

	December 31,
In thousands	2019			2018
Senior Secured Bank Credit Agreement	$	—		$	—
9% Senior Secured Second Lien Notes due 2021	614,919			614,919
9¼% Senior Secured Second Lien Notes due 2022	455,668			455,668
7¾% Senior Secured Second Lien Notes due 2024	531,821			—
7½% Senior Secured Second Lien Notes due 2024	20,641			450,000
6⅜% Convertible Senior Notes due 2024	245,548			—
6⅜% Senior Subordinated Notes due 2021	51,304			203,545
5½% Senior Subordinated Notes due 2022	58,426			314,662
4⅝% Senior Subordinated Notes due 2023	135,960			307,978
Pipeline financings	167,439			180,073
Capital lease obligations	—			5,362
Total debt principal balance	2,281,726			2,532,207
Debt discount⁽¹⁾	(101,767		)	—
Future interest payable⁽²⁾	164,914			250,218
Debt issuance costs	(10,009		)	(13,089		)
Total debt, net of debt issuance costs and discount	2,334,864			2,769,336
Less: current maturities of long-term debt⁽³⁾	(102,294		)	(105,125		)
Long-term debt and capital lease obligations	$	2,232,570		$	2,664,211

The ultimate parent company in our corporate structure, Denbury Resources Inc. (“DRI”), is the sole issuer of all our outstanding senior secured, convertible senior, and senior subordinated notes. DRI has no independent assets or operations. Each of the subsidiary guarantors of such notes is 100% owned, directly or indirectly, by DRI, and the guarantees of the notes are full and unconditional and joint and several; any subsidiaries of DRI that are not subsidiary guarantors of such notes are minor subsidiaries.

In December 2014, we entered into an Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and other lenders party thereto (as amended, the “Bank Credit Agreement”). The Bank Credit Agreement is a senior secured revolving credit facility with a maturity date of December 9, 2021, provided that the maturity date may occur earlier (February 12, 2021, May 14, 2021 or August 13, 2021) if the 2021 Senior Secured Notes due in May 2021 or 6⅜% Senior Subordinated Notes due in August 2021 (the “2021 Senior Subordinated Notes”), respectively, are not repaid or refinanced by each of their respective maturity dates. As of December 31, 2019, the borrowing base and lender commitments for the revolving credit facility were $615 million, and scheduled redeterminations of the borrowing base are to occur semiannually in May and

November of each year, with the next such redetermination being scheduled for May 2020. If our outstanding debt under the Bank Credit Agreement were to ever exceed the borrowing base, we would be required to repay the excess amount over a period not to exceed six months. Under the Bank Credit Agreement, letters of credit are available in an aggregate amount not to exceed $100 million, which may be increased at the sole discretion of the administrative agent, and short-term swingline loans are available in an aggregate amount not to exceed $25 million, each subject to the available commitments under the Bank Credit Agreement. The Bank Credit Agreement is guaranteed jointly and severally by each subsidiary of DRI that is 100% owned, directly or indirectly, by DRI and is secured by (1) a significant portion of our proved oil and natural gas properties held through DRI’s restricted subsidiaries; (2) the pledge of equity interests of such subsidiaries; (3) a pledge of commodity derivative agreements of DRI and such subsidiaries (as applicable); and (4) a pledge of deposit accounts, securities accounts and commodity accounts of DRI and such subsidiaries (as applicable).

As of December 31, 2019, (1) loans under the Bank Credit Agreement were subject to varying rates of interest based on either (a) for ABR Loans, a base rate determined under the Bank Credit Agreement (the “ABR”) plus an applicable margin ranging from 1.75% to 2.75% per annum, or (b) for LIBOR Loans, the LIBOR rate plus an applicable margin ranging from 2.75% to 3.75% per annum (capitalized terms as defined in the Bank Credit Agreement) and (2) the undrawn portion of the aggregate lender commitments under the Bank Credit Agreement was subject to a commitment fee of 0.50%. As of December 31, 2019, we had no outstanding borrowings, $87.2 million of letters of credit outstanding and were in compliance with all debt covenants under the Bank Credit Agreement.

