Unassociated Document


    
      

    

    
      Exhibit 10.4

      


      


      CARBON
DIOXIDE TRANSPORTATION AGREEMENT

      


      BETWEEN

      


      DENBURY
RESOURCES INC.

      


      AS
“TRANSPORTER”

      


      AND

      


      GENESIS
CRUDE OIL, L.P.

      


      AS
“SHIPPER”


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      CARBON
DIOXIDE TRANSPORTATION AGREEMENT

      


      TABLE
OF CONTENTS

      
 

      
        
          
            	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      
	
                    ARTICLE
      I - DEFINITIONS

                  	
                    1

                  
	
                    1.1

                  	
                    Defined
      words and terms

                  	
                    1

                  
	 
      	 
      	 
      
	
                    ARTICLE
      II - SCOPE OF TRANSPORTATION SERVICE

                  	
                    3

                  
	
                    2.1

                  	
                    Transportation
      of Carbon Dioxide

                  	
                    3

                  
	
                    2.2

                  	
                    Redelivery
      of Carbon Dioxide

                  	
                    4

                  
	
                    2.3

                  	
                    Non-Exclusive
      Transportation

                  	
                    4

                  
	
                    2.5

                  	
                    Operation
      of Transporter’s Pipeline

                  	
                    4

                  
	
                    2.6

                  	
                    Transporter’s
      Processing Rights

                  	
                    4

                  
	
                    2.7

                  	
                    Excess
      Quantities

                  	
                    4

                  
	
                    2.8

                  	
                    Call
      Option

                  	
                    5

                  
	 
      	 
      	 
      
	
                    ARTICLE
      III - RATES AND CHARGES

                  	
                    5

                  
	
                    3.1

                  	
                    Initial
      Rate

                  	
                    5

                  
	
                    3.2

                  	
                    Adjusted
      Rate

                  	
                    5

                  
	
                    3.3

                  	
                    Minimum
      Rate

                  	
                    5

                  
	
                    3.4

                  	
                    Tax
      Reimbursement

                  	
                    5

                  
	 
      	 
      	 
      
	
                    ARTICLE
      IV - TERM; EARLY TERMINATION FOR DEFAULT

                  	
                    6

                  
	
                    4.1

                  	
                    Term

                  	
                    6

                  
	
                    4.2

                  	
                    Default

                  	
                    6

                  
	
                    4.3

                  	
                    Occurrence
      of Default

                  	
                    6

                  
	 
      	 
      	 
      
	
                    ARTICLE
      V - RECEIPT POINTS, DELIVERY POINTS AND PRESSURES

                  	
                    7

                  
	
                    5.1

                  	
                    Receipt
      Points and Delivery Points

                  	
                    7

                  
	
                    5.2

                  	
                    Responsibility

                  	
                    7

                  
	
                    5.3

                  	
                    Pressure
      Criteria

                  	
                    7

                  
	 
      	 
      	 
      
	
                    ARTICLE
      VI - QUANTITY

                  	
                    7

                  
	
                    6.1

                  	
                    Delivery
      Rates

                  	
                    7

                  
	
                    6.2

                  	
                    Cooperation
      Regarding Deliveries

                  	
                    8

                  
	 
      	 
      	 
      
	
                    ARTICLE
      VII - QUALITY SPECIFICATIONS

                  	
                    8

                  
	
                    7.1

                  	
                    Specification

                  	
                    8

                  
	
                    7.2

                  	
                    Testing

                  	
                    8

                  
	
                    7.3

                  	
                    Failure
      to Meet

                  	
                    8

                  
	 
      	 
      	 
      
	
                    ARTICLE
      VIII - OWNERSHIP AND OPERATION OF FACILITIES

                  	
                    9

                  
	
                    8.1

                  	
                    Facility
      Ownership

                  	
                    9

                  


          

        

      

      

        
          
             


          

          
            i

            
              

            

          

          
             


          

        

      

       

      
        
          
            	
                    ARTICLE
      IX – MEASUREMENT

                  	
                    9

                  
	
                    9.1

                  	
                    Measurement
      Point

                  	
                    9

                  
	
                    9.2

                  	
                    Procedure

                  	
                    9

                  
	
                    9.3

                  	
                    Atmospheric
      Pressure

                  	
                    9

                  
	
                    9.4

                  	
                    Meter
      Standards

                  	
                    9

                  
	
                    9.5

                  	
                    Temperature

                  	
                    9

                  
	
                    9.6

                  	
                    Density

                  	
                    9

                  
	
                    9.7

                  	
                    Samples

                  	
                    9

                  
	 
      	 
      	 
      
	
                    ARTICLE
      X - FORCE MAJEURE

                  	
                    10

                  
	
                    10.1

                  	
                    Definition

                  	
                    10

                  
	
                    10.2

                  	
                    Extended
      Force Majeure

                  	
                    10

                  
	
                    10.3

                  	
                    Strikes
      and Lockouts

                  	
                    10

                  
	 
      	 
      	 
      
	
                    ARTICLE
      XI - NOTICES

                  	
                    11

                  
	
                    11.1

                  	
                    Transporter
      Notices

                  	
                    11

                  
	
                    11.2

                  	
                    Shipper
      Notices

                  	
                    11

                  
	
                    11.3

                  	
                    Change
      of Address

                  	
                    11

                  
	 
      	 
      	 
      
	
                    ARTICLE
      XII - PAYMENT, AUDIT AND FINANCIAL RESPONSIBILITY

                  	
                    11

                  
	
                    12.1

                  	
                    Payment

                  	
                    11

                  
	
                    12.2

                  	
                    Auditing

                  	
                    11

                  
	
                    12.3

                  	
                    Failure
      to Pay

                  	
                    12

                  
	
                    12.4

                  	
                    Financial
      Responsibility

                  	
                    12

                  
	 
      	 
      	 
      
	
                    ARTICLE
      XIII - WARRANTY

                  	
                    12

                  
	
                    13.1

                  	
                    Warranty

                  	
                    12

                  
	 
      	 
      	 
