LINN to Add Permian Properties for $352.2MM
LINN has signed three definitive purchase agreements to acquire oil and natural gas properties located in the Wolfberry trend of the Permian Basin for a combined price of $352.2 million, subject to closing conditions. The Company anticipates the acquisitions will close before the end of November 2010, and will be financed with proceeds from borrowings under its revolving credit facility.
"These acquisitions are an excellent addition to our existing Permian assets in the Wolfberry trend and a significant addition to our inventory of high-return oil projects," said Mark E. Ellis, President and Chief Executive Officer of LINN Energy. "Pro forma for these transactions, LINN's Permian Basin production is approximately 10,000 barrels of oil equivalent per day. Proved reserves are more than 74 million barrels of oil equivalent, with a high liquids content of approximately 76 percent, and are 41 percent proved developed. Since our first Permian acquisition in August 2009, we have built this region into the Company's second largest operating area. An important component of our organic growth will be derived from approximately 400 proved oil-focused Wolfberry drilling opportunities, which we expect will provide LINN with a five-year drilling inventory. Additionally, we expect these acquisitions to be immediately accretive to cash flow per unit upon closing."
Significant characteristics of the three acquisitions are:
- Net production of approximately 3,300 barrels of oil equivalent per day (73 percent oil);
- Proved reserves of approximately 30 million barrels of oil equivalent (72 percent oil);
- More than 230 Wolfberry drilling locations representing proved undeveloped reserves of 23 million barrels of oil equivalent; and
- Reserve life of approximately 25 years.
- Shale Loses 9 Billion Barrels of Reserves After SEC Inquiries (Jun 15)
- Linn Energy, Breitburn Could Be Tip of Iceberg for MLP Bankruptcies (May 16)
- Oil At $45 A Barrel Proving No Savior As Bankruptcies Add Up (May 13)