During the third quarter of 2019, we repurchased $11.0 million in aggregate principal amount of our then outstanding 5½% Senior Subordinated Notes due 2022 (the “2022 Senior Subordinated Notes”) in open market transactions for a total purchase price of $5.3 million, excluding accrued interest. Additionally, during the fourth quarter of 2019, we repurchased principally through exchanges an additional $25.3 million in aggregate principal amount of our then outstanding 2022 Senior Subordinated Notes and $75.7 million in aggregate principal amount of our then outstanding 4⅝% Senior Subordinated Notes due 2023 (the “2023 Senior Subordinated Notes”) for $11.2 million in cash and issuance of 38.3 million shares of the Company’s common stock. In connection with these transactions, we recognized a $55.5 million gain on debt extinguishment, net of unamortized debt issuance costs written off, during the year ended December 31, 2019, in our Consolidated Statements of Operations.

principal amount of our then outstanding senior subordinated notes for $102.6 million aggregate principal amount of new 7¾% Senior Secured Notes, $245.5 million aggregate principal amount of new 2024 Convertible Senior Notes and $120.0 million of cash. The exchanged senior subordinated notes consisted of $152.2 million aggregate principal amount of our 2021 Senior Subordinated Notes, $219.9 million aggregate principal amount of our 2022 Senior Subordinated Notes and $96.3 million aggregate principal amount of our 2023 Senior Subordinated Notes. In addition, holders also exchanged $425.4 million of 7½% Senior Secured Second Lien Notes due 2024 (the “7½% Senior Secured Notes”) for $425.4 million aggregate principal amount of 7¾% Senior Secured Notes. In July 2019, holders exchanged an additional $4.0 million aggregate principal amount of 7½% Senior Secured Notes for $3.8 million aggregate principal amount of 7¾% Senior Secured Notes. As a result, we recognized a noncash gain on debt extinguishment, net of transaction costs, totaling $100.5 million for the year ended December 31, 2019, in our Consolidated Statements of Operations.

In accordance with FASC 470-50, Modifications and Extinguishments, the June 2019 exchange of our existing senior subordinated notes was accounted for as a debt extinguishment. Therefore, our new 7¾% Senior Secured Notes and new 2024 Convertible Senior Notes were recorded on our balance sheet at fair market value based upon initial trading prices following their issuance, resulting in a discount to their principal amount of $22.6 million and $79.9 million, respectively. These debt discounts will be amortized as interest expense over the terms of these notes.

During January 2018, we closed transactions to exchange a total of $174.3 million aggregate principal amount of our then existing senior subordinated notes for $74.1 million aggregate principal amount of new 2022 Senior Secured Notes and $59.4 million aggregate principal amount of our previously outstanding 2023 Convertible Senior Notes, resulting in a net reduction in our debt principal from these exchanges of $40.8 million. The exchanged notes consisted of $11.6 million aggregate principal amount of our 2021 Senior Subordinated Notes, $94.2 million aggregate principal amount of our 2022 Senior Subordinated Notes and $68.5 million aggregate principal amount of our 2023 Senior Subordinated Notes. In May 2018, the debt principal balance and future interest applicable to the 2023 Convertible Senior Notes were reclassified to “Paid-in capital in excess of par” and “Common stock” in our Consolidated Balance Sheets following the conversion of the notes into shares of Denbury common stock (see Conversions of 2023 and 2024 Convertible Senior Notes into Common Stock in April and May 2018 below for further discussion).

During December 2017, we entered into privately negotiated agreements to exchange a total of $609.8 million aggregate principal amount of our existing senior subordinated notes for $381.6 million aggregate principal amount of new 2022 Senior Secured Notes and $84.7 million aggregate principal amount of 3½% Convertible Senior Notes due 2024, resulting in a net reduction in our debt principal from these exchanges of $143.6 million. The exchanged notes consisted of $364.0 million aggregate principal amount of our 2022 Senior Subordinated Notes and $245.8 million aggregate principal amount of our 2023 Senior Subordinated Notes.

During the second quarter of 2018, holders of all $59.4 million aggregate principal amount outstanding of our 2023 Convertible Senior Notes and $84.7 million aggregate principal amount outstanding of our 3½% Convertible Senior Notes due 2024 converted their notes into shares of Denbury common stock, at the rates specified in the indentures for these notes, resulting in the issuance of 55.2 million shares of our common stock upon conversion. The debt principal balances and future interest treated as debt applicable to the 2023 Convertible Senior Notes and 3½% Convertible Senior Notes due 2024, totaling $162.0 million, were reclassified to “Paid-in capital in excess of par” and “Common stock” in our Consolidated Balance Sheets upon the conversion of the notes into shares of Denbury common stock. As of April 18, 2018 and May 30, 2018, there were no remaining 3½% Convertible Senior Notes due 2024 and 2023 Convertible Senior Notes outstanding, respectively.

