Managing Our Environmental Footprint

Protecting the environment requires proper implementation and execution of our development plans. Denbury addresses wildlife protection, soil quality, plant species and other natural resources as a part of our development, reclamation and remediation efforts.

Denbury is subject to a variety of federal, state and local HSE laws and regulations. We strive to fully comply with all regulatory requirements and to minimize our operational “footprint” on the environment. Because we typically acquire mature properties, we are often faced with the challenge of correcting existing adverse environmental issues, in addition to minimizing future impacts. To ensure compliance with regulations, as well as company policies and procedures, audits are regularly conducted to identify matters that require corrective action.

We take great effort to minimize impacts to the environment. When constructing new projects, the following mitigation sequence is followed: Avoid, Minimize, Restore, Compensate. This process starts in the very early stages of planning a project with site selection, routing and mitigation included as integral parts of the analysis for any project.

REMOVAL OF FACILITIES

Denbury has a restoration program to remove out-of-service facilities in our newly acquired fields to reduce the overall footprint of our operations. In fields in which we are commencing CO2 EOR operations, facilities and sites that are no longer needed are systematically targeted for removal and restoration. Although the removal of these facilities can be costly, removal of obsolete facilities and restoration of these fields reflects our commitment to environmental stewardship.

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ADDING ENVIRONMENTAL VALUE TO U.S. OIL FIELDS

Older, depleted U.S. oil fields that we acquire often suffer from mechanical or environmental conditions that we remedy as our CO2 EOR operations commence. Denbury’s program to rejuvenate these fields and increase oil production from mature oil fields begins by initiating a comprehensive environmental assessment and remediation plan that addresses environmental issues, equips the field with updated technology and results in a more environmentally benign operation that is cleaner and “greener” than what existed prior to our work. As a rule, we review and address all areas of state-mandated regulatory compliance.

These actions, taken together, ensure identification of any age-related problems associated with an older facility, while adding improvements through new equipment and technology to modernize the facility and prepare it for CO2 injection.

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THE GREATER SAGE GROUSE CONSERVATION EFFORTS

Sage Grouse in wintering habitat

The habitat for sage grouse encompasses most of Denbury’s North Region operations; therefore, it is important to lead the effort in Montana to ensure that there are adequate policies in place to not only protect the bird from an Endangered Species Act (“ESA”) listing, but to allow continued development of our EOR operations and exploration activities.

Denbury was an active participant in many stakeholder meetings and legislative hearings in the State of Montana to develop a Montana State sage grouse conservation strategy that will work for our industry while still protecting the sage grouse from a listing under the ESA. Denbury was an industry leader in the passage of Senate Bill 261 in the 2015 legislative session that created the Montana Sage Grouse Stewardship Act (the “Act”). The Act required several things including the creation of the sage grouse conservation program, the Montana Sage Grouse Oversight Team, the development of a grant program, a habitat quantification tool (“HQT”) to evaluate habitat, and a compensatory mitigation program. Denbury was active in a stakeholder group that developed a policy document on compensatory mitigation and a HQT.

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GREENCORE PIPELINE RECLAMATION

Denbury met reclamation standards for Wyoming Department of Environmental Quality and Montana Department of Environmental Quality, in cooperation with the U.S. Bureau of Land Management, for restoration of the Greencore pipeline construction activities that took place in 2011 and 2012. Successful restoration in the arid regions of Wyoming and Montana can take multiple years to achieve. Denbury’s restoration effort was completed within five years after construction was complete. These reclaimed areas included an area greater than 200 miles in length comprised of both public and private lands and continue to provide sustainable habitats for sensitive species like the greater sage grouse. Denbury continues to manage invasive and noxious weeds associated with the pipeline as the restoration continues to thrive.

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WESTERN WYOMING ELK STUDY

Elk near our western Wyoming operations

Denbury is providing financial resources to mitigate any potential direct or indirect impacts to elk from our operations in western Wyoming. Mitigation efforts focus on the following three specific objectives as they relate to our operations in western Wyoming: elk damage prevention, elk monitoring and research, and elk habitat enhancement. These objectives are designed to prevent damage to private property caused by that portion of the Piney Elk Herd near our operations, determine elk response to our operations, and to enhance alternative habitats to offset any impact as a result of our operations.

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SOUND MITIGATION

When appropriate, Denbury employs noise control mitigation as a means of reducing the impact of sound “emissions.” Although, in most cases, the noise generated by the drilling rig is confined to the location and is a temporary disturbance, we consider the potential effects our operations may have on adjacent populated areas while adhering to applicable noise regulations.

When appropriate, we employ practical and efficient noise control as dictated by engineered sound studies to reduce the effects, including sound barriers and blankets to reduce the noise originating from drill sites. “Quiet Mode Plans” are sometimes used to reduce the noise at the well site during night hours. The plans may include training, installation of sound barriers and operations scheduling/planning with noise monitoring equipment to determine their effectiveness.

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LEED BUILDING

In 1998, the U.S. Green Building Council established and launched the first Leadership in Energy and Environmental Design (“LEED”) Pilot Project Program. This program created a rating system to help define and measure “green” buildings. Ratings are based on credits achieved, with a set number of points attached to each credit. These credits are broken down into different categories: Sustainable Sites, Water Efficiency, Energy and Atmosphere, Materials and Resources, Indoor Environmental Quality, Innovation in Design and Regional Priority.

When Denbury was in the early stages of designing our corporate headquarters, our commitment to sustainability was evidenced by making LEED certification a top priority. The design-build team preparing our headquarters space knew that green building practices reduce negative impacts on the environment and also reduce operating costs and increase workers’ productivity. Denbury was proud to receive this certification for our headquarters.

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