      
	
                    ARTICLE
      XIV - GENERAL TERMS AND CONDITIONS

                  	
                    12

                  
	
                    14.1

                  	
                    Waiver
      of Breach

                  	
                    13

                  
	
                    14.2

                  	
                    Regulatory
      Bodies

                  	
                    13

                  
	
                    14.3

                  	
                    CHOICE
      OF LAW

                  	
                    13

                  
	
                    14.4

                  	
                    Joint
      Preparation

                  	
                    13

                  
	
                    14.5

                  	
                    Assignment

                  	
                    13

                  
	
                    14.6

                  	
                    Modification
      and Entire Agreement

                  	
                    13

                  
	
                    14.7

                  	
                    Headings

                  	
                    13

                  
	
                    14.8

                  	
                    Damage
      Limitation

                  	
                    14

                  
	
                    14.9

                  	
                    Arbitration

                  	
                    14

                  
	
                    14.10

                  	
                    Master
      Agreement; Conflicts

                  	
                    14

                  


          

        

      

      

        
          
             


          

          
            ii

            
              

            

          

          
             


          

        

      

       

      CARBON
DIOXIDE TRANSPORTATION AGREEMENT

      


      


      THIS CARBON DIOXIDE TRANSPORTATION
AGREEMENT (this “Agreement”), made and
entered into effective as of September 1, 2003, by and between DENBURY RESOURCES INC., a
Delaware corporation, hereinafter referred to as “Transporter”, and
GENESIS CRUDE OIL, L.P.,
a Delaware limited partnership, hereinafter referred to as “Shipper”.

      


      WITNESSETH:

      


      WHEREAS, Shipper owns an
interest in and/or has the right to market or otherwise control the disposition
of Carbon Dioxide produced from certain wells located in the Jackson Dome area
in Rankin County, Mississippi; and,

      


      WHEREAS, Transporter owns and
operates a gathering system connected to a mainline pipeline extending
approximately one hundred eighty-three miles from a point at the outlet flange
of a Carbon Dioxide dehydration facility located in Rankin County near Jackson,
Mississippi, to a point in White Castle, Ascension Parish, Louisiana, which
currently is capable of delivering Carbon Dioxide to the various delivery
points; and,

      


      WHEREAS, Transporter currently
has available pipeline capacity for the transportation of Carbon Dioxide for
Shipper; and,

      


      WHEREAS, Shipper desires to
arrange for the transportation of Carbon Dioxide through Transporter’s pipeline
and Transporter desires to receive from, transport and redeliver to Shipper
Carbon Dioxide in accordance with the terms and conditions stated in this
Agreement.

      


      NOW, THEREFORE, for and in
consideration of the mutual benefits to be derived, the terms and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Transporter and Shipper hereby
agree with each other as follows:

      


      ARTICLE
I

      DEFINITIONS

      


      1.1           Defined words and
terms.  Except where the context otherwise indicates another or
different meaning or intent, the following words and terms as used herein shall
have the meanings indicated:

      


      (a)           The
term “Airgas
Contract”  has the meaning set out in the Master
Agreement.


      
        
           


        

        
          1

          
            

          

        

        
           


        

      

       

      (b)           The
term “Bankruptcy
Event” means, with respect to either party, the entry of a decree or
order by a court of competent jurisdiction adjudging the party a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the party under the
Federal Bankruptcy Code or any other applicable law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
party or of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of sixty (60) consecutive days; or the
consent by such party to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or consent seeking
reorganization or similar relief under the Federal Bankruptcy Code or any other
applicable law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the party or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as they
become due and its willingness to be adjudicated a bankrupt.

      


      (c)           The
terms “Carbon
Dioxide” and “CO2” each mean a
substance primarily composed of molecules containing one atom of carbon and two
atoms of oxygen and containing at least  95 percent by volume of such
molecules.

      


      (d)           The
term “Contract
Year” means a period of three hundred sixty-five (365) consecutive days
beginning on the first day of a full month following the month in which
deliveries commence under this Agreement or on any anniversary thereof;
provided, however, that any such year which contains a date of February 29th shall
consist of three hundred sixty-six (366) consecutive days.  This
definition of Contract Year contemplates the possibility of first deliveries
occurring on a day other than the first day of a month.

      


      (e)           The
term “cubic
foot” is the amount of Carbon Dioxide necessary to fill one cubic foot of
space at a base pressure of 15.025 psia and at a base temperature of 60 degrees
Fahrenheit.

      


      (f)           The
term “Daily Maximum
Quantity” has the meaning set out in the Master Agreement.

      


      (g)           The
term “day”
means a period beginning at 7:00 a.m. (local time) on a calendar day and ending
at 7:00 a.m. (local time) on the next succeeding calendar day.  The
date of a day shall be that of its beginning.

      


      (h)           The
term “Delivery
Points” has the meaning stated in Section
2.2.

      


      (i)           The
term “Industrial Sale
Contracts” has the meaning set out in the Master Agreement.

      


      (j)           The
term “Jackson Dome
Plant” means the Jackson Dome Processing Plant owned by Denbury located
in Brandon, Rankin County, Mississippi.


      
        
           


        

        
          2

          
            

          

        

        
           


        

      

       

      (k)           The
term “Master
Agreement” means that certain Production Payment Purchase and Sale
Agreement executed contemporaneously herewith by Transporter and
Shipper.

      


      (l)         
  The term “Master Documents”
means the Master Agreement and all agreements executed in connection therewith
or pursuant thereto, including but not limited to this Agreement.

      


      (m)           The
term “MCF”
means 1,000 cubic feet of Carbon Dioxide.

      


      (n)           The
term “MMCF”
means 1,000,000 cubic feet of Carbon Dioxide.

      


      (o)           The
term “month”
means a period beginning on the first day of a calendar month and ending at the
beginning of the first day of the next succeeding calendar month.

      


      (p)           The
term “pound-mass” means the
mass quantity of Carbon Dioxide equivalent to a pound-mass as defined by the
United States National Bureau of Standards.

