© 2014 The Texas Lawbook.
By Natalie Posgate – (Jan. 2) – Houston-based LINN Energy, Inc. and Blackstone Group’s GSO Capital Partners LP have entered a non-binding partnership in which GSO will provide up to $500 million of funding to LINN for future oil and gas development.
In return, GSO will receive an 85 percent working interest in the joint wells that LINN will develop until such time as it achieves a 15 percent internal rate of return on annual groupings of wells.
Houston corporate partners Anthony Speir and David Castro, Jr. of Kirkland & Ellis led the deal for GSO. They received assistance from Houston debt finance partner Will Bos and associates Chris Heasley, Kristin Bachmann and Chad Nichols, as well as attorneys from the firm’s New York, Chicago and San Francisco offices.
The in-house deal team team consisted of LINN General Counsel Candice Wells and Assistant General Counsel Holly Anderson.
Partners Michael King and Michael Dillard of Latham & Watkins led a Houston-based team that handled the deal for LINN. Also on the team were corporate associates Jesse Myers and Elizabeth More, as well as tax partner Tim Fenn and associate James Cole.
Last year, Latham advised LINN and LinnCo, LLC on the $4.3 billion acquisition of Denver-based Berry Petroleum Company, which completed on Dec. 16.
In the current deal, GSO will commit up to $500 million with five-year availability to fund 100 percent of specified costs associated with new wells drilled under the arrangement.
Wells said the deal has no specified close date but is subject to definitive documentation.
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