Linn Energy (LINE), an oil and natural gas development company, is buying up $2.3 billion worth of U.S. gas wells from Devon Energy (DVN), the companies announced today.
The wells located across the Rocky Mountains, Gulf Coast and mid-continent regions produce about 275 million cubic feet of gas per day, about 80% of which is natural gas.
Devon Energy, which is based in Oklahoma City, Okla., considers these assets as “non-core” and reported $350 million in earnings before interest, taxes, depreciation and amortization in 2013 from the properties.
Linn Energy has identified over 1,000 future drilling locations across the properties and 600 opportunities to re-tap existing wells, or what is known as recompletion. The Houston, Tex.-based company plans to finance the purchase with the future sale of its Granite Wash assets and other non-producing land.
The deal is expected to close in the third quarter this year with an effective date of Apr. 1, 2014.