      


      (q)           The
term “Production
Payment” has the meaning set out in the Master Agreement.

      


      (r)           The
term “psia”
means pounds per square inch absolute.

      


      (s)           The
term “psig”
means pounds per square inch gauge.

      


      (t)           The
term “Receipt
Points” has the meaning stated in Section
2.1.

      


      (u)           The
term “Transportation
Fee” has the meaning stated in Article
III.

      


      (v)           The
term “Transporter’s
Pipeline” means Transporter’s existing gathering system and pipeline used
for the gathering, dehydration and transportation of Carbon Dioxide from wells
owned or controlled by Transporter  in Rankin County,
Mississippi, which
gathering system extends from various wellheads owned or controlled by
Transporter to a point at the outlet flange of a Carbon Dioxide dehydration
facility located in Rankin County, Mississippi, and which pipeline extends from
that point to a point in Ascension Parish, Louisiana.

      


      ARTICLE
II

      SCOPE
OF TRANSPORTATION SERVICE

      


      2.1           Transportation of Carbon
Dioxide.  Subject to all of the terms, conditions, and
limitations of this Agreement, each day during the term hereof Shipper shall
have the right to tender to Transporter at the Receipt Points set forth in Exhibit A (the “Receipt Points”) for
transportation hereunder any volume of Carbon Dioxide up to the Daily Maximum
Quantity.


      
        
           


        

        
          3

          
            

          

        

        
           


        

      

       

      2.2           Redelivery of Carbon
Dioxide.  Subject to all of the terms, conditions, and
limitations of this Agreement, each day during the term hereof Transporter shall
redeliver to Shipper, at the Delivery Points set forth in Exhibit B (the “Delivery Points”),
the volume of Carbon Dioxide delivered by Shipper to Transporter at the Receipt
Points on such day, as such volumes may be adjusted for Shipper’s proportionate
share of reductions due to Carbon Dioxide lost and unaccounted for in
Transporter’s Pipeline and any other loss or shrinkage factor generally
applicable from time to time to Transporter’s Pipeline.

      


      2.3           Non-Exclusive
Transportation.  Subject to the qualification as to priority
set out in Section
2.4, nothing in this Agreement shall be construed to prohibit Transporter
from transporting Carbon Dioxide for a person or persons other than
Shipper.  Nothing in this Agreement shall be construed to require
Shipper to tender any minimum quantity of Carbon Dioxide to Transporter for
transportation hereunder.

      


      
        	
                 
      

              	
                2.4

              	
                INTENTIONALLY
      DELETED.

              


      

      


      2.5           Operation of Transporter’s
Pipeline.  Except as otherwise provided in Section 2.8,
Transporter will at all times maintain, preserve and keep all improvements,
machinery, equipment, pipe lines, tanks, fixtures and other personal property
and equipment of every kind and nature now or hereafter required in connection
with operation of Transporter’s Pipeline in good repair, working order and
condition, and promptly make all necessary and proper repairs, renewals,
replacements and substitutions.  Subject to the forgoing and its other
obligations hereunder, Transporter may, at its sole discretion, at any time and
from time to time, expand, extend, repair, reconfigure or temporarily shutdown
Transporter’s Pipeline and related equipment.   In exercising the
foregoing rights, Transporter shall have no liability to Shipper hereunder and
shall use all reasonable efforts to minimize any adverse impact on Shipper’s
rights hereunder.

      


      2.6           Transporter’s Processing
Rights.  Transporter reserves the right, prior to delivery to
Shipper at the Delivery Points set forth herein, at the sole cost of
Transporter, to process and/or treat Carbon Dioxide received from Shipper
hereunder for any purpose; provided, however, subject to Section 7.3, Carbon
Dioxide delivered to the Delivery Points shall meet the quality specifications
of Article VII
hereof.

      


      2.7           Excess
Quantities.  Shipper may, on any day and upon prior notice to
Transporter, tender at the Receipt Point volumes of Carbon Dioxide in excess of
the Daily Maximum Quantity, in which event Transporter may, in its sole
judgment, transport all or any portion of such excess volumes on a fully
interruptible basis.  However, the transportation of any excess
volumes by Transporter shall otherwise be subject to all of the terms and
provisions hereof.


      
        
           


        

        
          4

          
            

          

        

        
           


        

      

       

      2.8           Call
Option.  In the event a Triggering Event (as hereinafter
defined) occurs, Transporter shall have the right and option to either
(i) repair, replace, restore and reconstruct Transporter’s Pipeline in
substantially the form in which the same existed prior to any such Triggering
Event or (ii) exercise (or cause the exercise of) the Call Option provided for
in Section 2.4 of the Master Agreement.  Transporter shall notify
Shipper in writing of its election of one of the options set forth above within
thirty (30) days from the date of the Triggering Event.  If
Transporter elects the option set out in clause (i) above, then Transporter
shall commence the restoration work within thirty (30) days from the date of the
Triggering Event and diligently prosecute and complete the restoration work
within a reasonable time, in no event exceeding twelve (12) months from the date
of the Triggering Event.  If Transporter elects the option set forth
in clause (ii) above, the Call Option set forth in Section 2.4 of the Master
Agreement shall be exercised in accordance with the terms thereof.  If
Transporter fails to notify Shipper of its election of either clause (i) or (ii)
above within thirty (30) days from the date of the Triggering Event, Transporter
shall, as of such date, be deemed to have delivered notice to Shipper electing
to exercise the option set forth in clause (i) above.  For purposes
hereof, a “Triggering
Event” means (a) the entire or partial destruction or damage of
Transporter’s Pipeline by fire or any other casualty whatsoever; or (b) a
mechanic failure or other breakdown of Transporter’s Pipeline, which in either
case actually renders Transporter’s Pipeline inoperable for a minimum period of
ninety-five (95) consecutive days.

