoted Prices		Other		Significant
			in Active		Observable		Unobservable
			Markets		Inputs		Inputs
In thousands			(Level 1)		(Level 2)		(Level 3)		Total
September 30, 2012
Assets
	Oil and natural gas derivative contracts		$	—	$	23,600	$	6,040	$	29,640
Liabilities
	Oil and natural gas derivative contracts			—		(3,679)		—		(3,679)
		Total	$	—	$	19,921	$	6,040	$	25,961

December 31, 2011
Assets
	Short-term investments		$	86,682	$	—	$	—	$	86,682
	Oil and natural gas derivative contracts			—		23,481		23,950		47,431
Liabilities
	Oil and natural gas derivative contracts			—		(41,312)		—		(41,312)
		Total	$	86,682	$	(17,831)	$	23,950	$	92,801

The changes in the fair value of Denbury's Level 3 assets and liabilities

The following table summarizes the changes in the fair value of our Level 3 assets for the three and nine months ended September 30, 2012 and 2011:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
In thousands		2012		2011		2012		2011
Balance, beginning of period		$	13,214	$	6,638	$	23,950	$	16,478
	Unrealized gains (losses) on commodity derivative contracts included in earnings		(264)		1,717		4,031		(5,359)
	Receipts on settlement of commodity derivative contracts		(6,910)		(1,378)		(21,941)		(4,142)
Balance, end of period		$	6,040	$	6,977	$	6,040	$	6,977

Quantitative valuation techniques for assets and liabilities measured on a recurring basis (Level 3)

The following table details fair value inputs related to our Level 3 natural gas financial measurements:

In thousands		Fair Value at 9/30/2012		Valuation Technique	Unobservable Input	Range
Natural gas derivative contracts		$	6,040	Discounted Cash Flow	Forward commodity price curve	(a)

(a)	The derivative instruments detailed in this category include non-exchange-traded natural gas derivatives swaps that are valued based on regional pricing other than NYMEX. The regional pricing sources utilized for these instruments include the following (forward pricing ranges represent the high and low price expected to be received within the settlement period):

	Pricing Index		Settlement Period		Forward Pricing Range
	TETCO M1		10/1/2012 – 12/31/2012		$2.92/MMBtu – $3.55/MMBtu
	Houston Ship Channel		10/1/2012 – 12/31/2012		$2.98/MMBtu – $3.56/MMBtu
	Natural Gas – Midcontinent		10/1/2012 – 12/31/2012		$2.77/MMBtu – $3.53/MMBtu

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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