Houston-based Linn Energy agreed Tuesday to form a new joint venture with Quantum Energy Partners on Tuesday to fund selected oil and natural gas projects
Houston-based Quantum agreed to initially commit up to $1 billion of equity capital to fund acquisitions and development of oil and natural gas assets, Linn said.
Linn will also be able to participate in all acquisition opportunities with a direct working interest ranging from 15 percent to 50 percent.
Linn will manage the assets acquired by the joint venture in exchange for reimbursement of general and administrative expenses.
Additionally, after certain investor return hurdles are met, Linn will be able to to earn a promoted interest in the joint venture.
Upon the sale of any assets within the joint venture, Linn will be given right of first offer to acquire the assets.
Linn said the joint venture will allow it to participate in acquisitions outside of the conventional MLP asset profile and enhance its ability to capture acquisition opportunities during distressed market conditions.
“We are very excited to have finalized this new opportunity and are pleased to be working with Quantum in this unique partnership. We anticipate a number of attractive assets may come to market in the current environment and we expect these agreements will position the Company to take advantage of such opportunities,” Linn Energy chairman, president and CEO Mark E. Ellis said.