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NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc

Linn Energy, Llc · May 23, 2012 · 41 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. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 1
    NAPTP MLP Investor Conference Greenwich, Connecticut May 2012
  2. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 2
    LINN Overview f 9th largest public MLP/LLC and 11th largest domestic independent oil & natural gas company IPO in 2006 (NASDAQ: LINE) Equity market cap 7.2 billion Total net debt 4.9 billion Enterprise value 12.1 billion Salt Creek…
  3. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 3
    Year-To-Date Highlights f Recently raised Q112 distribution 5% sequentially Marks the 3rd consecutive year with a 5% distribution increase f Successfully drilled three wells in the primarily oil-producing Hogshooter play Avg. 24-hour…
  4. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 4
    Recent Acquisition Activity f Closed 4 acquisitions totaling 2.3 billion since December 2011(1)(2) Acquisitions / Joint-Venture f Acquisitions fully funded through recent capital raises Raised 2.6 billion in equity and debt since…
  5. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 5
    Granite Wash Operated Horizontal Drilling Activity (Greater Stiles Ranch) LINN Acreage 23,000 Gross Drilled Wells 12,000 Net 7TH STEP MENDOTA TWIN Roger Mills f Over 600 horizontal locations Acquisition 2012 Proposed CHANNELS County…
  6. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 6
    Granite Wash Horizontal Production Growth f 600 horizontal locations; or 10+ year inventory at current pace f Increased net production 59% in Q112 compared to Q411 f PXP acquisition significantly increased LINNs Granite Wash position…
  7. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 7
    LINN Provides Both Organic & Acquisition Growth f LINN is unique in that it provides investors with the potential for significant organic and acquisition growth Horizontal Granite Wash Permian Basin (Wolfberry) o 10 year drilling…
  8. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 8
    Financial Overview
  9. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 9
    Financial Highlights f Distribution growth of 15% in the last 20 months f Excellent acquisition track record 1.4 billion(1) in 2010 1.5 billion(1) in 2011 1.8 billion(2) in 2012 f Significant organic growth 40% growth from 2010 vs.…
  10. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 10
    Continued Success in Acquisition Activity f Record amount of f Record amount of f Record amount of negotiations in 2010 transactions closed in 2011 transactional value YTD(3) Screened 189 opportunities Screened 122 opportunities…
  11. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 11
    Significant Hedge Position f LINN is hedged 100% on expected natural gas production through 2017; and 100% on expected oil production through 2015 and 94% in 2016 f Puts provide price upside opportunity Natural Gas Positions Oil…
  12. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 12
    Significant Hedge Position (Equivalent Basis) f LINNs cash flow is notably more protected from oil and natural gas price uncertainty than its C-corp. and Upstream MLP peers f Prolonged periods of weak natural gas prices could put…
  13. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 13
    Distribution Stability and Growth f 81% increase in quarterly distribution since IPO f Distribution stability maintained throughout the Credit Crisis (i.e. 2008 2009) 16 out of 74 MLPs (or 23%) were forced to reduce or suspend…
  14. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 14
    LINN Historical Return LINN Total Return and Stock Price Appreciation (LINE IPO Present of 204%) 204% 132% 71% 16% 11% Note: Market data as of May 17, 2012 (LINE closing price of 35.97). Source: Bloomberg. 15
  15. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 15
    Size Advantage in E&P MLP/LLC Market f LINN has a significant size advantage in the f E&P market presents significantly more E&P MLP/LLC market acquisition opportunities than rest of MLP Greater access to capital markets market…
  16. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 16
    Why Invest in LINN High quality asset base Stable Multi-year inventory of liquids-rich development opportunities 48% liquids Distributions Long-life reserves (19 years) Diversified asset base (6 core areas / 15,000 gross producing…
  17. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 17
    Embrace & Drive Change Pursue Growth Take Action Respect Others Be Passionate Connect
  18. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 18
    LINN Overview ND Salt Creek Field WY MI Hugoton Field CA IL KS TX Panhandle Oklahoma Shallow TX Panhandle OK Granite Wash East Texas NM TX LINN Operations Corporate Headquarters LA Recent Acquisition (Houston) and JV…
  19. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 19
    Strategic Rationale APC Salt Creek JV 100% oil, high margin asset Excellent MLP Low decline rate…
  20. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 20
    Salt Creek Field 1900s Horse-drawn team hauling 60 barrels of oil from Salt Creek to refinery in Casper. Transporting equipment to Salt Creek. 21
  21. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 21
    Overview APC Salt Creek JV Acquisition Overview Sheridan Park f Received 23% of Anadarkos (APC) interest in the Salt Big Horn Campbell Crook Creek field, located in Wyomings Powder River Basin Wyoming Salt Creek Washakie Weston f…
