ExxonMobil has agreed to acquire Denbury, a US-based firm with operations and assets focused on carbon capture, utilisation, and storage (CCS) solutions and enhanced oil recovery (EOR), in an all-stock deal worth $4.9bn.
As per the terms of the deal, shareholders of the New York Stock Exchange (NYSE) listed Denbury will exchange each of their shares in the company with 0.84 shares of ExxonMobil. The deal values Denbury at $89.45 per share, based on the closing price of ExxonMobil on 12 July 2023.
Denbury president and CEO Chris Kendall said: “This transaction is a compelling opportunity for Denbury to join an admired global energy leader with a low-carbon focus, a robust balance sheet and a leading shareholder return programme.
“Over the last few years, Denbury has made significant progress executing our strategic plan, strengthening our enhanced oil recovery operations and capitalising on our unrivaled infrastructure to accelerate the growth of our CO2 transportation and storage business.”
Denbury’s operations are in the Gulf Coast and Rocky Mountain regions in the US.
For more than 20 years, its focus has been on using CO2 in its enhanced oil recovery operations. Since 2012, the company has also been engaged in CCS by injecting captured CO2 sourced from industries.
Through the acquisition, ExxonMobil will gain access to a 2,092km long CO2 pipeline network and 10 onshore sequestration sites that are strategically located for the company.
Besides, Denbury has oil and natural gas operations, which include proved reserves of more than 200 million barrels of oil equivalent. Out of these, 47,000 oil-equivalent barrels per day are currently being produced by the company.
ExxonMobil chairman and CEO Darren Woods said: “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.
“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 deal, which is conditional on regulatory reviews and approvals, as well as approval by Denbury’s shareholders, is anticipated to close in the fourth quarter of this year.
