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Linn Energy to sell Oklahoma Waterflood and Texas Panhandle assets

Linn Energy has signed an agreement to sell its Oklahoma Waterflood and Texas Panhandle assets to an undisclosed buyer for a contract price of $122m, subject to closing adjustments.

The combined properties to be sold consist of approximately 179,000 net acres in Oklahoma and Texas with third quarter net production of approximately 5,200 BOE/d, proved developed reserves of ~22.8 MMBOE and proved developed PV-10 of approximately $124 million. Annualized field level cash flow on these properties is approximately $21 million.

Additionally, the sale of these mature assets substantially reduces the Company’s future abandonment liabilities and operating expenses. Estimated annual general and administrative expenses for these combined properties is approximately $4-6 million, which is not included in the field level cash flow estimates provided.

The sale is expected to close in the first quarter of 2018 with an effective date of October 1, 2017. This transaction is subject to satisfactory completion of title and environmental due diligence, as well as the satisfaction of closing conditions. Jefferies LLC acted as financial advisor for the Texas Panhandle properties and Kirkland & Ellis LLP acted as legal counsel for both transactions.