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MERGER OVERVIEW – Linn Energy, Llc

Linn Energy, Llc · Dec 10, 2013 · 39 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. MERGER OVERVIEW – Linn Energy, Llc – slide 1
    Merger Overview December 2013
  2. MERGER OVERVIEW – Linn Energy, Llc – slide 2
    Transaction Overview Mark E. Ellis LINN Energy Chairman, President and CEO
  3. MERGER OVERVIEW – Linn Energy, Llc – slide 3
    Transaction Overview Consideration LinnCo to acquire Berry for 1.68 common shares of LinnCo 14% to Berrys closing price on November 1, 2013 Premium 24% to Berrys 30-day average on November 1, 2013 45% to Berrys closing price on…
  4. MERGER OVERVIEW – Linn Energy, Llc – slide 4
    Expected Benefits to LINN Expected to be accretive to cash available for distribution Improves diversification, scale and growth potential Increases LINNs production by 30% Increases LINNs liquids exposure o Berrys reserves are 75%…
  5. MERGER OVERVIEW – Linn Energy, Llc – slide 5
    LINN Energy And Berry Petroleum LINN Energy IPO in 2006 with initial enterprise value of 713 million Completed or announced 60 transactions ND for 15 billion(1) Uinta Basin ( in billions) Current(2) PF Berry(2)(3) MI WY Piceance…
  6. MERGER OVERVIEW – Linn Energy, Llc – slide 6
    MLP and Independent E&P Size Rankings LINN is one of the largest MLP and independent E&P companies 8th largest public MLP / LLC(1) 12th largest domestic independent oil & natural gas company(1) Rank Master Limited Partnership…
  7. MERGER OVERVIEW – Linn Energy, Llc – slide 7
    Strong, Diversified Reserve Base Oil Proved Reserves Increase 185 MMBbls LINN Energy LINN Energy + Berry PF 832 MMBoe 1,107 MMBoe (47% Liquids) (54% Liquids) Williston/ Williston/ Powder River Powder River E. Texas E. Texas 4%…
  8. MERGER OVERVIEW – Linn Energy, Llc – slide 8
    LINN Has Created an Acquisition Machine 2010 2011 2012 YTD 2013 (1) Screened 189 Screened 122 Screened 246 Screened 223 opportunities opportunities opportunities opportunities Bid 41 for Bid 31 for Bid 20 for Bid 10 for 10.1 billion…
  9. MERGER OVERVIEW – Linn Energy, Llc – slide 9
    Growth Through Accretive Acquisitions 15 billion in acquisitions across 60 separate transactions(1) Strong record of: Evaluating acquisitions Integrating assets Pursuing multiple acquisitions simultaneously Value of Acquisitions…
  10. MERGER OVERVIEW – Linn Energy, Llc – slide 10
    Recent Permian Acquisition (Q313) East Goldsmith Field Acquisition Acreage East Goldsmith Field 525 million acquisition of Proved Location Area PROB Location Area properties located in the Central Basin Platform of the Permian Basin…
  11. MERGER OVERVIEW – Linn Energy, Llc – slide 11
    Efficient Integration and Operations Efficiently integrated 60 separate transactions across multiple basins Currently operate: 70% of wells 15 total operated rigs running o 8 rigs focusing on horizontal drilling 7 primary operated…
  12. MERGER OVERVIEW – Linn Energy, Llc – slide 12
    LINN Operational Update Granite Wash 8 rigs drilling in the region o 2 rigs targeting the Hogshooter interval in the Mayfield area of western Oklahoma o 6 rigs focused on developing high-return, liquids-rich opportunities in the…
  13. MERGER OVERVIEW – Linn Energy, Llc – slide 13
    Permian Basin Significant Improvement in Size and Scale Overview (1)(2) Operations Map Significant operational and field Hockley synergies in the Permian Basin 80% liquids MIDLAND Garza 160 MMBoe proved reserves BASIN…
