Linn to Increase Play in Permian Basin
In a move that shows the continued significance of the Permian Basin, Houston-based oil and gas partnership Linn Energy LLC inked a deal for more than half a billion dollars in new assets there. Linn currently has Permian Basin assets in Texas and New Mexico.
The deal, for $525 million, is estimated by Linn to yield the production equivalent of 4,800 barrels of oil a day (boepd) in the first year, according to Bloomberg.
The seller of the acreage was not revealed. Linn is financing the land with proceeds from a committed term loan beginning at the close of the deal.
Earlier in the year, Linn’s stock took a hit when a deal to buy Berry Petroleum Co. for $2.42 billion was delayed. Linn’s stock rose by 13 percent on news of the Permian buy, according to Bloomberg. That was enough to erase some, but not all, of the earlier losses.
The Permian Basin is about 250 miles wide and 300 miles long, and contains a large oil and natural gas area. It accounts for about 17 percent of the nation’s crude oil supply. The first oil well in the Permian Basin began pumping in 1921.
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