8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 30, 2009

DENBURY RESOURCES INC.

(Exact name of Registrant as specified in its charter)

Delaware

(State or other jurisdiction
of incorporation or organization)

1-12935	20-0467835
(Commission File Number)	(I.R.S. Employer Identification No.)

5100 Tennyson Parkway Suite 1200
Plano, Texas	75024
(Address of principal executive offices)	(Zip code)

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

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

     Retirement of Gareth Roberts

     On June 30, 2009, Gareth Roberts, founder of Denbury Resources Inc., retired as Chief Executive Offer and President of the Company, along with resigning his officer and director positions with all Company subsidiaries. He will be continuing his service on the Company’s board of directors in his new position as Co-Chairman of the board, along with his employment in the non-officer role of Chief Strategist of the Company.

     In connection with his retirement, Mr. Roberts and the Company entered into a Founder’s Retirement Agreement (the “Agreement”) under which on June 30, 2009 he received retirement compensation of (i) $3.65 million in cash, plus (ii) the Company’s issuance to him of $6.35 million of the Company’s 9³/4% Senior Subordinated Notes due 2016. Under the Agreement, Roberts will be paid $250,000 per year for serving as Co-Chairman of the board through 2012. Also, Roberts will be paid $250,000 per year through 2012 as Chief Strategist, with any unpaid salary as Chief Strategist to become payable in a lump sum upon a Company change of control (as defined) or Roberts’ death or disability, and he will be eligible to participate in the Company’s insurance plans through 2012. Henceforth, Roberts is ineligible to receive future awards under the Company’s equity compensation plans or to participate in the Company’s Severance Protection Plan. Assuming his continued service to the Company as Chief Strategist, Mr. Roberts will be entitled to vest over time in his currently existing, unvested equity awards granted under the Company’s 2004 Omnibus Stock and Incentive Plan as per the existing terms and conditions of those awards. As part of the Agreement, Roberts has agreed not to compete with the Company through 2013.

     Also, on July 6, 2009, Mr. Roberts entered into a 10b5-1 trading plan providing for the sale of up to 30,000 shares of the Company’s common stock at a specified minimum price between September 14, 2009 and December 31, 2009.

     Promotion of New Executive Officers and Named Executive Officer Compensation Adjustments

     On June 30, 2009 the following executives were promoted to serve in the officers’ positions indicated below:

Name	Age	Position
Phil Rykhoek	52	Chief Executive Officer
Ronald T. (“Tracy”) Evans	47	President and Chief Operating Officer
Mark C. Allen	41	Senior Vice President, Chief Financial Officer, Secretary and Treasurer
Alan Rhoades	44	Vice President — Accounting (Principal Accounting Officer)

     Messrs. Rykhoek, Evans and Allen have been officers of the Company for approximately 14, 10 and 10 years, respectively. Mr. Alan Rhoades, a Certified Public Accountant, joined Denbury in July 2003. Before joining Denbury, Mr. Rhoades was Assistant Controller for Amerada Hess Corporation from 2001 to 2003, and held that same position for Triton Energy Limited from 1996 until it was acquired by Amerada Hess Corporation in 2001. Prior to joining Triton Energy Limited, Mr. Rhoades was a manager in the accounting firm of KPMG LLP.

     As of July 1, 2009, the annual base salaries of the following Named Executive Officers of the Company were increased to the levels listed below:

Phil Rykhoek and Tracy Evans	$	475,000
Mark Allen	$	355,000

     On June 30, 2009, each of Messrs. Rykhoek, Evans and Allen were granted the long term incentive awards listed below, valued one-half in shares of restricted stock and one-half in stock appreciation rights (“SARs”). The number of shares was determined using the closing price of the Company’s common stock on June 30, 2009 of $14.73 per share as quoted on the New York Stock Exchange (“NYSE”), and the number of SARs was determined based on the Black-Scholes valuation of the SARs as of that same date. Likewise, the Agreed Price (as defined in the Company’s 2004 Omnibus Stock and Incentive Plan) to measure appreciation of the SARs is that same $14.73 per share closing price on the NYSE on June 30, 2009. The shares of restricted stock and SARs will vest ratably over a three-year period.

