LINN Energy, LLC recently announced that it has signed a non-binding agreement with Quantum Energy Partners, a private capital investor, to finance future natural gas and oil developments and acquisitions.
In the agreement, which is still subject to final documentation, Quantum is obligated to invest equity capital amounting to $1 billion to finance developments and acquisitions of natural gas and oil assets.
As per the agreement, LINN will then participate in all of the acquisition opportunities. LINN will have a direct working interest between 15 and 50 percent. The company will manage all AcqCo assets for payments of administrative and general expenses.
"LINN and Quantum have a long history of adding value together and we're pleased to be working with them again," LINN President and CEO Mark Ellis said. "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."
S. Wil VanLoh Jr. and Dehraj Verma of Quantum said they are equally excited about the partnership.
“We have always held the management team in high regard and feel that this strategic partnership will allow the company to continue its trajectory of growth and value creation for its unitholders and shareholders while providing Quantum with a unique platform to acquire and exploit assets and generate strong risk-adjusted returns for our investors," the pair said in a statement. "We believe that energy companies looking to divest sizable or complex assets in today's market have limited choices. Our partnership with LINN will truly create a new strategic buyer for these assets, one that has the capital resources and speed of a financial buyer but the operational expertise and workforce of a strategic acquirer."
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