LINN Energy Inks Agreement for East Texas Properties
LINN Energy has signed a definitive purchase agreement to acquire properties located in East Texas for a contract price of $175 million, subject to closing conditions. The company anticipates the acquisition will close on or before May 1, 2012, and will be financed with proceeds from borrowings under its revolving credit facility.
"This mature long-life asset has a low decline rate of less than 10 percent and is expected to provide a steady stream of cash flow. It also offers an extensive future drilling inventory on a concentrated acreage position that is held by production," said Mark E. Ellis, Chairman, President and Chief Executive Officer. "This acquisition demonstrates the ability of our company to move quickly on acquisition opportunities. We have already entered into approximately $1.4 billion of acquisitions in the first quarter."
Significant characteristics expected from the acquisition:
- Immediately accretive to distributable cash flow per unit;
- Approximately 24 MMcfe/d of production (97 percent natural gas);
- Low decline rate of less than 10 percent and a reserve life of 15 years;
- Proved reserves of approximately 136 Bcfe (100 percent PDP);
- Approximately 430 wells on approximately 19,800 contiguous net acres;
- Multiple identified upside recompletion and infill-drilling opportunities.
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