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LINN Energy Announces Permian Trade With Exxon Mobil Corporation

Stocks in this article: LINELNCO

HOUSTON, May 21, 2014 (GLOBE NEWSWIRE) -- LINN Energy, LLC (Nasdaq:LINE) ("LINN" or "the Company") and LinnCo, LLC (Nasdaq:LNCO) ("LinnCo") announced today that LINN has signed a definitive agreement to trade a portion of its Permian Basin properties to Exxon Mobil Corporation (NYSE:XOM) and its wholly owned subsidiary XTO Energy Inc. (collectively, "ExxonMobil") for operating interests in the Hugoton Basin. The transaction is expected to close in the third quarter of 2014 with an effective date of June 1, 2014.

LinnCo logo

LINN will receive a portion of ExxonMobil's interest in its Hugoton Field, which is currently producing approximately 85 MMcfe/d (80 percent natural gas and 20 percent NGL) with a shallow base decline of approximately six percent. Total reserves are estimated to be approximately 700 Bcfe (80 percent natural gas and 78 percent PDP). The field is comprised of more than 500,000 net acres and has approximately 2,300 operated wells. LINN has identified more than 400 future drilling locations, doubling the Company's inventory in the Hugoton Field.

In exchange, ExxonMobil will receive approximately 25,000 net acres in the Midland Basin, which are located primarily in Midland, Martin, Upton and Glasscock Counties. ExxonMobil will obtain approximately 2.0 MBoe/d of current production, and LINN will retain approximately 3.0 MBoe/d of production from the aforementioned acreage. Additionally, ExxonMobil will receive approximately 1,000 acres in Lea County, New Mexico.

"Today's trade announcement with ExxonMobil is a strategic portfolio improvement for LINN that reinforces our commitment to mature, long-lived oil and natural gas assets with low and predictable decline rates," said Mark E. Ellis, Chairman, President and Chief Executive Officer. "We believe this trade unlocks value for LINN, and are extremely excited to add assets that we believe are an ideal fit for our already sizeable position in the Hugoton Basin. We also expect this transaction to be accretive to excess of net cash provided by operating activities after distributions to unitholders."

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