LINN Energy (LINE) to Acquire Jonah Field Properties in $1.03B Deal
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LINN Energy, LLC (Nasdaq: LINE) announced today that it signed a definitive purchase agreement to acquire properties in the Jonah Field, located in the Green River Basin of southwest Wyoming, from BP America Production Company for a contract price of $1.025 billion, subject to closing conditions and a preferential right of purchase. The company anticipates the acquisition will close on or before July 31, 2012, and will be financed with proceeds from borrowings under its revolving credit facility.
Hedging
Consistent with LINN's strategy to hedge production associated with acquisitions, the company has hedged approximately100 percent of the oil and natural gas production associated with this transaction through 2017, or approximately six years. LINN used a combination of swaps and puts to hedge the production volumes, which preserves significant upside if commodity prices rise.
Credit Facility
Including the pending Jonah Field transaction, LINN has announced or closed almost $3 billion of acquisitions year to date. To maintain adequate financial flexibility and liquidity in light of the company's expanding size and scale, prior to closing LINN intends to request an increase to its revolving credit facility note amount from $2 billion to $3 billion, subject to lender approval and final documentation.
Expected Closing
In addition to customary closing conditions, the acquisition is subject to a preferential right of purchase that encompasses substantially all of the properties. The expiry period for waiver or acceptance of the preferential right of purchase is anticipated during the first week of July 2012. The transaction is expected to close on or before July 31, 2012.
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Hedging
Consistent with LINN's strategy to hedge production associated with acquisitions, the company has hedged approximately100 percent of the oil and natural gas production associated with this transaction through 2017, or approximately six years. LINN used a combination of swaps and puts to hedge the production volumes, which preserves significant upside if commodity prices rise.
Credit Facility
Including the pending Jonah Field transaction, LINN has announced or closed almost $3 billion of acquisitions year to date. To maintain adequate financial flexibility and liquidity in light of the company's expanding size and scale, prior to closing LINN intends to request an increase to its revolving credit facility note amount from $2 billion to $3 billion, subject to lender approval and final documentation.
Expected Closing
In addition to customary closing conditions, the acquisition is subject to a preferential right of purchase that encompasses substantially all of the properties. The expiry period for waiver or acceptance of the preferential right of purchase is anticipated during the first week of July 2012. The transaction is expected to close on or before July 31, 2012.
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