      


      ARTICLE
III

      RATES
AND CHARGES

      


      3.1           Initial
Rate.  For the transportation and dehydration of each MCF of
Shipper’s Carbon Dioxide received at the Receipt Points during any month,
beginning with the date of first deliveries hereunder and continuing through the
end of the first Contract Year, Shipper shall pay Transporter a transportation
fee (the “Transportation Fee”),
which fee shall initially be $0.16 (the “initial
rate”).

      


      3.2           Adjusted
Rate.  Effective on the first day of each Contract Year after
the first Contract Year, the Transportation Fee shall be adjusted, upward or
downward.  Computations to determine such adjustments shall be made
utilizing $0.16/Mcf as the base rate.  The adjustment shall be based
upon the change in the annual average of the Producers Price Index, “PPI,” All
Commodities, 1982 = 100, as published by the United States Department of Labor,
Bureau of Labor Statistics.  To determine the adjusted rate for each
subsequent Contract Year, the following formula shall be used:

      


      Adjusted
rate = Base rate x (0.10 + 0.90 x PPI current/PPI base) or the initial rate,
whichever is greater.

      Thus, by
way of illustration, should the average PPI for the year 2002 be 125, and the
average PPI for the year 2003 be 130, the adjusted price for the subsequent
Contract Year, 2004, commencing on the anniversary of the Contract Year, would
be computed as follows:

      


      $0.16 x
(0.10 + 0.90 x 130/125) = $0.16576

      


      3.3           Minimum
Rate.  Notwithstanding the foregoing, the Transportation Fee,
as adjusted herein, shall never be less than $0.16 per MCF.

      


      3.4           Tax
Reimbursement.  In addition to the Transportation Fee provided
for above, Shipper shall reimburse Transporter for all taxes which are levied
upon and/or paid by Transporter with respect to the services performed under
this Agreement, but only if and to the extent that Shipper has the right to
receive reimbursement for such taxes from Shipper’s customers under the terms of
Shipper’s resale contracts with its customers.


      
        
           


        

        
          5

          
            

          

        

        
           


        

      

       

      ARTICLE
IV

      TERM;
EARLY TERMINATION FOR DEFAULT

      


      4.1           Term.  Subject
to the other provisions hereof, this Agreement shall be effective from the date
hereof and shall continue in force and effect until the Production Payment is
fully discharged.

      


      4.2           Default.  The
occurrence of one or more of the following matters shall constitute a default by
a party:

      


      (a)           the
occurrence of a Bankruptcy Event involving such party;

      


      (b)           the
failure of such party to make any payment to the other party as and when due
hereunder where such failure continues for thirty (30) days after the delivery
of written notice by the other party of such failure to make such payment;
and,

      


      (c)           the
breach by such party of any other material covenant, agreement, obligation, duty
or provision of this Agreement, where such breach continues for thirty (30) days
after its receipt of written notice thereof from the other party; provided,
however, that if the matter which is the subject of the breach cannot by its
nature with due diligence be remedied by such within said thirty (30) day
period, and such party shall have prepared a plan for remedying such failure
that is reasonably acceptable to the other party and such party is proceeding
with diligence to implement such plan, such thirty (30) day period shall be
extended by such additional time period as may be reasonably required to
implement such plan, and, provided further, however, that the remedying of such
potential default shall not affect the right of the other party to terminate
this Agreement if other defaults occur before such potential default has been
remedied.

      


      4.3           Occurrence of
Default.  Upon the occurrence of a default by a party, the
other party may exercise any right or remedy it may have at law and/or in
equity; provided that Transporter shall not be entitled to terminate this
Agreement.  If pursuant to an arbitration proceeding conducted in
accordance with Section 14.9, it is determined that as a result of a Shipper
default Transporter has suffered a specified amount of damages, the arbitrators
may provided as a remedy to Transporter that Transporter may sell a portion of
Shipper’s carbon dioxide necessary to generate sufficient proceeds to reimburse
Transporter for such damages.


      
        
           


        

        
          6

          
            

          

        

        
           


        

      

       

      ARTICLE
V

      RECEIPT
POINTS, DELIVERY POINTS AND PRESSURES

      


      5.1           Receipt Points and Delivery
Points.  The Receipt Points are set forth on Exhibit
A.  The Delivery Points are set forth on Exhibit
B.  Shipper may request at any time and from time to time that
Transporter agree to one or more additional Receipt Points or Delivery Points on
Transporter’s Pipeline.  Transporter shall not unreasonably withhold
its agreement to the addition of any additional Receipt Point or Delivery Point
requested by Shipper as long as Shipper reimburses Transporter for all
incremental costs incurred or to be incurred by Transporter as a result of the
addition of such Receipt Point or Delivery Point and, with respect to requested
Receipt Points only, so long as Transporter owns or controls the well or wells
to be producing into the requested Receipt Point.  If Transporter’s
estimated incremental cost to establish an additional Receipt Point or Delivery
Point requested by Shipper exceeds $25,000, then Transporter shall be entitled
to require that Shipper pay Transporter such estimated incremental cost before
agreeing to add such additional Receipt Point or Delivery Point, with a
“true-up” payment being made by the appropriate party to the other party when
the final, actual incremental costs of such additional Receipt Point or Delivery
Point are known.  Upon the addition of any Receipt Point or Delivery
Point, the parties shall execute an amendment of this Agreement which shall
reflect all of the Receipt Points or Delivery Points on a revised Exhibit A or Exhibit B, as
appropriate.  The exact point at which delivery by Transporter to
Shipper shall be deemed to be made shall be the flange or weld connecting the
facilities of Transporter’s Pipeline with the facilities of Shipper or Shipper’s
designee.

