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July 2023 Carbon Capture Update: Denbury Sells for $4.9B in Latest M&A Activity


By Nick Jones  |  August 10, 2023

Earlier rumors proved true this month when ExxonMobil announced it would make an all-stock purchase of Denbury Resources in a deal valued at $4.9 billion. Exxon’s investor materials made clear that a goal of this acquisition would be to consolidate CCUS projects, primarily along the Gulf Coast. While the deal stands out, like Denbury itself, as being unusually focused on carbon management, it is only one of three recent M&A announcements in the CCUS field. As such, this month’s CCUS update examines these deals and what they could mean for the deployment of carbon capture.


    • The EU Innovation Fund announced grants for five new projects at European cement and lime plants, including projects by Holcim, TITAN, Lhoist, and Heidelberg. A total of 29 CCS projects are underway at cement and lime plants in Europe, making this industry one of the leading adopters on the continent.
    • The U.S. EPA intends to issue two Class VI injection well permits for the Wabash Valley Resources and Nikola coal-to-hydrogen project in Indiana. The wells would allow for underground sequestration of 1.6 Mt/y of CO2. The permitting process now enters a period for public comment before the agency grants final approval. If issued, this would be only the second project to receive Class VI permits from the EPA.

    Spotlight: Energy Players Looking to Consolidate CCUS Positions with M&A

    E&Ps and oil majors have historically driven CCUS investment and remain highly active today. Since the beginning of June, three acquisitions have targeted E&Ps with multi-megaton CCUS portfolios in various stages of planning and development. Harbour Energy, which is developing offshore sequestration in the North Sea, is discussing a merger with smaller Talos Energy, which is developing sequestration in the Gulf of Mexico. Meanwhile, Vår Energi and Eni International have agreed to pay $4.9 billion for Neptune Energy, including Neptune’s slate of CCS projects in Norway, the UK, and the Netherlands.

    Finally, in July, ExxonMobil announced a plan to buy Denbury Resources. Denbury has long made CO2 a central part of its business, operating a network of CO2 pipelines and EOR fields in the U.S. More recently, Denbury has leveraged this existing infrastructure and expertise to provide carbon management services, currently offtaking 4 Mt/y of industrial CO2 with an incremental 18 Mt/y of CO2 offtake contracted with new projects in various phases of development. This portfolio could scale further, with many emission sources located near existing Denbury infrastructure along the Gulf Coast. Exxon cited the “Opportunity to accelerate up to 100 [Mt/y] of CO2 emissions reduction” as a primary reason behind the acquisition. Exxon had already been among the most prolific CCUS developers globally, and the acquisition of Denbury means Exxon now is party to over 46 Mt/y of capacity in various stages of development. Only Occidental, whose ambitious DAC program remains mostly preliminary, has a larger CCUS portfolio.


As seen above, these examples of recent M&A activity significantly impact the CCUS field. Exxon especially has seized an opportunity to consolidate their carbon management portfolio, potentially increasing economies of scale and value-chain integration. Exxon’s purchase of Denbury is a unique case due to Denbury’s business model incorporating CO2 centrally in both its historic operations and future plans. However, a number of other E&Ps, some of which have experience with EOR, appear similar to Denbury in their attempts to angle for future carbon management revenue and their historic CO2 use, though at a smaller scale than Denbury. For instance, California Resources (with a market cap of $3.6 billion) is a party to at least eight point-source CCUS projects and has filed 25 applications for Class VI wells. Other firm types, including midstream companies, power plant operators, and pure-play sequestration start-ups, are also building carbon management portfolios that could attract interest from buyers looking to enhance their positions in this new marketplace.



BTU Analytics is a FactSet Company. This article was originally published on the BTU Analytics website.

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Nick Jones

Energy Analyst

Mr. Nick Jones is an Energy Analyst for BTU Analytics, a FactSet Company. In this role, he researches developments and forecasts production in the Rocky Mountain region. Mr. Jones earned his bachelor’s in economics from the University of Michigan.


The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.