ExxonMobil enriches its low-carbon arsenal with new acquisition worth $4.9 billion

U.S.-headquartered energy giant ExxonMobil is getting its hands on – what it deems to be – the largest owned and operated CO2 pipeline network in the United States, thanks to a definitive agreement to acquire Denbury, a developer of carbon capture, utilisation and storage (CCS) solutions and enhanced oil recovery.


ExxonMobil explains that this acquisition is an all-stock transaction valued at $4.9 billion, or $89.45 per share based on its closing price on 12 July 2023. Under the terms of the agreement, Denbury shareholders will receive 0.84 shares of ExxonMobil for each Denbury share. These combined assets and capabilities are anticipated to further accelerate the U.S. giant’s Low Carbon Solutions business and create an even more compelling decarbonisation proposition.

Dan Ammann, President of ExxonMobil’s Low Carbon Solutions, stated: “Denbury’s advantaged CO2 infrastructure provides significant opportunities to expand and accelerate ExxonMobil’s low-carbon leadership across our Gulf Coast value chains. Once fully developed and optimised, 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.” 

Furthermore, the acquisition of Denbury provides the oil major with – what is considered to be – the largest owned and operated CO2 pipeline network in the U.S. at 1,300 miles, including nearly 925 miles of CO2 pipelines in Louisiana, Texas, and Mississippi. This is located within one of the largest U.S. markets for CO2 emissions, as well as ten strategically located onshore sequestration sites.

Darren Woods, ExxonMobil’s Chairman and CEO, commented: “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.

“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.” 

Moreover, ExxonMobil highlights that a cost-efficient transportation and storage system accelerates its CCS deployment over the next decade and underpins multiple low-carbon value chains including CCS, hydrogen, ammonia, biofuels, and direct air capture. Therefore, these synergies are expected to enable more than 100 MTA of emissions reductions over time, driving strong growth and returns.

Chris Kendall, Denbury’s President and Chief Executive Officer, remarked: “Importantly, given the significant capital and years of work required to fully develop our CO2 business, ExxonMobil is the ideal partner with extensive resources and capabilities. 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.”

This acquisition is in line with ExxonMobil’s strategy and five-year corporate plan, revealed in December 2022, when the firm announced its intention to ramp up its spending on greenhouse gas emission-reduction projects to $17 billion over the next five years while maintaining disciplined capital investments in its portfolio.

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Aside from Denbury’s carbon capture and storage assets, the acquisition includes Gulf Coast and Rocky Mountain oil and natural gas operations, which consist of proved reserves totalling over 200 million barrels of oil equivalent, with 47,000 oil-equivalent barrels per day of current production, providing immediate operating cash flow and near-term optionality for CO2 offtake and execution of the CCS business.

The acquisition has been unanimously approved by the companies’ boards of directors, however, it is still subject not only to customary regulatory reviews and approvals but also to the approval of Denbury shareholders. The completion of this acquisition is expected in the fourth quarter of 2023. 

While working on decarbonising its operations, ExxonMobil is also embarking on a search for more hydrocarbons. In line with this, the oil major recently received a stamp of approval for its 35-well exploration and appraisal drilling campaign on the Stabroek Block offshore Guyana from the country’s Environmental Protection Agency (EPA).

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This comes after the U.S. giant made a final investment decision for the Uaru project in the Stabroek Block.