Denbury Announces New CCUS Agreements and Provides 2023 CCUS Goals

PLANO, Texas–(BUSINESS WIRE)–#blueoil–Denbury Inc. (NYSE: DEN) (“Denbury” or the “Company”) today announced several new agreements related to its carbon capture, utilization and storage (“CCUS”) business and provided its 2023 goals, which are intended to further the Company’s leadership position in CCUS.

Chris Kendall, Denbury’s President and Chief Executive Officer, commented, “Today, we are announcing a number of new CCUS agreements, including CO₂ transportation agreements for customers in the emerging eFuels industry, our first dedicated CO₂ sequestration site in the Rocky Mountain region, and two new carbon capture technology investments. These agreements are focused on our strategy of rapidly capturing the CCUS market and expanding our CO₂ service offering. The growth potential of our CCUS business is transformational, and our Company is fully aligned and focused on delivering innovative carbon solutions for a sustainable future.”

New CO₂ transportation and/or storage agreements bring cumulative to more than 22 Mmtpa

• The Company recently executed an agreement with HIF Global, a leading eFuels company that is targeting to build a 200 million gallon per year carbon-neutral eGasoline and eMethanol facility by 2027, with the potential to decarbonize the emissions equivalent of over 400,000 vehicles. Denbury and HIF are actively engaged in sourcing 2 million metric tons per year (“Mmtpa”) of industrial-sourced CO₂ for transport and utilization at the planned Matagorda County, Texas, facility.
• Denbury also executed an agreement with Monarch Energy Development LLC, a hydrogen and eFuels project developer. Monarch currently has eFuels production facilities under development in Freeport and Beaumont, Texas, with estimated first production by 2026. Under the agreement, Denbury will transport 0.4 Mmtpa of industrial-sourced CO₂ to be used as a feedstock in the production process.

Initial dedicated CO₂ storage site in Rocky Mountain region

• In early 2023, the Company finalized a definitive agreement for the right to develop a dedicated CO₂ sequestration site on nearly 15,000 acres in Campbell County, Wyoming, directly underneath the Company’s Greencore CO₂ Pipeline. Denbury estimates potential CO₂ sequestration capacity of the site (now named Corvus) to be 40 million metric tons.

Carbon capture technology investments expand CO₂ service offering

• Denbury recently invested in ION Clean Energy, an industry leader in liquid solvent technologies that capture over 95% of CO₂ emissions while significantly reducing operating and capital costs for large-scale, post combustion CO₂ emissions. https://ioncleanenergy.com/
• The Company also recently completed an investment in Aqualung Carbon Capture, a leader in membrane CO₂ capture and separation technology. The patented technology drives a passive CO₂ separation, resulting in ability to economically capture 95%+ of CO₂ emissions across low (<3%) and high (30%+) CO₂ concentration levels. This highly scalable technology targets a wide range of both small and large sources of emissions. https://aqualung-cc.com/

Matt Dahan, Senior Vice President of CCUS Technology for Denbury stated, “We believe both Aqualung and ION are on the leading edge of reducing the cost of capture for a wide range of types and sizes of stationary CO₂ emissions facilities. Our investments in these emerging technologies will bring additional transport and sequestration opportunities to Denbury, and we look forward to working with both.”

2023 CCUS GOALS

• Execute additional CO₂ transportation and/or storage agreements from both brownfield and greenfield projects, so that by the end of 2023, Denbury’s cumulative agreements will cover CO₂ emissions totaling 30 Mmtpa.
• Expand the Company’s dedicated CO₂ storage portfolio with the acquisition of additional sequestration sites in strategic locations near areas with high concentrations of current and future CO₂ emissions.
• Submit Class VI permits to the Environmental Protection Agency (“EPA”) on at least 4 of the Company’s CO₂ sequestration sites. Denbury also targets drilling at least 2 stratigraphic test wells in 2023 on its CO₂ sequestration sites. Drilling has recently commenced on the Company’s Orion site in Alabama.
• Enhance Denbury’s CCUS business with strategic partnerships and equity investments around the entire value chain of CCUS.

ABOUT DENBURY

Denbury is an independent energy company with operations and assets focused on Carbon Capture, Use and Storage (CCUS) and Enhanced Oil Recovery (EOR) in the Gulf Coast and Rocky Mountain regions. For over two decades, the Company has maintained a unique strategic focus on utilizing CO₂ in its EOR operations and since 2012 has also been active in CCUS through the injection of captured industrial-sourced CO₂. The Company currently injects over four million tons of captured industrial-sourced CO₂ annually, with an objective to fully offset its Scope 1, 2, and 3 CO₂ emissions by 2030, primarily through increasing the amount of captured industrial-sourced CO₂ used in its operations. For more information about Denbury, visit www.denbury.com.

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Forward-Looking Statements: The data and/or statements contained above that are not historical facts, including estimated future CO₂ emissions reductions and volumes of CO₂ expected to be transported, stored, or utilized, and other plans and objectives for Denbury’s future carbon capture, utilization and storage activities (“CCUS”) are all forward-looking statements, as that term is defined in Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve a number of risks and uncertainties.

Such forward-looking information is based upon management’s current plans, expectations, estimates, and assumptions that could significantly and adversely be affected by various factors discussed below, many of which are beyond our control. As a consequence, actual results may differ materially from expectations, estimates or assumptions expressed in or implied by any forward-looking statements made by us or on our behalf.

Among the factors that could cause actual results of our CCUS activities to differ materially from the projections herein are: achieving successful completion of technical and feasibility evaluations; in certain cases raising of funds sufficient to build and operate greenfield CCUS projects; the successful construction or installation of add-on or new facilities; and receipt of required regulatory approvals or classifications, along with the other variables and timing considerations and the risks and uncertainties set forth from time to time in the Company’s public reports, filings and public statements including, without limitation, the Company’s 2022 Annual Report on Form 10-K to be filed with the SEC today.

Statement Regarding CCUS “Agreements”: References in this presentation to CCUS “Agreements” refers to both executed definitive agreements and executed term sheets or letters of intent covering various CCUS arrangements. In the case of arrangements covered by term sheets or letters of intent, those arrangements are subject to the negotiation and execution of definitive enforceable agreements.

Contacts

DENBURY CONTACTS:
Brad Whitmarsh, 972.673.2020, brad.whitmarsh@denbury.com
Beth Palmer, 972.673.2554, beth.palmer@denbury.com