The Jonah Field, located in the Green River Basin of southwest Wyoming, US will be purchased using the proceeds from the company’s revolving credit facility.
The Jonah Field has been identified as a potential resource of approximately 1.2 Tcfe and about 750 producing wells and more than 12,500 net acres potential for production optimization and cost savings.
With the acquisition, LINN Energy is expecting to maintain capital of approximately $40m to $50m for the first 12 months.
LINN Energy chairman, president and chief executive officer Mark E Ellis said the acquisition provides it with a significant operated position in the Green River Basin of Wyoming and the opportunity to add employees to the company’s staff who have hands-on experience with operations in the Jonah Field.
"These properties are expected to provide approximately 145 million cubic feet equivalent per day of liquids-rich natural gas production," said Ellis.
"Furthermore, we expect this asset to be immediately accretive to distributable cash flow per unit, and it holds significant future drilling inventory."
"Consistent with our strategy, we have hedged 100 percent of the expected net oil and natural gas production for approximately six years through 2017.
The company is also expecting production of around 145MMcfe/d, proved reserves of approximately 730 Bcfe, 73% natural gas, 23% NGL and 4% oil from the properties.
LINN has hedged almost 100% of the oil and natural gas production associated with this transaction through 2017.
It is expected to close the deal on or before 31 July 2012, subject to a preferential right of purchase that encompasses substantially all of the properties.