9% Senior Secured Second Lien Notes due 2021. In May 2016, we issued $614.9 million of 2021 Senior Secured Notes. The 2021 Senior Secured Notes, which bear interest at a rate of 9% per annum, were issued at par in connection with privately negotiated exchanges with a limited number of holders of existing senior subordinated notes. The 2021 Senior Secured Notes mature on May 15, 2021, and interest is payable semiannually in arrears on May 15 and November 15 of each year. At any time prior to December 15, 2020, we may redeem the 2021 Senior Secured Notes in whole or in part at our option, at a redemption price of 104.50% of the principal amount, and at par thereafter, as specified in the indenture. The 2021 Senior Secured Notes are not subject to any sinking fund requirements.

The 2021 Senior Secured Notes are guaranteed jointly and severally by our subsidiaries representing substantially all of our assets, operations and income and are secured by second-priority liens on substantially all of the assets that secure the Bank Credit Agreement, which second-priority liens are contractually subordinated to liens that secure our Bank Credit Agreement and any future additional priority lien debt.

9¼% Senior Secured Second Lien Notes due 2022. In December 2017 and January 2018, we issued $381.6 million and $74.1 million, respectively, of 2022 Senior Secured Notes. The 2022 Senior Secured Notes, which bear interest at a rate of 9.25% per annum, were issued at par in connection with exchanges with a limited number of holders of existing senior subordinated notes (see January 2018 Senior Subordinated Note Exchanges and 2017 Senior Subordinated Note Exchanges above). The 2022 Senior Secured Notes mature on March 31, 2022, and interest is payable semiannually in arrears on March 31 and September 30 of each year. We may redeem the 2022 Senior Secured Notes in whole or in part at our option, at a redemption price of 109.25% of the principal amount at any time prior to March 31, 2020, 104.625% of the principal amount prior to March 31, 2021, and at par thereafter. The 2022 Senior Secured Notes are not subject to any sinking fund requirements.

The 2022 Senior Secured Notes are guaranteed jointly and severally by our subsidiaries representing substantially all of our assets, operations and income and are secured by second-priority liens on substantially all of the assets that secure the Bank Credit Agreement, which second-priority liens are contractually subordinated to liens that secure our Bank Credit Agreement and any future additional priority lien debt.

7¾% Senior Secured Second Lien Notes due 2024. In June 2019, we issued $528.0 million of 7¾% Senior Secured Notes in connection with exchanges with certain holders of the Company’s outstanding senior subordinated notes and existing 7½% Senior Secured Notes (see 2019 Debt Reduction Transactions above). The 7¾% Senior Secured Notes, which carry a stated interest rate of 7.75% per annum, were recorded at approximately 94% of their principal amount in accordance with FASC 470-50, Modifications and Extinguishments, which equates to an effective yield to maturity of approximately 9.39%. In July 2019, we issued an additional $3.8 million of 7¾% Senior Secured Notes in exchange for $4.0 million of 7½% Senior Secured Notes, which were recorded at par. The 7¾% Senior Secured Notes mature on February 15, 2024, and interest is payable semiannually in arrears on February 15 and August 15 of each year. We may redeem the 7¾% Senior Secured Notes in whole or in part at our option beginning August 15, 2020, at a redemption price of 103.875% of the principal amount, and at declining redemption prices thereafter, as specified in the indenture governing the 7¾% Senior Secured Notes. Prior to August 15, 2020, we may at our option redeem up to an aggregate of 35% of the principal amount of the 7¾% Senior Secured Notes at a price of 107.75% of par with the proceeds of certain equity offerings. In addition, at any time prior to August 15, 2020, we may redeem the 7¾% Senior Secured Notes in whole or in part at a price equal to 100% of the principal amount plus a “make-whole” premium and accrued and unpaid interest. The 7¾% Senior Secured Notes are not subject to any sinking fund requirements.

The 7¾% Senior Secured Notes are guaranteed jointly and severally by our subsidiaries representing substantially all of our assets, operations and income and are secured by second-priority liens on substantially all of the assets that secure the Bank Credit Agreement, which second-priority liens are contractually subordinated to liens that secure our Bank Credit Agreement and any future additional priority lien debt.

7½% Senior Secured Second Lien Notes due 2024. In August 2018, we issued $450.0 million of 7½% Senior Secured Notes. The 7½% Senior Secured Notes, which bear interest at a rate of 7.50% per annum, were issued at par to repay outstanding borrowings on our Bank Credit Agreement, with additional proceeds used for general corporate purposes. After note exchanges completed in June and July of 2019, $20.6 million principal amount of the 7½% Senior Secured Notes remained outstanding as of December 31, 2019. The 7½% Senior Secured Notes mature on February 15, 2024, and interest is payable semiannually in arrears on February 15 and August 15 of each year. We may redeem the 7½% Senior Secured Notes in whole or in part at our

option beginning August 15, 2020, at a redemption price of 103.75% of the principal amount, and at declining redemption prices thereafter, as specified in the indenture governing the 7½% Senior Secured Notes. Prior to August 15, 2020, we may at our option redeem up to an aggregate of 35% of the principal amount of the 7½% Senior Secured Notes at a price of 107.50% of par with the proceeds of certain equity offerings. In addition, at any time prior to August 15, 2020, we may redeem the 7½% Senior Secured Notes in whole or in part at a price equal to 100% of the principal amount plus a “make-whole” premium and accrued and unpaid interest. The 7½% Senior Secured Notes are not subject to any sinking fund requirements.

