ExxonMobil Corporation announced that it has reached a definitive agreement to acquire Denbury Inc., a renowned developer of carbon capture and storage (CCS) solutions and enhanced oil recovery. The all-stock transaction is valued at US$4.9 billion.
The acquisition aligns with Exxon’s commitment to expand its Low Carbon Solutions business and delivering comprehensive carbon capture and sequestration offerings to industries that are challenging to decarbonise.
Darren Woods, Exxon’s Chairman and Chief Executive Officer (CEO), stated, “Acquiring Denbury reflects our determination to profitably grow our Low Carbon Solutions business by serving a range of hard-to-decarbonise industries with a comprehensive carbon capture and sequestration offering.” He emphasized that the combination of Denbury’s extensive network and Exxon’s expertise in CCS positions it to play a more significant role in the energy transition.
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The transaction is expected to generate significant synergies and drive growth and returns for Exxon. With the acquisition of Denbury, Exxon gains ownership of the largest CO2 pipeline network in the United States, spanning 1,300 miles. This includes approximately 925 miles of CO2 pipelines in Louisiana, Texas, and Mississippi, strategically located in one of the country’s largest markets for CO2 emissions. The deal also includes ten onshore sequestration sites. This extensive transportation and storage system will facilitate the rapid deployment of CCS for Exxon and its customers over the next decade, supporting various low-carbon value chains such as hydrogen, ammonia, biofuels, and direct air capture.
Chris Kendall, President, and CEO of Denbury, expressed enthusiasm for the agreement, highlighting Exxon’s global energy leadership and low-carbon focus. Kendall stated, “The all-equity consideration will allow Denbury shareholders to participate in the upside of ExxonMobil’s stock while benefitting from its strong capital return strategy.” He noted the extensive resources and capabilities of Exxon, making it the ideal partner to fully develop Denbury’s CO2 business.
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The acquisition includes not only Denbury’s carbon capture and storage assets but also its Gulf Coast and Rocky Mountain oil and natural gas operations. These operations encompass proved reserves of over 200 million barrels of oil equivalent and a current production rate of 47,000 oil-equivalent barrels per day, providing immediate operating cash flow and future opportunities for CO2 offtake and CCS initiatives.
The boards of directors of both ExxonMobil and Denbury have unanimously approved the transaction, which remains subject to customary regulatory reviews, approvals, and the consent of Denbury shareholders.
The closing of the transaction is expected to take place in the fourth quarter of 2023.
