Kinder Morgan buys Texas oilfield assets in carbon capture tax play - Reuters
Kinder Morgan (NYSE:KMI) has acquired oil and gas producing assets in the Permian Basin for ~$100M and is planning to tap U.S. carbon capture incentives to boost production from the properties, Reuters reported Wednesday.
The acquisition reportedly includes 265 wells in a mature area of the field and 11.6K acres of land that has the potential to increase oil production using the enhanced oil recovery technique; another 100M-300M barrels of oil could be recovered over time from the field by using enhanced oil recovery, the report said.
Reuters also reported that Kinder Morgan (KMI) separately plans to sell several of its older, conventional oilfields in the area in order to focus on higher-potential properties.
The purchase shows how the U.S. Inflation Reduction Act's $60/metric ton tax credit for carbon sequestration is prompting oil and gas deals by increasing the attractiveness of older oil-producing areas, according to the report.