	Total Dollar Value of	Shares of
	Incentive Awards	Restricted Stock	Number of SARs
Phil Rykhoek and Tracy Evans	$300,000	10,183	19,370
Mark Allen	$110,000	3,733	7,102

In addition, Mr. Rhoades was granted 30,000 shares of restricted stock subject to ratable annual vesting over a four-year period.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits

     The following exhibits are furnished in accordance with the provisions of Item 601 of Regulation S-K:

Exhibit
Number	Description of Exhibit
10.1	Founder’s Retirement Agreement between Denbury Resources Inc. and Gareth Roberts, effective June 30, 2009
10.2	$6.350 million 9.75% Senior Subordinated Note due 2016 issued on June 30, 2009 to Gareth Roberts

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DENBURY RESOURCES INC.
Date: July 7, 2009	By: Name:	/s/ Phil Rykhoek Phil Rykhoek
	Title:	Chief Executive Officer

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EX-10.1

Exhibit 10.1

FOUNDER’S RETIREMENT AGREEMENT

THIS FOUNDER’S RETIREMENT AGREEMENT (“Agreement”) is entered into by and between Denbury Resources Inc., a Delaware corporation (the “Company”), and Gareth Roberts (“Roberts”) effective June 30, 2009.

W I T N E S S E T H:

     WHEREAS, Roberts founded the Company in 1990 and since that time has served as its President and Chief Executive Officer; and

     WHEREAS, as part of a management succession plan for the Company approved by the Company’s Board of Directors (the “Board”) on February 5, 2009, the Company and Roberts have reached certain agreements as to the terms and conditions of Roberts’s retirement as Chief Executive Officer and President of the Company and his continued employment in the non-officer’s role of Chief Strategist of the Company;

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the Company and Roberts agree as follows:

     1. Resignation as Officer and Chief Executive Officer. Roberts and the Company agree that effective June 30, 2009, he shall resign as (a) President and Chief Executive Officer of the Company and (b) an officer and director of all other Company subsidiaries (including Genesis Energy, LLC), and shall not thereafter serve the Company or its subsidiaries in an officer’s capacity, as a member of the Company’s Investment Committee, or as a director of any Company subsidiary.

     2. Retirement Consideration. In consideration of Roberts’ outstanding service in founding the Company and leading its growth over the past 19 years, the Company hereby agrees that, subject to appropriate withholding as provided in Section 2(c) below, on June 30, 2009 it will:

     (a) pay Roberts $3.650 million in cash;

     (b) as authorized by a unanimous consent of the Board effective as of June 30, 2009, issue $6.350 million principal amount of the Company’s 9 3/4% Senior Subordinated Notes due 2016 (the “Senior Subordinated Notes”) under the Indenture (the “Indenture”) among the Company, certain of its subsidiaries which are guarantors thereof, and The Bank of New York Mellon Trust Company, N.A., as trustee, dated February 13, 2009, all pursuant to Section 4.08(a)(2) of the Indenture. Roberts agrees that the Senior Subordinated Notes shall not be transferable prior to July 1, 2011 without the Company’s consent, other than to members of his family or entities controlled by them for estate or other planning

purposes, and in the event of any such transfer, the transferee shall agree to such transfer restriction (unless waived by the Company); and

     (c) On or immediately prior to the date on which payments and/or issuances of Senior Subordinated Notes are to be made to Roberts hereunder or, if earlier, the date on which an amount is required to be included in the income of Roberts as a result of such payments and/or issuances, Roberts shall be required to pay to the Company in cash the amount which the Company reasonably determines to be necessary in order for the Company to comply with applicable federal or state tax withholding requirements and the collection of employment taxes.