The 7½% Senior Secured Notes are guaranteed jointly and severally by our subsidiaries representing substantially all of our assets, operations and income and are secured by second-priority liens on substantially all of the assets that secure the Bank Credit Agreement, which second-priority liens are contractually subordinated to liens that secure our Bank Credit Agreement and any future additional priority lien debt.

Restrictive Covenants in Indentures for Senior Secured Second Lien Notes. Each of the indentures for the 2021 Senior Secured Notes, 2022 Senior Secured Notes, 7¾% Senior Secured Notes and 7½% Senior Secured Notes contains customary covenants that are generally consistent and that restrict our ability and the ability of our restricted subsidiaries to (1) incur additional debt; (2) make investments; (3) create liens on our assets or the assets of our restricted subsidiaries; (4) create limitations on the ability of our restricted subsidiaries to pay dividends or make other payments to DRI or other restricted subsidiaries; (5) engage in transactions with our affiliates; (6) transfer or sell assets or subsidiary stock; (7) consolidate, merge or transfer all or substantially all of our assets and the assets of our restricted subsidiaries; and (8) make restricted payments (which includes paying dividends on our common stock or redeeming, repurchasing or retiring such stock or subordinated debt (including existing senior subordinated notes)), provided that in certain circumstances we may make unlimited restricted payments so long as we maintain a Leverage Ratio (as defined in the indentures) not to exceed 2.5 to 1.0 (both before and after giving effect to any restricted payment). As of December 31, 2019, we were in compliance with all debt covenants under the indentures related to our senior secured second lien notes.

6⅜% Convertible Senior Notes due 2024. In June 2019, we issued $245.5 million of 2024 Convertible Senior Notes in connection with exchanges with certain holders of the Company’s outstanding senior subordinated notes (see 2019 Debt Reduction Transactions above). The 2024 Convertible Senior Notes, which carry a stated interest rate of 6.375% per annum, were recorded at approximately 67% of their principal amount in accordance with FASC 470-50, Modifications and Extinguishments, which equates to an effective yield to maturity of approximately 15.31%. Interest on the 2024 Convertible Senior Notes is payable semiannually in arrears on June 30 and December 30 of each year and mature on December 31, 2024. We do not have the right to redeem the 2024 Convertible Senior Notes prior to their maturity. The 2024 Convertible Senior Notes are convertible into shares of our common stock at any time, at the option of the holders, at a rate of 370 shares of common stock per $1,000 principal amount of 2024 Convertible Senior Notes, which is equivalent to approximately 90.9 million shares of the Company’s common stock, subject to customary adjustments to the conversion rate and threshold price with respect to, among other things, stock dividends and distributions, mergers and reclassifications. The 2024 Convertible Senior Notes will be automatically converted into shares of common stock at this rate if the volume weighted average trading price of the Company’s common stock equals or exceeds the threshold price, which is $2.43 per share, for 10 trading days in any period of 15 consecutive trading days, subject to satisfaction of certain other conditions. Additionally, the Company may, based on a determination of its Board of Directors that such changes are in the best interests of the Company, and subject to certain limitations, increase the conversion rate. Any such conversion rate increase would cause a proportional decrease in the threshold price for mandatory conversions, and thereby would enable the Company to require a mandatory conversion into common stock at a lower price.

Restrictive Covenants in Indentures for Convertible Senior Notes. The indenture for the 2024 Convertible Senior Notes contains certain covenants that restrict our ability and the ability of our restricted subsidiaries to take or permit certain actions, including restrictions on our ability and the ability of our restricted subsidiaries to (1) incur additional debt; (2) make investments; (3) create liens on our assets or the assets of our restricted subsidiaries; (4) create restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to DRI or other restricted subsidiaries; (5) engage in transactions with our affiliates; (6) transfer or sell assets or subsidiary stock; (7) consolidate, merge or transfer all or substantially all of our assets and the assets of our restricted subsidiaries; and (8) make restricted payments (which includes paying dividends on our common stock or redeeming, repurchasing or retiring such stock or subordinated debt), provided that in certain circumstances we may make unlimited restricted payments so long as we maintain a Leverage Ratio (both as defined in the indenture) not to exceed 2.5 to 1.0

