LINN to Acquire O&G Properties in East Tx. Oil Field
LINN signed a definitive purchase agreement to acquire oil and natural gas properties located in the East Texas Oil Field in Gregg and Rusk Counties for a contract price of $95 million, subject to closing conditions. The Company anticipates the acquisition will close on or before October 1, 2010, and will be financed with internally generated cash flow and proceeds from borrowings under its revolving credit facility.
"This acquisition is a good fit for our existing portfolio of assets and provides an opportunity for the Company to enter a new operating area. The acquired properties have a reserve life of more than 25 years and an approximate five percent decline rate," said Mark E. Ellis, President and Chief Executive Officer of LINN Energy. "We also expect this new area to provide LINN with potential future consolidation opportunities."
Significant characteristics of the assets are:
- Current net production of approximately 900 barrels of oil equivalent per day (93 percent oil);
- Proved reserves of approximately 8 million barrels of oil equivalent (100 percent proved developed);
- Low decline rate of approximately 5 percent;
- Reserve life of more than 25 years;
- More than 350 operated producing wells; and
- More than 95 proved low-risk workover opportunities.
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