Exxon Mobil is in preliminary talks to acquire US-based oil and gas producer Denbury, reported Bloomberg News, citing people familiar with the matter.

Texas-based Denbury , which has operations focused on the Gulf Coast and Rocky Mountain regions, has a market capitalisation of approximately $5bn, according to Reuters.

The firm has over 2,092km of carbon dioxide (CO₂) pipelines in the Gulf Coast and Rocky Mountains.

Exxon has set a target to eliminate operational emissions by 2050 and expects the acquisition of Denbury to provide it with critical and hard-to-replicate infrastructure.

By 2030, Denbury aims be ‘carbon negative’ on a Scope 3 basis, including customers’ emissions.

In August 2022, Bloomberg News reported that Denbury was working with an undisclosed adviser for exploring the sale of the business.

Sources familiar with the matter told Reuters that other potential buyers of Denbury could include oil majors such as Chevron .

Denbury is engaged in enhanced oil recovery (EOR), a process involving the injection of CO₂ into existing oil fields to extract trapped oil.

In September 2020, the US-based firm 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 tonnes of CO₂ storage along the Gulf Coast, including sites in Texas, Louisiana, and Alabama.

Earlier this year, Exxon announced plans for lower-carbon investments of $15bn through 2027.