Linn Energy has signed a definitive agreement to divest its interest in properties located in the San Joaquin Basin, California, for a contract price of $263m to an undisclosed buyer.
This divestment is the first executed agreement under the company's non-core divestiture programme.
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Linn stated that it continues to explore the previously announced sales of non-core assets and has attracted significant interest in each of those packages.
Until now, the company has announced sale agreements with contract prices totalling $844.5m. The net proceeds are being used to cut down outstanding borrowings under the company's revolving credit facility and term loan.
Following these deals, the company expects to have less than $50m in total debt outstanding.
The California properties are located in Kern County and comprise around 500 total net acres in the South Belridge Field.
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By GlobalDataNet production in the first quarter was approximately 3,000 barrels of oil equivalent (boe) a day, while proved developed reserves were 11.7 million boe and proved developed PV-10 was approximately $168m.
The firm forecasts full-year adjusted EBITDAX associated with these properties to be around $30m.
In the second half of the year, the company allocated $21m of capital for the property developments, which will be redeployed for the development of growth projects or used to further improve the balance sheet.
The deal, which is expected to close no later than 31 July, carries an effective date of 1 March.
This transaction is subject to the completion of title and environmental due diligence and should meet other closing conditions.
