LINN Energy (LINE) Announces Permian Basin Transaction with Exxon Mobil (XOM)

LINN Energy (NASDAQ: LINE) and LinnCo, LLC (Nasdaq: LNCO) announced that LINN has signed a definitive agreement to trade a portion of its Permian Basin properties to Exxon Mobil Corporation (NYSE: XOM) for operating interests in California's South Belridge Field. The transaction is expected to close in the fourth quarter of 2014 with an effective date of June 1, 2014.

LINN will receive ExxonMobil's interest in its Hill Property located in the South Belridge Field, which is currently producing approximately 3.4 MBoe/d (~100 percent oil) with a shallow base decline of approximately ten percent. Proved reserves are estimated to be approximately 27 MMBoe, 51 percent of which is developed. LINN has identified significant upside potential through optimization projects, increased steam injection and extensive down spacing from more than 300 future drilling locations. LINN currently estimates total resource potential for the Hill Property to be approximately 67 MMBoe (~100 percent oil).

In exchange, ExxonMobil will receive approximately 17,000 net acres prospective for horizontal Wolfcamp drilling in the Midland Basin and approximately 4.7 MBoe/d of current production. Proved reserves are estimated to be 19 MMBoe. Additionally, ExxonMobil will receive approximately 800 acres in the New Mexico Delaware Basin.

"Our California team has done an excellent job this year of growing Diatomite production and managing our legacy fields," said Mark E. Ellis, Chairman, President and Chief Executive Officer. "We are very excited to add ExxonMobil's Hill Property to our inventory of development opportunities in the San Joaquin Valley. Today's trade announcement is another strategic portfolio improvement for our Company that reinforces our commitment to mature, long-lived oil and natural gas assets with low and predictable decline rates."

Significant benefits LINN expects to receive from the ExxonMobil trade:

• Excellent mature assets with a decline rate of approximately ten percent and reserve life of approximately 22 years;
• Hill Property currently generates more operating cash flow than Permian Basin properties traded and is expected to be accretive to excess of net cash provided by operating activities after distributions to unitholders;
• Total resource potential of approximately 67 MMBoe and approximately 27 MMBoe of proved reserves;
• Approximately 300 future drilling locations, significantly increasing the Company's California inventory;
• Tax efficient exchange of assets; and
• Credit positive from increased cash flow and reserves.

Following the closing of this transaction with ExxonMobil, LINN will have remaining production of approximately 10 MBoe/d and approximately 13,000 net acres in the Midland Basin that is prospective for horizontal Wolfcamp drilling. Mr. Ellis noted, "We continue to see strong interest in the market for a trade or sale of these remaining assets and believe there is significant additional value for our unitholders."

The transaction with ExxonMobil is subject to satisfactory completion of title and environmental due diligence, as well as the satisfaction of closing conditions. The transaction is expected to close in the fourth quarter of 2014 with an effective date of June 1, 2014.

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