Linn Energy Acquires $2.3 Billion of Devon Energy's Assets
On June 30, Linn Energy acquired $2.3 billion worth of assets from Devon Energy Corporation in a deal Linn Chairman, President, and CEO Mark E. Ellis called a “positive development” in achieving the company’s four specific objectives.
Ellis outlined the objectives as being to “realize value for the Midland Basin position; continue to make accretive acquisitions; reduce capital intensity while increasing efficiency; and improve credit metrics.”
The acquisition is huge, with Linn acquiring an asset package of around 900,000 acres of oil-rich land stretching from the Rockies, to Texas and Louisiana. The area comes equipped with roughly 4,500 wells, and Linn is already formulating plans to construct 1,000 more. They also have indentified 600 recompletion opportunities on the land acquired.
In order to fund the new acquisition, Linn plans to sell off some assets in the Texas Panhandle and western Oklahoma.
Linn also plans to use any excess funds to reduce any debt and other general corporate purposes, making this acquisition a big win for the company.
The deal was also beneficial for Devon, as it plans on using the funds to facilitate the decrease of its debt by more than $4 billion this year. The deal is also in-line with the company’s desire to reshape its portfolio.
President and CEO John Richels praised the deal and signaled a transition for his company, saying, “With the sale of our remaining non-core assets, the portfolio transformation that we announced late last year is now complete.” According to Richels, the portfolio transformation was a three-fold process which included “the accretive Eagle Ford entry, the innovative creation of EnLink Midstream, and the sale of our non-core properties.”
With the completion of this sale of non-core properties and several in the preceding months, Devon claims to have “generated in excess of $5 billion of proceeds at an accretive multiple of nearly 7 times 2013 EBITDA.”
The deal is still pending approval and review with an effective date of April 1.
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.