Plains Exploration to sell some US oil and natural-gas assets for $785 million

Plains Exploration & Production will sell some oil and natural-gas assets in Texas and Oklahoma to Linn Energy, for $785 million, as part of its plan to reduce debt.

Plains Exploration will sell assets in the gas-rich Granite Wash area of the Texas Panhandle for $600 million to Linn Energy, and South Texas conventional natural gas properties to an unnamed buyerfor $185 million.

The proposed sale comes after the Houston oil and gas company recently sold some of its Gulf of Mexico assets for $450 million to help reduce its $3.63 billion debt.

The assets being sold to Linn had sales volumes of about 84 million cubic feet of gas equivalent a day in the third quarter and 263 billion cubic feet of estimated proved reserves at the end of 2010.

The holdings being sold to the unnamed buyer had sales volumes of 39 million cubic feet a day equivalent in the quarter and 120 billion cubic feet of estimated proved reserves at the end of last year, said Plains.

Houston-based Linn is a top-20 US independent oil and natural gas development company, with approximately 3.2 Tcfe of proved reserves in producing US basins.

"This acquisition represents substantially all of Plains' assets in the Mid-Continent region including mature stable assets and an outstanding position in the Granite Wash.
 
This transaction will double Linn's current inventory of horizontal drilling locations to more than 400 in the Granite Wash" said Mark Ellis, president and CEO of Linn.
 
. "We expect to yield significant operational efficiencies in the Granite Wash as we leverage our pad drilling techniques, simultaneous-operations processes, and recently built gas gathering and water handling infrastructure."