Exxon Mobil Corp. is considering a takeover of Denbury Inc., an oil-recovery specialist with the largest carbon dioxide pipeline network in the US, according to people familiar with the matter.
Exxon has expressed preliminary interest in the Plano, Texas-based company, said the people, who asked to not be identified because the matter isn't public. No final decision has been made and Exxon could opt against proceeding with a potential deal, they added.
If it goes through it would be the biggest carbon-management investment since the Inflation Reduction Act passed in August, providing large tax incentives for burying carbon dioxide.
A representative for Denbury declined to comment. A representative for Exxon didn't immediately respond to a request for comment.
Denbury rose 6.6% to $98.81 at 12:45 p.m. in New York trading Monday, giving the company a market value of about $4.9 billion.
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 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.
Denbury is working with an adviser exploring a sale, Bloomberg News reported in August. The company exited bankruptcy 2020.
Exxon is one of the world's largest and most profitable oil and gas companies.
