US-based oil company Denbury is considering various strategic options including the potential sale of the business, reported Bloomberg News, citing people familiar with the development.
With a market capitalisation of approximately $4bn, the Texas-based firm is working with an undisclosed advisor to assess strategic options, the sources said.
Denbury is engaged in extracting enhanced oil recovery (EOR), a process involving the injection of carbon dioxide (CO₂) into existing oil fields to extract trapped oil.
According to the people, deliberations may or may not result in the signing of a deal.
In the recent weeks, several independent US producers made deals to capitalise on higher oil and gas prices following Russia’s invasion of Ukraine.
In September 2020, Denbury exited bankruptcy in a deal that removed bond debt worth $2.1bn and transferred control to its creditors.
The company has the potential for 1.5 billion tons of carbon storage along the Gulf Coast, including sites in Texas, Louisiana, and Alabama.
It is now planning to expand its carbon capture and storage capacity.
Denbury also intends to sign deals with potential firms to transport and store 10 million tonnes of industrial-sourced CO₂ annually.
Denbury’s operations and assets are focused on carbon capture, use, and storage (CCUS) and EOR in the Rocky Mountain and Gulf Coast regions.
The firm currently injects more than four million tonnes of captured, industrial-sourced CO₂ per year.
It aims to fully offset its Scope 1, 2, and 3 CO₂ emissions by 2030 by increasing the amount of captured CO₂ used in its operations.