LINN to Expand Presence in Permian Basin
LINN signed a definitive purchase agreement to acquire oil and natural gas properties located in the Permian Basin for a contract price of $90 million, subject to closing conditions. The Company anticipates the acquisition will close on or before August 16, 2010, and will be financed with internally generated cash flow and proceeds from borrowings under its revolving credit facility.
"This bolt-on acquisition in the Wolfberry trend of the Permian Basin is an attractive addition to our recently acquired assets in this area. This acquisition increases our exposure to oil and adds more than 50 proved low-risk infill drilling opportunities, which could be significantly increased as a result of further downspacing," said Mark E. Ellis, President and Chief Executive Officer of LINN Energy. "This transaction will also be immediately accretive to cash flow per unit."
Significant characteristics of the assets are:
- Net production of approximately 950 barrels of oil equivalent per day;
- Proved reserves of approximately 7 million barrels of oil equivalent (approximately 78 percent oil);
- Reserve life of 19 years; and
- More than 50 proved low-risk oil infill drilling locations.
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