(Credit: ExxonMobil)ExxonMobil said it will acquire Denbury, a carbon capture, utilization and storage solutions and enhanced oil recovery company, in a deal valued at $4.9 billion.
The all-cash transaction is based on a value of $89.45 per share – ExxonMobil’s closing price on July 12, 2023 – and Denbury shareholders will receive 0.84 shares of ExxonMobil for each Denbury share.
The deal provides ExxonMobil, one of the largest oil and gas companies in the United States, with one of the largest owned and operated CO2 pipeline network in the U.S. Denbury’s pipeline is 1,300 miles, including nearly 925 miles of CO2 pipelines in Louisiana, Texas and Mississippi.
It is located within one of the largest U.S. markets for CO2 emissions, with 10 onshore sequestration sites. Denbury is an independent energy company that has had strategic focus on utilizing CO2 in its enhanced oil recovery operations and since 2012.
The deal also includes Debury’s Gulf Coast and Rocky Mountain oil and natural gas operations, consisting of proved reserves totaling over 200 million barrels of oil equivalent, with 47,000 oil-equivalent barrels per day of current production. The operations provide immediate operating cash flow and near-term optionality for carbon offtake and execution of the carbon, capture, and storage (CCS) business, ExxonMobil stated.
“Acquiring Denbury reflects our determination to profitably grow our Low Carbon Solutions business by serving a range of hard-to-decarbonize industries with a comprehensive carbon capture and sequestration offering,” Darren Woods, Chairman and CEO of ExxonMobil, said in a statement. “The breadth of Denbury’s network, when added to ExxonMobil’s decades of experience and capabilities in CCS, gives us the opportunity to play an even greater role in a thoughtful energy transition, as we continue to deliver on our commitment to provide the world with the vital energy and products it needs.”
The board of directors of both companies have approved the transaction, subject to customary regulatory reviews and approvals. The deal, which is expected to close in the fourth quarter of 2023, is also subject to approval by Denbury shareholders.
“Denbury’s advantaged CO2 infrastructure provides significant opportunities to expand and accelerate ExxonMobil’s low-carbon leadership across our Gulf Coast value chains,” Dan Ammann, president of ExxonMobil Low Carbon Solutions, said in a statement. “Once fully developed and optimized, this combination of assets and capabilities has the potential to profitably reduce emissions by more than 100 million metric tons per year in one of the highest-emitting regions of the U.S.”
ExxonMobil expanded its CCS efforts last year at its LaBarge, Wyoming, facility.
