LINN Energy Announces $2.3 Billion Acquisition of Assets from Devon Energy
Planned Sale of Granite Wash to Finance
HOUSTON, June 30, 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 agreement to acquire assets in five
U.S. operating areas from Devon Energy Corporation (NYSE:DVN) ("Devon") for
$2.3 billion. The assets are currently producing approximately 275 MMcfe/d,
approximately 80 percent of which is natural gas, with a shallow base decline
of approximately 14 percent. Total proved reserves are estimated to be between
1.3-1.5 Tcfe (approximately 75 percent PDP) with total resource potential of
approximately 3 Tcfe. The asset package is comprised of approximately 900,000
net acres across the Rockies, Mid-Continent, east Texas, north Louisiana and
south Texas regions with approximately 4,500 total wells. LINN has identified
over 1,000 future drilling locations and over 600 recompletion opportunities.
LINN's acquisition of Devon assets is intended to be financed ultimately
through the sale of its Granite Wash assets and other non-producing acreage in
LINN's portfolio. Potential excess proceeds from the sale of assets, if any,
will be used initially to reduce debt and for general corporate purposes.
"Early in 2014, we outlined four keys to success at LINN: realize value for
the Midland Basin position; continue to make accretive acquisitions; reduce
capital intensity while increasing efficiency; and improve credit metrics,"
said Mark E. Ellis, Chairman, President and Chief Executive Officer. "We
believe today's announcement is a positive development in achieving these
objectives. As we enter into the second half of the year, we remain committed
to these important goals."
Sale of Granite Wash Assets
LINN plans to sell its position in the Granite Wash and Cleveland plays
located in the Texas Panhandle and western Oklahoma. Currently, LINN is
operating four drilling rigs in the area and producing 230 MMcfe/d of
liquids-rich natural gas. LINN's talented team has successfully tested and
developed 17 horizontal intervals, including shallow oil, liquids-rich Granite
Wash and deep Atoka natural gas. As a result of this delineation, LINN has
catalogued significant drilling inventory over its approximately 147,000 net
acre position. LINN first began horizontally drilling the Granite Wash in 2010
and has grown production in this prolific area from 65 MMcfe/d to its current
rate. To support this growth, the Company developed a substantial integrated
network of infrastructure including midstream and water handling facilities
which is capable of and recently handled a larger rig program.
Significant benefits from the acquisition of Devon assets and the planned sale
of LINN assets:
*Reinforce LINN's mission of developing mature, long-life oil and natural
*Lower decline rate and reduce capital intensity;
*Tax efficient upon successful completion of 1031 like-kind exchange;
*Meaningful additions to the Company's Rockies and Mid-Continent positions;
*Accretive to excess of net cash provided by operating activities after
distributions to unitholders;
*Credit positive from increased steady stream of predictable cash flow,
production and reserves.
LINN has secured $2.3 billion of committed interim financing for the
acquisition of Devon assets, subject to final documentation. The financing was
lead arranged by Scotiabank and included Barclays, RBC Capital Markets and
The transaction with Devon is subject to satisfactory completion of title and
environmental due diligence, as well as the satisfaction of closing
conditions. The transaction is expected to close in the third quarter of 2014
with an effective date of April 1, 2014.
Supplemental information regarding the acquisition of Devon assets is posted
Scotia Waterous acted as the exclusive financial advisor to LINN during this
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
and acquisition) in producing U.S. basins as of December 31, 2013.More
information about LINN Energy is available at www.linnenergy.com.
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, 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 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.
CONTACT: LINN Energy, LLC and LinnCo, LLC
Investors and Media:
Clay Jeansonne, Vice President, Investor and Public Relations
Zach Dailey, Director, Investor Relations
Sarah Nordin, Public Relations & Media
LINN Energy, LLC Logo
Press spacebar to pause and continue. Press esc to stop.