Texas-based oil and natural gas company LINN Energy (OTCQB:$LNGG) just announced that it has sold its ownership of the properties located in the Los Angeles Basin after signing a definitive agreement with an undisclosed buyer. The properties sold for $100 million, though closing adjustments of price could subject the number to change. In addition to the $100 million, $7 million in contingent payment is to be made if certain operational requirements are met within a year. Net proceeds from this sale is to be LINN’s additional cash, as well as used to fund the company’s share repurchase program that was recently announced.

The properties that were sold consisted of around 2,000 net acres in the Brea-Olinda Field, which is located in Orange and Los Angeles counties. In its first quarter, net production from the area was about 1,900 BOE/d, with proved developed reserves to be around 17.6 MMBOE that has about $126 million worth of PV-10. LINN projected its earnings associated with these properties to be $21 million this year. As such, since the company has sold off the property for the second half of the year, LINN has moved the $2 million intended to develop the properties into other growth projects and as additional cash on the balance sheet.

Addressing the sale, President and CEO of LINN Energy, Mark E. Ellis, said, “With the announcement of this sale, year-to-date, the company has announced more than $1 billion of asset sales compared to a total proved developed PV-10 of approximately $717 million. Pro forma for these transactions, LINN expects to extinguish all remaining outstanding debt and add cash on the balance sheet, which will be used to maximize shareholder returns, including funding our recently announced share repurchase program. The company continues its transformative business plan by accelerating investment in key horizontal growth plays, focusing on operational efficiency and marketing the remaining non-core assets.”

“The sale of our Brea assets completes our strategic exit from California. Given the regulatory and operational complexities, the Board of Directors determined it is in the best interests of the company to exit California and use the asset sale proceeds for more attractive and value maximizing initiatives,” added the Chairman of the Board of Directors at LINN, Evan Lederman.

The sale is to be finalized at the end of July 2017 — until then it is subject to change from completion of title and environmental legalities.

Tudor, Pickering, Holt & Co. and Jefferies LLC acted as co-financial advisors during this agreement. Ellis LLP acted as legal counsel.

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