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9 Pages

LINN acquires BP's Hugoton Basin assets for US$1.2 billion


LINN acquires BP's Hugoton Basin assets for US$1.2 billion

Report summary

LINN Energy is to acquire BP's Hugoton Basin assets in southwest Kansas for US$1.2 billion. The upstream portfolio holds proved reserves of 730 bcfe, of which 81% are proved developed. Current production is 110 mmcfed - two thirds gas, one third liquids. The portfolio also includes 100% ownership of BP's Jayhawk plant - a 450 mmcfd cryogenic gas processing facility. At a 10% discount rate, deal economics do not look particularly compelling. We value the upstream assets and the ...

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  • LINN acquires BP's Hugoton Basin assets for US$1.2 billion PDF - 1.25 MB 9 Pages, 7 Tables, 4 Figures

Description

The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Deal Insight report provides an in-depth analysis of this deal. You will also find information about upstream assets and the strategic rationale behind the deal.

For investors and businesses, this deal insight report provides an understanding of the effect this deal will have on the market, including oil and gas pricing and assumptions. Use it to keep up to date with deal announcements, gain expert insights and analyse potential developments that might affect your strategy.

Wood Mackenzie goes beyond company-reported data and announcements to give you an independent and informed view. Our unique valuation metrics are underpinned by our deep understanding of upstream assets and companies. We help you objectively benchmark and evaluate asset and corporate deals so you can compare deal economics around the world.

  • Executive summary
  • Transaction details
  • Upstream assets
    • Modelling assumptions
    • Midstream assets
  • Deal analysis
    • Discount rate sensitivity
    • Hedging
    • Jayhawk plant valuation
  • Strategic rationale
    • LINN Energy
    • BP
  • Oil & gas pricing and assumptions

In this report there are 11 tables or charts, including:

  • Executive summary
    • Executive summary: Table 1
  • Transaction details
  • Upstream assets
    • Wood Mackenzie upstream modelling assumptions
    • BP Hugoton assets
    • Upstream assets: Table 1
  • Deal analysis
    • Deal analysis: Table 1
    • Deal analysis: Table 2
    • Implied long-term gas price sensitivity to discount rate and long-term Brent assumption
  • Strategic rationale
    • LINN acquisitions from 2009 - seller highlighted
    • Strategic rationale: Table 1
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
    • Oil & gas pricing and assumptions: Table 2
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