ExxonMobil in $4.9bn deal to acquire Denbury
US major ExxonMobil said July 13 it had entered into a definitive agreement to acquire carbon capture and storage (CCS) developer Denbury in an all-stock deal valued at $4.9bn, with Denbury shareholders to receive 0.84 shares of ExxonMobil for each share tendered.
“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,” ExxonMobil CEO Darren Woods said. “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 acquisition will give ExxonMobil the largest owned and operated CO2pipeline network in the US, at 1,300 miles, including nearly 925 miles of CO2 pipeline in Louisiana, Texas and Mississippi, and 10 strategically located onshore sequestration sites.
“Denbury’s advantaged CO2 infrastructure provides significant opportunities to expand and accelerate ExxonMobil’s low-carbon leadership across our Gulf Coast value chains,” said Dan Ammann, president of ExxonMobil Low Carbon Solutions. “Once fully developed and optimised, this combination of assets and capabilities has the potential to profitably reduce emissions by more than 100mn tonnes/year in one of the highest-emitting regions of the US.”
In addition to Denbury’s carbon capture and storage assets, the acquisition includes Gulf Coast and Rocky Mountain oil and natural gas operations consisting of proved reserves totalling more than 200mn barrels of oil equivalent (boe) and 47,000 boe/day of current production.
The boards of both companies have approved the transaction, which remains subject to customary regulatory reviews and approvals, as well as to approvals from Denbury shareholders. It is expected to close in Q4 2023.