     3. Equity Awards. Those equity awards held by Roberts immediately prior to June 30, 2009 shall be treated according to the terms of such awards and of the Company’s equity compensation plans under which they have been issued, including the vesting provisions thereof, and in a manner which accommodates both Roberts’ transition from a full-time employee to a part-time employee under the terms of Section 4 below, and under the terms of Section 1 above, his no longer being a member of the Company’s Investment Committee nor an officer of the Company or any of its subsidiaries.

     4. Employment as Chief Strategist. Roberts shall be employed by the Company as its Chief Strategist for the period commencing June 30, 2009 and ending December 31, 2012 (the “Employment Period”), and in lieu of and in replacement of Roberts’ current salary, during the Employment Period Roberts shall be paid a yearly salary at the rate of $250,000 per year in accordance with, and subject to, the Company’s payroll policies that apply to other employees of the Company. Roberts’ employment as the Company’s Chief Strategist shall not require him to render services to the Company on a full-time basis, but on a basis as requested from time to time by the Chairman of the Company’s Board, or by the Company’s Chief Executive Officer, at such places as may reasonably be agreed upon.

          In connection with Roberts serving as the Company’s Chief Strategist, during the Employment Period the Company will provide Roberts with an office and secretarial assistance at the Company’s headquarters in Plano, Texas. Additionally, Roberts shall be entitled to reimbursement for reasonable and necessary expenses incurred in furtherance of the Company’s business in accordance with the Company policies, and upon presentation of documentation in accordance with the expense reimbursement policies of the Company as they may exist from time to time, and submission to the Company of adequate documentation in accordance with federal income tax regulations. Roberts shall be entitled to participate in the Company’s medical and dental insurance, life insurance, accidental death and dismemberment insurance, and disability benefits, to the extent such insurance or benefits are made available to other employees of the Company, with Roberts to bear the same proportion of the cost of such insurance or benefits as borne by the other employees of the Company. On June 30, 2009, the Company will also transfer to Roberts the title to the Jaguar which has served as Roberts’ Company-provided automobile.

          In the event of a “Change in Control” (as defined in the Company’s Severance Protection Plan) or Roberts’ death or disability (as defined in the Company’s 2004 Omnibus

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Stock and Incentive Plan), in each case prior to the end of the Employment Period, Roberts (or his estate) shall be entitled to receive in a lump sum (within 30 days of such event), the salary otherwise payable to him under the provisions of this Section 4 during the remainder of the Employment Period.

     5. Continuing Service as Director. Commencing June 30, 2009, in accordance with the unanimous consent of the Board adopted effective June 30, 2009, as part of Roberts’ continuation of service as a member of the Board of the Company, Roberts will become Co-Chairman of the Board, it being agreed by the parties hereto that his compensation for serving on the Board through the end of calendar year 2012 shall be $250,000 per year, in addition to reimbursement of expenses of attending meetings of the Board or its committees. Commencing June 30, 2009, Roberts will also be entitled to participate in the Company’s Director Compensation Plan which provides for issuance of shares to directors in lieu of directors’ cash compensation.

     6. Non-Eligibility for Company Plans. Other than as set out above, after June 30, 2009, Roberts will not be eligible to receive awards under the Company’s equity compensation plans made available to employees or directors, nor will he be eligible to receive a “Severance Benefit” under the terms of the Company’s Severance Protection Plan.

     7. Non-Competition Agreement. In consideration of the agreements contained herein, to which Roberts acknowledges he is not otherwise entitled, Roberts agrees to the following covenants as reasonable and necessary for the protection of the Company’s business interests:

     (a) Definitions:

     “Competing Business” means any person or entity that competes with or would compete with or displace any of the activities of the Company in those geographic areas where the Company (i) currently has activities as of June 30, 2009 or (ii) anticipates doing future business as part of the Company’s business plan disclosed to or developed by Roberts prior to December 31, 2013, or engages in any other activities so similar in nature or purpose to those of the Company so as to compete with, or displace or attempt to compete with or displace, any of such activities of the Company. This definition is expressly understood to encompass the purchase, ownership or development of CO2 reserves, oil fields with remaining oil potentially recoverable through CO2 enhanced oil recovery operations, CO2 pipelines, or carbon capture and storage facilities in the geographic areas designated above, and the injection of CO2 into previously producing oil fields for the purpose of tertiary recovery of remaining oil reserves in such geographic areas.

