LINN Energy, Inc. (OTCQB:LNGG) (“LINN” or the “Company”) announces that it has signed a definitive agreement to sell its interest in conventional properties located in west Texas to an undisclosed buyer for a contract price of $119.5 million, subject to closing adjustments.
The properties to be sold consist of approximately 28,000 net acres in west Texas with 2017 net production of approximately 6,300 BOE/d, proved developed reserves of ~14.4 MMBOE(1) and proved developed PV-10 of approximately $106 million(1). Annualized field level cash flow on these properties is approximately $32 million(2). Estimated annual general and administrative expense for these properties is approximately $3 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 January 1, 2018. This transaction is subject to satisfactory completion of title and environmental due diligence, as well as the satisfaction of closing conditions. RBC Richardson Barr and Jefferies LLC acted as co-financial advisors and Kirkland & Ellis LLP as legal counsel during the transaction.
|(1)||Proved developed reserves are as of year-end 2017 and updated with pricing of $3.00 per MMBtu for natural gas and $50.00 per bbl for oil. PV-10 represents the present value, discounted at 10% per year, of estimated future net cash flows. The Company’s calculation of PV-10 herein differs from the standardized measure of discounted future net cash flows determined in accordance with the rules and regulations of the SEC in that it is calculated before income taxes with the pricing and timing assumptions noted.|
|(2)||Annualized field level cash flow estimates are calculated from the full year 2017|