Why did Denbury shares surge at this time? Exxon mentioned to weigh takeover (NYSE:DEN)

Denbury (NYSE:DEN) shares soared to an all-time intraday excessive $104.05 earlier than settling for a 6.8% acquire Monday after Bloomberg reported Exxon Mobil (NYSE:XOM) has expressed preliminary curiosity in shopping for the corporate, however no remaining choice has been made.

Bloomberg had reported in August that Denbury (DEN) was exploring choices together with a possible sale.

Denbury (DEN) owns greater than than 1,300 miles of pipelines devoted to transporting carbon dioxide, whereas shopping for the corporate would offer essential and hard-to-replicate infrastructure to help Exxon’s (XOM) carbon seize ambitions.

A takeover additionally would comprise the largest carbon administration funding because the August passage of the Inflation Discount Act, which raised tax credit for carbon seize by 70% to $85/ton; executives together with Exxon (XOM) CEO Darren Woods have praised the act for its monetary help for carbon seize.

Denbury (DEN) additionally has probably the most aggressive internet zero goal of any giant U.S. oil firm, aiming to be carbon destructive on a Scope 3 foundation, which incorporates prospects’ emissions, by 2030.

The corporate’s Rocky Mountain belongings are related to Exxon’s (XOM) Shute Creek gasoline facility close to LaBarge, Wyoming, which has captured extra carbon than some other asset within the U.S.

Denbury (DEN) just lately was praised by Jinjoo Lee in The Wall Avenue Journal‘s Heard On The Avenue column, which touted the corporate’s carbon dioxide gathering infrastructure as being “in simply the best place on the proper time.”

Denbury’s (DEN) carbon options enterprise “might present vital upside,” Elephant Analytics wrote in an evaluation printed early this summer season on Looking for Alpha.