Hugoton Basin
LINN’s Hugoton Basin position consists of more than 760,000 net acres of oil and natural gas properties located in the central portion of the Texas Panhandle extending into southwestern Kansas.
The Company’s Texas properties in the basin primarily produce from the Brown Dolomite formation at depths of approximately 3,200 feet and its Kansas properties primarily produce from the Council Grove and Chase formations at depths ranging from 2,500 feet to 3,000 feet.
Hugoton Basin proved reserves represented approximately 18 percent of total proved reserves at December 31, 2013, of which 82 percent were classified as proved developed. This region produced 143 MMcfe/d or 17 percent of the Company’s 2013 average daily production. During 2013, the Company invested approximately $35 million to drill in this region. During 2014, the Company anticipates spending approximately three percent of its total oil and natural gas capital budget for development activities in the Hugoton Basin region.
Natural Gas Gathering Systems
To more efficiently transport its natural gas in the Texas Panhandle to market, the Company owns and operates a network of natural gas gathering systems comprised of approximately 665 miles of pipeline and associated compression and metering facilities that connect to numerous sales outlets in the area. The Company also owns and operates the Jayhawk natural gas processing plant in southwestern Kansas with a capacity of approximately 450 MMcfe/d, allowing it to extract maximum value from the liquids-rich natural gas produced in the area. The Company’s production in the area is delivered to the plant via a system of approximately 2,100 miles of pipeline and related facilities operated by the Company, of which approximately 250 miles of pipeline are owned by the Company.
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