Edgar Filing: DENBURY RESOURCES INC

Filed Pursuant to Rule 424(b)(3)
Registration Number 333-57382

PROSPECTUS SUPPLEMENT
(To Prospectus dated September 23, 2003)

8,000,000 SHARES

(DENBURY RESOURCES INC. LOGO)

DENBURY RESOURCES INC.

COMMON STOCK

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The selling shareholders named in this prospectus supplement are selling
8,000,000 shares of common stock of Denbury Resources Inc. We will not
receive any of the proceeds from the sale of these shares.

Our common stock is listed on the New York Stock Exchange under the
symbol "DNR." On December 18, 2003, the last reported sale price of our
common stock on the New York Stock Exchange was $14.24 per share.

INVESTING IN THE SHARES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE S-3 OF THIS PROSPECTUS SUPPLEMENT AND PAGE 1 OF THE ACCOMPANYING
PROSPECTUS.

CIBC World Markets Corp. has agreed to purchase the common stock from the
selling shareholders at a price of $13.25 per share, resulting in
aggregate proceeds of $106,000,000 to the selling shareholders. CIBC
World Markets Corp. proposes to offer the common stock offered by this
prospectus supplement from time to time for sale in one or more
transactions on the New York Stock Exchange at market prices prevailing
at the time of sale, at prices related to market prices or at negotiated
prices, subject to prior sale when, as and if delivered to and accepted
by CIBC World Markets Corp. See "Underwriting."

Denbury has agreed to pay expenses incurred by the selling shareholders
in connection with this offering.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL
OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

CIBC World Markets Corp. expects to deliver the shares on or about
December 24, 2003.

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CIBC WORLD MARKETS

The date of this Prospectus Supplement is December 19, 2003

TABLE OF CONTENTS

PAGE
----

PROSPECTUS SUPPLEMENT
Summary..................................................... S-1
Risk Factors................................................ S-3
Use of Proceeds............................................. S-9
Selling Shareholders........................................ S-9
Underwriting................................................ S-10
Legal Matters............................................... S-11
Glossary.................................................... S-11
PROSPECTUS
About This Prospectus....................................... (i)
Where You Can Find More Information......................... (i)
Risk Factors................................................ 1
Forward-Looking Statements.................................. 2
The Company................................................. 3
Use of Proceeds............................................. 4
Description of Capital Stock................................ 4
Selling Shareholders........................................ 6
Plan of Distribution........................................ 7
Legal Opinions.............................................. 8
Experts..................................................... 8

This document is in two parts. The first part is this prospectus supplement,
which describes the specific terms of this offering. The second part is the
accompanying prospectus, which gives a general description of the common stock
held by the selling shareholders. If the description of the offering varies
between this prospectus supplement and the accompanying prospectus, you should
rely on the information in this prospectus supplement.

You should rely only on the information contained or incorporated by reference
in this prospectus supplement and the accompanying prospectus. We have not
authorized anyone to provide you with additional or different information. If
anyone provides you with additional, different or inconsistent information, you
should not rely on it. The selling shareholders are offering to sell the shares,
and seeking offers to buy the shares, only in jurisdictions where offers and
sales are permitted. You should not assume that the information we have included
in this prospectus supplement or the accompanying prospectus is accurate as of
any date other than the dates shown in these documents or that any information
we have incorporated by reference is accurate as of any date other than the date
of the document incorporated by reference. Our business, financial condition,
results of operations and prospects may have changed since that date.

SUMMARY

This summary does not contain all of the information that you should consider
before investing in our common stock. You should read this entire prospectus
supplement and the accompanying prospectus carefully, including the matters
discussed under the caption "Risk Factors" and the detailed information or
financial statements included or incorporated by reference in this prospectus
supplement and the accompanying prospectus. When used in this prospectus
supplement, the terms "we," "our" and "us" except as otherwise indicated or as
the context otherwise indicates, refer to Denbury Resources Inc. and its
subsidiaries. Oil and natural gas terms used in this prospectus supplement are
defined in the "Glossary" section.

THE COMPANY

We are an independent oil and natural gas company engaged in acquisition,
development and exploration activities in the U.S. Gulf Coast region. We are the
largest producer of oil and natural gas in Mississippi and have significant
operations onshore Louisiana and in the offshore Gulf of Mexico. Our strategy is
to increase the value of our properties in our core areas through a combination
of acquisitions, exploitation, drilling and proven engineering extraction
processes, including secondary (waterflood) and tertiary (carbon dioxide or
CO(2) injection) recovery techniques.

We believe that CO(2) flooding is the most efficient tertiary recovery mechanism
for crude oil. Our ownership of critical CO(2) assets, our dominant position as
the largest producer in Mississippi and our inventory of prospects have
positioned us to increase our reserves there at attractive finding costs. In our
CO(2) operations in Mississippi, we believe that there are significant
additional reserves in fields controlled by us along our CO(2) pipeline in
addition to our proved reserves in this area.

We have a well-balanced portfolio of development, exploitation and exploration
projects, including long-lived oil and shorter-lived natural gas properties. We
operate our largest fields, which gives us a significant advantage through being
able to control our cost structure and the timing of major operational
decisions. A key to our growth has been our strategy of exploitation and
development of acquired properties, with a goal of doubling the reserves in
place at the time of acquisition.

As of December 31, 2002, we had estimated proved reserves of 130.7 MMBOE, with a
PV-10 Value of $1.43 billion. Of these proved reserves, 66% are proved developed
and 26% are natural gas. Our third quarter 2003 average production was 33,116
BOE/d, which was 55% oil and 45% natural gas. From 2000 to 2002, we had a 20%
compounded annual growth rate in net asset value per share, based on the
year-end PV-10 Value of our proved reserves using constant prices of $25.00 per
barrel of oil and $4.00 per Mcf of natural gas in each period. We are continuing
to focus upon growth in our net asset value per share, through both debt
reduction and increases in our reserve value using constant prices.

We manage our operations and financial resources conservatively to enable us to
execute our business plan over the entire commodity price cycle. Our goal is to
maintain a ratio of debt to operating cash flow of not more than approximately
2.0 to 1.0. We hedge a portion of our commodity price risk to help protect a
base level of cash flow for budgeted capital expenditures and projected
economics of properties we acquire.

Effective December 29, 2003, Denbury will complete a tax-free internal
reorganization to form a holding company structure. The reorganization does not
affect Denbury's listing on the NYSE, nor does it affect its stockholders'
proportional ownership of Denbury, their stock certificates or their rights and
interests in Denbury.

Our principal executive office is located at 5100 Tennyson Parkway, Suite 3000,
Plano, Texas 75024 and our telephone number is 972-673-2000.

S-1

THE OFFERING

Common stock offered by the selling
shareholders: 8.0 million shares

Common stock outstanding on December 1, 2003: 54.0 million shares(1)

Use of proceeds: We will not receive any of
the proceeds from the sale of
shares by the selling
shareholders. The selling
shareholders will receive all
net proceeds from the sale of
shares of our common stock
offered in this prospectus
supplement.

New York Stock Exchange symbol: DNR

---------------

(1) As of December 1, 2003, options to acquire approximately 5.5 million shares
of common stock at a weighted average exercise price of $9.18 per share were
outstanding.

S-2

RISK FACTORS

There are a number of risks associated with investing in Denbury and in our
industry. You should consider carefully the following risk factors, in addition
to the risk factors and other information contained in this prospectus
supplement, in the accompanying prospectus and in the documents that are
incorporated by reference, before you decide to purchase our stock.

OIL AND NATURAL GAS PRICES ARE VOLATILE. A SUBSTANTIAL DECREASE IN OIL AND
NATURAL GAS PRICES COULD ADVERSELY AFFECT OUR FINANCIAL RESULTS.

