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Denbury, Mississippi’s largest...

Denbury, Mississippi’s largest oil producer, acquired by ExxonMobil Corp

By: Frank Corder - July 19, 2023

FILE- An Exxon service station sign is seen, April 25, 2017, in Nashville, Tenn. Exxon Mobil is buying pipeline operator Denbury, the beneficiary of changes in U.S. climate policy that intended to reduce the amount of emissions released into the atmosphere. Exxon Mobil Corp. said Thursday, July 13, 2023, that the acquisition gives it the largest owned and operated carbon dioxide pipeline network in the U.S. at 1,300 miles. (AP Photo/Mark Humphrey, File)

Exxon’s acquisition of Denbury is aimed at making carbon capture a more profitable endeavor.

Last week, ExxonMobil Corp announced an agreement to acquire oil and gas producer Denbury Inc. for $4.9 billion.

Chris Kendall, Denbury’s President and Chief Executive Officer said in a statement that the transaction is a compelling opportunity for Denbury to join an admired global energy leader with a low-carbon focus, a robust balance sheet and a leading shareholder return program.

“Through this process, it became clear that the transaction with ExxonMobil is in the best interests of our company, our shareholders, and all Denbury stakeholders,” Kendall stated. “Importantly, given the significant capital and years of work required to fully develop our CO2 business, ExxonMobil is the ideal partner with extensive resources and capabilities.”

According to a report from Reuters on the buyout, Exxon’s move is meant to accelerate its energy transition business with an established carbon dioxide sequestration operation, essentially seeking to make carbon capture a more profitable endeavor.

The Mississippi Energy Institute (MEI) points out that over the last 20 years, Denbury has been Mississippi’s largest oil producer, accounting for about half of oil production in the state.

“Denbury’s utilization of geologic carbon dioxide to repressurize previously produced oil fields, known as enhanced oil recovery, allowed it to evolve into a company with unique expertise in the transportation and injection of carbon dioxide into geologic formations,” MEI stated. “That expertise along with its extensive carbon dioxide pipeline network, which originates in Mississippi, positions Denbury as a prime player in the emerging carbon capture and geologic storage industry.”

The Denbury pipeline spans some 1,300 miles across the Gulf South. MEI notes that Exxon’s acquisition of Denbury puts it in position to be the primary facilitator of projects in the Gulf of Mexico region.

Exxon CEO Darren Woods said in a statement that acquiring Denbury reflects the company’s determination to profitably grow its Low Carbon Solutions business by serving a range of hard-to-decarbonize industries with a comprehensive carbon capture and sequestration offering.

“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,” Woods said.

Reuters reported that Jefferies analyst Sam Burwell estimated Exxon was paying $1.9 billion for Denbury’s carbon capture infrastructure and $3 billion for its oil production.

In addition to Denbury’s carbon capture and storage assets, the company said in their announcement of the acquisition that it not only includes Gulf Coast oil and natural gas operations but also their Rocky Mountain operations. Denbury notes that these two operations consist of proved reserves totaling over 200 million barrels of oil equivalent, with 47,000 oil-equivalent barrels per day of current production.

About the Author(s)
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Frank Corder

Frank Corder is a native of Pascagoula. For nearly two decades, he has reported and offered analysis on government, public policy, business and matters of faith. Frank’s interviews, articles, and columns have been shared throughout Mississippi as well as in national publications. He is a frequent guest on radio and television, providing insight and commentary on the inner workings of the Magnolia State. Frank has served his community in both elected and appointed public office, hosted his own local radio and television programs, and managed private businesses all while being an engaged husband and father. Email Frank: