ExxonMobil completes $4.9bn acquisition of Denbury to expand low carbon solutions

Exxon Mobil Corporation (ExxonMobil) has successfully completed the acquisition of Denbury Inc. (NYSE: DEN) in an all-stock transaction valued at a substantial $4.9 billion, equivalent to $89.45 per share based on ExxonMobil’s closing price as of July 12, 2023. According to the terms of the deal, Denbury shareholders will now hold 0.84 shares of ExxonMobil for each Denbury share previously owned.

ExxonMobil Acquires Denbury, Boosting CO2 Pipeline Network and Carbon Capture Capabilities

“This transaction is a major step forward in the profitable growth of our Low Carbon Solutions business,” stated ExxonMobil’s Chairman and CEO, Darren Woods. The deal signifies a major enhancement in ExxonMobil’s portfolio, marrying the company’s expertise with Denbury’s specialized talent and extensive CO2 pipeline network. This move not only cements ExxonMobil’s position in low-carbon innovation but also aligns with the broader initiative to address industrial decarbonization needs while curbing emissions in its own operations.

With this strategic acquisition, ExxonMobil now possesses the largest owned and operated CO2 pipeline network in the U.S., comprising over 1,300 miles of CO2 pipelines across key states such as Louisiana, Texas, and Mississippi. These additions are key to ExxonMobil’s strategy, given their location in one of the U.S.’s largest markets for CO2 emissions.

ExxonMobil Strengthens Low Carbon Leadership with Strategic Denbury Acquisition

The deal also brings under ExxonMobil’s ambit Gulf Coast and Rocky Mountain oil and natural gas operations, boasting more than 200 million barrels of proved oil equivalent reserves. The immediate operating cash flow and the optionality for scaling carbon capture operations are added financial and strategic benefits.

Projecting into the future, ExxonMobil foresees a potential to curtail CO2 emissions by over 100 million metric tons annually, thanks to the integrated assets and capabilities acquired through Denbury.

Deal Background:

Initially announced in July 2023, ExxonMobil’s definitive agreement to acquire Denbury marked a notable commitment of $4.9 billion towards enhancing its Low Carbon Solutions business. This strategic acquisition not only expands the company’s CCS capabilities but also aligns with its vision to lead in low carbon technologies.

The expansion of ExxonMobil’s CO2 pipeline network through this acquisition is anticipated to play a pivotal role in CCS deployment across significant U.S. markets.

Moreover, Denbury’s inclusion in ExxonMobil’s operations extends beyond pipelines; it brings immediate cash flow and diversifies options for future carbon capture development. Pending regulatory and shareholder approvals, the closure of this transaction is anticipated for the fourth quarter of 2023.