LINN Energy To Sell Assets Worth $2.3 Bln - Update

(RTTNews) - Linn Energy, LLC (LINE) and LinnCo, LLC (LNCO) on Friday said LINN has signed a definitive agreement to sell its entire position in Granite Wash and Cleveland plays to privately held institutional affiliates of EnerVest, Ltd., for $1.95 billion. The company also said it will sell its Wolfberry positions in the Permian Basin to Fleur de Lis Energy, LLC for a contract price of $350 million.

The sale of Granite Wash and Cleveland properties is expected to close in the fourth quarter of 2014 with an effective date of September 1, 2014. Sale of Permian Basin properties is expected to close in the fourth quarter of 2014 with an effective date of August 1, 2014.

The company intends to use the sale proceeds to finance its $2.3 billion acquisition of assets from Devon Energy Corp. (DVN), which closed in August. Both these sales are expected to be tax efficient upon successful completion of a reverse 1031 like-kind exchange.

It was on June 30, that Devon Energy agreed to sell certain non-core U.S. assets to oil and natural gas development company Linn Energy(LINE) for $2.3 billion. The assets comprise of about 900,000 net acres across the Rockies, Mid-Continent, east Texas, north Louisiana and south Texas regions with about 4,500 total wells.

Granite Wash and Cleveland plays are located in the Texas Panhandle and western Oklahoma. The properties consist of nearly 145,000 net acres, 195 MMcfe/d of current production, 755 Bcfe of year-end 2013 proved reserves and related midstream facilities. LINN has planned to spend about $210 million of capital on these assets in 2014.

Permian Basin properties include nearly 7,200 net acres, 4.6 MBoe/d of current production and 19 MMBoe of year-end 2013 proved reserves and LINN has plans ti invest around $95 million of capital on these assets in 2014.

Mark Ellis, chairman, president and chief executive officer of the company said, "One of our goals for 2014 was to maximize value for our Midland Basin and Granite Wash assets in order to reduce the capital intensity and decline rate within our portfolio. We believe today's announcements largely accomplish this goal."

Following the closing of the deal, LINN will have remaining production of about 8.0 MBoe/d and nearly 6,600 net acres in the Midland Basin that is prospective for horizontal Wolfcamp drilling.

RBC Richardson Barr, Scotia Waterous and Wells Fargo acted as financial advisors to LINN during the Granite Wash and Cleveland play transaction.

RBC Richardson Barr acted as sole financial advisor to LINN during the Permian Basin transaction.

Linn Energy closed Thursday's trading at $29.08, down 1.69 percent. Linn Co ended at $28.37, down 1.46 percent.