US Denbury has announced that its stockholders have voted to approve its merger with ExxonMobil.
The merger agreement, expected to close on November 2, 2023, states that ExxonMobil will acquire all outstanding shares of Denbury at an exchange ratio of 0.84 shares of ExxonMobil for each Denbury share.
Exxon Mobil agreed in July to acquire Denbury for $4.9 billion to accelerate ExxonMobil’s energy transition business by incorporating Denbury’s established carbon dioxide (CO2) sequestration operation.
With the acquisition of Denbury, ExxonMobil gains access to the largest owned and operated CO2 pipeline network in the U.S., spanning 1,300 miles, including nearly 925 miles of CO2 pipelines in Louisiana, Texas, and Mississippi, strategically located within one of the largest U.S. markets for CO2 emissions. Additionally, Denbury has 10 strategically located onshore sequestration sites.
The acquisition of Denbury provides ExxonMobil with a cost-efficient transportation and storage system, will accelerate the deployment of carbon capture and storage (CCS) for both ExxonMobil and third-party customers over the next decade, as ExxonMobil said in a press release.
“Denbury’s advantaged CO2 infrastructure provides significant opportunities to expand and accelerate ExxonMobil’s low-carbon leadership across our Gulf Coast value chains,” said Dan Ammann, President of ExxonMobil Low Carbon Solutions.
“Once fully developed and optimized, 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 US,” Ammann added.
This system will also support multiple low-carbon value chains, including CCS, hydrogen, ammonia, biofuels, and direct air capture.
Besides Denbury’s CCS assets, the acquisition includes Gulf Coast and Rocky Mountain oil and natural gas operations that consist of proved reserves totaling over 200 million barrels of oil equivalent (boe), with current production of 47,000 boe/d. This provides immediate operating cash flow and near-term opportunities for CO2 offtake and the execution of the CCS business.