8 MBOEPD for $285 million

LINN Energy (ticker: LNGG) continues to concentrate its operations, announcing the sale of its Williston Basin properties today. The buyer was not disclosed.

LINN is selling about 20,000 net acres in North Dakota, South Dakota and Montana for a contract price of $285 million. These properties had net production of about 8 MBOEPD in Q2 2017, and are estimated to hold 20 MMBOE of proved developed reserves. The PV-10 of the proved developed reserves is about $186 million.

LINN will be able to save $7 million due to this sale, as the company had budgeted this amount for projects in the acreage in Q4. The transaction is expected to close in Q4.

The sale price of $285 million equates to a production valuation of $35,625 per flowing BOE. This is closely in line with the average, as $35,000 per flowing BOE is commonly used when evaluating transactions.

Six previous sales, three more planned

This is the latest in a series of divestments by LINN.

The company has recently sold properties in six other locations, and plans to sell additional properties. The largest of these sales involved LINN’s western Wyoming properties, which were sold to Jonah Energy for $581.5 million in May.

In total, LINN will receive over $1 billion for its sales, which have divested properties from California to South Texas. The company has sold about 32.5 MBOEPD of production, and just under 115 MMBOE of reserves. Further sales will divest the company’s waterfloods in Oklahoma, acreage in the Permian and Altamont Bluebell properties in Utah, according to the company.

LINN Energy Sells Bakken Properties

Source: LNGG

LINN will use the proceeds in its quest to develop its SCOOP/STACK properties. The company formed Roan Resources, a venture with privately-held Citizen Energy II in June to accomplish this goal. Roan will hold 140,000 total net acres, with total estimated net resource potential of more than 2 billion BOE.

LINN and Citizen will focus on accelerating operations in the combined Roan area, increasing production and cash flow. Subject to market conditions, Roan Resources plans to undertake an initial public offering in early 2018, following which shares of the newly public company could be distributed to LINN shareholders.

LINN Energy Sells Bakken Properties

Source: LNGG


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