DENBURY ONSHORE, LLC

Incident Narrative

ON THE MORNING OF DECEMBER 20, 2010 AT ABOUT 9:15AM, A HUNTER, MR. JIMMY YOUNG CALLED TO EXPLAIN TO ONE OF DENBURY'S PIPELINERS, THAT THE GROUND ON DENBURY'S ROW NEAR KINDER, LOUISIANA HAD INDICATIONS OF A LEAK. THE PIPELINER REPORTED THE CIRCUMSTANCES TO HIS SUPERVISOR, THE PIPELINE FOREMAN FOR THE AREA, BY PHONE, WHO IN TURN REPORTED THE SITUATION TO HIS SUPERVISOR, THE PIPELINE SUPERINTENDANT. THE PIPELINE FOREMAN DISPATCHED TWO OTHER PIPELINERS TO THE SCENE. THE PIPELINE REGULATORY SPECIALIST WAS NOTIFIED AT THIS TIME. THE PIPELINE FOREMAN DIRECTED THE FIRST RESPONDER PIPELINER TO INVESTIGATE THE SITE AND REPORT. BECAUSE THERE WAS A FOREIGN PIPELINE CROSSING CLOSE TO THE SITE OF THE SUSPECTED LEAK, IT COULD NOT BE IMMEDIATELY CONFIRMED THAT THIS WAS A LEAK FROM THE 24' GREEN LINE. THE PIPELINE FOREMAN ARRIVED AT THE SCENE AT NOON ON 12/20/10. EMS USA, INC. WAS CALLED OUT TO EXCAVATE TO TRY TO DISCOVER THE SOURCE OF THE LEAK. THEY ARRIVED ON SITE ON 12/20/10 AT ABOUT 1:30PM AND THE PIPELINE FOREMAN CONFIRMED THE LEAK ON 12/20/10 AT 4:30PM. THE INITIAL COST TO REPAIR THE LEAK WAS ESTIMATED AT $40,000 AT THIS TIME, AND THE LEAK RATE WAS ESTIMATED AT 0.5 GAL/HR. PERSONNEL ON SITE ESTIMATED THAT THE LINE WOULD BE EVACUATED WITHIN 24 HOURS, MAKING THE CONFIRMED LEAK SIZE 12 GALLONS. FROM 12/21/10 THROUGH 12/22/10, THE LINE WAS BLOWN DOWN BETWEEN MLV-14 AND MLV-16. TROY CONSTRUCTION WAS SELECTED AS THE CONTRACTOR TO REPLACE THE SECTION OF LEAKING PIPE. BLOWDOWN WAS CONCLUDED AT 3:00PM ON 12/22/10. OTHER PROJECT DETAILS AND LOGISTICS WERE CONFIRMED, INCLUDING MOVING PRE-TESTED PIPE FROM THE KINDER YARD TO THE JOBSITE AND MAKING COATING REPAIRS TO THE PRE-TESTED PIPE. AT 9:30PM, THE PIPELINE SUPERINTENDENT PRODUCED A REVISED REPAIR COST ESTIMATE OF $75,000, MAKING THIS A NRC REPORTABLE ACCIDENT. A NRC REPORT WAS MADE VERBALLY (THE WEBSITE WOULD NOT WORK PROPERLY) AT 10:10 PM. THE FOLLOWING DAY, 12/23/10, BLOWDOWN OF THE LINE HAD BEEN COMPLETED AND A SAFETY MEETING WAS HELD AT THE SITE OF THE LEAK AT ABOUT 8:00AM. AIR MOVERS WERE SET UP AT MLV-14 AND MLV-16 AND OQ DOCUMENTATION WAS REVIEWED FOR PERSONNEL OF TROY, TEAM (X-RAY) AND JOHN CHANCE SURVEYORS. DRUG AND ALCOHOL PLANS WERE ALSO CHECKED. PERMITS WERE ISSUED AND WORK COMMENCED TO CUT THE LINE AND REMOVE THE LEAKING SECTION. DETAILS WERE CONFIRMED FOR CUTTING AND SHIPPING THE DAMAGED PIPE SPECIMEN TO STORK METALLURGICAL LABS IN HOUSTON. AFTER THE WELDING OF THE REPLACEMENT PIPE WAS COMPLETE, RECOMMISSIONING AN APPROXIMATE 25 MILE SECTION OF THE PIPELINE WAS STARTED AT MLV-14 AT APPROXIMATELY 4:30PM. TOTAL REPRESSURING WAS ACCOMPLISHED THE FOLLOWING DAY, 12/24/10 AT 7:30PM. THE LEAK IS ATTRIBUTED TO AN IMPERFECTION IN THE ERW WELD.