Linn sells down Permian position

Dec. 12, 2014
Linn Energy LLC, of Houston, has agreed to sell assets in Ector and Midland counties, Tex., to Fleur de Lis Energy LLC, of Dallas, for $350 million.

Linn Energy LLC, of Houston, has agreed to sell assets in Ector and Midland counties, Tex., to Fleur de Lis Energy LLC, of Dallas, for $350 million.

The Permian basin assets produce from several zones, including the Strawn, Wolfcamp, and Spraberry formations.

The properties include 7,200 net acres and production of 4,600 boe/d. Proved reserves totaled 19 million boe at year-end 2013.

"This field has an extensive geologic column consisting of multiple producing horizons within the Permian basin," said Porter Timble, chief executive officer of Fleur de Lis.

Linn is running a 2-rig vertical drilling program in the area and planned to spend $95 million there this year.

Fleur de Lis, a private energy company, is partnered with KKR Natural Resources, an affiliate of the private equity firm KKR.

Jonathan Smidt, a Member of KKR and head of KKR Natural Resources, said: "We believe this represents an exciting opportunity to acquire high-quality producing assets that will benefit from ongoing development, and the application of new technologies, within the hydrocarbon rich Permian basin."

Linn will retain 8,000 boe/d of production and 6,600 net acres in the Midland basin prospective for horizontal drilling in the Wolfcamp shale. The company said there is strong market interest for a trade or sale of these assets.

The deal with Fleur is expected to close in the fourth quarter, carry a retroactive effective date of Aug. 1.