     “Covered Persons” means any person employed by the Company either as an employee, consultant or advisor, as of June 30, 2009, or hired by the Company prior to December 31, 2013.

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     (b) No Unfair Competition. Roberts agrees that for a period extending until December 31, 2013 or an earlier date, if any, on which there is or is deemed to be either a “change in control” as defined under the Company’s Omnibus Stock and Incentive Plan (“Non-Competition Termination Date”), Roberts will not (i) work for, supervise, assist or participate in, a Competing Business in any capacity (as owner, employee, consultant, advisor, contractor, officer, director, lender, investor, agent, or otherwise) or otherwise engage in any Competing Business, or (ii) induce or attempt to induce or solicit any Covered Person to diminish, curtail, divert, or cancel its or their business relationship with, or employment by, the Company. This Section creates a narrowly tailored restraint in order to avoid unfair competition and irreparable harm to the Company and is not intended or to be construed as a general restraint from engaging in a lawful profession or a general covenant against competition in the oil and gas industry through December 31, 2013. To this end, within the constraints of the first sentence of this Section 7(b), the Company agrees that Section 7(a) will not prohibit Roberts’ work, engagement, or investment in the oil and gas industry (the “Activities”) so long as (i) the Activities do not involve Roberts or entities, persons or groups for whom Roberts works, consults or invests (x) competing with or displacing the activities of the Company in those geographic areas where the Company has Activities, or (y) using the Company’s data or non-public business plan disclosed or known to Roberts during his employment by the Company, and (ii) Roberts obtains the prior unanimous approval of the Company’s Investment Committee. If Roberts wishes to pursue the Activities prior to December 31, 2013 (or any earlier Non-Competition Termination Date), he will present to Phil Rykhoek, or his successor as Chief Executive Officer of the Company, a written description of any such proposed Activities. It is expected that any such proposal shall include, among other things, (i) the geographical area within which Roberts desires to pursue the Activities, (ii) the terms of any proposed acquisition of properties or leases, and (iii) if necessary, a complete geological review of the proposal. The Company agrees to respond in writing to Roberts’s request within 10 business days of receipt of such written description, at the address provided in Section 9 below, stating the Company’s approval (which can only be provided by the unanimous approval of its Investment Committee) or disapproval of such Activities and the specific reasons for any disapproval to the extent the Company can do so without disclosing to Roberts otherwise non-public information. The Company agrees not to unreasonably withhold consent to Roberts’s request to engage in future Activities. In the event that approval is granted to Roberts, a preferential right to purchase the property involved in such Activities will be granted to Denbury if Roberts proposes to sell, convey or transfer such approved Activities. Further, nothing herein will prohibit ownership of less than 10% of the publicly traded capital stock of an entity so long as this is not a controlling interest, or prohibit ownership of mutual fund investments.

     (c) No Personal Use of Company Oil and Gas Resources. Roberts agrees that in conjunction with his continuing employment by the Company and his continuing service on the Company’s Board, he will not utilize Company oil and gas resources, including, but not limited to, maps, seismic information,

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feasibility studies, personnel, computers, software, books and records, or any other corporate assets, in connection with the Activities for his own account or the account of any entity, persons or groups for whom he works or consults or in which he invests, unless the Company’s Investment Committee provides its prior express written consent.

     8. Governing Law. This Agreement shall be governed by and construed under the laws of the State of Texas.

     9. Notice. Any notice, payment, demand or communication required or permitted to be given by this Agreement shall be deemed to have been sufficiently given or served for all purposes if delivered personally to and signed for by the party or to any officer of the party to whom the same is directed or if sent by registered or certified mail, return receipt requested, postage and charges prepaid, addressed to such party at the address set forth below or to such other address as shall have been furnished in writing by such party for whom the communication is intended. Any such notice shall be deemed to be given on the date so delivered.

