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