Kinder Morgan Acquires Permian Basin Assets

Kinder Morgan Energy Partners (KMP) has purchased various properties from Journey Acquisition-I and Journey 2000 located primarily in the Permian Basin of West Texas.

The oil and gas properties produce approximately 850 barrels of oil equivalent per day (BOE/D) net and include some fields with enhanced oil recovery (EOR)development potential near KMP's CO2 operations. During the next several months, Kinder Morgan CO2 Co. will perform technical evaluations to confirm the CO2 EOR potential. The KMP subsidiary will generate definitive plans to develop this potential if it proves to be economic.

The purchase price plus the anticipated investment to further develop this CO2 EOR potential and a new CO2 supply pipeline is approximately $115 million, but the total investment is likely to be considerably less because KMP plans to divest some of the acquired properties in the near future because they are not CO2 EOR candidates.

"We are pleased to finalize this agreement with Journey," said Tim Bradley, president of KMP's CO2 company. "Although the SACROC and Yates units are larger in scale, this important acquisition allows us to expand our CO2 technology capabilities and extend our CO2 supply infrastructure to new areas in the Permian Basin." The transaction is expected to be immediately accretive to cash available to KMP unitholders.

KMP holds a 97-percent working interest in the approximately 31,000 barrels per day (Bpd) producing SACROC unit, one of the largest and oldest oil fields in the U.S. using carbon dioxide flooding technology. In addition, the company owns nearly 50 percent of the historic Yates Field Unit, which produces approximately 25,000 Bpd.