LINN Energy inks $220mn deal for oil, natural gas assets in Texas, Oklahoma
LINN Energy announced on Monday that it signed an agreement with Panther Energy and Red Willow Mid-Continent to acquire 40% of their oil and natural gas properties located in Ochiltree and Lipscomb Counties, Texas and Ellis County, Oklahoma for $220mn, subject to closing conditions.
LINN anticipates the acquisition will close on or before June 1, and will be financed with net proceeds from the recently announced senior notes offering.
"The acquisition of these properties enhances LINN's overall position in the Texas Panhandle area, and marks our entry into the liquids-rich window of the horizontal Cleveland play in the Anadarko Basin," said Mark E. Ellis, CEO of LINN Energy.
"Partnering with Panther will align us with an experienced and efficient operator that has been active and successful in this area for several years,” he added. “This acquisition provides high rate-of-return projects and we expect it to be immediately accretive to our unitholders."
Bob Zahradnik, chairman of Panther Energy, added, "We have created significant value in the Anadarko Basin, and we look forward to developing this area with a solid partner like LINN Energy. This divestiture is a tactical transaction to fund the substantial capital demands of our successful programs in the deepwater Gulf of Mexico and West Texas."
Significant characteristics of the assets, according to the companies, are:
- Net production of approximately 2,700 bpd of oil equivalent from approximately 170 producing wells;
- Proved reserves of approximately 10 million barrels of oil equivalent (45% oil, 37% proved developed);
- Total acreage position of 140,000 gross (44,000 net) acres;
- More than 165 proved low-risk infill drilling locations.
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