      


      5.2           Responsibility.  As
between the parties hereto, and subject to the limitations set forth in other
provisions of this Agreement, Transporter shall be responsible for any injuries,
losses, expenses, claims, liabilities, or damages caused by the Carbon Dioxide
while it is in Transporter’s Pipeline until it shall have been delivered to
Shipper or Shipper’s designee at the Delivery Points, and, after such delivery,
Shipper shall be responsible for any injuries, losses, expenses, claims,
liabilities, or damages caused thereby.  Subject to the limitations
set forth in other provisions of this Agreement, each party (the “Indemnifying Party”)
shall indemnify the other party in respect of any injuries, losses, expenses,
claims, liabilities, or damages occurring while the Carbon Dioxide is in
possession of the Indemnifying Party.  Transporter shall not take
title to Shipper’s Carbon Dioxide in Transporter’s Pipeline merely by receipt of
such Carbon Dioxide for Shipper’s account

      


      5.3           Pressure
Criteria.  All Carbon Dioxide tendered by Shipper at any
Receipt Point shall be delivered at pressures sufficient to enter Transporter’s
Pipeline at the working pressures maintained by Transporter at such Receipt
Point from time to time.  Transporter shall deliver the volumes of
Carbon Dioxide as provided for hereunder at the Delivery Points at pressures
ranging from 1100 to 1400 psig.  Notwithstanding the foregoing,
Transporter reserves the right at any time and from time to time, to revise the
maximum and/or the minimum pressures set forth above on ten (10) days’ prior
notice to Shipper to the extent the implementation of any such revision is
prudent in light of the operating conditions on the Transporter’s
Pipeline.

      


      ARTICLE
VI

      QUANTITY

      


      6.1           Delivery
Rates.  Transporter and Shipper shall endeavor to deliver and
to accept, respectively, Carbon Dioxide in as reasonable constant rates as is
practicable.  Transporter and Shipper understand and agree that the
amount of Carbon Dioxide delivered hereunder from time to time may not exactly
equate with the volume of Carbon Dioxide requested for delivery hereunder since
variations may occur due to the inherent fluctuations in normal pipeline
operations.  Upon request from Shipper, Transporter may deliver Carbon
Dioxide on any day in excess of the Daily Maximum Quantity, but Transporter
shall not be obligated to do so.


      
        
           


        

        
          7

          
            

          

        

        
           


        

      

       

      6.2           Cooperation Regarding
Deliveries.  Shipper or Shipper’s agent shall notify
Transporter monthly, in advance, of Shipper’s estimated daily requirements at
each of the Receipt Points and the Delivery Points for the next succeeding month
and Transporter shall deliver such requirements, up to the Daily Maximum
Quantity, out of the volumes received by Transporter at the Receipt Points for
Shipper’s account.  Transporter and to the extent it will not result
in a default under a Industrial Sale Contract, Shipper agree to fully cooperate
with each other in adjusting monthly and daily deliveries
hereunder.  Shipper or Shipper’s agent shall give twenty-four (24)
hours’ prior notice of any additional changes in its daily requirements as may
be necessary from time to time and, on receipt of such notice by Shipper,
Transporter shall undertake as soon as practicable to conform its
deliveries to Shipper’s revised daily requirements (up to the Daily Maximum
Quantity) and shall notify Shipper as soon as practicable if Transporter is
unable to do so.  In the event of an emergency which poses danger to
life or property, no prior notice shall be necessary before partial or total
shutdown by either party, but notice of such shutdown and the reason therefor
shall be given as soon as practicable thereafter.  If a shutdown
becomes necessary for either party on a non-emergency basis, such party shall
give at least twenty-four (24) hours’ prior notice to the other
party.

      


      ARTICLE
VII

      QUALITY
SPECIFICATIONS

      


      7.1           Specification.  The
Carbon Dioxide delivered by Transporter to Shipper at the Delivery Points shall
meet the following specifications (collectively the “Quality
Specification”):

      


      (a)           Water.  The
Carbon Dioxide shall not contain any free water and the water vapor content
shall not exceed thirty (30) pounds per MMcf.

      


      (b)           Hydrogen sulfide and
sulfur.  The Carbon Dioxide shall not contain more than 10
parts by weight of hydrogen sulphide nor more than 35 parts by weight of total
sulfur per 1,000,000 parts of Carbon Dioxide.

      


      (c)           CO2
Volume.  The Carbon Dioxide shall be  95% pure (dry
basis).

      


      7.2           Testing.  Transporter
shall ensure that tests to determine the quality of Carbon Dioxide are conducted
as often as necessary in Transporter’s sole opinion, utilizing approved standard
methods in general use.  Transporter may furnish Shipper with copies
of all test results.  Transporter shall give Shipper reasonable notice
of all such tests in order that Shipper or Shipper’s agent may have its
representative present, if Shipper so desires.

      


      7.3           Disclaimer. THE
PARTIES HERETO RECOGNIZE AND AGREE THAT TRANSPORTER IS NOT A MERCHANT OF FOOD
GRADE OR MERCHANTABLE CARBON DIOXIDE FOR USE IN FOOD OR DRINK OR OTHER
CONSUMABLES AND TRANSPORTER IN NO WAY WARRANTS THE MERCHANTABILITY OR FITNESS OF
ANY CARBON DIOXIDE DELIVERED OR TO BE DELIVERED HEREUNDER FOR ANY PARTICULAR
PURPOSE.


      
        
           


        

        
          8

          
            

          

        

        
           


        

      

       

      ARTICLE
VIII

      OWNERSHIP
AND OPERATION OF FACILITIES

      


      8.1           Facility
Ownership.  Transporter will own, operate and maintain the
Transporter’s Pipeline, and the pipelines and measurement facilities, including
any additional equipment installed by or at the request of Shipper, at each
Receipt Point and at each Delivery Point.  Transporter will maintain
Carbon Dioxide custody to the upstream flange of Shipper’s valve on the outlet
side of Transporter’s measurement facilities at each Delivery
Point.  Transporter shall be solely responsible for the delivery of
Carbon Dioxide to the inlet side of Shipper’s tap valve at each Delivery
Point.  All piping downstream from the Delivery Points shall be the
responsibility of Shipper.

      


      ARTICLE
IX

      MEASUREMENT

      


      9.1           Measurement
Point.  The Carbon Dioxide delivered hereunder shall be
measured for custody transfer at the Delivery Points in accordance with the
standards set out in this Article.