Our future financial condition, results of operations and the carrying value of
our oil and natural gas properties depend primarily upon the prices we receive
for our oil and natural gas production. Oil and natural gas prices historically
have been volatile and are likely to continue to be volatile in the future,
especially given current world geopolitical conditions. Our cash flow from
operations is highly dependent on the prices that we receive for oil and natural
gas. This price volatility also affects the amount of our cash flow available
for capital expenditures and our ability to borrow money or raise additional
capital. The amount we are able to borrow or have outstanding under our bank
credit facility is subject to semi-annual redeterminations based on current
prices at the time of redetermination. In the short-term, our production is
relatively balanced between oil and natural gas, but long-term, oil prices are
likely to affect us more than natural gas prices because approximately 74% of
our reserves are oil. The prices for oil and natural gas are subject to a
variety of additional factors that are beyond our control. These factors
include:

-- the level of consumer demand for oil and natural gas;

-- the domestic and foreign supply of oil and natural gas;

-- the ability of the members of the Organization of Petroleum Exporting
Countries to agree to and maintain oil price and production controls;

-- the price of foreign oil and natural gas;

-- domestic governmental regulations and taxes;

-- the price and availability of alternative fuel sources;

-- weather conditions;

-- market uncertainty;

-- political conditions or hostilities in oil and natural gas producing
regions, including the Middle East; and

-- worldwide economic conditions.

These factors and the volatility of the energy markets generally make it
extremely difficult to predict future oil and natural gas price movements with
any certainty. Declines in oil and natural gas prices would not only reduce
revenue, but could reduce the amount of oil and natural gas that we can produce
economically and, as a result, could have a material adverse effect on our
financial condition, results of operations and reserves. If the oil and natural
gas industry experiences significant price declines, we may, among other things,
be unable to meet our financial obligations or make planned expenditures.

WE COULD INCUR A WRITE-DOWN OF THE CARRYING VALUES OF OUR PROPERTIES IN THE
FUTURE DEPENDING ON OIL AND NATURAL GAS PRICES, WHICH COULD NEGATIVELY IMPACT
OUR NET INCOME.

Under the full cost method of accounting, SEC accounting rules require us to
review the carrying value of our oil and gas properties on a quarterly basis for
possible write-down or impairment. Under these rules, capitalized costs of
proved reserves may not exceed a ceiling calculated at the present value of
estimated

S-3

future net revenues from those proved reserves, determined using a 10% per year
discount and unescalated prices in effect as of the end of each fiscal quarter
(PV-10 Value). Capital costs in excess of the ceiling must be permanently
written down. The changes in oil and natural gas prices have a significant
impact on our PV-10 Value, and thus a decline in prices could cause a write-down
which would negatively affect our net income.

OUR PRODUCTION WILL DECLINE IF OUR ACCESS TO SUFFICIENT AMOUNTS OF CARBON
DIOXIDE IS LIMITED.

The crude oil production from our tertiary recovery projects depends on our
having access to sufficient amounts of carbon dioxide. Our ability to produce
this oil would be hindered if our supply of carbon dioxide were limited due to
problems with our current CO(2) producing wells and facilities, including
compression equipment, or catastrophic pipeline failure. Our anticipated future
production growth is also dependent on our ability to increase the production
volumes of CO(2). If our crude oil production were to decline, it could have a
material adverse effect on our financial condition and results of operations.

ESTIMATING OUR RESERVES, PRODUCTION AND FUTURE NET CASH FLOW IS DIFFICULT TO DO
WITH ANY CERTAINTY.

Estimating quantities of proved oil and natural gas reserves is a complex
process. It requires interpretations of available technical data and various
assumptions, including assumptions relating to economic factors, such as future
commodity prices, production costs, severance and excise taxes, capital
expenditures and workover and remedial costs, and the assumed effect of
governmental regulation. There are numerous uncertainties about when a property
may have proved reserves as compared to potential or probable reserves,
particularly relating to our tertiary recovery operations. Actual results most
likely will vary from our estimates. Also, the use of a 10% discount factor for
reporting purposes, as prescribed by the SEC, may not necessarily represent the
most appropriate discount factor, given actual interest rates and risks to which
our business or the oil and natural gas industry in general are subject. Any
significant inaccuracies in these interpretations or assumptions or changes of
conditions could cause the quantities and net present value of our reserves to
be overstated.

The reserve data included in documents incorporated by reference represent only
estimates. You should not assume that the present values referred to in this
prospectus supplement and other documents incorporated by reference represent
the current market value of our estimated oil and natural gas reserves. In
accordance with requirements of the SEC, the estimates of present values are
based on prices and costs as of the date of the estimates. Actual future prices
and costs may be materially higher or lower than the prices and cost as of the
date of the estimate.

At December 31, 2002, approximately 34% of our estimated proved reserves were
undeveloped. Recovery of undeveloped reserves requires significant capital
expenditures and may require successful drilling operations. The reserve data
assumes that we can and will make these expenditures and conduct these
operations successfully, but these assumptions may not be accurate, and this may
not occur.

OUR FUTURE PERFORMANCE DEPENDS UPON OUR ABILITY TO FIND OR ACQUIRE ADDITIONAL
OIL AND NATURAL GAS RESERVES THAT ARE ECONOMICALLY RECOVERABLE AND HAVING THE
CAPITAL RESOURCES TO DEVELOP THESE RESERVES.

Unless we successfully replace the reserves that we produce, our reserves will
decline, resulting eventually in a decrease in oil and natural gas production
and lower revenues and cash flows from operations. We historically have replaced
reserves through both drilling and acquisitions. We may not be able to continue
to replace reserves at acceptable costs. The business of exploring for,
developing or acquiring reserves is capital intensive. We may not be able to
make the necessary capital investment to maintain or expand our oil and natural
gas reserves if cash flows from operations are reduced, due to lower oil or
natural gas prices or otherwise, or if external sources of capital become
limited or unavailable. Further, the process of using CO(2) for tertiary
recovery and the related infrastructure requires significant capital investment,
often one to two years prior to any resulting production and cash flows from
these projects, heightening potential capital constraints. If we do not continue
to make significant capital expenditures, or if our outside capital resources
become limited, we may not be able to maintain our growth rate. In addition, our
drilling activities are subject to numerous risks,

S-4

including the risk that no commercially productive oil or natural gas reserves
will be encountered. Exploratory drilling involves more risk than development
drilling because exploratory drilling is designed to test formations for which
proved reserves have not been discovered.

OUR FAILURE, IN THE LONG TERM, TO COMPLETE FUTURE ACQUISITIONS SUCCESSFULLY
COULD REDUCE OUR EARNINGS AND SLOW OUR GROWTH.

Acquisitions are an essential part of our long-term growth strategy, and our
ability to acquire additional properties on favorable terms is key to our
long-term growth. There is intense competition for acquisition opportunities in
our industry. The level of competition varies depending on numerous factors.
Depending on conditions in the acquisition market, it may be difficult or
impossible for us to identify properties for acquisition or we may not be able
to make acquisitions on terms that we consider economically acceptable.
Competition for acquisitions may increase the cost of, or cause us to refrain
from, completing acquisitions. Our strategy of completing acquisitions is
dependent upon, among other things, our ability to obtain debt and equity
financing and, in some cases, regulatory approvals. Our ability to pursue our
long-term growth strategy may be hindered if we are not able to obtain financing
or regulatory approvals. Our ability to grow through acquisitions and manage
growth will require us to continue to invest in operational, financial and
management information systems and to attract, retain, motivate and effectively
manage our employees. The inability to manage the integration of acquisitions
effectively could reduce our focus on subsequent acquisitions and current
operations, which, in turn, could negatively impact our earnings and growth. Our
financial position and results of operations may fluctuate significantly from
period to period, based on whether or not significant acquisitions are completed
in particular periods.

THERE ARE RISKS IN ACQUIRING OIL AND NATURAL GAS PROPERTIES.

