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IPAA OGIS Conference – Linn Energy, Llc

Linn Energy, Llc · Sep 27, 2011 · 36 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. IPAA OGIS Conference – Linn Energy, Llc – slide 1
    IPAA OGIS Conference September September 27, 27, 2011 DISTRIBUTION GROWTH ACQUISITIONS ASSETS PEOPLE
  2. IPAA OGIS Conference – Linn Energy, Llc – slide 2
  3. IPAA OGIS Conference – Linn Energy, Llc – slide 3
    LINN Overview h Top 20 largest domestic independent oil & natural gas company and top 10 public MLP/LLC (1) Williston Basin Bakken Founded in 2003, IPO in 2006 (NASDAQ: LINE) h 16 MMBoe proved reserves Michigan h 3% of total…
  4. IPAA OGIS Conference – Linn Energy, Llc – slide 4
    Growth Through Accretive Acquisitions Over 6 billion in acquisitions completed since the Companys inception Includes 47 separate transactions in millions 6,213 6,300 Value Of Acquisitions Per Year 857 5,600 5,356 4,900 (1)…
  5. IPAA OGIS Conference – Linn Energy, Llc – slide 5
    Acquisition q Activity y h Record amount of negotiations g occurred during g 2010 Screened 189 opportunities Bid 41 for 10.1 billion Closed 13 for 1.4 billion h Deal activity year-to-date 2011 Screened 94 acquisitions Bid…
  6. IPAA OGIS Conference – Linn Energy, Llc – slide 6
    Granite Wash Operated Horizontal Drilling Activity (Greater Stiles Ranch) h Over 200 horizontal locations 7TH STEP MENDOTA TWIN h 19 operated wells drilled to date CHANNELS Roger Mills County Hemphill County h Average IP rates: 19…
  7. IPAA OGIS Conference – Linn Energy, Llc – slide 7
    LINN in the Permian Basin Permian Production Growth 14 h Strategic entry in 2009 12 Thousand Bbls/Day h Long-life, low-risk reserves 10 Unit Grayburg 88 MMB MMBoe proved d reserves 8 6 78% liquids (45% proved developed) 4…
  8. IPAA OGIS Conference – Linn Energy, Llc – slide 8
    Williston Basin Bakken Play h Strategic entry into premier oil basin Non-operated position with high quality operators North Offers high rates of return Dakota Significant growth potential Mountrail Additional consolidation…
  9. IPAA OGIS Conference – Linn Energy, Llc – slide 9
    MVP Drilling Inventory h LINNs drilling inventory includes the Most Valuable Plays (the MVP list) with returns much higher than cost of capital MVPs Provide High Rates Of Return Drilling Inventory 115% Bakken: 800 Wolfberry: 400…
  10. IPAA OGIS Conference – Linn Energy, Llc – slide 10
    Organic Growth is a Game Changer h Significant potential for rapid organic growth Horizontal Granite Wash Permian Basin (Wolfberry) Additional organic growth o 35 wells planned in 2011 o 130 wells planned in 2011 not included o 4 rigs…
  11. IPAA OGIS Conference – Linn Energy, Llc – slide 11
    Financial Overview
  12. IPAA OGIS Conference – Linn Energy, Llc – slide 12
    Stability and Growth High quality asset base Multi-year inventory of liquids rich development opportunities 50% liquids Stable Long-life reserves (20 years) Diversified asset base (5 core areas / 11,000 producing wells)…
  13. IPAA OGIS Conference – Linn Energy, Llc – slide 13
    Capturing Robust Margins h Accelerating production towards crude oil and NGL volumes allows LINN to realize significantly higher margins Growth In Crude Oil and NGL Volumes 35 55% age Daily Production Volumes (MBbl/d) 30 50%…
  14. IPAA OGIS Conference – Linn Energy, Llc – slide 14
    Capturing Margins Is The Name Of The Game h Acquisition margins remain strong 110.00 NYMEX Five Year WAVG Forward Strip For Commodity y Type y Acquired (( per Boe)) ((1)) 100.00 LINN Weighted Average Acquisition Costs ( per Boe)…
  15. IPAA OGIS Conference – Linn Energy, Llc – slide 15
    Significant Hedge Position h LINN is hedged 100% on expected natural gas production through 2015 and 100% on expected oil production through 2013 and 80% in 2014 and 2015 Natural Gas Positions Oil Positions h Puts provide upside on…
  16. IPAA OGIS Conference – Linn Energy, Llc – slide 16
    Significant Hedge Position (Equivalent Basis) h LINNs cash flow is notably more protected from oil and natural gas price uncertainty than its C-Corp peers 120% edged 100% 99% 98% 100% 92% 88% duction He 28% 26% 14% 80%…
  17. IPAA OGIS Conference – Linn Energy, Llc – slide 17