Denbury Resources Inc.
5100 Tennyson Parkway, Suite 1200
Plano, TX 75024

Gareth Roberts
5100 Tennyson Parkway, Suite 1200
Plano, TX 75024

     10. Severability. In the event any provisions hereof shall be modified or held ineffective by any court, such adjudication shall not invalidate or render ineffective the balance of the provisions hereof.

     11. Entire Agreement. This Agreement constitutes the sole agreement between the parties and supersedes any and all other agreements, oral or written, relating to the subject matter covered by the Agreement, with the exception of (i) any indemnity agreement which may exist between the Company and Roberts, and which indemnity agreement shall remain in force independent of this Agreement, and (ii) the terms of the Company’s equity compensation plans which are not otherwise specifically addressed in this Agreement.

     12. Waiver. Any waiver or breach of any of the terms of this Agreement shall not operate as a waiver of any other breach of such terms or conditions, or any other terms or conditions, nor shall any failure to enforce any provisions hereof operate as a waiver of such provision or any other provision hereof.

     13. Assignment. This Agreement is personal to Roberts and the rights and interests of Roberts hereunder may not be sold, transferred, assigned or pledged.

     14. Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives, successors (including specifically any successor to the Company by merger, reorganization or otherwise).

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     15. Disputes.

     (a) If a dispute arises under this Agreement arising out of, related to or in connection with, the payment of amounts provided hereunder to be paid by the Company to Roberts, the timing of such payments or their calculation or, questions regarding the breach of the terms hereof or the issue of arbitrability (a “Dispute”), and the dispute cannot be settled through direct discussions by the parties within a reasonable amount of time, the Company and Roberts agree that such disputes shall be referred to and finally resolved by, binding arbitration in accordance with the provisions of Exhibit A hereto. The Company will pay the actual fees and expenses of the arbitrators, and the parties shall bear equally all other expenses of such arbitration, unless the arbitrators determine that a different allocation would be more equitable. The award of the arbitrators will be the exclusive remedy of the parties for such disputes.

     (b) Jurisdiction and venue of any action relating to this Agreement or Roberts’s employment by the Company (subject to the provisions of Section 15(a) hereof), shall be in the state courts of Plano, Collin County, Texas.

     IN WITNESS WHEREOF, the parties hereto affixed their signatures hereunder as of the date first above written.

DENBURY RESOURCES INC.
By: Name:	/s/ Wieland Wettstein Wieland Wettstein
Title:	Chairman of the Board of Directors
GARETH ROBERTS
/s/ Gareth Roberts

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EXHIBIT A

DISPUTE RESOLUTION PROCEDURES

     1. Applicable Law/Arbitration. Venue for the arbitration provided under Section 15(b) of the Agreement shall be in Plano, Collin County, Texas. Except for the limited rights described in Paragraph 9 below, the parties waive their right to file a lawsuit in a court of law to prosecute any Dispute.

     2. Negotiation. When a Dispute has arisen and negotiations have reached an impasse, either party may give the other party written notice of the Dispute. In the event such notice is given, the parties shall attempt to resolve the Dispute promptly by negotiation. Within ten (10) days after delivery of the notice, the receiving party shall submit to the other a written response. Thereafter, the parties shall promptly attempt to resolve the Dispute. All reasonable requests for information made by one party to the other will be honored.

     3. Confidentiality of Settlement Negotiations. All negotiations and proceedings pursuant to Paragraph 2 above are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence and any additional confidentiality protections provided by applicable law.

     4. Commencement of Arbitration. If the Dispute has not been resolved by negotiation within fifteen (15) days of the disputing party’s notice, or if the parties have failed to confer within fifteen (15) days after delivery of the notice, either party may then initiate arbitration by providing written notice of arbitration to the other party. In order to be valid, the notice shall contain a precise and complete statement of the Dispute. Within fifteen (15) days of receipt of the notice initiating arbitration, the receiving party shall respond by providing a written response which shall include its precise and complete response to the Dispute, and which includes any counter Dispute that the responding party may have.