  22. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 22
    Overton Field Acquisition On May 1, 2012, LINN closed a 175 million acquisition in the prolific Overton Field in East Texas from Southwestern Energy. Strategic Rationale Smith County f Strategic entry into East Texas natural gas…
  23. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 23
    Hugoton Acquisition Fits The MLP Model On March 30, 2012, LINN closed a 1.2 billion acquisition in the liquids-rich Kansas Hugoton Field from BP America. 9 Finney Liquids-Rich Hamilton Liquids-rich production of 110 MMcfe/d…
  24. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 24
    Plains Exploration (PXP) Acquisition Acquisition Overview f Closed December 15, 2011 Mendota NW Marvin Lake f 555 million(1) HEMPHILL Twin Channel f Highly accretive 7th Step Buffalo Wallow f Adds more than 200 low-risk Granite…
  25. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 25
    Granite Wash Trend Area OK OCHILTREE TX WOODWARD UPSCOMB MAJOR ELLIS DEWEY HEMPHILL ROBERTS BLAINE Oklahoma Texas CUSTER RODGER MILLS CANADIAN Greater Stiles Ranch GRAY WHEELER WASHITA LINN Acreage BECKHAM…
  26. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 26
    PXP / Cleveland Vs. Cordillera Deal Metrics f The Apache-Cordillera deal value was justified largely by unproven potential in the Tonkawa and Marmaton formations These opportunities may exist in much of the acreage acquired in the…
  27. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 27
    Texas Granite Wash Horizontal Program f Graph represents cumulative production performance of LINN-operated Granite Wash wells over time compared to production model f Relatively narrow band of results indicates repeatability of program…
  28. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 28
    Granite Wash / Atoka Wash Stratigraphy f Horizontal drilling has significantly changed well results and returns in the Granite Wash f LINN has completed wells in 6 separate zones PRODUCING ZONES Tonkawa 9,400 Lansing Kansas City…
  29. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 29
    Encouraging Results From LINNs Initial Hogshooter Wells f During Q112, LINN drilled three Hogshooter IP Oil Natural Gas Rate (Bbls/d) (MMcf/d) operated horizontal Hogshooter wells Well 1 2,454 3.0 f Average 24-hour initial production…
  30. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 30
    Granite Wash Value Comparison f Hogshooter oil-producing wells generate significantly more revenue than other Granite Wash wells, based on initial production Hogshooter revenue is 7x greater than the value of a dry gas well; and…
  31. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 31
    Ensuring Take-Away Capacity In the Granite Wash f LINN gathering system in the Granite Wash Constructed 63 miles in 2011 Multiple interconnects Extending 43 miles in 2012 Exposure to more processing capacity Hemphill County TWO…
  32. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 32
    Permian Basin Permian Production Growth f Strategic entry in 2009 16 14 f Long-life, low-risk reserves 12 10 MBbls/d 88 MMBoe proved reserves 8 6 79% liquids (56% proved developed) 4 Reserve life 18 years 2 f Growth…
  33. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 33
    Drilling in the Wolfberry f Vertical well development f Multi-stage fracture stimulation f Emerging horizontal well development f Targeting deeper zones f Infill potential Eastern A Central Basin Platform WESTERN WELL EASTERN…
  34. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 34
    Williston Basin Bakken Play f Strategic entry into premier oil basin in 2011 Non-operated position with high quality operators North Offers high rates of return Dakota Significant growth potential Mountrail Additional consolidation…
  35. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 35
    Financial Appendix
  36. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 36
    Proved Reserves The following table sets forth certain information with respect to LINNs pro forma proved reserves for the year ended December 31, 2011, calculated on the basis required by SEC rules: Pro Forma Proved % Proved Region…
  37. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 37
    Historical Financial Statements Reconciliation of Non-GAAP Measures f The Company defines adjusted EBITDA as net income (loss) plus the following adjustments: Net operating cash flow from acquisitions and divestitures, effective date…
  38. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 38
    Historical Financial Statements Adjusted EBITDA f The following presents a reconciliation of net loss to adjusted EBITDA: Three Months Ended March 31, 2012 2011 (in thousands) Net loss (6,202) (446,682) Plus: Net operating cash…
  39. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 39
    Historical Financial Statements Adjusted Net Income f The following presents a reconciliation of net loss to adjusted net income: Three Months Ended March 31, 2012 2011 (in thousands, except per unit amounts) Net loss (6,202)…
  40. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 40
    Reserve Replacement / F&D Calculations Reconciliation of Non-GAAP Measures Year Ended December 31, 2011 2010 Costs incurred (in thousands): Costs incurred in oil and natural gas property acquisition, exploration and development…
  41. NAPTP MLP INVESTOR CONFERENCE – Linn Energy, Llc – slide 41
    The U.S. Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only resources that qualify as reserves as defined by SEC rules. We use terms describing hydrocarbon quantities in…

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