US-based pipeline operator Kinder Morgan has acquired oil and gas assets in West Texas for approximately $100 million Reutersciting people familiar with the matter.
The transaction with Avad Energy Partners includes approximately 265 wells within a mature segment of the U.S.’s most expansive oil field, according to Avad marketing materials and people close to the matter.
The acquisition also gives Kinder Morgan 11,600 hectares with the potential to scale up oil production through enhanced oil recovery techniques, including carbon dioxide (CO₂) injection.
The acquisition underlines the impact of the Inflation Reduction Act’s $60 per ton carbon sequestration tax credit on the oil and gas industry, making older oil fields more financially viable, one of the people said.
The company’s strategic acquisition includes an oil field with a production history dating back to the 1920s. This field currently has a production of approximately 1,100 barrels per day (bpd).
Kinder Morgan is considering using the country’s carbon capture incentives to boost production from its oil and gas properties.
Kinder Morgan’s existing oil production, which produces approximately 50,000 barrels per day, uses CO₂ injection to enhance oil recovery. This makes the field more economical because of the new tax credit in the US.
In line with the new focus on higher potential properties, Kinder Morgan is reportedly planning to divest several older conventional oil fields in the region.
One of the people said: “This shows that KMI remains committed to exploration and production (E&P).”
Estimates suggest that an additional 100 to 300 million barrels of oil could be recovered from the field over time using improved oil recovery techniques.
Last year, Kinder Morgan acquired $1.81 billion worth of assets in South Texas from Nextera Energy Partners, expanding its natural gas pipeline network.
“Kinder Morgan Acquires Texas Oil and Gas Assets from Avad Energy” was originally created and published by Offshore Technology, a brand owned by GlobalData.
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