  14. MERGER OVERVIEW – Linn Energy, Llc – slide 14
    Permian Basin Horizontal Wolfcamp Potential Overview Wolfcamp Operations Map Currently active in non-operated horizontal Yoakum Terry Lynn Garza Wolfcamp (Diamondback operated) and expect to begin operated activity in 2014…
  15. MERGER OVERVIEW – Linn Energy, Llc – slide 15
    Strategic Highlights Robert F. Heinemann Berry Petroleum President and CEO
  16. MERGER OVERVIEW – Linn Energy, Llc – slide 16
    Expected Benefits to Berry Berry believes that LINN is offering a compelling value to Berry shareholders Berry shareholders to receive 1.68 common shares of LinnCo o 14% premium to Berrys closing price on November 1, 2013 o 24%…
  17. MERGER OVERVIEW – Linn Energy, Llc – slide 17
    Berry Petroleum Overview Overview Key Statistics Berry Petroleum is a Denver-based independent E&P 2011 2012 2013E company focused on developing its oil assets in the: Production (Boe/d) 35,687 36,402 40,500 40,800 San Joaquin…
  18. MERGER OVERVIEW – Linn Energy, Llc – slide 18
    Berrys Business Plan Commentary Invest in Consistent Oil Growth Invest only in the development of crude oil Increase oil production from five assets in three basins BOE/D Improve margin from oil growth and improved marketing…
  19. MERGER OVERVIEW – Linn Energy, Llc – slide 19
    Berrys 2013 Performance Highlights from Last 12 Months Production Growth of 5 Oily Assets (Q312 Q313) Oil production has grown 20% since Q312 40,000 with total production growing 14% Uinta: +36% 30,000 Production mix increased to…
  20. MERGER OVERVIEW – Linn Energy, Llc – slide 20
    South Midway-Sunset Asset Highlights South Midway-Sunset Field Map Stable production from legacy assets in the 9th largest U.S. field 26 30 29 28 27 Produced 12,275 Bo/d in Q3, 92% NRI S. Midway 36 35 31 32 33 34 Produce heavy…
  21. MERGER OVERVIEW – Linn Energy, Llc – slide 21
    North Midway-Sunset Asset Highlights North Midway Assets Diatomite has 360 million barrels of oil in place on McKittrick 21Z 540 acres, targeting 1,000 wells on 5/8 acre spacing Focusing on consistently growing the completion Berry…
  22. MERGER OVERVIEW – Linn Energy, Llc – slide 22
    Uinta Assets Asset Highlights Uinta Resource Development Compiled 122,000 net acres with 75 MMBoe of risked resource since entering basin in 2003 Current production on 40-acre spacing; historically 60% crude oil and 40% gas…
  23. MERGER OVERVIEW – Linn Energy, Llc – slide 23
    Merger Benefits for Berry Observations Combined size and scale can fully maximize the value of Berrys assets Berrys long-lived reserves with shallow decline are an ideal fit for the Upstream MLP model Merger is a tax-free event for…
  24. MERGER OVERVIEW – Linn Energy, Llc – slide 24
    Financial Highlights Kolja Rockov LINN Energy Executive Vice President and CFO
  25. MERGER OVERVIEW – Linn Energy, Llc – slide 25
    Financial Highlights First ever acquisition of a public C-Corp. by an upstream LLC or MLP Transaction value of 4.9 billion, including assumed debt of 1.7 billion Expected to be accretive to cash available for distribution Accretion…
  26. MERGER OVERVIEW – Linn Energy, Llc – slide 26
    LinnCo Structure Advantages Reduces Tax Shareholders receive Form 1099 rather than a Schedule K-1 Reporting No state income tax filing requirements Burdens No UBTI(1) implications Efficient Tax Estimated tax at LinnCo(2)…
  27. MERGER OVERVIEW – Linn Energy, Llc – slide 27
