HOUSTON, Aug. 4, 2014 (GLOBE NEWSWIRE) -- LINN Energy, LLC (Nasdaq: LINE ) ("LINN" or "the Company") and LinnCo, LLC (Nasdaq: LNCO ) ("LinnCo") announced today that LINN has signed a definitive purchase agreement to acquire assets in the Hugoton Basin from Pioneer Natural Resources Company (NYSE: PXD ) ("Pioneer") for a contract price of $340 million. The assets are currently producing approximately 40 MMcfe/d, approximately 60 percent of which is natural gas, with a shallow base decline of approximately six percent. Total proved reserves are estimated to be approximately 340 Bcfe (approximately 95 percent PDP). The asset package is comprised of approximately 235,000 net acres, all held by production, with approximately 1,200 producing wells. LINN has identified 180 future drilling locations and 150 recompletion opportunities. The Company anticipates the acquisition will close in the third quarter of 2014 with an effective date of July 1, 2014, and will be financed ultimately through the sale of producing and non-producing acreage in LINN's portfolio.
"This acquisition further strengthens LINN's significant position in the Hugoton Basin and reinforces our commitment to the previously announced strategic portfolio improvement plan," said Mark E. Ellis, Chairman, President and Chief Executive Officer. "Following our acquisition from BP in 2012, this year's announced trade with ExxonMobil, and today's announcement with Pioneer, LINN will become the largest producer in the field and will have pro forma production in the basin of approximately 275 MMcfe/d and two natural gas processing plants with capacity of 690 MMcfe/d. We also expect this acquisition to be accretive to excess of net cash provided by operating activities after distributions to unitholders."
Expected significant characteristics of the acquisition:
- Excellent mature assets with a decline rate of approximately six percent;
- Reserve life of approximately 23 years;
- Current production of approximately 40 MMcfe/d and total proved reserves of approximately 340 Bcfe;
- Approximately 51 percent operating interest in the Satanta natural gas processing plant with capacity of 240 MMcfe/d; and
- Expected to be accretive to excess of net cash provided by operating activities after distributions to unitholders.
The transaction with Pioneer is subject to satisfactory completion of title and environmental due diligence, as well as the satisfaction of closing conditions.
Sale of Anadarko Basin Acreage
Additionally, the Company has entered into an agreement to sell its rights to the Woodford and Meramec horizons in the STACK play on approximately 26,000 undeveloped acres in the Anadarko Basin for a purchase price of approximately $90 million, subject to closing conditions and price adjustments. The transaction is expected to close in the fourth quarter of 2014 with an effective date of December 1, 2013.
The Company expects the acquisition of assets from Pioneer to be funded through today's announced sale of acreage in the Anadarko Basin and the planned sale of other producing and non-producing acreage in LINN's portfolio. Supplemental information regarding these transactions is posted at www.linnenergy.com .
Conference Call and Webcast
As previously announced, LINN will report earnings for the quarter ended June 30, 2014, on Thursday, August 7, 2014. Management will host a conference call on Thursday, August 7, 2014, at 10 a.m. Central (11 a.m. Eastern) to discuss these transaction announcements, the Company's second quarter 2014 results and its outlook for the remainder of 2014. Prepared remarks by Mark E. Ellis, Chairman, President and Chief Executive Officer, and Kolja Rockov, Executive Vice President and Chief Financial Officer, will be followed by a question and answer session.
Investors and analysts are invited to participate in the call by dialing (855) 319-4076, or (631) 887-3945 for international calls, using Conference ID: 62521081. Interested parties may also listen over the Internet at www.linnenergy.com .
A replay of the call will be available on the Company's website or by phone until 4:00 p.m. Central (5 p.m. Eastern), August 21, 2014. The number for the replay is (855) 859-2056, or (404) 537-3406 for international calls, using Conference ID: 62521081.
ADVISORS
RBC Richardson Barr acted as financial advisor to LINN during this transaction.
ABOUT LINN ENERGY
LINN Energy's mission is to acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets. LINN Energy is a top-15 U.S. independent oil and natural gas development company, with approximately 8 Tcfe of proved reserves (pro forma for announced 2014 trade, acquisitions and planned sale of Mid-Continent assets) in producing U.S. basins as of December 31, 2013. More information about LINN Energy is available at www.linnenergy.com .
ABOUT LINNCO
LinnCo was created to enhance LINN Energy's ability to raise additional equity capital to execute on its acquisition and growth strategy. LinnCo is a Delaware limited liability company that has elected to be taxed as a corporation for United States federal income tax purposes, and accordingly its shareholders will receive a Form 1099 in respect of any dividends paid by LinnCo. More information about LinnCo is available at www.linnco.com .
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
This press release includes "forward-looking statements." All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements include, but are not limited to forward-looking statements related to acquisitions, trades or divestitures or their expected tax treatment, timing and payment of distributions, taxes and the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company's drilling program, production, hedging activities, capital expenditure levels and other guidance included in this press release. These statements are based on certain assumptions made by the Company based on management's experience and perception of current conditions, historical trends, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include risks relating to the Company's financial performance and results, availability of sufficient cash flow to pay distributions and execute its business plan, prices and demand for oil, natural gas and natural gas liquids, the ability to replace reserves and efficiently develop current reserves and other important factors that could cause actual results to differ materially from those projected as described in the Company's reports filed with the Securities and Exchange Commission. Please read "Risk Factors" in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases.
Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.
LINN Energy, LLC and LinnCo, LLC Investors and Media: Clay Jeansonne, Vice President, Investor and Public Relations 281-840-4193 Zach Dailey, Director, Investor Relations 713-904-6547 Sarah Nordin, Public Relations & Media 713-904-6605
