Denbury is focused on the development of enhanced oil recovery and carbon capture, utilisation and storage (CCUS) operations in the Rocky Mountain and Gulf Coast regions.
As per the deal terms, shareholders of Denbury will receive 0.84 ExxonMobil shares for each share held in the company.
Exxon chairman and 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.”
ExxonMobil expects the acquisition of Denbury to provide it with the largest owned and operated CO₂ pipeline network in the US.
Denbury owns oil and natural gas operations, with proved reserves totalling more than 200 million barrels of oil equivalent (boe) in the Gulf Coast and Rocky Mountain regions. These operations have 47,000boe per day of current production.
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Denbury president and CEO Chris Kendall said: “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.”
ExxonMobil Low Carbon Solutions president Dan Ammann said: “Once fully developed and optimised, this combination of assets and capabilities has the potential to profitably reduce emissions by more than 100 million metric tonnes per year in one of the highest-emitting regions of the US.”
The two companies’ boards of directors have unanimously approved the transaction.
Due to be closed in the fourth quarter of 2023, the transaction is subject to customary regulatory reviews and approvals.