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Linn Updates Roan Ops in Q1; Talks Midcontinent Well Results

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   |    Thursday,May 03,2018

LINN reported its Q1 2018 results.

Highlights:

• Announced strategic plan to separate into two public companies, Roan Resources ("Roan") and Riviera Resources ("Riviera") during mid-summer 2018
• Completed strategic divesture program resulting in approximately $2 billion of closed asset sales
• Strong balance sheet with no debt and a first quarter ending cash balance of approximately $227 million
• Returned more than $600 million of capital to LINN shareholders through share repurchases
• Blue Mountain Midstream ("Blue Mountain") anticipates commissioning the Chisholm Trail cryogenic plant by the end of the second quarter 2018
• Outperformed guidance on production, operating expenses and adjusted EBITDAX for the quarter

Roan Ops Update

Roan Resources was formed in the second quarter of 2017 and is focused on the accelerated development of approximately 150,000 net acres in the prolific Merge/SCOOP/STACK play of Oklahoma.

During the first quarter, Roan operated six drilling rigs in the Merge and drilled 13 operated wells with lateral lengths ranging between one-to-two miles. Completion activity in the first quarter slowed from the fourth quarter 2017 pace while awaiting the start-up of Blue Mountain's Chisholm Trail cryogenic plant. Net production averaged approximately 38,000 BOE/d and Roan ended the quarter with 11 drilled but uncompleted ("DUC") wells. Roan expects the inventory of DUC wells to increase until processing capacity is expanded. Once the new plant is commissioned at the end of second quarter, Roan will fully resume completion activity to work down its DUC inventory and expects significant growth in the second half of 2018.

Roan was successful in reducing drill-times and improving geo-steering efforts during the quarter. An example of this includes the one-mile Orange Sherbet 17-10-6-2H well, which was drilled spud-to-TD in approximately 11 days, an improvement of seven days compared to its closest one-mile offset well drilled in 2017. Geo-steering improved Roan's in-zone ratio to approximately 95% during the quarter.

Roan had impressive results in the quarter and highlights two of its pads in Grady County. On the Collins pad, the Collins 11-2-9-5-1XH had an initial production 30-day rate of 3,548 BOE/d and a 90-day rate of 2,544 BOE/d (74% liquids). A second well, the Collins 10-3-9-5-1XH, had an initial production 30-day rate of 3,228 BOE/d and a 90-day rate of 2,486 BOE/d (77% liquids) while producing more than 132,000 barrels of oil during its first 90 days. Both Collins wells are targeting the Mississippian formation from two-mile laterals. On the Griffin pad, the Griffin 26-23-10-5-1XH had an initial production 30-day rate of 2,478 BOE/d and a 90-day rate of 1,917 BOE/d (82% liquids) and the Griffin 26-35-10-5-1XH had an initial production 30-day rate of 1,812 BOE/d and a 90-day rate of 1,544 BOE/d (65% liquids). Both Griffin wells are targeting the Mississippian formation from 1.5-mile laterals.

In early April, Roan completed its spring 2018 borrowing base redetermination process for its senior secured revolving credit facility. All participating lenders consented to a borrowing base increase from $275 million to $425 million. As of March 31, 2018, approximately $205 million had been drawn on the revolver. Roan has no other outstanding debt.