Exxon Mobil in talks to purchase oil & fuel producer Denbury -Bloomberg Information By Reuters

(Reuters) -Exxon Mobil Corp is contemplating a takeover of oil and fuel producer Denbury Inc and the talks are at a preliminary stage, Bloomberg Information reported on Monday, citing individuals conversant in the matter.

Shares of Plano, Texas-based vitality firm Denbury jumped as a lot as 12% earlier on Monday, earlier than paring some positive aspects to shut up about 7%, giving it a market worth of about $5 billion.

Denbury is predicted to be fetch a big premium if it proceeds with the sale, making it a doubtlessly sizable transaction.

Denbury has been exploring choices and is working with an advisor on a possible sale, sources conversant in the matter have beforehand instructed Reuters. Different potential patrons may embody oil majors comparable to Chevron Corp (NYSE:), the sources stated.

The corporate focuses on utilizing carbon dioxide to extract oil from outdated wells and thus is seen as a pretty asset for oil majors and different large-cap vitality firms which can be beginning to expand bets on the environmental, social and company governance (ESG) technique.

Denbury emerged from chapter in 2020 and its inventory has carried out strongly since then, thus offering an exit alternative for its collectors who grew to become shareholders within the firm.

Denbury’s pipelines and storage potential on the Gulf Coast are additionally seen as enticing options for potential patrons.

Exxon (NYSE:) declined to remark and Denbury didn’t instantly reply to Reuters’ request for remark.