LINN Energy, LLC announced today that it signed a definitive purchase agreement to acquire Hugoton Basin properties located in Kansas from BP America Production Company for a contract price of $1.2 billion, subject to closing conditions.
The company said it anticipates the acquisition will close on or before March 30, 2012, and will be financed with proceeds from borrowings under its revolving credit facility.
“ This acquisition marks our entry into the largest conventional natural gas field in the U.S., and it is an excellent fit for our business strategy ,” said Mark E. Ellis, Chairman, President and Chief Executive Officer . “ This impactful transaction has a low decline rate of 7 percent and is expected to provide 110 million cubic feet equivalent of liquids-rich production that is 37 percent NGLs. This acquisition should be immediately accretive to distributable cash flow per unit and is expected to provide a very steady stream of cash flow with little requirement for capital investment. We also fully hedged for five years 100 percent of natural gas production and 68 percent of NGL production, utilizing natural gas puts .”
Significant characteristics expected from the acquisition:
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LNG World News Staff, February 28, 2012