Via MarketWatch — Linn Energy on Monday set plans to pay $1 billion to buy Wyoming natural gas and oil fields from BP PLC as the independent energy producer bulks up with its second largest acquisition this year.
Linn Energy LLC, a Houston-based specialist in conventional production from mature fields, said it would add acreage in the Jonah Field in Wyoming’s Green River Basin owned by BP America Production Company, a unit of BP PLC .
The Jonah Field acquisition, which will be financed under an existing revolving credit facility, includes about 753 billion cubic feet equivalent of proven natural gas reserves.
“The long-life, low-decline characteristics of the Jonah Field make this asset an excellent fit for us,” Linn Energy Chief Executive Officer Mark Ellis said instatement.
Prior to the Jonah Field deal, analysts at Raymond James reiterated their strong buy rating on Linn Energy, partly because the company’s policy of hedging against price moves will protect it from downside swings in commodity prices.
“We believe the acquisition market will likely be tremendous over the next 12 to 24 months providing the opportunity for Linn Energy to do a significant amount of highly accretive acquisitions,” Raymond James analyst Kevin Smith said in a note to clients on Friday.
The latest deal comes after Linn Energy closed a $1.2 billion acquisition oil and natural gas properties in the Hugoton Basin area of southwestern Kansas from BP earlier this year.
And in April, Linn Energy set plans to invest $600 million over the next three to six years for a enhanced oil recovery operation in the Salt Creek field in the Powder River Basin of Wyoming with Anadarko Petroleum Corp.
With a market capitalization of $7.2 billion and debt of $5.9 billion, Linn Energy’s $13.1 billion in enterprise value ranks it as the 10th largest domestic independent oil and gas company. Separately on Monday, Linn Energy filed to raise up to $1 billion through an initial public offering of common shares in Linn Co LLC, which will trade on the Nasdaq under the symbol LNCO.