2011-05-31-2011-05-09

To buy 140,000 gross acres with 170 wells in Ochiltree and Lipscomb cos., TX, and Ellis Co., OK, gaining 2,700 BOE/d.

Houston-based Linn Energy LLC (Nasdaq: LINE) plans to acquire 40% of privately held Panther Energy Co. LLC and Red Willow Mid-Continent LLC's oil and gas properties in Ochiltree and Lipscomb counties, Texas, and Ellis County, Oklahoma, for $220 million.

The assets include 140,000 gross acres (44,000 net) with proved reserves of approximately 10 million barrels of oil equivalent (45% oil; 37% proved developed).

Net production is some 2,700 barrels of oil equivalent per day from 170 producing wells. Upside includes more than 165 proved, low-risk infill drilling locations.

"The acquisition of these properties enhances Linn's overall position in the Texas Panhandle area, and marks our entry into the liquids-rich window of the horizontal Cleveland play in the Anadarko Basin," says Mark E. Ellis, president and chief executive.

"Partnering with Panther will align us with an experienced and efficient operator that has been active and successful in this area for several years. This acquisition provides high rate-of-return projects and we expect it to be immediately accretive to our unitholders."

Bob Zahradnik, chairman of Panther Energy, adds, "We have created significant value in the Anadarko Basin, and we look forward to developing this area with a solid partner like Linn Energy. This divestiture is a tactical transaction to fund the substantial capital demands of our successful programs in the deepwater Gulf of Mexico and West Texas."

The deal is expected to close by June 1, and will be financed with net proceeds from the company's recently announced senior notes offering.