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LINN Energy to divest Wyo. acreage for $200M, increases share buyback plan


According to Market Intelligence, December 2022


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LINN Energy to divest Wyo. acreage for $200M, increases share buyback plan

LINN Energy Inc. agreed to sell certain properties in the Washakie Field in Wyoming to an undisclosed buyer for $200 million as part of its strategy to divest noncore assets in order to lower costs and streamline the business.

The assets in the sale include about 163,000 net acres with second-quarter net production of about 66 MMcfe/d, proved reserves of about 226 Bcfe and proved developed PV10 of about $102 million, representing the present value of estimated future net cash flows discounted at 10% per year. LINN had allocated $3 million of capital for the properties for the fourth quarter, according to an Oct. 4 news release.

"The board believes that the incremental liquidity provided by this sale and others is best utilized to continue to repurchase shares at what we believe is still a significant discount to fair market value," said Evan Lederman, chairman of LINN's board.

The company concurrently approved an increase in the company's ongoing share repurchase program to $400 million of its outstanding shares of class A common stock, from the previous amount of $200 million.

The deal is scheduled to close in the fourth quarter, with an effective date of Aug. 1. Jefferies LLC acted as sole financial adviser, and Kirkland & Ellis LLP acted as legal counsel.

LINN said it has announced sale agreements totaling more than $1.3 billion year-to-date.