ExxonMobil to become No. 1 owner-operator of CO2 pipelines in U.S. with Denbury purchase

By Eric L. Taylor Thursday, July 13, 2023 businessreport.com

ExxonMobil Corp. announced this morning it has entered into a definitive agreement to acquire Denbury Inc. in an all-stock transaction valued at $4.9 billion.

The acquisition will make ExxonMobil the largest owner and operator of carbon dioxide, or CO2, pipelines in the U.S. at 1,300 miles, with almost 925 miles of that network concentrated in Louisiana, Texas and Mississippi.

Denbury recently announced its plans to develop an 8,500-acre CO2 sequestration site about 50 miles northeast of Baton Rouge, as reported in Daily Report. Named Virgo, the site will have an estimated storage capacity of at least 100 million metric tons of CO2 and be ready to accept its first injection as early as 2026. The company also has sequestration projects planned near Donaldsonville and New Orleans.

Once Denbury’s Gulf Coast-based carbon capture, sequestration and storage assets are fully developed, the combined assets of both companies will have the potential to reduce the region’s emissions by 100 million metric tons per year, according to Dan Ammann, president of ExxonMobil Low Carbon Solutions. 

In addition to its carbon capture and storage assets, ExxonMobil will also acquire Denbury’s oil and natural gas operations in the Gulf Coast and Rocky Mountain regions, which have proven reserves totaling over 200 million barrels of oil equivalent and a daily production capacity of 47,000 oil-equivalent barrels per day.

The boards of both companies have unanimously approved the deal, which is also subject to approval by Denbury shareholders. The transaction is expected to close in the fourth quarter.