Denbury Data, page-15

Hi Dan,

No produced gas was reported to the WOGCC for August so we have yet to see the miscible phase (oil and CO2) being present at any of the production wells. August production of 910 barrels of oil is not a significant increase over the 725 barrels for July and certainly does not reflect the rate change that should be generated by CO2-EOR.

It is time for Elk / Denbury to provide details of Grieve EOR simulation results and assure Elk shareholders (and Denbury’s shareholders) that the CO2 injection is going to plan and that recent production history is following the model's forecast.

It is not unreasonable for shareholders to be advised when and in what quantities oil from CO2-EOR can be expected to be produced from Grieve particularly when Elk and Denbury have that information from their reservoir simulations of the CO2 flood.

Yesterday’s ASX announcement highlight has Grieve “initial oil production during field de-watering phase”. How are operations “de-watering” Grieve when the produced water is being re-injected into the Grieve Muddy formation (the oil producing formation)?

Another billion cubic feet of CO2 was injected in Grieve in the Muddy formation in August. That was 485,000 barrels at reservoir conditions or 15,600 barrels/day of CO2 of CO2 for August – where is it going per the reservoir simulation? Is the injected CO2 “de-watering” the field by pushing fluid out the reservoir spill point? If that is the case, why does Denbury continue to inject CO2 in some of the lowest wells on structure?

More than 46 billion cubic feet of CO2 that has been injected to date and Denbury continues to inject CO2 at an average rate of 35 million cubic feet per day and say, at a nominal cost to them of US$1 MM per month. Denbury must have some reason for this level of investment in an asset in which they hold a 51% interest.

Elk management should be privy to the operating logic being employed by Denbury at Grieve – Elk’s shareholders would like that information shared but more specifically, would like to know when oil is forecast to be produced from Grieve’s CO2-EOR and if current production is tracking the simulation results.