Exxon Mobil Corp (NYSE:XOM). under the leadership of CEO Darren Woods has strategically expanded its Low Carbon Solutions business through the acquisition of E&P Denbury Inc., a carbon capture, utilization, and storage expert. The all-stock deal, confirmed by Woods in July, was valued at $4.9 billion and included a 2% premium on Denbury's closing price. This translated to Exxon paying $89.45 per Denbury share, offering 0.84 Exxon shares in exchange.
This acquisition has given Exxon control of the largest CO pipeline network in the U.S., spanning over 1,300 miles across Louisiana, Texas, and Mississippi. Additionally, it includes Gulf Coast and Rocky Mountain oil and natural gas operations which boasted more than 200 million barrels of oil equivalent (MMboe) in proven reserves by the end of 2022 and a production rate of approximately 46,000 barrels of oil equivalent per day (boe/d).
The deal also provides Exxon with access to over 15 strategically located onshore CO storage sites, further bolstering its Low Carbon Solutions business. ExxonMobil is committed to reducing its own emissions and meeting industrial decarbonization needs. Through optimization of these newly acquired assets, the company anticipates an annual reduction of over 100 million metric tons in CO emissions.
The acquisition aligns with ExxonMobil's strategic move to expand its low carbon solutions business under Woods' leadership. The company's commitment towards industrial decarbonization needs is evident with this strategic acquisition that not only expands its infrastructure but also reinforces its low-carbon leadership.
InvestingPro Insights
Based on the latest data from InvestingPro, Exxon Mobil Corp.'s (XOM) market cap stands at a significant 428.83B USD as of Q3 2023, while its P/E ratio is at a modest 10.73. The company has seen a revenue of 344.75B USD over the last twelve months as of Q3 2023. On the other hand, Denbury Inc. (DEN) has a market cap of 4560M USD with a P/E ratio of 9.47 and a revenue of 1489.85M USD over the same period.
Looking at the InvestingPro Tips for both companies, Exxon Mobil Corp. is a prominent player in the Oil, Gas & Consumable Fuels industry and has maintained its dividend payments for 53 consecutive years, making it a stable investment. The company is also predicted to be profitable this year. Denbury Inc., on the other hand, has been consistently increasing its earnings per share and is also predicted to be profitable this year.
These insights suggest that Exxon Mobil Corp.'s acquisition of Denbury Inc. is a strategic move that combines the stability of Exxon Mobil Corp. with the growth potential of Denbury Inc. For more detailed insights and additional tips, consider exploring the InvestingPro platform, which includes over 10 tips for each company.
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