LINN Energy LLC (Nasdaq:LINE) and LinnCo LLC (Nasdaq:LNCO) noted December 15 the closing of the previously announced sale of LINN’s entire position in the Granite Wash and Cleveland plays located in the Texas Panhandle and western Oklahoma to privately held institutional affiliates of EnerVest Ltd. and FourPoint Energy LLC at a contract price of $1.95 billion, subject to pre- and post-closing purchase price adjustments.
In addition, on November 14, 2014, LINN closed the previously announced sale of its Wolfberry positions in Ector and Midland counties in the Permian Basin to Fleur de Lis Energy LLC at a contract price of $350 million, subject to pre- and post-closing purchase price adjustments. These sales are expected to be tax efficient upon successful completion of a reverse 1031 like-kind exchange.
The company intends to use combined net proceeds from these sales to repay in full the $1.3 billion term loan, which is the only remaining interim financing from its $2.3 billion acquisition from Devon Energy Corp. which closed on August 29, 2014, and reduce borrowings under its revolving credit facility.
Upon closing of the Granite Wash sale and repayment of the term loan, lenders under the company's credit facilities will complete the semi-annual redetermination and increase LINN's borrowing base to $4.5 billion and reaffirm the $1.4 billion borrowing base for LINN's wholly owned subsidiary, Berry Petroleum Co. LLC. Previously, LINN's borrowing base was reduced by $275 million in connection with its $1.1 billion unsecured notes offering in September 2014. As a result of the redetermination, the maximum credit amount under LINN's credit facility will be restored to $4.0 billion while the commitment amount under Berry's credit facility will remain unchanged at $1.2 billion. The maturity date for the LINN and Berry credit facilities, along with LINN's outstanding $500 million term loan, is April 2019.
Following repayment of the term loan and a portion of the indebtedness under its revolving credit facility with proceeds from these asset sale transactions, LINN has pro forma liquidity of approximately $2.4 billion as of September 30, 2014.
On November 21, 2014, LINN closed the previously announced trade with Exxon Mobil Corp. whereby LINN received ExxonMobil's interest in California's South Belridge Field and ExxonMobil received production and acreage prospective for horizontal Wolfcamp drilling in the Permian Basin.