Exxon is in preliminary talks of buying the oil and gas producer Denbury, Bloomberg News reported on Oct. 10.
Denbury specializes in using CO2 to extract oil from old wells. This makes the company an attractive asset for oil giants looking to accelerate their environmental, social and corporate governance (ESG) strategy.
Utilizing the captured industrial-sourced carbon dioxide significantly decreases the carbon footprint of the oil produced at Denbury, which is in line with the company’s target to entirely offset its Scope 1, 2 and 2 CO2 emissions by 2030.
The shares of the Texas-based Denbury went up by as much as 12% on Monday, before reducing gains to end at about 7%, reaching a market value of approximately $5 billion.
Denbury is looking at options for a potential sale and working with an advisor, Reuters previously reported, citing sources that said Chevron is also among potential buyers.
Relevant: Exxon To Build Carbon Capture On Federal Lands
In 2020, Denbury emerged from bankruptcy and has had a high-performing stock since then, creating a good exit opportunity for its creditors-turned-shareholders.
The company also has pipelines and storage potential on the Gulf Coast, which further makes it an attractive asset for potential buyers.
Carbon capture and storage (CCS) is the process of capturing carbon from industrial activity and storing permanently it in deep geological formations. The United Nations Intergovernmental Panel on Climate Change and the International Energy Agency agree that CCS is among the key low-carbon technological solutions to achieve climate targets at the lowest cost.
Exxon is a leader in CCS, and currently has a carbon capture capacity of about 9 million tons annually.
Chevron is also working to reduce its carbon footprint and plans to grow lower-carbon businesses in renewables, hydrogen, CCS, offsets, and other emerging low-carbon technologies.
Read more: Exxon, Shell, And CNOOC To Develop One Of The Largest Carbon Capture Hubs
