By Kevin Crowley, and David Wethe

July 13, 2023 at 8:00 AM EDT

Updated on July 13, 2023 at 11:27 AM EDT

Exxon Mobil Corporation agreed to buy Denbury Inc. for US$4.9 billion, its biggest acquisition in six years, in a deal that will provide the oil giant the largest network of carbon dioxide pipelines in the U.S.

The all-stock transaction values Plano, Texas-based Denbury at $89.45 a share, the companies said Thursday in a statement. 

Denbury’s key asset is 1,300 miles (about two thousand kilometres) of pipelines dedicated to transporting CO2, critical infrastructure if the U.S. is going to be successful in capturing carbon emissions from facilities like refineries and chemical plants.

The acquisition is the largest single carbon-management investment since the Inflation Reduction Act passed in August. The law included landmark climate provisions, providing substantial tax incentives for companies to capture CO2 emissions and store them underground rather than pollute the atmosphere.

Buying Denbury will “allow us to move much more quickly than if we were to go out and try to build and replicate that infrastructure ourselves,” said Dan Ammann, president of Exxon’s Low Carbon Solutions business in a Bloomberg Television interview. It will “accelerate the growth of this business and do that on a very profitable basis.”

Denbury’s Rocky Mountain assets are connected to Exxon’s Shute Creek gas facility near LaBarge, Wyo., which has captured more carbon than any other asset in the U.S.

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