A Brownfield Framework for Monetizing Non-Producing Oil & Gas Assets as Renewable Energy Sites

The energy transition presents a critical challenge and a massive opportunity for the traditional oil and gas (O&G) sector. As global energy consumption shifts toward decarbonization, holders of non-producing (or fully abandoned) O&G assets, including land, surface infrastructure, and existing rights-of-way, are increasingly faced with the risk of stranded assets. This analysis provides a strategic framework for utility-scale energy developers to assess and monetize these underutilized O&G assets for the deployment of solar and wind generation. The target audience for this framework includes utility-scale project developers, independent power producers (IPPs), and asset managers seeking to de-risk and accelerate renewable energy deployments.

The Strategic Value Proposition of Repurposed Brownfield O&G Sites

Non-producing O&G sites are often uniquely positioned for renewable energy development due to the existence of key infrastructure and land attributes that significantly de-risk project development and reduce time-to-market.

Core Competitive Advantages

• Existing Interconnection Infrastructure: The most significant advantage is often the presence of existing, or easily accessible, electrical transmission and distribution (T&D) infrastructure. O&G operations require power; often these sites are near substations or T&D lines originally built or upgraded for drilling and production, drastically simplifying the complex and time-consuming interconnection process for utility-scale renewables.

• Established Access and Rights-of-Way (ROWs): Land parcels typically benefit from established access roads, easements, and ROWs for pipelines and utilities. This mitigates the often-lengthy and costly process of securing new land use and access permits.

• Favorable Zoning and Permitting Precedent: Areas historically zoned or permitted for heavy industrial O&G use may face less local opposition or have a more streamlined permitting pathway for a different type of industrial energy use, such as a solar farm or wind installation, compared to greenfield sites.

• Brownfield Incentives: Many states and federal programs, including the Inflation Reduction Act (IRA), offer lucrative bonus tax credits for projects sited on "energy communities," which can include brownfield sites, coal closures, and certain areas related to historical O&G operations. This provides a significant uplift to project economics.

A Phased Monetization Framework for Developers

A successful strategy for repurposing O&G land requires a systematic, data-driven approach focused on resolving land rights, assessing site readiness, and optimizing the financial structure.

Phase I: Due Diligence and Asset Evaluation

The first step for a developer is a comprehensive, data-driven analysis of the target asset using intelligence platforms that integrate surface and subsurface data.

• 1. Land Rights Due Diligence: The primary hurdle is the severance of surface and mineral estates, which is common in O&G regions. In most O&G states, the mineral estate is dominant, meaning the mineral owner has the right of "reasonable use" of the surface to access their resources. Mitigation requires the developer to secure a Surface/Land Use Waiver (or non-development agreement) from the mineral rights holder. Compensation is typically structured as an annual fee or a production royalty tied to the renewable energy output.

• 2. Infrastructure and Resource Assessment:

  • Grid Capacity: Verify the capacity and voltage of nearby substations and T&D lines. Analyze historical O&G load data to estimate available capacity for injection into the grid.

  • Renewable Resource Quality: Quantify the solar irradiance (GHI/DNI) or wind speed resource (at hub height) to determine the optimal renewable technology: Solar PV, Wind, or a Hybrid system.

  • Geotechnical Review: Assess soil stability, topography, and any environmental contamination (e.g., old sumps, spills, or orphaned wells) that may require remediation and factor into the cost of new utility-scale solar or wind.

Phase II: Project Structuring and De-Risking

This phase focuses on translating asset advantages into bankable financial models.

• 1. Tax Equity Optimization (IRA): Maximize value through tax credits, including the base credit structure (ITC/PTC), the Energy Community Bonus, and the Domestic Content Bonus.

• 2. Hybrid and Storage Integration: Non-producing O&G sites, especially former well pads, can be ideal for a hybrid renewable plus battery energy storage system (BESS). This co-location utilizes the same interconnection point to increase dispatchability and revenue capture by shifting power output to peak demand windows.

• 3. Power Offtake Strategy: Secure Power Purchase Agreements (PPAs) or other off-take contracts that value the project's enhanced reliability (via BESS) and locational marginal pricing (LMP) advantages near existing load or high-demand hubs.

Phase III: Deployment and Land Stewardship

Project execution involves specialized considerations for land conversion.

• 1. Remediation and Reclamation: Coordinate with the O&G asset owner to ensure proper plugging of any orphaned or abandoned wells and necessary remediation of any environmentally disturbed areas prior to construction. This is essential for compliance and de-risking.

• 2. Construction and Co-existence: For assets with continued, but non-disruptive, horizontal drilling rights, carefully design the renewable layout to maintain clear setback distances and access for future O&G operations, while maximizing the surface area used for solar PV or wind turbine placements.

3. Case Study: Monetizing a Stranded Permian Basin Asset

Using LandGate's intelligence platform to identify optimal sites, a developer targets a non-producing asset in West Texas to demonstrate the framework's financial advantages.

Metric	Non-Producing O&G Asset (LandGate Data)	Greenfield Solar Site (Comparable Area)
Location	300-acre decommissioned natural gas compressor site, Pecos County, TX (Permian Basin)	300-acre raw ranchland, Pecos County, TX
Project Size	50 MW DC Solar PV	50 MW DC Solar PV
Grid Proximity	1/4 mile to existing 69 kV utility line tie-in point	5 miles to nearest 69 kV utility line
Resource Quality	Excellent GHI (Identical to Greenfield)	Excellent GHI
IRA Qualification	Qualifies for 10% Energy Community Bonus (O&G job loss criteria)	Does Not Qualify (No Energy Community designation)
Project Value	$55 Million (before debt)	$50 Million (before debt)

Pecos County, TX Infrastructure on the LandGate Platform

Financial & Development Impact Analysis

1. Interconnection De-Risking: LandGate's platform identifies the existing 69 kV tie-in point from the former gas facility.

   • Time Savings: An estimated 1.5 years saved in the interconnection queue process due to using a point with known historical capacity and existing ROWs, drastically reducing schedule risk.

   • Cost Savings: An estimated $4 Million saved on new transmission line construction and associated easement negotiations (5 miles of new line vs. 1/4 mile of upgrade).

2. IRA Bonus Tax Credit Uplift: Qualifying the site as an Energy Community provides a substantial boost to the tax equity valuation.

   • For a $50 million investment, the 10% Energy Community Bonus adds an immediate $5 Million in Investment Tax Credit (ITC) value. This additional, predictable cash flow significantly improves the project's Internal Rate of Return (IRR) and lowers the cost of capital.

3. Land Rights Resolution: The site requires a one-time payment for a Surface Use Waiver to the mineral owner. By using LandGate's data to value the solar rights independently of the non-producing minerals, the developer negotiates a fair, above-market compensation that resolves the mineral dominance issue upfront, creating a clean path to title.

The result is a $55 million project (including the IRA bonus value) on a de-risked timeline, which is highly attractive to IPPs and utility offtakers compared to an otherwise identical $50 million greenfield project with years of interconnection uncertainty.

The transition from well pad to power grid is not merely an alternative land use; it is a strategic imperative. For developers, a systematic framework that uses integrated data to assess grid proximity, quantify resource quality, and leverage powerful federal incentives like the IRA's Energy Community Bonus provides a superior path for capital deployment. Monetizing non-producing O&G assets mitigates the risk of stranded assets for O&G holders while simultaneously providing the high-potential, shovel-ready sites necessary to meet the rapidly accelerating demand for utility-scale clean energy.

To learn more about LandGate’s tools and data for energy developers, book a demo with our dedicated infrastructure team.