Linn Energy's deal with Devon praised by Raymond James

|About: Devon Energy Corporation (DVN)|By:, SA News Editor

Linn Energy’s (LINE +0.8%) $2.3B asset purchase from Devon Energy (DVN -0.1%) earns the praise of Raymond James analysts, who note that LINE plans to sell its high-decline Granite Wash assets to fund the deal, meaning the company is not likely to need to tap debt or equity markets for related funding.

The firm estimates LINN may need to reserve only 20% of EBITDA to maintain the cash flow from the new assets vs. ~40% of EBITDA likely need to maintain the Granite Wash; through this transaction and the Permian divestiture program, LINN could reduce its overall capital budget by ~$400M.

LNCO -0.3%.