Tuesday, March 1, 2011

Linn Energy enters Bakken Shale and adds Permian oil assets to its portfolio in a $434 million deal

Linn Energy agreed to acquire oil properties for a total combined contract price of $434 million in three separate deals. One acquisition of non-operated properties for $196 million from Concho Resources marks Linn's entry into the Williston Basin Bakken play. The additional two are bolt-on acquisitions, which further expand the company's position in the Permian Basin of Texas and New Mexico.

Combined Statistics of three acquisitions totalling $434 Million:
  • Current net production of approximately 3,000 Boe/d
  • Current net production is approximately 90% oil and NGLs
  • Significant organic growth expected, with an estimated 2011 exit rate of approximately 4,000 Boe/d
  • Combined purchase price represents an EBITDA multiple of approximately 6x
  • Proved reserves of approximately 22 MMBoe (approximately 40% proved developed)
  • Reserve life of more than 20 years and approximately 600 oil drilling locations

Mark E. Ellis, President and Chief Executive Officer, said, “The deal positions us in another oil basin with numerous mature producing assets providing Linn with the opportunity for further consolidation. All of these properties generate high cash margins in the current oil environment and meaningfully add to our inventory of oil drilling locations."

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