Dominion Resources said Monday it would sell its Mid-Continent natural gas assets to Linn Energy for $2.05 billion, part of its bid to focus more on its power business.
Shares of Linn Energy were 12.6 percent higher, up $4.16 to $37.07 in afternoon trading on Nasdaq. Dominion stock rose modestly, up 45 cents, or 0.5 percent, to $86.76 on the New York Stock Exchange.
Analysts had expected Dominion's Mid-Continent assets, which are located primarily in Oklahoma, to fetch a purchase price between $1.7 billion to $2 billion.
Houston-based Linn Energy also said it secured $1.5 billion of private equity from investors led by Lehman Brother MLP Opportunity Fund. The private placement, which prices the shares at $31.25, is expected to close simultaneously with the gas asset acquisition, expected on or before Oct. 1.
Dominion has now sold or agreed to sell all of the natural gas and oil exploration and production operations it plans to divest. Dominion is retaining its Appalachian gas assets.
Last November, the Richmond, Virginia-based power company said it would pursue the sale of most of its exploration and production assets as part of a restructuring. Prior to the Mid-Continent deal, Dominion had agreed to sell $11.84 billion of those assets.
Dominion, one of the nation's largest energy producers, including 26,500 megawatts of power generation, said it would use the proceeds from the sales to pay down $3.2 billion to $3.5 billion in debt and repurchase common stock.