Our long-term business strategy includes growing our reserve base through
acquisitions. We are continually identifying and evaluating acquisition
opportunities such as our August 2002 COHO acquisition and the acquisition of
Matrix Oil and Gas, Inc. in 2001. However, the magnitude of these acquisitions,
together with the inherent difficulty in evaluating the acquired properties and
forecasting reserves, may result in our inability to achieve or maintain
targeted production levels. In that case, our ability to realize the total
economic benefit from an acquisition may be reduced or eliminated.

The acquisition of oil and gas properties involves uncertainties and requires an
assessment of several factors, including recoverable reserves, future oil and
gas prices, operating costs, potential environmental and other liabilities and
other factors beyond our control. These assessments are necessarily inexact, and
it is generally not possible to review in detail every individual property
involved in an acquisition. We generally assume preclosing liabilities and often
are not entitled to contractual indemnification for preclosing liabilities,
including environmental liabilities. Often, we acquire interests in properties
on an "as is" basis with limited or no remedies for breaches of representations
and warranties. Price volatility also makes it difficult to budget for and
project the return on acquisitions and development and exploration projects. We
will not be able to assure you that our acquisitions will achieve desired
profitability objectives. We may assume cleanup or reclamation obligations in
connection with these acquisitions, and the scope and cost of these obligations
may ultimately be materially greater than estimated at the time of the
acquisition.

Acquisitions may involve a number of other special risks, including:

-- diversion of management attention from existing operations;

-- unexpected losses of key employees, customers and suppliers of the
acquired business;

-- conforming the financial, technological and management standards,
processes, procedures and controls of the acquired business with those of
our existing operations; and

-- increasing the scope, geographic diversity and complexity of our
operations.

S-5

OIL AND NATURAL GAS DRILLING AND PRODUCING OPERATIONS INVOLVE VARIOUS RISKS.

Drilling activities are subject to many risks, including the risk that no
commercially productive reservoirs will be discovered. There can be no assurance
that new wells drilled by us will be productive or that we will recover all or
any portion of our investment in such wells. Drilling for oil and natural gas
may involve unprofitable efforts, not only from dry wells but also from wells
that are productive but do not produce sufficient net reserves to return a
profit after deducting drilling, operating and other costs. The seismic data and
other technologies we use do not allow us to know conclusively prior to drilling
a well that oil or natural gas is present or may be produced economically. The
cost of drilling, completing and operating a well is often uncertain, and cost
factors can adversely affect the economics of a project. Further, our drilling
operations may be curtailed, delayed or canceled as a result of numerous
factors, including:

-- unexpected drilling conditions;

-- title problems;

-- pressure or irregularities in formations;

-- equipment failures or accidents;

-- adverse weather conditions;

-- compliance with environmental and other governmental requirements; and

-- cost of, or shortages or delays in the availability of, drilling rigs,
equipment and services.

Our operations are subject to all the risks normally incident to the operation
and development of oil and natural gas properties and the drilling of oil and
natural gas wells, including encountering well blowouts, cratering and
explosions, pipe failure, fires, formations with abnormal pressures,
uncontrollable flows of oil, natural gas, brine or well fluids, release of
contaminants into the environment and other environmental hazards and risks.

The nature of these risks is such that some liabilities could exceed our
insurance policy limits, or, as in the case of environmental fines and
penalties, cannot be insured. We could incur significant costs that could have a
material adverse effect upon our financial condition due to these risks.

Our CO(2) tertiary recovery projects require a significant amount of electricity
to operate the facilities. If these costs were to increase significantly, it
could have a material adverse effect upon the profitability of these operations.

WE ARE SUBJECT TO COMPLEX FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS THAT
COULD ADVERSELY AFFECT OUR BUSINESS.

Exploration for and development, exploitation, production and sale of oil and
natural gas in the United States are subject to extensive federal, state and
local laws and regulations, including complex tax laws and environmental laws
and regulations. Existing laws or regulations, as currently interpreted or
reinterpreted in the future, or future laws or regulations could harm our
business, results of operations and financial condition. We may be required to
make large expenditures to comply with environmental and other governmental
regulations. In addition, in connection with the Matrix acquisition, we acquired
several offshore properties which are regulated by the Minerals Management
Service of the U.S. Department of Interior. Accordingly, our offshore properties
will undergo more frequent on-site governmental reviews and will be subject to a
greater number of compliance procedures, which could result in increased
compliance or operating costs or production being delayed or suspended.

Matters subject to regulation include oil and gas production and saltwater
disposal operations and our processing, handling and disposal of hazardous
materials, such as hydrocarbons and naturally occurring radioactive materials,
discharge permits for drilling operations, spacing of wells, environmental
protection,
S-6

reports concerning operations, and taxation. Under these laws and regulations,
we could be liable for personal injuries, property damage, oil spills, discharge
of hazardous materials, reclamation costs, remediation and clean-up costs and
other environmental damages.

SHORTAGES OF OIL FIELD EQUIPMENT, SERVICES AND QUALIFIED PERSONNEL COULD REDUCE
OUR CASH FLOW AND ADVERSELY AFFECT RESULTS OF OPERATIONS.

The demand for qualified and experienced field personnel to drill wells and
conduct field operations, geologists, geophysicists, engineers and other
professionals in the oil and natural gas industry can fluctuate significantly,
often in correlation with oil and natural gas prices, causing periodic
shortages. There have also been shortages of drilling rigs and other equipment,
as demand for rigs and equipment has increased along with the number of wells
being drilled. These factors also cause significant increases in costs for
equipment, services and personnel. Higher oil and natural gas prices generally
stimulate increased demand and result in increased prices for drilling rigs,
crews and associated supplies, equipment and services. We cannot be certain when
we will experience these issues and these types of shortages or price increases
could significantly decrease our profit margin, cash flow and operating results
or restrict our ability to drill those wells and conduct those operations which
we currently have planned and budgeted.

WE DEPEND ON OUR KEY PERSONNEL.

We believe our continued success depends on the collective abilities and efforts
of our senior management. The loss of one or more key personnel could have a
material adverse effect on our results of operations. We do not have any
employment agreements and do not maintain any key man life insurance policies.
Additionally, if we are unable to find, hire and retain needed key personnel in
the future, our results of operations could be materially and adversely
affected.

AFTER THIS OFFERING OUR CONTROLLING STOCKHOLDER WILL STILL HOLD A SIGNIFICANT
PERCENTAGE OF OUR OUTSTANDING COMMON STOCK.

Affiliates of the Texas Pacific Group beneficially own approximately 32% of our
outstanding common stock before this offering and will own approximately 17%
following this offering. Their representatives currently hold three of eight
seats on our board of directors. No immediate plans have been made, nor do any
arrangements exist, regarding their representatives continuing to serve as board
members. As a result of its ownership and provisions of our certificate of
incorporation and bylaws, the Texas Pacific Group has historically had the
effective ability to elect all our directors and to control our business and
affairs, including decisions with respect to the acquisition or disposition of
assets, the future issuance of our common stock or other securities, dividend
policy and decisions with respect to our drilling, operating and acquisition
expenditure plans. While the Texas Pacific Group owns less than 50% of our
stock, they still are our largest single stockholder and still control such a
large portion of our stock that their effective control will not be
significantly diminished. Since our certificate of incorporation requires a
two-thirds majority vote by the board of directors on most significant
transactions, such as significant asset purchases and sales, issuances of equity
and debt, changes in the board of directors and other matters, assuming that
representatives of the Texas Pacific Group continue to hold over one-third of
the board seats as they currently do, they will still be able to veto any
decisions on these matters solely by themselves after the offering.

OUR LEVEL OF INDEBTEDNESS MAY ADVERSELY AFFECT OPERATIONS AND LIMIT OUR GROWTH.

