ExxonMobil Acquires Denbury Resources
Friday, July 14, 2023Exxon Mobil Corporation announced this week it has entered into an agreement to acquire Denbury Inc., an experienced developer of carbon capture, utilization and storage (CCS) solutions and enhanced oil recovery.
The acquisition is an all-stock transaction valued at $4.9 billion, or $89.45 per share based on ExxonMobil’s closing price on July 12. Under the terms of the agreement, Denbury shareholders will receive 0.84 shares of ExxonMobil for each Denbury share.
“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,” said Darren Woods, Chairman and CEO. “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 of Denbury provides ExxonMobil with 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, as well as 10 strategically-located onshore sequestration sites. Among the properties is Denbury's CO2 enhanced oil recovery operation in Montana and southwestern North Dakota.
“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 program," said Denbury CEO Chris Kendall. "Over the last few years, Denbury has made significant progress executing our strategic plan, strengthening our enhanced oil recovery operations and capitalizing on our unrivaled infrastructure to accelerate the growth of our CO2 transportation and storage business. To build even further on this positive momentum, the Denbury board of directors and management team undertook a thorough review process and considered a number of alternatives to maximize long-term value."
The boards of directors of both companies have unanimously approved the transaction, which is subject to customary regulatory reviews and approvals, and also subject to approval by Denbury shareholders. The transaction is expected to close in the 4th quarter of 2023.