The $100m transaction encompasses around 265 wells.S-based pipeline operator Kinder Morgan has acquired oil and gas assets in West Texas for approximately $100m, reported Reuters, citing people familiar with the matter.
The transaction with Avad Energy Partners encompasses around 265 wells within a mature segment of the US’ most extensive oilfield, according to Avad’s marketing materials and and people close to the matter.The acquisition also brings Kinder Morgan 11,600 acres with the potential to scale up oil production through enhanced oil recovery techniques, which could involve carbon dioxide (CO₂) injection.
The acquisition underscores the impact of the Inflation Reduction Act’s $60 per tonne tax credit for carbon sequestration on the oil and gas industry, making older oilfields more financially viable, one of the people said.The company’s strategic acquisition includes an oilfield with a production history dating back to the 1920s. This field currently has production of around 1,100 barrels per day (bpd).Kinder Morgan is considering utilising the country’s carbon capture incentives to boost production from the oil and gas properties.
Kinder Morgan’s existing oil production operation, which produces around 50,000bpd, employs CO₂ injection to enhance oil recovery. This makes the field more economic due to 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 oilfields in the region.
One of the people said: “This is showing KMI is staying in exploration and production (E&P) business.”Estimates suggest that an additional 100m–300m barrels of oil could be extracted from the field over time using enhanced oil recovery techniques.Last year, Kinder Morgan acquired $1.81bn worth of South Texas assets from Nextera Energy Partners, enhancing its natural gas pipeline network.
Source:https://www.offshore-technology.com