An affiliate of Anadarko Petroleum Corp. on Tuesday took on Linn Energy LLC as a partner in an enhanced oil recovery project on the 22,000-acre Salt Creek Field of Wyoming's Powder River Basin.

The Woodlands, TX-based Anadarko assigned Linn a 23% stake in the legacy oilfield in exchange for funding $400 million of future development costs. Over the next three to six years, Linn said it plans to invest a total of $600 million in the partnership, including the $400 million to Anadarko. The joint venture (JV) calls for participating in 4,000 wells gross.

"We believe this long-life asset is unique because it is expected to deliver 10 years of steady production growth while, at the same time, providing a low base-decline rate," said Linn CEO Mark E. Ellis.

Anadarko has been using carbon dioxide (CO2) to develop the field since 2004, and additional development associated with the JV is expected to double current production by 2015, Ellis said.

"CO2 can potentially be used to enhance recovery in other reservoirs and portions of the field," Ellis said. Linn has the "potential to apply this knowledge and technology to several of our existing legacy oilfields."

Average net production between the partners is expected to be about 1,600 b/d over the next year. By 2016 net production from Salt Creek is forecast to climb to about 3,800 b/d; estimated reserve life is about 28 years. The reserves have an estimated base decline rate of less than 7%, with about 1 billion bbl of oil (gross) remaining in place. According to Linn, the JV's maintenance capital costs over the first year are expected to be $5-15 million. Linn already has hedged all of the current net production associated with the JV through 2014.