     5. Selection of Arbitrator(s). The arbitration may be conducted and decided by a single person that is mutually agreeable to the parties and knowledgeable and experienced in the type of matter that is the subject of the Dispute if a single arbitrator can be agreed upon by the parties. If the parties cannot agree on a single arbitrator within ten (10) days of the date of the response to the notice of arbitration, then the arbitration shall be determined by a panel of three (3) arbitrators. To select the three arbitrators, each party shall, within ten (10) days of the expiration of the foregoing ten day period, select a person that it believes has the qualifications set forth above as its designated arbitrator, and such arbitrators so designated shall mutually agree upon a similarly qualified third person to complete the arbitration panel and serve as its chairman. In the event that the persons selected by the parties are unable to agree upon a third member of the arbitration panel within ten (10) days after the selection of the latter of the two arbitrators, then he/she shall be selected from the CPR (as defined below) panel using the CPR rules. Once selected, no arbitrator shall have any ex parte communications with either party.

     6. Arbitration Process. The arbitration hearing shall commence within a reasonable time after the selection of the arbitrator(s), as set by the arbitrator(s). The

arbitrator(s), shall allow the parties to engage in pre-hearing discovery, to include exchanging (i) requests for and production of relevant documents, (ii) up to fifteen (15) interrogatories, (iii) up to fifteen (15) requests for admissions, and producing for deposition and at the arbitration hearing, up to four (4) persons within each parties’ control. Any additional discovery shall only occur by agreement of the parties or as ordered by the arbitrator(s) upon a finding of good cause. The arbitration shall be conducted under the rules of the CPR International Institute for Conflict Prevention & Resolution (“CPR”) in effect on the date of notice of the Dispute for dispute resolution rules for non-administered arbitration of business disputes. The parties may agree on such other rules to govern the arbitration that are not set out in this provision as they may mutually deem necessary.

     7. Arbitration Decision. The arbitrator(s) shall have the power to award interim relief, and to grant specific performance. The arbitrator(s) may award interest at the Default Interest Rate. The arbitrator’s decision may be based on such factors and evidence as the arbitrator(s) deems fit. The arbitrator(s) shall be required to render a written decision to the parties no later than fifteen (15) days after the completion of the hearing.

     8. Arbitration Award. The award of a majority of the arbitrator(s) shall be final, conclusive and binding. The award rendered by the arbitrator(s) may be entered in any court having jurisdiction in respect thereof, including any court in which an injunction may have been sought.

     9. Injunctive Relief. With respect to the Dispute, controversy or claim between the parties, nothing in this Exhibit A shall prevent a party from immediately seeking injunctive relief in a court to maintain the status quo during the arbitration.

EX-10.2

Exhibit 10.2

9.75% Senior Subordinated Notes Due 2016

Denbury Resources Inc., a Delaware corporation, promises to pay to Gareth Roberts, or his assigns, the principal sum of $6,350,000 Dollars on March 1, 2016.

          Interest Payment Dates: March 1 and September 1.

          Record Dates: February 14 and August 17.

Additional provisions of this Security are set forth on the other side of this Security.

Dated: June 30, 2009

DENBURY RESOURCES INC.
by
	/s/ Phil Rykhoek
	Name:	Phil Rykhoek
	Title:	Senior Vice President and Chief Financial Officer
	/s/ Mark C. Allen
	Name:	Mark C. Allen
	Title:	Vice President and Chief Accounting Officer

TRUSTEE’S CERTIFICATE OF

           AUTHENTICATION

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee, certifies that this is one of the Securities referred to in the Indenture.

by /s/ Julie H. Ramos        Julie H. Ramos

FORM OF REVERSE SIDE OF SECURITY

9.75% Senior Subordinated Notes Due 2016

1. Interest

          Denbury Resources Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Company will pay interest semiannually on March 1 and September 1 of each year, commencing September 1, 2009. Interest on the Securities will accrue from June 30, 2009. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Securities plus 1% per annum, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

2. Method of Payment

          The Company will pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the February 14 or August 17 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by this promissory note (including principal, premium, if any, and interest) will be made by wire transfer of immediately available funds to Gareth Roberts in accordance with wire transfer instructions provided in writing by Mr. Roberts to the Trustee as provided in this paragraph 2. The Company will make all payments in respect of a certificated Security (including principal, premium, if any, and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Security will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

3. Paying Agent and Registrar

          Initially, The Bank of New York Mellon Trust Company, N.A. (the “Trustee”), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any Wholly Owned Subsidiary may act as Paying Agent, Registrar or co-registrar.

