Kinder Morgan, Inc. (KMI) has reportedly acquired oil and gas-producing assets in West Texas and is planning to tap U.S. carbon capture incentives to increase output from the properties.
The company paid about $100 million for the oilfield, reported Reuters.
"The purchase shows how the U.S. Inflation Reduction Act's $60 per metric ton tax credit for carbon sequestration is spurring oil and gas deals by increasing the attractiveness of older oil-producing areas," the report quoted a person familiar with the matter.
As per the report, the transaction includes some 265 wells in a mature area of the largest U.S. oil field and around 11,600 acres of land having potential to boost oil production using the enhanced oil recovery technique involving carbon dioxide injection.
Apart from this, Kinder Morgan is reportedly planning to sell several of its older, conventional oilfields in the area to concentrate on the higher-potential properties.
Investors can gain exposure to the stock via Ultimus Managers Trust Westwood Salient Enhanced Midstream Income ETF (NYSE:MDST) and Tortoise North American Pipeline ETF (NYSE:TPYP).
Price Action: KMI shares traded lower by 0.39% at $19.32 at the last check Thursday.
Photo via Shutterstock