Exxon has acquired carbon capture, utilization and storage company Denbury to expand its Low Carbon Solutions business. The all-stock agreement was valued at $4.9 billion, or $89.45 per share, and included a 2% premium on Denbury’s closing price. This equates to 0.84 Exxon shares per Denbury share.
Following this acquisition, Exxon now controls the largest CO2 pipeline network in the U.S., spanning over 1,300 miles, including around 925 miles in Louisiana, Texas, and Mississippi. The oil and gas major now also has access to over 15 strategically located onshore carbon storage locations.
“This transaction is a major step forward in the profitable growth of our Low Carbon Solutions business,” said Exxon’s Chairman and CEO Darren Woods. “Our expertise, combined with Denbury’s talent and CO2 pipeline network, expands our low-carbon leadership and best positions us to meet the decarbonization needs of industrial customers while also reducing emissions in our own operations.”
The deal also encompasses Gulf Coast and Rocky Mountain oil and natural gas operations, featuring reserves exceeding 200 million barrels of oil equivalent by the end of 2022. These operations currently yield around 46,000 barrels of oil equivalent per day, offering a source of instant operating cash flow and the potential for carbon capture initiatives.
The company projects a yearly reduction of 100 million metric tons in carbon dioxide emissions.
According to the most recent data from InvestingPro, Exxon boasts a substantial market capitalization of $428.83 billion as of Q3 2023, and its price-to-earnings (P/E) ratio is at a modest 10.73. Over the past twelve months as of Q3 2023, the company has generated revenues totaling $344.75 billion. Denbury has a market capitalization of $4.56 billion, a P/E ratio of 9.47, and has recorded revenues of $1,489.85 million during the same time period.