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Exxon Mobil in talks to buy oil & gas producer Denbury -Bloomberg News

Published 10/10/2022, 01:46 PM
Updated 10/10/2022, 06:20 PM
© Reuters. Signage is seen at an Exxon gas station in Brooklyn, New York City, U.S., November 23, 2021. REUTERS/Andrew Kelly/Files
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(Reuters) -Exxon Mobil Corp is considering a takeover of oil and gas producer Denbury Inc and the talks are at a preliminary stage, Bloomberg News reported on Monday, citing people familiar with the matter.

Shares of Plano, Texas-based energy company Denbury jumped as much as 12% earlier on Monday, before paring some gains to close up about 7%, giving it a market value of about $5 billion.

Denbury is expected to be fetch a significant premium if it proceeds with the sale, making it a potentially sizable transaction.

Denbury has been exploring options and is working with an advisor on a potential sale, sources familiar with the matter have previously told Reuters. Other potential buyers could include oil majors such as Chevron Corp (NYSE:CVX), the sources said.

The company specializes in using carbon dioxide to extract oil from old wells and thus is seen as an attractive asset for oil majors and other large-cap energy companies that are starting to make bigger bets on the environmental, social and corporate governance (ESG) strategy.

Denbury emerged from bankruptcy in 2020 and its stock has performed strongly since then, thus providing an exit opportunity for its creditors who became shareholders in the company.

© Reuters. Signage is seen at an Exxon gas station in Brooklyn, New York City, U.S., November 23, 2021. REUTERS/Andrew Kelly/Files

Denbury's pipelines and storage potential on the Gulf Coast are also seen as attractive features for potential buyers.

Exxon (NYSE:XOM) declined to comment and Denbury did not immediately respond to Reuters' request for comment.

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