      


      9.2           Procedure.  Custody
transfer measurement of Carbon Dioxide shall be determined from pound-mass
quantities, which will be converted to standard cubic feet
quantities.  The molecular weight of the metered stream of Carbon
Dioxide, calculated from the compositional analyses, shall be the basis for
conversion of pound-mass measurement units to standard cubic feet measurement
units.

      


      9.3           Atmospheric
Pressure.  The atmospheric pressure at the Delivery Point shall
be based upon 14.73 psia at sea level, corrected to actual elevation, and may be
assumed to be constant for calculation purposes.

      


      9.4           Meter
Standards.  The Carbon Dioxide delivered hereunder shall be
measured with orifice meters constructed and installed in accordance with the
October, 1981, compilation of standards in the American Petroleum
Institute, Manual of Petroleum Standards, Chapter 14, with any subsequent
amendments, revisions and additions which may be mutually acceptable to
Transporter and Shipper.  Computations of pound mass shall also be
made in accordance with said manual.

      


      9.5           Temperature.  The
temperature of the Carbon Dioxide shall be determined by an on-line temperature
measuring device so installed that it will sense the temperature of the Carbon
Dioxide flowing through the meter.

      


      9.6           Density.  The
density of the Carbon Dioxide shall be determined by an on-line density meter
referenced to weight in a vacuum, or by calculation utilizing the pressure,
temperature and composition of the Carbon Dioxide flowing through the
meter.

      


      9.7           Samples.  A
composite sample of Transporter’s Pipeline Carbon Dioxide stream shall be
accumulated during each month and analyzed for its composition by gas
chromatograph or other methods agreed to by Transporter and Shipper, at
Transporter’s expense.


      
        
           


        

        
          9

          
            

          

        

        
           


        

      

       

      ARTICLE
X

      FORCE
MAJEURE

      


      10.1         Definition.  If,
while this Agreement is in effect, either party is rendered unable, wholly or in
part, by Force Majeure to carry out its obligations (except financial
obligations) under this Agreement, it is agreed that, on such party’s giving
notice and reasonably full particulars of such Force Majeure in writing to the
other party within ten (10) business days after the occurrence of the Force
Majeure relied on, then the obligations of the party giving such notice, so far
as they are affected by such Force Majeure, shall be suspended during the
continuance of any inability so caused, but for no longer period, and such cause
shall so far as possible be remedied with all reasonable
dispatch.  The term “Force Majeure”, as used herein, shall mean acts
of God, strikes, lockouts or other industrial disturbances, acts of the public
enemy, wars, terrorism, blockades, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, storms, floods, high water, washouts, arrests and
restraints of government and people, civil disturbances, explosions, breakage or
accident to machinery or lines of pipe, freezing of wells or lines of pipe,
partial or entire failure of wells, and any other causes, whether of the kind
herein enumerated or otherwise, not reasonably within the control of the party
claiming Force Majeure. Without limiting the
generality of the foregoing, the term “Force Majeure” shall likewise include (a)
in those instances where either party hereto is required to obtain servitudes,
rights-of-way grants, permits or licenses to enable such party to perform
hereunder, the inability of such party to acquire, or the delays on the part of
such party in acquiring, at reasonable cost and after the exercise of reasonable
diligence, such servitudes, rights-of-way grants, permits or licenses, and (b)
in those instances where either party hereto is required to furnish materials
and supplies for the purpose of constructing or maintaining facilities or is
required to secure permits or permissions from any governmental agency to enable
such party to perform hereunder, the inability of such party to acquire, or the
delays on the part of such party in acquiring, at reasonable cost and after the
exercise of reasonable diligence, such materials and supplies, permits and
permissions.  An occurrence of Force Majeure affecting Transporter’s
supply sources or processing facilities or gathering system or Transporter’s
Pipeline shall be deemed to be an occurrence of Force Majeure affecting
Transporter hereunder.

      


      10.2         Extended Force
Majeure.  If, after deliveries have commenced hereunder, an
event of Force Majeure significantly affects the amount of Carbon Dioxide
Transporter is capable of delivering for a consecutive period of 180 days, then,
at any time after such period and prior to the time such event has been
remedied, Shipper may cancel this Agreement.

      


      10.3         Strikes and
Lockouts.  It is understood and agreed that the settlement of
strikes or lockouts shall be entirely within the discretion of the party having
the difficulty and that the above requirement that any Force Majeure shall be
remedied with all reasonable dispatch shall not require the settlement of
strikes or lockouts by acceding to the demands of any opposing party when such
course is inadvisable in the discretion of the party having the
difficulty.


      
        
           


        

        
          10

          
            

          

        

        
           


        

      

       

      ARTICLE
XI

      NOTICES

      


      11.1         Transporter
Notices.  All notices provided for herein shall be in writing
and shall be deemed to be delivered to Transporter when deposited in the United
States mail to the following address:

      


      
        
          	 
      	
                  DENBURY
      RESOURCES INC.

                
	 
      	
                  Attn:
      Linda A. Miller

                
	 
      	
                  5100
      Tennyson Parkway

                
	 
      	
                  Suite
      3000

                
	 
      	
                  Plano,
      Texas  75024

                


        

      

      


      11.2         Shipper
Notices.  All
notices provided for herein shall be in writing and shall be deemed to be
delivered to Shipper when deposited in the United States mail to the following
address:

      


      
        
          	 
      	
                  GENESIS
      CRUDE OIL, L.P.

                
	 
      	
                  Attn:
      Mark J. Gorman

                
	 
      	
                  500
      Dallas St. Suite 2500

                
	 
      	
                  Houston,
      Texas  77002

                


        

      

      


      11.3         Change of
Address.  Either party may change its address described in this
Article by sending written notice to the other party in accordance with the
provisions of this Article.

