Linn Energy sells Permian assets, finalizes $1.5 billion in equity deals

Linn Energy said it will sell its remaining Permian Basin position in Howard County for $281 million to an undisclosed buyer.

The move comes as the financially struggling exploration and production firm continues to make divestment moves as oil prices keep coming down. The assets include 6,400 net acres northeast of Midland for prospective horizontal drilling in the Wolfcamp area of the Permian. The deal also includes existing production from 133 wells in the area.

Houston-based Linn, which has seen its stock value plummet from $32 per unit last July down to more than $9 a unit on Monday, also said it has finalized previously announced equity deals that total up to $1.5 billion in potential value in order to go back into a growth mode.

Houston’s Quantum Energy Partners committed up to $1 billion of equity capital to fund acquisitions and the development of oil and natural gas assets. Linn could invest in all acquisition opportunities with a direct working interest ranging from 15 percent to 50 percent.

Likewise, Linn signed a formal agreement with GSO Capital Partners, which is an arm of the New York-based Blackstone Group. GSO is committing up to $500 million for five years to fund Linn’s drilling projects.

Early this year, Linn responded to collapsing oil prices by cutting its capital spending and cash distributions by at least half. In October, Linn announced a deal to sell assets in the Texas Panhandle and western Oklahoma to EnerVest for nearly $2 billion. It also reached a deal to sell some other Permian Basin assets to Fleur de Lis Energy for $350 million.

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