4. Indenture

          The Company issued the Securities under an indenture dated as of February 13, 2009 (the “Base Indenture”), as supplemented by the First Supplemental Indenture dated as of

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June 30, 2009 (as so supplemented, the “Indenture”), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the Act for a statement of those terms.

          The Securities are general unsecured obligations of the Company. The Company shall be entitled, subject to its compliance with Section 4.03 of the Base Indenture, to issue Additional Securities pursuant to Section 2.13 of the Base Indenture. The Securities issued on the Issue Date pursuant to the Base Indenture, this Security and any Additional Securities will be treated as a single class for all purposes under the Indenture. The Indenture contains covenants that limit the ability of the Company and its subsidiaries to incur additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock; make investments; engage in transactions with affiliates; transfer or sell assets; guarantee indebtedness; restrict dividends or other payments of subsidiaries; and consolidate, merge or transfer all or substantially all of its assets and the assets of its subsidiaries. These covenants are subject to important exceptions and qualifications.

5. Optional Redemption

          Except as set forth below, the Company shall not be entitled to redeem the Securities prior to March 1, 2013.

          On and after March 1, 2013, the Company shall be entitled at its option to redeem all or a portion of the Securities upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed in percentages of principal amount on the redemption date), plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on March 1 of the years set forth below:

Period	Redemption Price
2013		104.8750	%
2014		102.4375	%
2015 and thereafter		100.0000	%

          Prior to March 1, 2012, the Company may at its option on one or more occasions redeem Securities (which includes Additional Securities, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Securities (which includes Additional Securities, if any) originally issued at a redemption price (expressed as a percentage of principal amount) of 109.75%, plus accrued and unpaid interest to the redemption date, with the net cash proceeds from one or more Stock Offerings; provided, however, that

          (1) at least 65% of such aggregate principal amount of Securities (which includes Additional Securities, if any) remains outstanding immediately after the

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occurrence of each such redemption (other than Securities held, directly or indirectly, by the Company or its Affiliates); and

     (2) each such redemption occurs within 60 days after the date of the related Stock Offering.

6. Notice of Redemption

          Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at its registered address. Securities in denominations larger than $1,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Securities (or such portions thereof) called for redemption.

7. Put Provisions

          Upon a Change of Control, any Holder of Securities will have the right to cause the Company to repurchase all or any part of the Securities of such Holder at a purchase price equal to 101% of the principal amount of the Securities to be repurchased on the date of purchase plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date) as provided in, and subject to the terms of, the Indenture.

8. Subordination

          The Securities are subordinated to Senior Indebtedness of the Company, as defined in the Indenture. To the extent provided in the Indenture, Senior Indebtedness of the Company must be paid in full in cash before the Securities may be paid. The Company agrees, and each Securityholder by accepting a Security agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact for such purpose.

9. Guaranties

          The payment by the Company of the principal of, and premium and interest on, the Securities is fully and unconditionally guaranteed on a joint and several senior subordinated basis by each of the Subsidiary Guarantors on the terms set forth in the Indenture.

10. Denominations; Transfer; Exchange

          The Securities are in registered form without coupons in denominations of $2,000 principal amount and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange

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any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date.

11. Persons Deemed Owners

          The registered Holder of this Security may be treated as the owner of it for all purposes.

12. Unclaimed Money

          If money for the payment of principal, premium (if any) or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

13. Discharge and Defeasance

          Subject to certain conditions, the Company at any time shall be entitled to terminate some or all of its obligations under the Securities and the Indenture, including the Subsidiary Guarantees, if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity, as the case may be.

