Plains Exploration & Production Co., Houston, (NYSE: PXP) plans to sell Granite Wash assets in Texas and Oklahoma to Linn Energy LLC, Houston, (Nasdaq: LINE) and conventional gas assets in South Texas to an undisclosed third party for a total $785 million in two deals.

The Linn deal involves some 20,000 Granite Wash net acres and approximately 75,000 net acres outside of Granite Wash for a total $600 million. The assets double Linn’s inventory of Granite Wash locations, with significant upside potential, increase organic growth potential and raise Granite Wash current production by approximately 75%.

Net production is approximately 80 million cu. ft. equivalent per day. Proved reserves as of Dec. 31, 2010, were 263 billion cu. ft. of gas equivalent (90% gas).

Linn estimates proved reserves will be significantly higher at year-end 2011 due to the more than 200 low-risk infill drilling locations.

The deal, expected to close by Dec. 31, will double Linn’s current inventory of horizontal drilling locations to more than 400 in the Granite Wash.

Linn plans to fund the deal with internally generated cash flow and proceeds from borrowings under its revolving credit facility.

Barclays Capital Inc. is financial advisor to Plains and J.P. Morgan Securities LLC rendered a fairness opinion. Citi and RBC Richardson Barr are financial advisors to Linn.

The second, $185-million deal consists of all of Plains’ working interests in its South Texas conventional gas properties. Total working interest sales volumes during the third quarter were approximately 39 million cu. ft. of gas equivalent per day. Proved reserves as of year-end 2010 were 120 billion cu. ft. equivalent.

The deal is expected to close in December. The effective date is Sept. 1. Barclays Capital is financial advisor to Plains and Simmons & Co. International rendered a fairness opinion.