    LinnCo Structure Overview LINE LNCO Current distribution of 2.90 / unit (1) Current dividend of 2.90 / share (2) Schedule K-1 (partnership) Form 1099 (C-Corp.) LINE LNCO Unitholders Shareholders 2.90 Common Dividend Shares…
  28. MERGER OVERVIEW – Linn Energy, Llc – slide 28
    Significant Hedge Position (Graphs Do Not Include Pending Berry Transaction) LINN is hedged 100% on expected natural gas production through 2017; 100% on expected oil production through 2016 LINN partnered with Berry to hedge a…
  29. MERGER OVERVIEW – Linn Energy, Llc – slide 29
    Significant Hedge Position (Equivalent Basis) (Does Not Include Pending Berry Transaction) LINNs cash flow is notably more protected from oil and natural gas price uncertainty than its C-Corp. and Upstream MLP / LLC peers 100% 100%…
  30. MERGER OVERVIEW – Linn Energy, Llc – slide 30
    LINNs Distribution Stability and Growth LINN has performed well through all kinds of commodity price cycles Distribution stability maintained throughout the Credit Crisis (i.e. 2008 2009) 16 out of 74 MLPs (23%) were forced to reduce…
  31. MERGER OVERVIEW – Linn Energy, Llc – slide 31
    Distribution History Consistently paid distribution for 32 quarters 81% increase in quarterly distribution since January 2006 IPO(1) Distribution History 20.20 20.00 19.470.73 18.740.73 18.020.73 18.00 17.290.73 16.570.73…
  32. MERGER OVERVIEW – Linn Energy, Llc – slide 32
    LINN Historical Return LINN Total Return and Unit Price Appreciation (LINE IPO Present of 190%) 275% 225% 207% 190% 175% 125% 67% 75% 66% 64% 25% (25%) (75%) (125%) 2006 2007 2008 2009 2010 2011 2012 2013 LINE Total…
  33. MERGER OVERVIEW – Linn Energy, Llc – slide 33
    Current Landscape for E&P MLPs LINN has a significant size advantage in E&P market presents significantly more the E&P MLP / LLC market acquisition opportunities than rest of MLP Greater access to capital markets market Ability to…
  34. MERGER OVERVIEW – Linn Energy, Llc – slide 34
    Updated Q4 2013 Guidance(1) LINN reiterates Q4 estimated production guidance of 840 - 860 MMcfe/d 2013E organic production growth of 8 - 10% remains on-track (in spite of severe winter weather in the Permian and Mid-Continent…
  35. MERGER OVERVIEW – Linn Energy, Llc – slide 35
    Summary Combined company will be one of the largest independent oil and natural gas companies in North America Pro forma production of 180,000 Boe/d Proved reserves of approximately 1.1 billion Boe (54 percent liquids) Combined…
  36. MERGER OVERVIEW – Linn Energy, Llc – slide 36
    LINN Energys mission is to acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets. a kind of oil & natural gas company
  37. MERGER OVERVIEW – Linn Energy, Llc – slide 37
    Berry Bonds and Revolver Post-Closing Berry Bonds Transaction triggers Change of Control and investor option to put bonds at 101% of par; LINN plans to make a Change of Control offer pursuant to the indenture If bonds are put, LINN…
  38. MERGER OVERVIEW – Linn Energy, Llc – slide 38
    Capital Structure (9/30/13) ( in millions) LINN Pro Forma Capital Structure at 9/30/13 (1) (2) Summary Balance Sheet Before Merger Adjustments After Merger Cash and cash equivalents 27 --- 27 (1) Credit facility 1,730 (435) 1,295…
  39. MERGER OVERVIEW – Linn Energy, Llc – slide 39
    Appendix Substantial Institutional Yield Market LinnCo structure allows LINN to access the much larger institutional market MLP sector has grown tremendously but still remains primarily retail MLP Sectors Enterprise Value Growth Top-10…

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