As of December 1, 2003, we had approximately $145 million of borrowing capacity
available under our bank credit facility at the current borrowing base of $220
million. The next semi-annual redetermination of the borrowing base will be on
April 1, 2004. Our bank borrowing base is adjusted at the banks' discretion and
is based in part upon external factors over which we have no control. In the
event our then redetermined borrowing base is less than our outstanding
borrowings under the facility, we will be required to repay the deficit over a
period of six months. We may also incur additional indebtedness in the future
under our bank
S-7

credit facility in connection with our acquisition, development, exploitation
and exploration of oil and natural gas producing properties.

As of September 30, 2003 our long-term debt comprised approximately 44% of our
total capitalization.

If oil and natural gas prices were to decline significantly, particularly for an
extended period of time, our degree of leverage could increase substantially.
This could have important consequences to shareholders, including but not
limited to, reduced cash flow, which could reduce our capital expenditures, our
future production growth, our ability to borrow funds, and increase our
vulnerability to general economic conditions.

OUR USE OF HEDGING ARRANGEMENTS COULD RESULT IN FINANCIAL LOSSES OR REDUCE OUR
INCOME.

To reduce our exposure to fluctuations in the prices of oil and natural gas, we
currently and may in the future enter into hedging arrangements for a portion of
our oil and natural gas production. Hedging arrangements expose us to risk of
financial loss in some circumstances, including when:

-- production is less than expected;

-- the counter-party to the hedging contract defaults on its contract
obligations (as was the case with respect to our hedges placed in 2001
with an Enron subsidiary as counter-party, which resulted in our suffering
a loss); or

-- there is a change in the expected differential between the underlying
price in the hedging agreement and actual prices received.

In addition, these hedging arrangements may limit the benefit we would receive
from increases in the prices for oil and natural gas.

THE LOSS OF MORE THAN ONE OF OUR LARGE OIL AND NATURAL GAS PURCHASERS COULD HAVE
A MATERIAL ADVERSE EFFECT ON OUR OPERATIONS.

For the year ended December 31, 2002, two purchasers each accounted for more
than 10% of our oil and natural gas revenues and in the aggregate, for 25% of
these revenues. A loss of these purchasers could have a material adverse effect
on the prices that we are able to obtain on our production.

S-8

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of shares by the selling
shareholders. The selling shareholders will receive all net proceeds from the
sale of shares of our common stock offered in this prospectus supplement.

SELLING SHAREHOLDERS

The following table sets forth information concerning ownership of our capital
stock as of December 1, 2003 by each selling stockholder. As of December 1,
2003, there were approximately 54.0 million shares of our common stock
outstanding. The percentages shown below reflect the selling shareholders'
ownership of our issued and outstanding common stock.

SHARES OWNED
IMMEDIATELY AFTER
SHARES OWNED AS OF SALE OF ALL SHARES
DECEMBER 1, 2003 TO BE OFFERED
------------------------ -----------------------
PERCENT OF SHARES TO BE PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) SHARES OUTSTANDING OFFERED SHARES OUTSTANDING
--------------------------------------- ---------- ----------- ------------ --------- -----------

TPG Partners, L.P. ................. 5,023,167 9.3% 2,326,306 2,696,861 5.0%
TPG Parallel I, L.P. ............... 500,596 * 231,834 268,762 *
TPG Investors II, L.P. ............. 1,044,325 1.9% 483,643 560,682 1.0%
TPG Parallel II, L.P. .............. 683,225 1.3% 316,412 366,813 *
TPG Partners II, L.P. .............. 10,011,721 18.5% 4,636,581 5,375,140 10.0%
TPG 1999 Equity Partners II, L.P. ... 11,280 * 5,224 6,056 *
---------- ----- --------- --------- -----
Texas Pacific Group Totals.......... 17,274,314 32.0% 8,000,000 9,274,314 17.2%
========== ===== ========= ========= =====

---------------------------

* Less than one percent

(1) TPG Advisors, Inc. is the sole general partner of TPG GenPar, L.P., which in
turn is the sole general partner of TPG Partners, L.P. and TPG Parallel I,
L.P. TPG Advisors II, Inc. is the sole general partner of TPG 1999 Equity
Partners II, L.P. and TPG GenPar II, L.P., which in turn is the sole general
partner of TPG Investors II, L.P., TPG Parallel II, L.P., and TPG Partners
II, L.P. Messrs. David Bonderman, a former director of Denbury, James
Coulter and William Price, a director of Denbury, are the sole directors and
shareholders of TPG Advisors, Inc. and TPG Advisors II, Inc. The address for
all of the selling shareholders listed above is 301 Commerce Street, Suite
3300, Fort Worth, Texas 76102.

As of December 1, 2003, TPG held approximately 32% of our outstanding common
stock, giving TPG sufficient voting power to control the election of directors
and to determine our corporate and management polices and enough voting power on
our board of directors to veto actions requiring two-thirds board approval, such
as mergers, consolidations, sales of all or substantially all of our assets,
asset purchases and equity or debt issuances. Since December 1995, TPG has made
four separate investments in our common stock.

In April 1999, we entered into a registration rights agreement with TPG covering
all 27,274,314 shares of our common stock that TPG then owned. The agreement
provides TPG both demand and piggyback registration rights. Under the agreement,
TPG has the demand right to cause us to file up to four registration statements.
To date, TPG has exercised two demands to be included in a shelf registration,
one of which is currently available for this offering. TPG's remaining demand
rights expire on April 21, 2007, and are subject to black-out periods. Under the
registration rights agreement, we cannot grant any registration rights to any
other person on terms more favorable than those granted to TPG.

S-9

UNDERWRITING

We and the selling shareholders have entered into an underwriting agreement with
CIBC World Markets Corp., as the underwriter. The underwriter has agreed to
purchase all of the shares offered by this prospectus supplement if any are
purchased.

The shares should be ready for delivery on or about December 24, 2003, against
payment in immediately available funds. The underwriter is offering the shares
subject to various conditions and may reject all or part of any order. CIBC
World Markets Corp. proposes to offer the common stock offered by this
prospectus supplement from time to time for sale in one or more transactions on
the New York Stock Exchange at market prices prevailing at the time of sale, at
prices related to market prices or at negotiated prices, subject to prior sale
when, as and if delivered to and accepted by CIBC World Markets Corp. The
underwriter may effect these transactions by selling shares to or through
dealers, and these dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriter and/or the purchasers of the
common stock for whom they may act as agents or to whom they sell as principal.

We have agreed to indemnify the underwriter against certain liabilities,
including liabilities under the Securities Act of 1933.

The selling shareholders have agreed to a 45-day "lock up" with respect to all
of the shares of common stock that they beneficially own, including securities
that are convertible into shares of common stock and securities that are
exchangeable or exercisable for shares of common stock. This means that, subject
to certain exceptions, for a period of 45 days following the date of this
prospectus supplement, the selling shareholders may not offer, sell, pledge or
otherwise dispose of these securities without the prior written consent of CIBC
World Markets Corp.

Other than in the United States, no action has been taken by us, the selling
shareholders or the underwriter that would permit a public offering of the
shares of common stock offered by this prospectus supplement in any jurisdiction
where action for that purpose is required. The shares of common stock offered by
this prospectus supplement may not be offered or sold, directly or indirectly,
nor may this prospectus supplement or any other offering material or
advertisements in connection with the offer and sale of any such shares of
common stock be distributed or published in any jurisdiction, except under
circumstances that will result in compliance with the applicable rules and
regulations of that jurisdiction. Persons into whose possession this prospectus
supplement comes are advised to inform themselves about, and to observe any
restrictions relating to the offering and the distribution of this prospectus
supplement. This prospectus supplement does not constitute an offer to sell or a
solicitation of an offer to buy any shares of common stock offered by this
prospectus supplement in any jurisdiction in which such an offer or a
solicitation is unlawful.

Our common stock is traded on the New York Stock Exchange under the symbol
"DNR."