6⅜% Senior Subordinated Notes due 2021. In February 2011, we issued $400 million of 2021 Senior Subordinated Notes. The 2021 Senior Subordinated Notes, which bear interest at a rate of 6.375% per annum, were sold at par. After note repurchases in open market transactions and exchange transactions completed over the last four years, $51.3 million principal amount of the 2021 Senior Subordinated Notes remained outstanding as of December 31, 2019. The 2021 Senior Subordinated Notes mature on August 15, 2021, and interest is payable on February 15 and August 15 of each year. We may redeem the 2021 Senior Subordinated Notes in whole or in part at our option at a redemption price of 100% of the principal amount.

5½% Senior Subordinated Notes due 2022. In April 2014, we issued $1.25 billion of 2022 Senior Subordinated Notes. The 2022 Senior Subordinated Notes, which bear interest at a rate of 5.5% per annum, were sold at par. After note repurchases in open market transactions and exchange transactions completed over the last four years, $58.4 million principal amount of the 2022 Senior Subordinated Notes remained outstanding as of December 31, 2019. The 2022 Senior Subordinated Notes mature on May 1, 2022, and interest is payable on May 1 and November 1 of each year. At any time prior to May 1, 2020, we may redeem the 2022 Senior Subordinated Notes in whole or in part at our option, at a redemption price of 101.375% of the principal amount, and at par thereafter, as specified in the indenture. The 2022 Senior Subordinated Notes are not subject to any sinking fund requirements.

4⅝% Senior Subordinated Notes due 2023. In February 2013, we issued $1.2 billion of 2023 Senior Subordinated Notes. The 2023 Senior Subordinated Notes, which bear interest at a rate of 4.625% per annum, were sold at par. After note repurchases in open market transactions and exchange transactions completed over the last four years, $136.0 million principal amount of the 2023 Senior Subordinated Notes remained outstanding as of December 31, 2019. The 2023 Senior Subordinated Notes mature on July 15, 2023, and interest is payable on January 15 and July 15 of each year. At any time prior to January 15, 2021, we may redeem the 2023 Senior Subordinated Notes in whole or in part at our option at a redemption price of 100.771% of the principal amount, and at par thereafter, as specified in the indenture. The 2023 Senior Subordinated Notes are not subject to any sinking fund requirements.

Restrictive Covenants in Indentures for Senior Subordinated Notes. Each of the indentures for the 2021 Senior Subordinated Notes, 2022 Senior Subordinated Notes and 2023 Senior Subordinated Notes contains certain covenants that are generally consistent and that restrict our ability and the ability of our restricted subsidiaries to take or permit certain actions, including restrictions on our ability and the ability of our restricted subsidiaries to (1) incur additional debt; (2) make investments; (3) create liens on our assets or the assets of our restricted subsidiaries; (4) create restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to DRI or other restricted subsidiaries; (5) engage in transactions with our affiliates; (6) transfer or sell assets or subsidiary stock; (7) consolidate, merge or transfer all or substantially all of our assets and the assets of our restricted subsidiaries; and (8) make restricted payments (which includes paying dividends on our common stock or redeeming, repurchasing or retiring such stock or subordinated debt), provided that the restricted payments covenant in the indentures for the 2022 Senior Subordinated Notes and 2023 Senior Subordinated Notes permits us in certain circumstances to make unlimited restricted payments so long as we maintain a Leverage Ratio (both as defined in the 2022 Senior Subordinated Notes and 2023 Senior Subordinated Notes Indentures) not to exceed 2.5 to 1.0 (both before and after giving effect to any restricted payment), although we will not be able to realize the practical benefit of the restricted payment covenant flexibility in the 2022 Senior Subordinated Notes and 2023 Senior Subordinated Notes Indentures until the 2021 Senior Subordinated Notes have been redeemed or retired. As of December 31, 2019, we were in compliance with all debt covenants under the indentures related to our senior subordinated notes.

In connection with the issuance of our outstanding long-term debt, we have incurred debt issuance costs, which are being amortized to interest expense using the straight line or effective interest method over the term of each related facility or borrowing. Remaining unamortized debt issuance costs were $14.0 million and $19.1 million at December 31, 2019 and 2018, respectively. Issuance costs associated with our Bank Credit Agreement are included in “Other assets” in our Consolidated Balance Sheets, and issuance costs associated with our senior secured second lien notes, convertible senior notes, and senior subordinated notes are included as a reduction of “Long-term debt, net of current portion” in our Consolidated Balance Sheets.