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Denbury Layoffs

Denbury Inc. is a privately held oil and natural gas corporation. Their operations are concentrated in two critical regions of the United States. They are the Gulf Coast and the Rocky Mountains.

Denbury Inc. is an experienced carbon capture, utilization, and storage system developer for increased oil recovery. The acquisition of Denbury Inc. by Exxon Mobil Corporation was disclosed on July 13, 2023. Based on ExxonMobil’s closing price on July 12, 2023, the acquisition represents a stock-for-stock deal of $4.9 billion, or $89.45 per share. As per the transaction terms, Denbury stockholders will get 0.84 ExxonMobil shares for every Denbury share.

There is no news about the layoffs at Denbury Inc. Let us learn briefly about the company in this article.

About the company

The company Denbury Inc. engages in oil and gas exploration. Its headquarters are in Plano, Texas, and it was incorporated in Delaware. Their properties in the Gulf Coast region are located in Mississippi, Texas, Louisiana, and Alabama. In the Rocky Mountain region, they are located in Montana, North Dakota, and Wyoming. The corporation wants to raise the value of its holdings through exploitation, drilling, and tried-and-true engineering techniques. It has a significant focus on carbon dioxide-enhanced oil recovery.

With $1.3 billion in revenue, Denbury ranked as the 67th largest public company in Dallas-Fort Worth in 2019. The business declared bankruptcy in July 2020. In September 2020, it came out of bankruptcy and changed its name from Denbury Resources, Inc. to Denbury, Inc.

Denbury had 191.689 million barrels of oil in projected proven reserves as of December 31, 2021. Of that, 98.6% was petroleum, and 1.4% was natural gas. Jackson Dome is home to the business’s projected 910 billion cubic feet of potential carbon dioxide reserves. The Cedar Creek Anticline in Montana and North Dakota, which made up 23% of production in 2021, is the company’s highest-producing property.

Based on regulatory filings, Denbury had 765 workers at the end of 2022. In all, 351 worked in the business’ corporate offices in Plano’s Legacy area.

Denbury Resources exits Chapter 11

After completing its financial restructuring, Denbury Inc. was able to exit Chapter 11. According to information provided in an SEC filing on September 15, 2020, the firm has changed its legal name from Denbury Resources Inc. to Denbury Inc. According to an SEC filing, Denbury stated 

It also intends to list its fresh common stock in the reformed firm. This is for trading on the New York Stock Exchange under the DEN ticker.

Denbury Resources filed for Chapter 11 bankruptcy protection. It happened after agreeing on a prepackaged plan to remove the business’s $2.1 billion debt. The company gained approval for its prepackaged restructuring plan from the U.S. Bankruptcy Court for the Southern District of Texas.

The bankruptcy court oversaw the Plano-based oil and gas company for almost two months. Denbury Inc. reentered the stock market on September 21, 2020. It paid off $2.1 billion in debt in a bankruptcy reorganization under court supervision.

The same day, the trading markets changed for the worse. It caused Denbury’s share price to drop from $20.65 at the open to $18.10 at the close. With the help of a prior arrangement with its creditors, Denbury was able to pay down $2.1 billion in bond obligations. Denbury’s operations were financed by $615 million from existing lenders for the nearly two months it was under supervision.

CEO Chris Kendall issued a statement when the company’s reorganization was completed. “Today is a significant day for Denbury and all of our stakeholders. Denbury is a stronger firm with the financial flexibility to continue growing our distinctive vision for many years. We finished our restructuring process promptly and efficiently.”

According to Kendall, the reorganization increases Denbury’s competitiveness. It is achieved by allowing it to focus on its “emerging carbon capture, use, and storage business.” As we mentioned, carbon dioxide injections during drilling are the company’s area of expertise for more effective oil extraction from the Gulf Coast and Rocky Mountain regions.

ExxonMobil will purchase Denbury for $4.9 billion

On July 13, 2023, ExxonMobil announced that it had agreed to acquire oil and gas producer Denbury. In an all-stock transaction, the deal is for $4.9 billion, or $89.45 per share. Shareholders of Denbury will get 0.84 ExxonMobil shares for every share they own, as per the transaction terms.

Denbury is an appealing asset for oil majors and other large-cap energy firms beginning to place large bets on their environmental, social, and corporate governance agendas. It’s because of its expertise in exploiting carbon dioxide to extract oil from aging wells.

The largest oil producer in the United States, Exxon, wants to reduce its operational emissions by 2050. It also has plans to create technologies that still need to be commercialized. It covers hydrogen energy, biofuels made from algae, and carbon capture and storage.

Denbury’s oil and natural gas operations on the Gulf Coast and Rocky Mountains are also included in Exxon’s acquisition.

“Acquiring Denbury shows our desire to expand our low-carbon solutions business. We aim to achieve this by providing a range of difficult industries to decarbonize with a comprehensive carbon capture and sequestration offering.” Exxon CEO Darren Woods said these things in a statement.

According to a Reuters calculation, the acquisition will be completed in the fourth quarter. It represents a premium of 1.9% to Denbury’s most recent close. The shares were up approximately 1% in premarket trade at $88.35.

As we know, Denbury emerged from bankruptcy in September 2020. Since then, its stock has increased by over five times.

According to Darren Woods,

“The depth of Denbury’s network, paired with ExxonMobil’s decades of expertise and abilities in CCS, gives us a chance to play an even greater role in an insightful energy transition. We keep delivering on our commitment to offer the world the essential energy and goods it needs.”

According to Exxon, Denbury has the largest owned and managed network of CO2 pipelines in the U.S., totaling 1,300 miles. This network includes nearly 925 miles of CO2 pipelines in Louisiana, Texas, and Mississippi. They are situated in one of the U.S.’s major CO2 emission markets and in 10 carefully chosen onshore sequestration locations.

Conclusion

In recent years, ExxonMobil has been laying off employees aggressively. They’ve gone through several rounds of layoffs. ExxonMobil revealed plans to reduce its global workforce by 15% in 2020. This would result in the loss of 14,000 workers by 2022. Around 1,900 of those jobs were in the U.S. Business Insider obtained some leaked documents that revealed the timing of the cuts, but those details remain under wraps.

 

Then, ExxonMobil was all about cutting costs in 2022. By 2023, they aimed to reduce operational expenses by $6 billion. Will this affect employees at the recently acquired Denbury? We are still determining what will happen next. Let us hope for positive things to happen shortly.

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