LINN Energy announces sale of Wyoming assets for $71.5 million

HOUSTON -- LINN Energy, Inc., has announced that it has signed a definitive agreement to sell its interest in properties located in Salt Creek field in Wyoming to Denbury Resources Inc. for a contract price of $71.5 million, subject to closing adjustments.

This sale represents the second executed agreement of the Company’s non-core divestiture program. LINN continues to market the previously announced non-core asset sales and there remains significant interest in each of those packages. Year-to-date, the Company has announced sale agreements with contract prices totaling $916 million with net proceeds expected to be used to reduce outstanding borrowings under the Company’s revolving credit facility and term loan. Pro-forma for these transactions, the Company expects to extinguish all remaining outstanding debt.

The Wyoming properties consist of non-operated interest in approximately 5,000 net acres in Salt Creek field. First-quarter net production was approximately 2,000 boed, proved developed reserves of ~9 MMboe and proved developed PV-10 of approximately $54 million.The Company forecasts full-year adjusted EBITDAX associated with these properties of approximately $5 million. In the second half of the year, the Company had budgeted $4 million of capital for the development of these properties. This capital will be redeployed for the development of growth projects or added as additional cash on the balance sheet to be used to maximize shareholder returns.

“The Salt Creek sale marks a milestone in the ongoing transformation of LINN from a highly levered production-based MLP to a streamlined growth-oriented enterprise. Pro-forma following the closing of the Jonah, South Belridge and Salt Creek asset sales, the Company will have extinguished all remaining outstanding debt. This is a significant achievement for the company considering it had approximately $8.4 billion in debt outstanding at the end of 2015. Both management and the board will continue to work hand-in-hand to execute on LINN’s transformative business plan, including the sale of the remaining non-core assets, accelerating investment in key horizontal growth plays, focusing on our overall cost structure to become a best-in-class low cost operator and using future cash proceeds to maximize shareholder returns,” said CEO Mark Ellis and Chairman Evan Lederman.

The transaction is expected to close in the second quarter of 2017 with an effective date of March 1, 2017. This transaction is subject to satisfactory completion of title and environmental due diligence, as well as the satisfaction of closing conditions.