Linn Energy Inc. has agreed to sell a portion of its assets in California's San Joaquin Basin to an undisclosed buyer for $263 million as it continues to reduce its debt.

The Houston-based producer, which emerged from voluntary bankruptcy in late February, said Tuesday the assets being sold include 500 net acres in Kern County, CA, in the South Belridge Field. The acreage had net production of about 3,000 boe/d in 1Q2017. Proved developed reserves were 11.7 million boe as of March 1, and an estimated proved developed value of $168 million based on the estimated present revenue, net estimated direct expenses, discounted at an annual discount rate of 10%, or PV-10.

"Linn continues to market the previously announced noncore asset sales and there remains significant interest in each of those packages," management said. "Year-to-date, [we have] 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."

The company had budgeted $21 million to develop the assets in the second half of 2017, but will instead redeploy the capital to develop growth projects or to further delever its balance sheet.

The transaction, subject to conditions, is expected to close by the end of July, with an effective date of March 1. Pro-forma for the transactions, Linn expects to have less than $50 million in total debt outstanding. Tudor, Pickering, Holt & Co. and Jefferies LLC acted as co-financial advisers, while Kirkland & Ellis LLP was the legal counsel for the transaction.

Linn emerged from Chapter 11 in late February after citing the sustained decline in commodity prices when it filed for protection as Linn Energy LLC in May 2016. The company emerged as an independent explorer after agreeing to sell assets in the Williston and Permian basins, in South Texas and California. It also agreed to spin off Berry Petroleum Co. LLC, a company it had acquired in 2013 for $4.3 billion. Linn began trading over-the-counter on the OTCQB market in April.