(By Balachander) Linn Energy LLC (NASDAQ:LINE) has agreed to acquire properties in the Jonah Field, located in the Green River Basin of southwest Wyoming, from BP America Production Co. (NYSE: BP) (LON: BP) for $1.03 billion.
The Houston, Texas-based company expects the deal to immediately add to distributable cash flow per unit. It also forecasts production of roughly 145 million cubic feet equivalent per day (MMcfe/d) of liquids-rich natural gas and proved reserves of around 730 billions Of cubic feet equivalent (Bcfe) from the deal.
"This acquisition provides LINN with a significant operated position in the Green River Basin of Wyoming," said Chief Executive Officer Mark Ellis. "The long-life, low-decline characteristics of the Jonah Field make this asset an excellent fit for us."
Linn Energy has hedged about 100 percent of the expected oil and natural gas production for roughly six years through 2017.
The company expects to finance the acquisition, which will be completed by July 31, with debt.
As of Dec. 31, 2011, Linn Energy has roughly 4.3 trillion cubic feet equivalents (Tcfe) of proved reserves in producing basins in the United States.
The company's core focus areas are the Mid-Continent, Permian Basin, Hugoton Basin, Powder River Basin, Williston Basin, Michigan and California.
Barclays Capital, BMO Capital Markets and RBC Richardson Barr acted as financial advisors to Linn Energy for the transaction.
The stock, which has been trading in the 52-week range of $31.03 to $41.13, lost 1.93 percent to trade at $35.40 on Monday.