Exxon Mobil Corp. is considering a takeover of Plano-based Denbury Incorporated. They are an oil and gas producer with the largest carbon dioxide pipeline network in the U.S. This is according to people familiar with the matter.
Irving-based Exxon has expressed preliminary interest in the company. They are asking not to be identified because the matter isn’t public. They are adding that no final decision has been made. With that Exxon could opt against proceeding with a potential deal.
If a takeover happens, it would be the biggest carbon-management investment since the Inflation Reduction Act was passed in August. It will be providing large tax incentives for burying carbon dioxide. The legislation increased tax credits for carbon capture 70% to $85 a ton.
Executives including Exxon CEO Darren Woods have praised the act. Is is bringing financial support for carbon capture. Morgan Stanley says could be highly profitable in the future.
Shares of Denbury jumped as much as 12% and traded at $98.83 in New York Monday afternoon, giving the company a market value of about $4.9 billion. A Denbury representative declined to comment, while an Exxon representative didn’t immediately respond to a request for comment.
Carbon capture is the bedrock of Exxon’s climate strategy, which aims to eliminate the oil giant’s operational emissions by 2050. Denbury’s 1,300 miles of pipelines in the Gulf Coast and the Rocky Mountains dedicated to transporting carbon dioxide would give Exxon critical and hard-to-replicate infrastructure that will be essential if its carbon capture push is to be a success.
Source: The Dallas Morning News
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