Houston is taking a significant step towards achieving its energy transition goals as ExxonMobil announces the acquisition of Denbury, a leading developer of carbon capture, utilization, and storage (CCS) solutions and enhanced oil recovery. This $4.9 billion all-stock transaction bolsters ExxonMobil’s commitment to advance its Low Carbon Solutions business and providing a comprehensive carbon capture and sequestration offering.
The acquisition of Denbury grants access to the company’s extensive CO2 pipeline network, which spans 1,300 miles across the United States, including nearly 925 miles in Louisiana, Texas, and Mississippi. This positions ExxonMobil with the largest owned and operated CO2 pipeline network in the country, strategically located within one of the largest U.S. markets for CO2 emissions. Additionally, ExxonMobil gains control of 10 strategically located onshore sequestration sites, further enhancing its carbon capture and storage capabilities.
By combining Denbury’s assets and capabilities with ExxonMobil’s decades of experience in CCS, the companies will accelerate the deployment of carbon capture and storage technologies for both ExxonMobil and its third-party customers. This approach will facilitate the growth of multiple low carbon value chains, including CCS, hydrogen, ammonia, biofuels, and direct air capture, furthering Houston’s commitment to a sustainable energy future.
Darren Woods, Chairman and CEO of ExxonMobil, emphasizes the pivotal role this acquisition plays in advancing a thoughtful energy transition. He states, “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.”
This acquisition not only encompasses Denbury’s CCS assets but also includes their Gulf Coast and Rocky Mountain oil and natural gas operations. These operations boast proved reserves exceeding 200 million barrels of oil equivalent, with a current production capacity of 47,000 oil-equivalent barrels per day.
“ExxonMobil’s acquisition of Denbury is a significant development for Houston’s energy transition,” says Jane Stricker, Executive Director of the Greater Houston Partnership’s Houston Energy Transition Initiative (HETI). “This strategic move underscores Houston’s commitment to developing and advancing low-carbon solutions and sustainable practices in the energy sector, enhancing Houston’s position as a global leader in the transition to an abundant, resilient, and low-carbon energy future.”
The transaction has received unanimous approval from the boards of directors of both ExxonMobil and Denbury. However, it is subject to customary regulatory reviews and approvals and is contingent upon approval by Denbury’s shareholders. The closing of the transaction is anticipated to take place in the fourth quarter of 2023.
As Houston continues its transition towards a sustainable energy landscape, ExxonMobil’s recent relocation to Spring and acquisition of Denbury will drive innovation, accelerate emissions reductions and a more resilient energy sector for the Greater Houston area.