Lynden to sell oil and gas assets in Wolfberry Project wells

Lynden Energy’s subsidiary, Lynden USA, has signed an agreement with BreitBurn Energy Partners to sell oil and gas assets in the Wolfberry Project.

Under the agreement, Lynden will sell its interest in 16 gross (7.0 net) Wolfberry Project wells, along with the underlying leases covering about 1,440 gross acres (630 acres net to Lynden), for $25m.

The company owns a 43.75% working interest in the wells, and has a right to earn 43.75% working interest in the portion of the leases that are not held by production.

Lynden said that its working interest partner has also entered into agreement to sell its interest in the assets.

The company’s net production is about 20% from the wells after royalties, as of December 1, 2012, and expects to reach a net production exit rate of 900-1,000 barrels of oil equivalent per day by the end of 2012, after royalties.

Lynden’s strategy behind disposing of the portions of its proven acreage is to strengthen its working capital position and to redeploy funds to its less developed and unproven acreage.

The company confirmed that the sale of the assets will not have any impact on its ongoing plans of spudding 43 gross (18.14 net) Wolfberry Project wells, scheduled from July 1, 2012 to June 30, 2013.

The Wolfberry Project comprises about 18,931 gross (16,979 net) acres, which is equal to about 6,730 acres net of Lynden’s working interest.

The sale is expected to be completed iby the end of December 2012, subject to customary closing conditions.