May 2 Jonah Energy, a natural gas company backed
by investors including private equity firm TPG Capital, has
agreed to acquire oil and gas-producing land in Wyoming from
Linn Energy for around $580 million, the companies
said on Tuesday.
The 27,000 net acres to be acquired from Linn complements
Jonah's existing assets in Sublette County, with more than half
of the 1,200 producing wells being bought from Linn already
operated by Jonah, according to the companies' statement.
Linn Energy filed for Chapter 11 bankruptcy protection in
May 2016, one of the largest casualties of the oil-price slump
that began in mid-2014. The exploration and production-focused
master limited partnership had around $10 billion of debt when
it entered the bankruptcy process. It emerged following a debt
reorganisation on Feb. 28.
"The deal was very much strategic, as we've been focused on
trying to secure this adjacent acreage since 2014. However, the
ultimate timing was opportunistic because Linn's emergence from
bankruptcy served as a catalyst," Christopher Ortega, partner at
TPG Capital, said in a telephone interview.
The acquisition will be funded by equity from Jonah's
investor group, which also includes buyout firm EIG Global
Energy Partners and management, as well as an existing debt
facility belonging to the company that will be increased in size
in light of the deal, the statement said.
Jonah's financial adviser was Evercore Partners, while its
legal adviser was Vinson & Elkins LLP.
(Reporting by David French in New York)