Exxon Mobil has announced that it will acquire Denbury Inc., a company that specializes in carbon capture, utilization and storage (CCUS) solutions, for $4.9B in an all-stock deal. The deal values Denbury at $89.45 per share, a slight premium to its closing price on Wednesday.
Denbury recycles carbon dioxide (CO2) through its Enhanced Oil Recovery (EOR) operations, and uses it to produce environmentally-friendly, carbon-negative Blue Oil. The company owns the largest CO2 pipeline network in the U.S., spanning 1,300 miles across Louisiana, Texas, and Mississippi, as well as 10 onshore sequestration sites.
The acquisition is part of Exxon Mobil’s new Low Carbon business, which aims to develop CCUS projects that can reduce greenhouse gas emissions and generate revenues. Exxon CEO Darren Woods said that the Low Carbon business has the potential to outperform its legacy oil and gas business within a decade and generate hundreds of billions in revenues.
Exxon Mobil has already signed a long-term contract with industrial gas company Linde Plc. (NYSE:LIN) to transport and store CO2 from Linde’s planned clean hydrogen project in Beaumont, Texas. Linde is building a $1.8B complex that will produce clean hydrogen and nitrogen using autothermal reforming with carbon capture.
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