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Linn and Quantum Energy form USD 1bn strategic acquisition alliance

25th March 2015

Linn Energy, LLC and LinnCo, LLC has announced that LINN has signed a non-binding letter of intent with private capital investor Quantum Energy Partners to fund selected future oil and natural gas acquisitions and development on those acquired assets ("QL Energy I, LLC" or "AcqCo")

Linn Energy, LLC and LinnCo, LLC has announced that LINN has signed a non-binding letter of intent with private capital investor Quantum Energy Partners to fund selected future oil and natural gas acquisitions and development on those acquired assets ("QL Energy I, LLC" or "AcqCo")
The USD 1bn equity commitment, combined with the ability to leverage AcqCo and Linn's acquisition of a direct working interest, results in the potential to exceed USD 2.5bn of acquisition and development funding from the AcqCo alliance

Subject to final documentation, Quantum has agreed to initially commit up to USD 1bn of equity capital to fund acquisitions and development of oil and natural gas assets. Linn will have the ability to participate in all acquisition opportunities with a direct working interest ranging from 15 per cent to 50 per cent.

AcqCo assets will be managed by Linn in exchange for a reimbursement of general and administrative expenses. Additionally, after certain investor return hurdles are met, Linn will have the ability to earn a promoted interest in AcqCo.

Upon the sale of any assets within AcqCo, Linn will be given right of first offer to acquire those assets.

The USD 1bn equity commitment, combined with the ability to leverage AcqCo and Linn's acquisition of a direct working interest, results in the potential to exceed USD 2.5bn of acquisition and development funding from the AcqCo alliance.

Furthermore, the agreement also provides for potential future commitments of equity capital from Quantum thereby increasing the ultimate size of AcqCo.

"Linn and Quantum have a long history of adding value together and we're pleased to be working with them again," said Mark E. Ellis, Linn chairman, president and chief executive officer. "As the founding investor in Linn and a leading private capital provider to the energy sector that also participated in the formation of two other upstream MLPs, Quantum is uniquely qualified for this new acquisition alliance. Based in Houston, Quantum brings considerable size and scale to source and fund acquisitions, along with the flexibility and responsiveness to be very effective partners."

 

 

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