Rules of the Securities and Exchange Commission may limit the ability of the
underwriter to bid for or purchase shares before the distribution of the shares
is completed. However, the underwriter may engage in the following activities in
accordance with the rules:

-- Stabilizing transactions -- The underwriter may make bids or purchases for
the purpose of pegging, fixing or maintaining the price of the shares, so
long as stabilizing bids do not exceed a specified maximum.

-- Over-allotments and syndicate covering transactions -- The underwriter may
sell more shares of common stock in connection with this offering than the
number of shares that it has committed to purchase. This over-allotment
creates a short position for the underwriter. The underwriter must close
out any short position by purchasing shares in the open market. A short
position is more likely to be created if the underwriter is concerned
that, in the open market after pricing, there may be downward pressure on
the price of the shares that could adversely affect investors who purchase
shares in this offering.

S-10

-- Penalty bids -- If the underwriter purchases shares in the open market in
a stabilizing transaction or syndicate covering transaction, it may
reclaim a selling concession from the selling group members who sold those
shares as part of this offering.

Similar to other purchase transactions, the underwriter's purchases to cover the
syndicate short sales or to stabilize the market price of our common stock may
have the effect of raising or maintaining the market price of our common stock
or preventing or mitigating a decline in the market price of our common stock.
As a result, the price of the shares of our common stock may be higher than the
price that might otherwise exist in the open market. The imposition of a penalty
bid might also have an effect on the price of the shares if it discourages
resale of the shares.

Neither we nor the underwriter make any representation or prediction as to the
effect that the transactions described above may have on the price of the
shares. These transactions may occur on the Nasdaq National Market or otherwise.
If such transactions are commenced, they may be discontinued without notice at
any time.

LEGAL MATTERS

The validity of the shares of common stock to be sold in the offering will be
passed upon for us by our counsel, Jenkens and Gilchrist, A Professional
Corporation, Houston, Texas. Certain legal matters in connection with the
offering will be passed upon for the underwriter by Vinson & Elkins L.L.P.,
Houston, Texas.

GLOSSARY

The terms defined in this section are used throughout this prospectus
supplement:

Bbl One stock tank barrel of 42 U.S. gallons liquid
volume, used herein in reference to crude oil
or other liquid hydrocarbons.

BOE One barrel of oil equivalent using the ratio of
one barrel of crude oil, condensate or natural
gas liquids to 6 Mcf of natural gas.

BOE/d BOEs produced per day.

Mcf One thousand cubic feet of natural gas.

MMBOE One million BOEs.

PV-10 Value When used with respect to oil and natural gas
reserves, PV-10 Value means the estimated
future gross revenue to be generated from the
production of proved reserves, net of estimated
production and future development costs, using
prices and costs in effect at the determination
date, before income taxes, and without giving
effect to non-property-related expenses,
discounted to a present value using an annual
discount rate of 10% in accordance with the
guidelines of the Securities and Exchange
Commission.

Proved Developed Reserves Reserves that can be expected to be recovered
through existing wells with existing equipment
and operating methods.

Proved Reserves The estimated quantities of crude oil, natural
gas and natural gas liquids which geological
and engineering data demonstrate with
reasonable certainty to be recoverable in
future years from known reservoirs under
existing economic and operating conditions.

Proved Undeveloped Reserves Reserves that are expected to be recovered from
new wells on undrilled acreage or from existing
wells where a relatively major expenditure is
required.

S-11

PROSPECTUS

17,274,314 SHARES

(DENBURY RESOURCES INC. LOGO)

DENBURY RESOURCES INC.

COMMON STOCK

The selling shareholders named in this prospectus may sell up to 17,274,314
shares of common stock of Denbury from time to time under this prospectus.
Denbury will not receive any of the proceeds from the sale of the common stock
by the selling shareholders.

We will provide specific terms of offerings of common stock hereunder in
supplements to this prospectus, which will include the initial offering price,
aggregate amount of the offering, risk factors and the agents, dealers or
underwriters, if any, to be used in connection with the sale of these common
stock. You should read this prospectus and any supplement carefully before you
invest.

Our common stock is traded on the New York Stock Exchange under the symbol
"DNR."

This prospectus may not be used to sell common stock unless accompanied by
a supplement to this prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this prospectus is September 23, 2003

You should rely only on the information contained in or incorporated by
reference in this prospectus and in any prospectus supplement. We have not
authorized anyone to provide you with different information. We are not making
an offer of this common stock in any state where the offer is not permitted. You
should not assume that the information contained in or incorporated by reference
in this prospectus is accurate as of any date other than the date on the front
of this prospectus or the applicable prospectus supplement.

TABLE OF CONTENTS

PAGE
----

About This Prospectus....................................... i
Where You Can Find More Information......................... i
Risk Factors................................................ 1
Forward-Looking Statements.................................. 2
The Company................................................. 3
Use of Proceeds............................................. 4
Description of Capital Stock................................ 4
Selling Shareholders........................................ 6
Plan of Distribution........................................ 7
Legal Opinions.............................................. 8
Experts..................................................... 8

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process, one or more selling shareholders may resell up to 17,274,314
shares of our common stock that they own in one or more offerings. In addition,
a separate prospectus for the Company has been included in this registration
statement under which the Company may sell up to $150 million of securities
described in that prospectus. This prospectus provides you with a general
description of the common stock such selling shareholders may offer. Each time
the selling shareholders sell common stock, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement, together with additional information described under the
heading "WHERE YOU CAN FIND MORE INFORMATION."

As used in this prospectus, "Denbury," "we," "us," and "our" refer to
Denbury Resources Inc. and its subsidiaries.

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the informational requirements of the Securities Exchange
Act of 1934, which requires us to file annual, quarterly and special reports,
proxy statements and other information with the SEC. You may read and copy any
document that we file at the Public Reference Room of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the operation of its public reference room. You may view
our reports electronically at the SEC's Internet site at http://www.sec.gov, or
at our own website at http://www.denbury.com.

This prospectus constitutes part of a Registration Statement on Form S-3
filed with the SEC under the Securities Act of 1933. It omits some of the
information contained in the Registration Statement, and reference is made to
the Registration Statement for further information with respect to us and the
common stock we are offering. Any statement contained in this prospectus
concerning the provisions of any document

filed as an exhibit to the Registration Statement or otherwise filed with the
SEC is not necessarily complete, and in each instance reference is made to the
copy of the filed document.

The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information and the
information in the prospectus. We incorporate by reference (excluding any
information furnished pursuant to Item 9 or Item 12 of any Report on Form 8-K)
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
we sell all the common stock covered by this prospectus:

1. Our Annual Report on Form 10-K for the year ended December 31,
2002;

2. Our Quarterly Reports on Form 10-Q for the quarters ended March 31
and June 30, 2003;

3. The description of our common stock contained in Amendment No. 1 to
our registration statement on Form 8-A filed on April 21, 1999, including
any amendment or report filed before or after the date of this prospectus
for the purpose of updating the description;

4. Current Reports on Form 8-K dated March 11, 2003, March 17, 2003,
March 19, 2003, May 1, 2003, July 31, 2003, August 12, 2003, and September
22, 2003; and

5. Information under the caption "Security Ownership of Certain
Beneficial Owners and Management" on pages 13 and 14 of our Definitive
Proxy Statement dated April 11, 2003.

You may request a copy of these filings at no cost, by writing or
telephoning Phil Rykhoek, Senior Vice President and Chief Financial Officer,
Denbury Resources Inc., 5100 Tennyson Pkwy., Ste. 3000, Plano, Texas 75024,
phone: (972) 673-2000.

RISK FACTORS

There are a number of risks associated with investing in Denbury and in our
industry. You should carefully review the more detailed description of risk
factors contained in the supplement to this prospectus.

STEEP OR PROLONGED DROPS IN PRICES CAN HARM US FINANCIALLY AND HURT OUR ABILITY
TO GROW.

