Continuing its strategy of divesting assets considered noncore to the company, Houston-based Linn Energy LLC said it has entered into an agreement with an undisclosed buyer to sell its deep rights in certain central Oklahoma acreage, which includes the Woodford Shale interval, for cash consideration of $229 million.

The independent oil and gas producer noted that the sale includes no producing reserves and that it will retain the rights to the shallow portion of the acreage. Linn Energy said it anticipates closing by the end of the year. Pro forma for the transaction, the company expects to have available capacity of more than $600 million, including cash on its balance sheet.

“Consistent with our strategy of monetizing noncore positions, we have sold approximately $1 billion of oil and gas assets during the last six months, creating value for our unitholders,” said Linn Energy CEO Michael C. Linn. “We believe that these transactions have benefited the company by repositioning our asset base. With this sale, we expect to considerably strengthen our balance sheet and improve our financial flexibility. We feel confident in our ability to weather the current credit environment and continue to pay our distributions.”

The Woodford Shale is situated mostly in the Arkoma Basin of southeastern Oklahoma. While gas has been produced from the shale for a long time, there were reportedly only 24 Woodford Shale gas wells just four short years ago. Reports from earlier this year now put anywhere from 750 to 1,500 wells currently in the shale. The play is believed to hold around 4 Tcf of natural gas.

As part of its repositioning, Linn Energy in April agreed to sell its Appalachian Basin acreage to XTO Energy for $600 million (see Daily GPI, April 16). At the time, CEO Linn suggested that the company did not have enough resources to take advantage of the emerging gas play. That sale included 152,000 net acres spread across the Marcellus Shale gas play in western Pennsylvania and West Virginia with proved estimated reserves of 145 Bcfe from the shallow Mississippian and Devonian reservoirs, with 75% proved developed.

In late August, the company closed the previously announced sale of certain oil and gas properties in the Verden area of Oklahoma to Laredo Petroleum Inc. for a contract price of $185 million.

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