Aug 15 Linn Energy LLC has hired banks
to sell its oil production assets in the Texas Panhandle and
western Oklahoma in an auction that could raise as much as $2
billion, according to people familiar with the matter.
The Houston-based oil and gas company said in June it would
sell the assets, referred to collectively as Granite Wash, to
pay back debt it took on to finance its $2.3 billion acquisition
of oil and gas assets from Devon Energy Corp.
Linn has turned to Bank of Nova Scotia and Royal
Bank of Canada to identify prospective buyers and manage
the sale process, the people said this week.
The people said the Granite Wash assets have roughly $400
million in annual earnings before taxes, depreciation and
amortization. The assets could fetch between $1.5 billion and $2
billion, the people added.
Some of the sources said other oil and gas companies will
likely dominate the sale process, although private equity firms
have also shown interest.
The sources asked not to be identified because the
deliberations are private. Representatives for Linn and the
banks did not respond to requests for comment.
The Granite Wash oil patch is located in the Oklahoma and
the Texas Panhandle and comprises liquid-rich sandstone. Linn
uses horizontal drilling and fracturing technology to extract
the oil from depths ranging from 10,000 to 16,000 feet.
Linn's purchase from Devon spanned 900,000 acres and 4,500
wells in the Rocky Mountains, the U.S. Mid-Continent, north
Louisiana and east and south Texas.
(Reporting By Greg Roumeliotis and Mike Stone in New York;
Additional reporting by Soyoung Kim; editing by Gunna Dickson)