Dominion Completes Sale of Reserves to Linn Energy
From Associated Press
Dominion Resources said today it finished selling off its mid-continent gas and oil reserves to Linn Energy, pulling the gas and power company further out of the exploration and production business.
Dominion plans to use the $2.05 billion from the sale for general corporate purposes, including share buybacks. The sale of the reserves, located mostly in Oklahoma and containing 780 billion cubic feet equivalent (CFE) of natural gas and oil, was announced last month.
Linn said the sale price is subject to customary adjustments.
The deal is the last in a series of resource sales Dominion has made as it shifts its focus toward power generation, its retail businesses and energy distribution, transmission and storage. Over the past three months, the company said it has sold about 5.5 trillion CFE of proved reserves for about $13.9 billion. It still has about 1 trillion CFE of reserves in the Appalachian Basin.
Houston-based Linn said it closed a private placement of $1.5 billion of equity securities to third-party investors. It also said it entered into a new $1.8 billion secured revolving credit facility. Funds from both sources were used to pay for the Dominion deal.
Linn expects the purchase will add to distributable cash flow. The company said management plans to recommend that the board boost cash distribution to $2.52 per unit annually, up from $2.28 currently, beginning in the fourth quarter.
Linn said it plans to release revised guidance for the third quarter of 2007 and fiscal years 2007 and 2008 shortly.
Dominion shares slipped 2 cents to $85.18, while Linn shares added 20 cents to $34.68.
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