14. Amendment, Waiver

          Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended with the written consent of the Holders of at least a majority in principal amount of the Securities then outstanding and (ii) any default or noncompliance with any provisions may be waived with the written consent of the Holders of at least a majority in principal amount of the Securities then outstanding. Subject to certain exceptions set forth in the Indenture, without notice to or the consent of any Securityholder, the Company, the Subsidiary Guarantors and the Trustee may amend the Indenture or the Securities to cure any ambiguity, omission, defect or inconsistency, or to comply with Article 5 of the Indenture, or to provide for uncertificated Securities in addition to or in place of certificated Securities (provided that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code), or to make any change to the subordination provisions of the Indenture that would limit or terminate the benefits available to any holder of Senior Indebtedness (or its Representative) of the Company or any Subsidiary Guarantor, or to add guarantees (including Subsidiary Guarantees) with respect to the Securities, or to secure the Securities, or to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power conferred on the Company or any Subsidiary Guarantor, or to make any change that does not adversely affect the rights of any Securityholder, or to comply with any requirement of the SEC in connection with qualifying the Indenture under the Act. No amendment may be made to the subordination provisions of the Indenture that adversely affects the rights of any holder of Senior Indebtedness

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of the Company or of any Subsidiary Guarantor then outstanding unless the holders of such Senior Indebtedness (or their Representative) consent to such change.

15. Defaults and Remedies

          Under the Indenture, Events of Default include (i) default for 30 days in payment of interest on the Securities when due; (ii) default in payment of principal on the Securities at maturity, upon redemption pursuant to paragraph 5 of the Securities, upon declaration or acceleration or otherwise, or failure by the Company to redeem or purchase Securities when required; (iii) failure by the Company to comply with its obligations under certain covenants; (iv) failure by the Company to comply with other agreements in the Indenture or the Securities, in certain cases subject to notice and lapse of time; (v) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of the Company or any Significant Subsidiary (other than Limited Recourse Indebtedness) if the amount accelerated (or so unpaid) exceeds $10.0 million; (vi) certain events of bankruptcy, insolvency or reorganization with respect to the Company or a Significant Subsidiary; (vii) any judgment or decree for the payment of money in excess of $10.0 million is rendered against the Company or a Significant Subsidiary, remains outstanding for a period of 60 days following such judgment or decree and is not discharged, waived or stayed within 10 days after notice; or (viii) any Subsidiary Guarantee ceases or otherwise fails to be in full force and effect (other than in accordance with the terms of such Subsidiary Guarantee) or any Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guarantee if such default continues for a period of 10 days after notice thereof to the Company. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Securities may declare the principal of and accrued but unpaid interest on all the Securities to be due and payable immediately. Certain events of bankruptcy, insolvency or reorganization are Events of Default which will result in the Securities being due and payable immediately upon the occurrence of such Events of Default. A default under clauses (iv), (v), (vii) or (viii) will not constitute an Event of Default until the Trustee or the Holders of 25% in principal amount of the outstanding Securities notifies the Company of the default and the Company does not cure such default within the time specified after receipt of such notice.

          Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing Default (except a Default in payment of principal or interest) if it determines that withholding notice is in the interest of the Holders.

16. Trustee Dealings with the Company

          Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.

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17. No Recourse Against Others

          A director, officer, employee, stockholder, incorporator, or member, as such, of the Company or any Subsidiary Guarantor shall not have any liability for any obligations of the Company or any Subsidiary Guarantor under the Securities, any Subsidiary Guarantee, or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

18. Authentication

          This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security.

19. Abbreviations

          Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

20. CUSIP Numbers

          The Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

22. Governing Law

          THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          The Company will furnish to any Securityholder upon written request and without charge to the Securityholder a copy of the Indenture which has in it the text of this Security in larger type. Requests may be made to:

Denbury Resources Inc.
5100 Tennyson Parkway
Suite 1200
Plano, Texas 75024
Attention of Chief Financial Officer