Our revenue, profitability and cash flow depend upon the prices and demand
for oil and natural gas. The markets for oil and natural gas are very volatile,
as evidenced by the recent volatility in natural gas prices in response to the
war between the United States and Iraq. The changes in oil and natural gas
prices have a significant impact on the value of our reserves and a decline in
prices could cause a write-down of our oil and gas properties, which would
negatively affect our net income.

OUR CONTROLLING STOCKHOLDER STILL HOLDS A SIGNIFICANT PERCENTAGE OF OUR
OUTSTANDING COMMON STOCK.

Although between November 2002 and March 2003 affiliates of the Texas
Pacific Group have sold approximately 37% of the Denbury common stock that they
owned, they still beneficially own approximately 32% of our outstanding common
stock. Texas Pacific Group representatives currently hold three of eight seats
on our board of directors. As a result of this ownership and provisions of our
certificate of incorporation and bylaws, the Texas Pacific Group has
historically had the effective ability to elect all our directors and to control
our business and affairs, including decisions with respect to the acquisition or
disposition of assets, the future issuance of our common stock or other
securities, dividend policy and decisions with respect to our drilling,
operating and acquisition expenditure plans.

OIL AND NATURAL GAS DRILLING AND PRODUCING OPERATIONS INVOLVE VARIOUS RISKS.

Our drilling activities are subject to many risks, including the risk that
we will not discover commercially productive reservoirs. Operating and
developing oil and natural gas properties involves a number of inherent risks,
including the risk of personal injury, environmental contamination or loss of
wells. In addition, our drilling operations may be curtailed, delayed or
canceled as a result of other factors, including title problems, adverse weather
conditions, and compliance with environmental and other governmental
requirements. We may not be able to insure against all of these risks.

A FAILURE TO ACQUIRE PRODUCING PROPERTIES ON A PROFITABLE BASIS IN THE FUTURE
MAY SIGNIFICANTLY AFFECT OUR PROFITABILITY AND GROWTH.

Our significant growth in recent years is attributable in significant part
to our acquiring producing properties. Our ability to continue to make
successful acquisitions is influenced by many factors beyond our control.

ESTIMATING OUR RESERVES, PRODUCTION AND FUTURE NET CASH FLOW IS DIFFICULT TO DO
WITH ANY CERTAINTY.

Estimates of our proved developed oil and natural gas reserves and the
resulting future net revenues contained in this prospectus and elsewhere are
based on a number of uncertainties. A drop in prices or estimated production
volumes could materially adversely affect our revenues, profitability and
financial health.

OUR LEVEL OF INDEBTEDNESS MAY ADVERSELY AFFECT OPERATIONS AND LIMIT OUR GROWTH.

We make, and will continue to make, substantial capital expenditures to
acquire, develop, produce, explore and abandon our oil and natural gas reserves.
Our bank borrowing base is adjusted at the banks' discretion and is based in
part upon external factors over which we have no control. Further, our cash flow
from operations is highly dependent on the prices that we receive for oil and
natural gas. Any decrease in our revenues, as a result of lower oil or gas
prices or otherwise, could limit our ability to replace reserves or maintain
production at current levels. If our cash flow from operations drops
significantly, we may be unable to find additional debt or equity financing.

SHORTAGES OF OIL FIELD EQUIPMENT, SERVICES AND QUALIFIED PERSONNEL COULD REDUCE
OUR CASH FLOW AND ADVERSELY AFFECT RESULTS OF OPERATIONS.

Our ability to conduct operations in a timely and cost effective manner
depends on the availability of supplies, equipment and personnel. The oil and
gas industry is cyclical and experiences periodic shortages of drilling rigs and
other equipment, tubular goods, supplies and experienced personnel. Shortages
can delay operations and materially increase operating and capital costs.

OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO FIND, DEVELOP OR ACQUIRE ADDITIONAL
OIL AND NATURAL GAS RESERVES THAT ARE ECONOMICALLY RECOVERABLE.

Unless we successfully replace the reserves that we produce, our reserves
will decline, resulting eventually in a decrease in oil and natural gas
production. This would lead to lower production and cash flow.

OUR PRODUCTION WILL DECLINE IF OUR ACCESS TO SUFFICIENT AMOUNTS OF CARBON
DIOXIDE IS LIMITED.

The crude oil production from our tertiary recovery projects depends on our
having access to sufficient amounts of carbon dioxide (CO(2)). Our ability to
produce this oil would be hindered if our supply of CO(2) were limited due to
problems with our current CO(2) producing wells and facilities, including
compression equipment, or catastrophic pipeline failure. Our anticipated future
production growth is also dependent on our ability to increase the production
volumes of CO(2). If our crude oil production were to decline, it could have a
material adverse effect on our financial condition and results of operations.

OUR USE OF HEDGING ARRANGEMENTS COULD RESULT IN FINANCIAL LOSSES OR REDUCE OUR
INCOME.

To reduce our exposure to fluctuations in the prices of oil and natural
gas, we currently and may in the future enter into hedging arrangements for a
portion of our oil and natural gas production. Hedging arrangements expose us to
risk of financial loss in some circumstances, including when:

- production is less than expected;

- the counter-party to the hedging contract defaults on its contract
obligations (as was the case with respect to our hedges placed in 2001
with an Enron subsidiary as counter-party, which resulted in our
suffering a loss); or

- there is a change in the expected differential between the underlying
price in the hedging agreement and actual prices received.

In addition, these hedging arrangements may limit the benefit we would
receive from increases in the prices for oil and natural gas.

THE LOSS OF MORE THAN ONE OF OUR LARGE OIL AND NATURAL GAS PURCHASERS COULD HAVE
A MATERIAL ADVERSE EFFECT ON OUR OPERATIONS.

For the year ended December 31, 2002, two purchasers each accounted for
more than 10% of our oil and natural gas revenues and in the aggregate for 25%
of these revenues. We would not expect the loss of any single purchaser to have
a material adverse effect upon our operations. However, the loss of a large
single purchaser could potentially reduce the competition for our oil and
natural gas production, which in turn could negatively impact the prices we
receive.

FORWARD-LOOKING STATEMENTS

Some of the information included in this prospectus, any prospectus
supplement and the documents we have incorporated by reference contain
forward-looking statements. Forward-looking statements use forward-

looking terms such as "believe," "expect," "may," "intend," "will," "project,"
"budget," "should" or "anticipate" or other similar words. These statements
discuss "forward-looking" information such as:

- anticipated capital expenditures and budgets;

- future cash flows and borrowings;

- pursuit of potential future acquisition or drilling opportunities; and

- sources of funding for exploration and development.

These forward-looking statements are based on assumptions that we believe
are reasonable, but they are open to a wide range of uncertainties and business
risks, including the following:

- fluctuations of the prices received or demand for oil and natural gas;

- uncertainty of drilling results, reserve estimates and reserve
replacement;

- operating hazards;

- acquisition risks;

- availability and deliverability of CO(2);

- unexpected substantial variances in capital requirements;

- environmental matters; and

- general economic conditions.

Other factors that could cause actual results to differ materially from
those anticipated are discussed in our periodic filings with the SEC, including
our Annual Report on Form 10-K for the year ended December 31, 2002.

When considering these forward-looking statements, you should keep in mind
the risk factors and other cautionary statements in this prospectus, any
prospectus supplement and the documents we have incorporated by reference. We
will not update these forward-looking statements unless the securities laws
require us to do so.

THE COMPANY

We believe that CO(2) flooding is the most efficient tertiary recovery
mechanism for crude oil. Our ownership of critical CO(2) assets, our dominant
position as the largest producer in Mississippi and our inventory of prospects
have positioned us to increase our reserves there at attractive finding costs.
In our CO(2) operations in Mississippi, we believe that there are significant
additional reserves in fields controlled by us along our CO(2) pipeline in
addition to our proved reserves in this area.