      


      ARTICLE
XII

      PAYMENT,
AUDIT AND FINANCIAL RESPONSIBILITY

      


      12.1         Payment.  Transporter
shall furnish Shipper a monthly statement showing (i) the total quantity of
Carbon Dioxide received hereunder during the preceding month at each Receipt
Point, (ii) the total quantity of Carbon Dioxide delivered hereunder during the
preceding month at each Delivery Point, and (iii) the incremental costs incurred
by Transporter to add any additional Delivery Points requested by
Shipper.  Shipper shall make payment by wire transfer to such address
as Transporter may designate from time to time on or before the later to occur
of (x) the tenth day following the day that Transporter’s monthly statement was
delivered or (y) the twentieth day of the month following the month that Carbon
Dioxide was delivered, such wire transfer being for all amounts payable
hereunder.

      


      12.2         Auditing.  Each
party shall have the right at reasonable business hours to examine the books,
records, and measurement documents of the other party to the extent necessary to
verify the accuracy of any statement, payment, calculation, or determination
made pursuant to the provisions of this Agreement for any Contract Year within
two (2) Contract Years following the end of such Contract Year.  If
any such examination shall reveal, or if either party shall discover, any error
or inaccuracy in its own or the other party’s statement, payment, calculation,
or determination, then proper adjustment and correction thereof shall be made as
promptly as practicable thereafter, except that no adjustment or correction
shall be made for an error or inaccuracy if more than two (2) Contract Years
have elapsed since the end of the Contract Year in which such error or
inaccuracy occurred.


      
        
           


        

        
          11

          
            

          

        

        
           


        

      

       

      12.3         Failure to
Pay.  If Shipper fails to pay any amount payable to Transporter
hereunder when due, interest thereon shall accrue and be payable at the lesser
of (i) the highest legally permissible rate or (ii) the prime lending rate, plus
an additional five percent (5%), established by the Chase Manhattan Bank, N.A.,
New York, from the date when payment was due until the date payment is
made.  If such failure to pay any amount continues
for  thirty (30) days or more after the due date of such amount for
any reason, then (a) Transporter may suspend its deliveries of Carbon Dioxide
hereunder, (b) Transporter shall have the right to make direct deliveries in
satisfaction of the delivery requirements in the Industrial Sale Contracts, and
(c) such matter shall be resolved in accordance with the arbitration provisions
described in Section
14.9.

      


      12.4         Financial
Responsibility.  Notwithstanding anything to the contrary in
this Agreement, should Transporter reasonably believe it necessary to assure
payment for transportation of Carbon Dioxide being delivered or to be delivered
hereunder, Transporter may at any time, require (i) advance cash payment; (ii) a
standby irrevocable letter of credit at Shipper’s expense in a form and from a
bank acceptable to Transporter, in Transporter’s sole opinion; or (iii) other
security of a type and form and amount which may be deemed reasonably
satisfactory to Transporter.  In the event banking or credit
information requested by Transporter has not been furnished within a reasonable
time in Transporter’s sole opinion, Transporter shall have the right, with five
(5) days’ prior notice, to withhold and/or suspend deliveries hereunder, in
addition to any and all other remedies available hereunder; provided that
Transporter shall not have the right to terminate this Agreement.

      


      ARTICLE
XIII

      WARRANTY

      


      13.1         Warranty.  Each
party warrants, for itself, its successors, heirs, legal representatives and
assigns, to the other party that at the time such party delivers Carbon Dioxide
to the other party, such party will have good title to or the good right to
deliver such Carbon Dioxide, and that such Carbon Dioxide shall be free and
clear from liens, encumbrances and claims of every kind.  Each party
shall indemnify and save the other party harmless from all suits, claims, liens,
damages, costs, losses, expenses and encumbrances of whatsoever nature arising
from and out of claims of any or all persons to said Carbon Dioxide, or title
thereto, or to royalties, taxes, license fees, payments or other charges thereon
applicable before the delivery of the Carbon Dioxide by such party to the other
party.

      


      ARTICLE
XIV

      GENERAL
TERMS AND CONDITIONS

      


      14.1         Waiver of
Breach.  The waiver by any party of any breach of the
provisions of this Agreement shall not constitute a continuing waiver of other
breaches of the same or other provisions of this Agreement.


      
        
           


        

        
          12

          
            

          

        

        
           


        

      

       

      14.2         Regulatory
Bodies.  This Agreement, all operations contemplated hereunder
and all terms and provisions contained herein, and the respective obligations of
the parties are subject to applicable federal and state laws and the applicable
orders, rules, and regulations of any state or federal regulatory authority
having appropriate jurisdiction.  However, nothing contained herein
shall be construed as a waiver of any right of any party to question or contest
any such law, order, rule, or regulation in any forum having or alleging to have
jurisdiction.  Shipper and Transporter each agree to comply with all
applicable laws and regulations governing the operations and transactions
involved in this Agreement, including, but not limited to, applicable
regulations governing safety, pollution, and pipeline and other
operations.  Transporter and Shipper understand that Shipper’s ability
to deliver Carbon Dioxide hereunder is subject to existing and future
governmental regulations affecting Transporter’s Pipeline.

      


      14.3         CHOICE OF
LAW.  THIS
AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF MISSISSIPPI, EXCLUDING ITS CONFLICTS OF LAW
PROVISIONS.

      


      14.4         Joint
Preparation.  This Agreement was prepared by all parties hereto
and not by any party to the exclusion of one or the other.

      


      14.5         Assignment.  The
interests of the parties in this Agreement, and Transporter’s interest in the
Transporter’s Pipeline, may not be subsequently assigned, either in whole or in
part, unless (i) any such assignee expressly agrees in writing to assume
and perform all of the assignor’s obligations under this Agreement, and
(ii) such assignment is made and accepted expressly subject and subordinate
to this Agreement.  Further, any subsequent assignment, either in
whole or in part, to an entity that is not as financially creditworthy at the
time of the assignment as the assignor shall require the consent of the other
party hereto, which consent may not be unreasonably withheld or
delayed.  Subject to the compliance with the terms of clauses (i) and
(ii) above, either party may encumber or pledge their respective interests in
connection with a financing without the consent of the other
party.  Any purported assignment, sale, conveyance or other transfer
in contravention of the foregoing terms shall be null and
void.  Subject to the foregoing, this Agreement binds and inures to
the benefit of the parties and their respective permitted successors and
assigns, and nothing contained in this Agreement, express or implied, is
intended to confer upon any other person or entity any benefits, rights, or
remedies.

