FourPoint Energy, LLC, and privately held institutional affiliates of EnerVest, Ltd., announced today the signing of a purchase and sale agreement to acquire all of Linn Energy's (Nasdaq: LINE and Nasdaq: LNCO) oil and gas properties and related midstream assets in the Western Anadarko Basin for a purchase price of $1.95 billion ($975 million net to FourPoint Energy). The assets include an interest in 1,358 producing wells primarily in the Granite Wash, Tonkawa, Cleveland and Marmaton formations with daily net production of 195 Mmcfed. The assets cover more than 145,000 net acres throughout western Oklahoma and the Texas Panhandle, of which 97 percent are held by production.
In addition to the upstream assets to be acquired, the purchase price includes a wholly-owned midstream asset consisting of more than 170 miles of gas gathering and compression systems, liquid stabilization, associated water supply and disposal infrastructure, and an oil terminal facility in Wheeler County, TX. These integrated midstream assets combined with the partnership's proximal midstream assets in Hemphill and Roger Mills counties will provide price optionality and uninterrupted takeaway for the venture's oil and gas volumes as well as serve as a platform for third party volume growth.
The acquisition positions the joint venture with a large-scale footprint in a premiere multi-pay resource play where the team has substantial core competencies established over a decade of operations in the basin. "This transaction uniquely complements the partnership's current acreage position by materially increasing our scale in ownership throughout our liquids-rich core area. The Linn assets will transform the joint venture's current operatorship profile within producing wells, add a significant inventory of operated upside locations, provide access to higher value oil and gas markets and afford control of capital allocation. Additionally, we have identified several cost synergies and strategic opportunities that will be pursued as we develop the asset base," said George Solich, President and CEO of FourPoint Energy.
Pro forma for the acquisition and prior to customary post-closing adjustments, the joint venture will boast an acreage position of more than 325,000 net acres in the established AMI with net production estimated to exceed 315 Mmcfed. FourPoint and EnerVest expect strong growth while spending within free cash flow and continuing to exploit the multi-year drilling inventory associated with the combined asset base. The acquisition is expected to close on or before December 15, 2014.
Jefferies LLC acted as financial advisor to FourPoint Energy and EnerVest in connection with this transaction.