We have a well-balanced portfolio of development, exploitation and
exploration projects, including long-lived oil and shorter-lived natural gas
properties. We operate our largest fields, which gives us a significant
advantage through being able to control our cost structure and the timing of
major operational decisions. A key to our growth has been our strategy of
exploitation and development of acquired properties, with a goal of doubling the
reserves in place at the time of acquisition.

As of December 31, 2002, we had estimated proved reserves of 130.7 MMBOE,
with a PV-10 Value of $1.426 billion. Of these proved reserves, 66% are proved
developed and 25.6% are natural gas. Our first quarter
3

2003 average production was 36,093 BOE/d, which was 54% oil and 46% natural gas.
From 2000 to 2002, we had a 20% compounded annual growth rate in net asset value
per share, based on the year-end PV-10 Value of our proved reserves using
constant prices of $25.00 per barrel of oil and $4.00 per mcf of natural gas in
each period. We are continuing to focus upon growth in our net asset value per
share, principally through debt reduction and increases in our reserve value
using constant prices.

We manage our operations and financial resources conservatively to enable
us to execute our business plan over the entire commodity price cycle. Our goal
is to maintain a ratio of debt to operating cash flow of not more than
approximately 2.0 to 1.0. We hedge a portion of our commodity price risk to help
protect a base level of cash flow for budgeted capital expenditures and
projected economics of properties we acquire.

Our principal executive office is located at 5100 Tennyson Parkway, Suite
3000, Plano, Texas 75024 and our telephone number is 972-673-2000.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of common stock by
the selling shareholders. The selling shareholders will receive all net proceeds
from the sale of shares of our common stock offered in this prospectus.

DESCRIPTION OF CAPITAL STOCK

GENERAL

As of June 30, 2003, we are authorized to issue up to 125,000,000 shares of
stock, including up to 100,000,000 shares of common stock, par value $.001 per
share, and up to 25,000,000 shares of preferred stock, par value $.001 per
share. As of June 30, 2003, we had 53,973,381 shares of common stock and no
shares of preferred stock outstanding. As of that date, we also had
approximately 7,209,178 shares of common stock reserved for issuance to cover
the granting or exercising of options under our option plan, or in connection
with other awards under various employee or director incentive and compensation
plans. As of June 30, 2003, a total of 5,556,262 stock options were outstanding
under our option plan.

The following is a summary of the key terms and provisions of our equity
securities. You should refer to the applicable provisions of our certificate of
incorporation, bylaws, the Delaware General Corporation Law and the documents we
have incorporated by reference for a complete statement of the terms and rights
of our capital stock.

COMMON STOCK

Voting Rights. Each holder of common stock is entitled to one vote per
share. Subject to the rights, if any, of the holders of any series of preferred
stock pursuant to applicable law or the provision of the certificate of
designation creating that series, all voting rights are vested in the holders of
shares of common stock. Holders of shares of common stock have noncumulative
voting rights, which means that the holders of more than 50% of the shares
voting for the election of directors can elect 100% of the directors, and the
holders of the remaining shares voting for the election of directors will not be
able to elect any directors. As of June 30, 2003, the Texas Pacific Group held
approximately 32% of our outstanding common stock.

Dividends. Dividends may be paid to the holders of common stock when, as
and if declared by the board of directors out of funds legally available for
their payment, subject to the rights of holders of any preferred stock. Denbury
has never declared a cash dividend and intends to continue its policy of using
retained earnings for expansion of its business.

Rights upon Liquidation. In the event of our voluntary or involuntary
liquidation, dissolution or winding up, the holders of common stock will be
entitled to share equally, in proportion to the number of shares of common stock
held by them, in any of our assets available for distribution after the payment
in full of all debts

and distributions and after the holders of all series of outstanding preferred
stock, if any, have received their liquidation preferences in full.

Non-Assessable. All outstanding shares of common stock are fully paid and
non-assessable. Any additional common stock we offer and issue under this
prospectus will also be fully paid and non-assessable.

No Preemptive Rights. Holders of common stock are not entitled to
preemptive purchase rights in future offerings of our common stock.

Listing. Our outstanding shares of common stock are listed on the New York
Stock Exchange under the symbol "DNR." Any additional common stock we issue will
also be listed on the NYSE and any other exchange on which our common stock is
then traded.

PREFERRED STOCK

Our board of directors can, without approval of our shareholders, issue one
or more series of preferred stock and determine the number of shares of each
series and the rights, preferences and limitations of each series. Our
Certificate of Incorporation requires that the decision to create a series of
preferred stock must be made by no fewer than 2/3 of the members of the board of
directors. The following description of the terms of the preferred stock sets
forth certain general terms and provisions of our authorized preferred stock. If
we offer preferred stock, a description will be filed with the SEC and the
specific designations and rights will be described in a prospectus supplement,
including the following terms:

- the series, the number of shares offered and the liquidation value of the
preferred stock;

- the price at which the preferred stock will be issued;

- the dividend rate, the dates on which the dividends will be payable and
other terms relating to the payment of dividends on the preferred stock;

- the liquidation preference of the preferred stock;

- the voting rights of the preferred stock;

- whether the preferred stock is redeemable or subject to a sinking fund,
and the terms of any such redemption or sinking fund;

- whether the preferred stock is convertible or exchangeable for any other
securities, and the terms of any such conversion; and

- any additional rights, preferences, qualifications, limitations and
restrictions of the preferred stock.

The description of the terms of the preferred stock to be set forth in an
applicable prospectus supplement will not be complete and will be subject to and
qualified in its entirety by reference to the certificate of designation
relating to the applicable series of preferred stock. The registration statement
of which this prospectus forms a part will include the certificate of
designation as an exhibit or incorporate it by reference.

Undesignated preferred stock may enable our board of directors to render
more difficult or to discourage an attempt to obtain control of us by means of a
tender offer, proxy contest, merger or otherwise, and to thereby protect the
continuity of our management. The issuance of shares of preferred stock may
adversely affect the rights of the holders of our common stock. For example, any
preferred stock issued may rank prior to our common stock as to dividend rights,
liquidation preference or both, may have full or limited voting rights and may
be convertible into shares of common stock. As a result, the issuance of shares
of preferred stock may discourage bids for our common stock or may otherwise
adversely affect the market price of our common stock or any existing preferred
stock.

Any preferred stock will, when issued, be fully paid and non-assessable.

SELLING SHAREHOLDERS

As of June 30, 2003, the selling shareholders, which are all affiliates of
the Texas Pacific Group, are holders of 17,274,314 shares of our common stock,
or approximately 32% of our outstanding common stock. Texas Pacific Group
representatives currently hold three of eight seats on our board of directors
and it is our largest shareholder. As a result of their stock ownership and
provisions of our certificate of incorporation and bylaws, the Texas Pacific
Group has historically had the effective ability to elect all our directors and
to control our business and affairs.

The following table sets forth information concerning ownership of our
issued and outstanding common stock as of June 30, 2003 by each selling
shareholder. As of June 30, 2003, there were approximately 53,973,381 shares of
our common stock issued and outstanding. Also shown below is information on the
selling shareholders' ownership of our issued and outstanding common stock after
sale of all the shares offered hereunder.

SHARES OWNED
IMMEDIATELY AFTER
SHARES OWNED AS OF SALE OF ALL
JUNE 30, 2003 SHARES TO BE
------------------------ OFFERED
PERCENT OF SHARES TO BE -----------------
NAME AND ADDRESS OF BENEFICIAL OWNER(1) SHARES OUTSTANDING OFFERED SHARES PERCENT
--------------------------------------- ---------- ----------- ------------ ------- -------

TPG Partners, L.P......................... 5,023,167 9.3% 5,023,167 -- 0%
TPG Parallel I, L.P....................... 500,596 * 500,596 -- 0%
TPG Investors II, L.P..................... 1,044,325 1.9% 1,044,325 -- 0%
TPG Parallel II, L.P...................... 683,225 1.3% 683,225 -- 0%
TPG Partners II, L.P...................... 10,011,721 18.6% 10,011,721 -- 0%
TPG 1999 Equity Partners II, L.P.......... 11,280 * 11,280 -- 0%
---------- ---- ---------- ---- --
Texas Pacific Group Totals................ 17,274,314 32.0% 17,274,314 -- 0%
========== ==== ========== ==== ==

---------------

* Less than one percent

The selling shareholders are not obligated to sell the shares offered under
this prospectus and may choose not to sell any of the shares or only a portion
of the shares. SEC rules, however, require that we assume that the selling
shareholders sell all of the shares being offered hereunder.

