Exxon Mobil to buy Denbury for a premium of less than 2%, in a $4.9 billion stock deal - MarketWatch

Shares of Denbury Inc. inched higher Thursday after Exxon Mobil Corp. announced an agreement to buy the Texas-based carbon-capture company for a relatively small premium, in an all-stock deal valued at $4.9 billion.

Under the terms of the deal, Denbury shareholders will receive 0.84 Exxon Mobil shares XOM, -1.57% for each Denbury share DEN, -0.85% they own. Based on Wednesday’s closing prices, that values Denbury shares at $89.45 each, or a 1.9% premium.

Denbury’s stock ticked up 0.1% in morning trading, while Exxon Mobil shares fell 0.5%.

At Exxon Mobil’s current stock price, the deal’s terms value Denbury shares at $88.98 each. That price implies a market capitalization of $4.47 billion for Denbury.

“Acquiring Denbury reflects our determination to profitably grow our Low Carbon Solutions business by serving a range of hard-to-decarbonize industries with a comprehensive carbon capture and sequestration offering,” said Exxon Chief Executive Darren Woods.

Exxon Mobil said the acquisition, which is expected to close in the fourth quarter of 2023, provides it with a 1,300-mile carbon-dioxide pipeline network, the largest in the U.S.

“The breadth of Denbury’s network, when added to ExxonMobil’s decades of experience and capabilities in CCS [carbon capture, utilization and storage], 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 added.

Besides just the carbon capture and storage assets, the acquisition includes Denbury’s Gulf Coast and Rocky Mountain oil and natural-gas operations, which provides 47,000 oil-equivalent barrels per day of production.

Denbury’s stock has gained 0.9% year to date while Exxon shares have declined 4.0%, the Energy Select Sector SPDR exchange-traded fund XLE, +0.36% has lost 4.2% and the S&P 500 SPX, +0.57% has run up 17.1%.

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2023-07-13 12:11:00Z
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