LINN Expands Presence in Permian Basin for $305MM
LINN Energy announced that it signed a definitive purchase agreement to acquire oil and natural gas properties located in the Permian Basin for a contract price of $305 million, subject to closing conditions. The Company anticipates that the acquisition will close on or before May 27, 2010, and will be financed with proceeds from borrowings under its revolving credit facility.
"This bolt-on acquisition is expected to double LINN's oil production and reserves in the Permian Basin and significantly increases our presence in this area. With approximately 120 proved low-risk infill drilling and optimization opportunities, this acquisition also offers the potential for significant growth of oil production," said Mark E. Ellis, President and Chief Executive Officer of LINN Energy. "Additionally, this transaction will be immediately accretive to cash flow per unit upon closing."
Significant characteristics of the assets are:
- At mid-year 2010, net production is expected to be approximately 2,800 barrels of oil equivalent per day (more than 75 percent oil);
- Proved reserves of approximately 18 million barrels of oil equivalent (approximately 71 percent oil);
- Reserve life of approximately 17 years;
- Approximately 120 proved low-risk infill drilling and optimization opportunities; and
- A sizable entry into the prolific Wolfberry oil play.
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