The prospectus supplement for any offering of the common stock by selling
shareholders will include the following information:

- the names of the selling shareholders;

- the number of shares of common stock held by each of the selling
shareholders;

- the percentage of the outstanding common stock held by each of the
selling shareholders; and

- the number of shares of common stock offered by each of the selling
shareholders.

In April 1999, we entered into a registration rights agreement with the
Texas Pacific Group covering all 27,274,314 shares of our common stock that the
Texas Pacific Group then owned. The agreement provides the Texas Pacific Group
both demand and piggyback registration rights. Under the agreement, the Texas
Pacific Group has the demand right to cause us to file up to four registration
statements. To date, the Texas Pacific

Group has exercised two demands to be included in a shelf registration, one of
which is currently available for this offering. The Texas Pacific Group's
remaining demand rights expire on April 21, 2007, and are subject to black-out
periods. Under the registration rights agreement, we cannot grant any
registration rights to any other person on terms more favorable than those
granted to the Texas Pacific Group.

PLAN OF DISTRIBUTION

The selling shareholders may sell the common stock offered by this
prospectus and applicable prospectus supplements:

- through underwriters or dealers;

- through agents;

- directly to purchasers; or

- through a combination of any such methods of sale.

Any such underwriter, dealer or agent may be deemed to be an underwriter
within the meaning of the Securities Act of 1933.

The applicable prospectus supplement relating to the common stock will set
forth:

- their offering terms, including the name or names of any underwriters,
dealers or agents;

- the purchase price of the common stock and the proceeds to us from such
sale;

- any underwriting discounts, commissions and other items constituting
compensation to underwriters, dealers or agents;

- any initial public offering price;

- any discounts or concessions allowed or reallowed or paid by underwriters
or dealers to other dealers;

- any securities exchanges on which the common stock may be listed.

If underwriters or dealers are used in the sale, the common stock will be
acquired by the underwriters or dealers for their own account and may be resold
from time to time in one or more transactions in accordance with the rules of
the New York Stock Exchange:

- at a fixed price or prices which may be changed;

- at market prices prevailing at the time of sale;

- at prices related to such prevailing market prices; or

- at negotiated prices.

The common stock may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more of such firms. Unless otherwise set forth in an applicable prospectus
supplement, the obligations of underwriters or dealers to purchase the common
stock will be subject to certain conditions precedent and the underwriters or
dealers will be obligated to purchase all the common stock if any is purchased.
Any public offering price and any discounts or concessions allowed or reallowed
or paid by underwriters or dealers to other dealers may be changed from time to
time.

Common stock may be sold directly by the selling shareholders or through
agents designated by the selling shareholders from time to time. Any agent
involved in the offer or sale of the common stock in respect of which this
prospectus and a prospectus supplement is delivered will be named, and any
commissions payable by the selling shareholders to such agent will be set forth,
in the prospectus supplement. Unless otherwise indicated in the prospectus
supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.

If so indicated in the prospectus supplement, the selling shareholders will
authorize underwriters, dealers or agents to solicit offers from certain
specified institutions to purchase common stock from the selling shareholders at
the public offering price set forth in the prospectus supplement pursuant to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. Such contracts will be subject to any conditions set forth
in the prospectus supplement and the prospectus supplement will set forth the
commission payable for solicitation of such contracts. The underwriters and
other persons soliciting such contracts will have no responsibility for the
validity or performance of any such contracts.

Underwriters, dealers and agents may be entitled under agreements entered
into with the selling shareholders to be indemnified by us against certain civil
liabilities, including liabilities under the Securities Act of 1933, or to
contribution by us to payments which they may be required to make. The terms and
conditions of such indemnification will be described in an applicable prospectus
supplement. Underwriters, dealers and agents may be customers of, engage in
transactions with, or perform services for, us in the ordinary course of
business.

Certain persons participating in any offering of common stock may engage in
transactions that stabilize, maintain or otherwise affect the price of the
common stock offered. In connection with any such offering, the underwriters or
agents, as the case may be, may purchase and sell common stock in the open
market. These transactions may include overallotment and stabilizing
transactions and purchases to cover syndicate short positions created in
connection with the offering. Stabilizing transactions consist of certain bids
or purchases for the purpose of preventing or retarding a decline in the market
price of the common stock; and syndicate short positions involve the sale by the
underwriters or agents, as the case may be, of a greater number of common stock
than they are required to purchase from us, as the case may be, in the offering.
The underwriters may also impose a penalty bid, whereby selling concessions
allowed to syndicate members or other broker-dealers for the common stock sold
for their account may be reclaimed by the syndicate if such common stock are
repurchased by the syndicate in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
common stock, which may be higher than the price that might otherwise prevail in
the open market, and if commenced, may be discontinued at any time. These
transactions may be effected on the New York Stock Exchange in the
over-the-counter market or otherwise. These activities will be described in more
detail in the sections entitled "Plan of Distribution" or "Underwriting" in the
applicable prospectus supplement.

LEGAL OPINIONS

Jenkens & Gilchrist, A Professional Corporation, will issue an opinion for
Denbury regarding the legality of the common stock offered by this prospectus
and applicable prospectus supplement. If the common stock is being distributed
in an underwritten offering, certain legal matters will be passed upon for the
underwriters by counsel identified in the applicable prospectus supplement.

EXPERTS

The consolidated financial statements incorporated in this prospectus by
reference from Denbury's Annual Report on Form 10-K for the year ended December
31, 2002, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.

With respect to the unaudited interim financial information for the periods
ended March 31, 2003 and 2002 and June 30, 2003 and 2002 which is incorporated
herein by reference, Deloitte & Touche LLP have applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their reports included in the Company's Quarterly Reports
on Form 10-Q for the quarters ended March 31, 2003 and June 30, 2003 and
incorporated by reference herein (which reports include an emphasis paragraph
regarding the adoption of Statement of Financial Accounting Standards No. 143,
"Accounting for Retirement Obligations"), they did not audit and they do not
express an opinion on

that interim financial information. Accordingly, the degree of reliance on their
report on such information should be restricted in light of the limited nature
of the review procedures applied. Deloitte & Touche LLP are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited interim financial information because those reports are
not "reports" or a "part" of the registration statement prepared or certified by
an accountant within the meaning of Sections 7 and 11 of the Act.

Certain estimates of our oil and natural gas reserves and related
information incorporated by reference in this prospectus have been derived from
engineering reports prepared by DeGoyler and MacNaughton as of December 31,
2002, 2001 and 2000, and all such information has been so included on the
authority of such firm as an expert regarding the matters contained in its
reports.

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DENBURY RESOURCES LOGO

DENBURY RESOURCES INC.

8,000,000 SHARES

COMMON STOCK

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PROSPECTUS SUPPLEMENT
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December 19, 2003

CIBC WORLD MARKETS

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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. NO DEALER, SALESPERSON OR OTHER PERSON IS
AUTHORIZED TO GIVE INFORMATION THAT IS NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING BASE PROSPECTUS. THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING BASE PROSPECTUS ARE NOT AN OFFER TO SELL
NOR ARE THEY SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION
CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING BASE
PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS SUPPLEMENT,
REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR ANY
SALE OF THESE SECURITIES.

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