      


      14.6         Modification and Entire
Agreement.  No amendment or other modification of the terms or
provisions of this Agreement shall be made except by the execution of written
agreements by both parties, and any attempted modification or amendment not in
compliance with the terms of this sentence shall be void ab
initio.  This Agreement and the other Master Documents contain the
entire agreement between the parties with respect to the subject matter hereof,
and supersede and terminate all prior negotiations, representations or
agreements, whether written or oral, by and between the parties with respect to
such subject matter

      


      14.7         Headings.  The
Table of Contents and headings contained in this Agreement are used solely for
convenience and do not constitute a part of the agreement between the parties
hereto, and they should not be used to aid in any manner in construing this
Agreement.


      
        
           


        

        
          13

          
            

          

        

        
           


        

      

       

      14.8         Damage
Limitation.  Neither party shall be liable to the other for any
special, indirect, consequential or punitive damages of any nature.

      


      14.9         Arbitration.  In
the event of a dispute between the parties as to any matter arising under this
Agreement, such dispute shall be resolved in accordance with the dispute
resolution provisions identified in Article XIV of the Master
Agreement.

      


      14.10       Master Agreement;
Conflicts.  This Agreement is delivered pursuant to and as a
part of the transactions under the Master Agreement and is made expressly
subject thereto. In the event of any express conflict between the terms and
provisions of this Agreement and the terms and provisions of the Master
Agreement, the terms and provisions of this Agreement shall
control.  The inclusion in the Master Agreement of provisions not
addressed in this Agreement shall not be deemed a conflict, and all such
additional provisions contained in the Master Agreement (including but not
limited to Section 15.1 thereof) shall be given full force and
effect.


      
        
           


        

        
          14

          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed in multiple originals by their proper officers thereunto duly
authorized, as of the date first hereinabove written.

      


      
        
          
            
              
                
                  
                    
                      	 
      	
                              TRANSPORTER

                            
	 
      	 
      	 
      
	 
      	
                              DENBURY RESOURCES
      INC.

                            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                              By:

                            	
                              /s/  Phil
  Rykhoek

                            
	 
      	 
      	
                              Phil
      Rykhoek

                            
	 
      	 
      	
                              Senior
      Vice President and

                            
	 
      	 
      	
                                  Chief
      Financial Officer

                            
	 
      	 
      	 
      
	 
      	
                              SHIPPER

                            
	 
      	 
      	 
      
	 
      	
                              GENESIS
      CRUDE OIL, L.P.

                            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                              By:

                            	
                              /s/  Mark J.
    Gorman

                            
	 
      	 
      	
                              Mark
      J. Gorman

                            
	 
      	 
      	
                              President

                            


                    

                  

                

              

            

          

        

      

      

        
          
             


          

          
            15

            
              

            

          

          
             


          

        

      

       

      EXHIBIT
“A”

      TO

      CARBON
DIOXIDE TRANSPORTATION AGREEMENT BETWEEN

      DENBURY
RESOURCES INC. AND

      GENESIS
CRUDE OIL, L.P.

      DATED
EFFECTIVE AS OF SEPTEMBER 1, 2003

      


      


      RECEIPT POINT LOCATIONS AND
DAILY MAXIMUM QUANTITY

      


      


      Daily Maximum
Quantity: The Daily Maximum Quantity shall be the amount specified for
such term in the Master Agreement.

      


      


      
        
          
            
              
                	
                        Receipt Point Description

                      	 
      	
                        Daily Maximum
      Quantity at this Receipt Point
      (if
  applicable)

                      
	 
      	 
      	 
      	 
      
	
                        1.

                      	
                        AirGas

                      	 
      	
                        22,500
      Mcf/d

                      
	 
      	
                        217
      Andrew Jackson Circle

                      	 
      	 
      
	 
      	
                        Star,
      Mississippi 39167

                      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                        2.

                      	
                        Praxair

                      	 
      	
                        8,750
      Mcf/d

                      
	 
      	
                        214
      Carbonic Dr.

                      	 
      	 
      
	 
      	
                        Brandon,
      Mississippi 39042

                      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                        3.

                      	
                        BOC

                      	 
      	
                        17,500
      Mcf/d

                      
	 
      	
                        159
      Andrew Chapel Rd.

                      	 
      	 
      
	 
      	
                        Brandon,
      Mississippi 39042

                      	 
      	 
      


              

            

          

        

      

      

        
          
             


          

          
             

            
              

            

          

          
             


          

        

      

       

      EXHIBIT
“B”

      TO

      CARBON
DIOXIDE TRANSPORTATION AGREEMENT BETWEEN

      DENBURY
RESOURCES INC. AND

      GENESIS
CRUDE OIL, L.P.

      DATED
EFFECTIVE AS OF SEPTEMBER 1, 2003

      


      


      DELIVERY POINT
LOCATIONS

      


      
        
          
            
              	
                      Delivery Point Description

                    	
                      Daily Maximum
      Quantity at this Delivery Point
      (if
  applicable)

                    


            

          

        

      

      


      


      Wells and
wellhead meter numbers:

      


      
        
          	
                  McKay
      #2

                	
                  FQI
      300

                
	
                  McKay
      #1 (not flowing)

                	
                  FQI
      301

                
	
                  Hauburg
      #4

                	
                  FQI
      302

                
	
                  Hauburg
      #3

                	
                  FQI
      303

                
	
                  Hauburg
      #1

                	
                  FQI
      304

                
	
                  Hauburg
      #2

                	
                  FQI
      305

                
	
                  Hauburg
      #6

                	
                  FQI
      306

                
	
                  Hauburg
      #5

                	
                  FQI
      307

                
	
                  Cruthirds
      #1

                	
                  FQI
      309

                
	
                  Denkmann

                	
                  FQI
      310

                
	
                  International
      Paper (IP)

                	
                  FQI
      311

                
	
                  Barksdale

                	
                  FQI
      312