ExxonMobil has completed its acquisition of Denbury Inc., a carbon solutions company, in an all-stock transaction valued at $4.9 billion. The agreement was originally announced in July.

Denbury uses carbon dioxide to obtain oil from wells that have otherwise dried up. As stated on the National Energy Technology Laboratory’s website, “Carbon dioxide enhanced oil recovery (CO2 EOR) is a technique used to recover oil, typically from mature fields that have ceased being productive through traditional primary and secondary recovery methods.” The technology in place to encourage this type of retrieval is what has attracted oil companies that are interested in carbon capturing.

“This transaction is a major step forward in the profitable growth of our low-carbon solutions business,” Chairman and CEO Darren Woods said. “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.” 

With the addition of Denbury’s more than 1,300 miles of CO2 dedicated pipelines in the United States, ExxonMobil now has the largest owned and operated CO2 pipeline in the country. This includes nearly 925 miles of pipelines in Louisiana, Texas and Mississippi, located in one of the largest U.S. markets for CO2 emissions. The company also has access to more than 15 strategically located onshore CO2 storage sites.

The acquisition also includes Gulf Coast and Rocky Mountain oil and natural gas operations, consisting of proved reserves totaling more than 200 million barrels of oil equivalent as of year-end 2022, with approximately 46,000 oil-equivalent barrels per day of current production. These operations provide immediate operating cash flow and optionality for carbon capture operations.

The combination of these assets and capabilities has the potential to reduce CO2 emissions by more than 100 million metric tons per year once fully developed and optimized.  

ExxonMobil also acquired Pioneer Natural Resources last month in a transaction worth approximately $64.5 billion.