DEN - Denbury down 7% in two days after Exxon opts for competing carbon capture deal

Denbury ( NYSE: DEN ) -3.5% in Friday's trading and down more than 7% during the past two days, as a speculated takeover by Exxon Mobil ( XOM ) now is considered unlikely after the oil giant announced its partnership on a competing carbon capture project .

Exxon ( XOM ) struck a deal with CF Industries and EnLink Midstream to capture and permanently store up to 2M tons/year of carbon dioxide in Louisiana, which would appear to end the rationale for Exxon to buy Denbury ( DEN ), operator of the largest carbon dioxide pipeline network in the U.S.

Denbury ( DEN ) would have been a "logical partner" for Exxon ( XOM ), given its assets in Louisiana, so the deal with CF and EnLink is "negative" because it means Exxon is less likely to acquire Denbury, Siebert Williams Shank analyst Gabriele Sorbara said, according to Bloomberg.

Sorbara said she still sees Denbury ( DEN ) as a takeout target for its "highly coveted CO2 infrastructure assets," although at a reduced premium with Exxon out of the picture.

Denbury's ( DEN ) carbon solutions business "may provide significant upside," Elephant Analytics wrote in an analysis published early this summer on Seeking Alpha .

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