Linn to purchase acreage from Devon for $2.3 billion

Linn Energy LLC, Houston, has agreed to acquire assets in five US operating areas from Devon Energy Corp., Oklahoma City, for $2.3 billion, effective Apr. 1.

The agreement, expected to close in the third quarter, covers 900,000 net acres in the Rockies, Midcontinent, East Texas, North Louisiana, and South Texas regions with 4,500 total wells. Linn says it has identified more than 1,000 future drilling sites and more than 600 recompletion opportunities.

Production from the assets by Devon totals 275 MMcfd of gas equivalent, of which 80% is gas. As of Dec. 31, 2013, proved reserves associated with the properties totaled 1.242 tcfe of gas.

Linn plans to sell its position in the Granite Wash and Cleveland plays in the Texas Panhandle and western Oklahoma, through which it intends to finance the acquisition from Devon.

Linn is operating four drilling rigs in the area and producing 230 MMcfed of liquids-rich gas. The company has tested and developed 17 horizontal intervals, including shallow oil, liquids-rich Granite Wash, and deep Atoka gas.

Because of this delineation, Linn has catalogued significant drilling inventory over its 147,000 net acre position. Linn began horizontally drilling the Granite Wash in 2010 and has increased production in the area from 65 MMcfed to its current rate.

The company in 2011 doubled its inventory of Granite Wash horizontal drilling sites in Texas and Oklahoma to more than 400 through a $600 million purchase of assets (OGJ Online, Nov. 8, 2011).

John Richels, Devon president and chief executive officer, commented, “With the sale of our remaining noncore assets, the portfolio transformation that we announced late last year is now complete.”

Devon has made significant changes to its portfolio over the past year, acquiring 82,000 net acres in the Eagle Ford for $6 billion (OGJ Online, Feb. 28, 2014); merging its midstream assets with CrossTex to create EnLink Midstream LLC and master limited partnership EnLink Midstream Partners LP (OGJ Online, Mar. 7, 2014); and selling its Canadian conventional assets for $3.125 billion (OGJ Online, Apr. 2, 2014).

“The sale of Canadian and US noncore properties over the past few months has generated in excess of $5 billion of proceeds at an accretive multiple of nearly 7 times 2013 EBITDA,” said Richels. The transaction reduces Devon’s debt by more than $4 billion this year.

Richels added that liquids are expected to represent 60% of the company’s production by yearend, while multiyear oil production growth is projected to be more than 20%.

Related Articles

US Forest Service withdraws proposed groundwater directive

06/22/2015 The US Forest Service withdrew a proposed directive on groundwater resource management on June 19, and announced it would hold public discussions o...

Salerno considers same-season relief wells basic Arctic offshore tool

06/22/2015 US Bureau of Safety and Environmental Enforcement Director Brian Salerno disagreed with oil and gas industry comments that a requirement in propose...

Williams rejects unsolicited bid from Energy Transfer Equity

06/22/2015 Williams Cos. Inc., Tulsa, has rejected an unsolicited all-equity acquisition proposal valued at $53.1 billion from Dallas-based Energy Transfer Eq...

WPX Energy adds to acreage in Gallup oil play

06/22/2015 WPX Energy Inc., Tulsa, has added to its San Juan Gallup acreage in New Mexico with the purchase of another 14,300 net acres from an undisclosed se...

Lundin appoints president, chief executive officer

06/22/2015 Lundin Petroleum AB reported that its board has appointed Alex Schneiter as president and chief executive officer following Ashley Heppenstall’s de...

MARKET WATCH: NYMEX, Brent crude oil price fall on Greece’s debt concerns

06/22/2015 US crude oil futures for July delivery dropped back below $60/bbl on the New York market in June 19 trading, and analysts said concerns over Greece...

US crude export debate increasingly geopolitical, EIA conference told

06/22/2015 The ongoing debate over whether more US crude oil exports should be authorized has more in common with conditions in the 1980s when supplies were a...

CAPP: Canadian production to reach 5.3 million b/d by 2030

06/22/2015 The Canadian Association of Petroleum Producers (CAPP) estimates production of Canadian oil will increase 43% over 16 years to 5.3 million b/d by 2...

Study outlines policy strategy for unconventional development

06/22/2015 Unconventional oil and gas presents perhaps the single largest opportunity to improve the trajectory of the US economy, according to a report relea...
White Papers

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected