The ink’s not dry yet on Denbury’s huge deal today, but it certainly marks the happy ending to a Cinderella story.
Reese Energy Consulting is following the latest from oil giant Exxon, which will acquire Houston-based Denbury for $4.9 billion. The tale is worth retelling.
After the energy sector plunged amid the pandemic in 2020, more than 100 oil and gas companies filed for bankruptcy—the most in a generation. Denbury was among them. The company had long distinguished itself as a champion of CO2 EOR to stimulate oil and gas production, and by 2018 had captured nearly twice the amount of CO2 from the atmosphere than it emitted to produce oil. Denbury in early 2020 announced the industry’s most aggressive target to become carbon-negative by 2030, along with a goal to become the nation’s CCUS leader by way of a new business arm. Then the pandemic struck.
But Denbury’s re-emergence later that year lit a fire in the belly to build out its nascent CCUS business with a network that quickly included the Jackson Dome, the Gulf Coast region’s largest naturally occurring source of CO2; the nation’s largest CO2 pipeline network at 1,300 miles; and 1.5 billion tons of carbon storage stretched across Texas, La., and Ala. Exxon, meanwhile, was sketching out its own low-carb goals, pledging in 2022 to spend $15 billion in investments through 2027. On October 11, word was out that Exxon had eyes on a Denbury takeover, triggering a 12% jump in Denbury stock. Four days later, Exxon struck a deal instead with CF Industries and Enlink. Now the prodigal oil giant has returned, and Denbury gets its glass slipper.