LINN Energy, Inc. has announced that it has signed a definitive agreement to sell its interest in properties located in the San Joaquin basin, Calif., to an undisclosed buyer for a contract price of $263 million, subject to closing adjustments.

This sale represents the first executed agreement of the Company’s non-core divestiture program. LINN continues to market the previously announced non-core asset sales and there remains significant interest in each of those packages. Year-to-date, the Company has announced sale agreements with contract prices totaling $844.5 million with net proceeds expected to be used to reduce outstanding borrowings under the Company’s revolving credit facility and term loan. Pro-forma for these transactions, the Company expects to have less than $50 million in total debt outstanding.

The California properties, located in Kern County, consist of approximately 500 total net acres in South Belridge field. First quarter net production was approximately 3,000 boed, proved developed reserves of ~11.7 MMboe and proved developed PV-10 of approximately $168 million.The Company forecasts full-year adjusted EBITDAX associated with these properties of approximately $30 million. In the second half of the year, the Company had budgeted $21 million of capital for the development of these properties. This capital will be redeployed for the development of growth projects or used to further de-lever the balance sheet.

The transaction is expected to close no later than July 31, 2017 with an effective date of March 1, 2017. This transaction is subject to satisfactory completion of title and environmental due diligence, as well as the satisfaction of closing conditions.

Tudor, Pickering, Holt & Co. and Jefferies LLC acted as co-financial advisors and Kirkland & Ellis LLP as legal counsel during the transaction.

Source: www.worldoil.com