Denbury Data, page-17

Hi Value_Hunter,

There was talk of injecting produced water into the Cloverly and the WOGCC has Grieve #1 listed as a water injector into the Cloverly but no water has been reported as being injected into this well this year. All the injected water is reported to be going to the Muddy formation and the volume for August was similar to the produced volume (207,899 produced and 207,853 injected).

There was talk about CO2 being recycled but if there is no gas being produced, it is difficult to recycle it. Of course some of the injected CO2 may not be purchased CO2 but recycled CO2 not reported by Denbury as produced gas but if that was the case, why would Denbury be recycling CO2 for no gain in oil production? I think it is all purchased CO2 that is being injected at Grieve at this stage.

86% of the CO2 has been injected in wells that are highest on structure. It was placed in wells that were used to recycle produced gas to the gas cap in the oil producing phase and were some of the last gas wells used to blow down the Grieve gas cap in the gas producing phase. Only Denbury can explain why more recently (July and August) a significant proportion (67.7 and 50.5%) of the 1 billion cubic feet of CO2 each month is being injected in the lowest wells on structure.

Denbury is producing mostly (94%) from the next group of wells below the up dip CO2 injection wells and they should be the first wells to see the miscible phase (CO2 and oil) as it advances down the structure. All the oil is coming from these wells. Again, only Denbury can explain why they are producing 100% water from one down dip well.

What we need Elk to tell us is when they expect that miscible phase to reach the producing wells. Denbury and Elk have that information from their reservoir simulations. Denbury uses those simulations to optimize the placement of CO2 and generally manage the Grieve EOR operation. The danger I see the directors of both companies are exposing themselves to is the possible market advantage that might be gained by those who have access or have been given access to the simulation results. Failure to make a qualified ASX release of Denbury's/Elk's best estimate of first EOR oil based on their latest reservoir simulation results does place an unnecessary liability on the directors of each company; they are not the only ones who have access to the reservoir simulation results.