ExxonMobil reportedly in talks to buy Denbury Inc.

Oil producer Exxon is reportedly in talks to acquire Denbury Inc. for $4.9 billion. Yahoo Finance Markets Reporter Ines Ferre details Denbury's carbon capture technology and the stock action surrounding the two energy companies following this news.

Video Transcript

JULIE HYMAN: Speaking of oil, we're watching a story in the energy space today, ExxonMobil reportedly considering-- or actually buying oil and gas producer Denbury. So what else do we know there? Interestingly, we haven't seen that much of an increase in Denbury. But what Denbury really does here is carbon capture, right? It has CO2 pipelines in the US.

INES FERRE: Yeah, that's right. Its biggest asset is that CO2 pipeline network that runs through Louisiana through Mississippi through Texas. And these are big areas with a lot of industry, a lot of big polluters. So you put that carbon into these pipelines. And in the past, Denbury has used that CO2 to recover more oil. Now, they can store that CO2 underground safely permanently, reducing emissions from the atmosphere.

It's a logical acquisition, really, if you think about it for ExxonMobil to go this route in order to be reducing carbon emissions. And this is a big turnaround for this company, because you mentioned that the stock price hasn't really-- it's down slightly. Well, this is a company with a $4.4 billion market cap. The deal would be for Exxon to buy Denbury for $89.45 per share. So you can see there that right now it's trading at around $87 per share.

But also, this is a company that had gone bankrupt at one point. It exited bankruptcy. It went bankrupt when oil prices really plunged at the beginning of the pandemic. It since then, its stock price has gone up four-fold. So the stock price completely skyrocketing over the last, look at this, three years up 381%. And what's interesting about this deal also is that the Inflation Act of last year, that law that went into effect, that has created tax incentives for companies to capture CO2 emissions, to store them underground, and to not pollute the atmosphere.

JULIE HYMAN: Yeah, really interesting move here. And we'll continue to watch Exxon's moves on that front. Thanks, Ines.