    Distribution Stability and Growth h 73% increase in quarterly distribution since IPO h Distribution stability maintained through difficult market conditions (i.e. 2008) Distribution History Growth (10%) Stability Growth (58%)…
  18. IPAA OGIS Conference – Linn Energy, Llc – slide 18
    Distribution History h Consistently paid the distribution for 22 quarters h Consistent yield generates long-term returns Distribution History 13.01 13.00 12.32 0.69 12.00 11.66 0.66 11.00 0.66 11.00 10.34 0.66 10.00 9 71 0.63 9.71…
  19. IPAA OGIS Conference – Linn Energy, Llc – slide 19
    LINN Historical Return LINN Total Return and Stock Price Appreciation (LINE IPO Present of 197%) 240% 210% 197% 180% 150% 120% 108% 90% 77% 60% 36% 30% 0% 1% -30% -60% 1/12/06 7/19/06 1/23/07 7/30/07 2/3/08 8/9/08 2/13/09…
  20. IPAA OGIS Conference – Linn Energy, Llc – slide 20
    Size Advantage in E&P MLP/LLC Market h LINN has a significant size advantage in the h E&P market presents significantly more E&P MLP/LLC market acquisition opportunities than rest of MLP Greater access to capital markets market…
  21. IPAA OGIS Conference – Linn Energy, Llc – slide 21
    Attractive Valuation h LINN represents an attractive valuation relative to other MLP segments Current Yields By Sector 8.0% 7.8% 7.8% 7.6% 7.4% 7.4% 7.2% 7.2% 7.2% 7.0% 6.9% 6.8% 6.6% 6.5% 6 4% 6.4% 6.2% 6.0% 5…
  22. IPAA OGIS Conference – Linn Energy, Llc – slide 22
    Why Invest in LINN Multi-year inventory of liquids rich development opportunities Significant organic growth rate which is amongst the highest in both E&P C C-Corp Corp and E&P MLP markets Attractive current yield of 7.4% Tax…
  23. IPAA OGIS Conference – Linn Energy, Llc – slide 23
  24. IPAA OGIS Conference – Linn Energy, Llc – slide 24
    Appendix
  25. IPAA OGIS Conference – Linn Energy, Llc – slide 25
    Granite Wash / Atoka Wash Stratigraphy h Horizontal drilling has significantly changed well results and returns in the Granite Wash PRODUCING LATERAL BOREHOLES ZONES 12,000 Carr G UPPER R Britt A N A I B T MIDDLE E C…
  26. IPAA OGIS Conference – Linn Energy, Llc – slide 26
    Texas Granite Wash Horizontal Program Cumulative Production by Well h Graph represents cumulative production performance of LINN-operated Granite Wash wells over time compared to production model h Relatively narrow band of results…
  27. IPAA OGIS Conference – Linn Energy, Llc – slide 27
    Drilling in the Wolfberry h Vertical well development h LINN Activity Current net production 9,000 Boe/d h Multi-stage fracture stimulation EURs of 100 160 MBoe h Emerging g g horizontal well development p 5 rigs running 130 wells…
  28. IPAA OGIS Conference – Linn Energy, Llc – slide 28
    Permian Basin Consolidation h 1.3 1 3 billion billi iin P Permian i assets t acquired i d h A Average price i per Boe B 14 14 h 10 major transactions completed in 20 months h Lifting cost of 3 7 per Boe 4 small transactions…
  29. IPAA OGIS Conference – Linn Energy, Llc – slide 29
    Price Advantages To Long-Term Hedging h Contango oil and natural gas strips provide future hedging opportunity Hedging g g 5-years y ahead allows LINN to lock in higher g commodity ypprices Crude Oil Futures Curve Natural Gas…
  30. IPAA OGIS Conference – Linn Energy, Llc – slide 30
    As used herein, Pro Forma Proved Reserves represents the sum of (i) the Companys estimated proved reserves as of December 31, 2010, (ii) the estimated proved reserves acquired in the acquisitions the Company has completed during 2011,…
  31. IPAA OGIS Conference – Linn Energy, Llc – slide 31
    Coverage Ratio Calculation Three Months Ended June 30, March 31, 2011 2011 (in thousands, except unit and ratio amounts)) (1) Adjusted EBITDA 263,606 209,996 (2) Less: interest expense (57,798) (58,751) Less: maintenance capital…
  32. IPAA OGIS Conference – Linn Energy, Llc – slide 32
    Historical Financial Statements Reconciliation of Non-GAAP Non GAAP Measures h The Company defines adjusted EBITDA as net income (loss) plus the following adjustments: Net operating cash flow from acquisitions and divestitures,…
  33. IPAA OGIS Conference – Linn Energy, Llc – slide 33
    Historical Financial Statements Adjusted EBITDA h The following presents a reconciliation of net income (loss) to adjusted EBITDA: Three Months Ended Six Months Ended June 30,, June 30,, 2011 2010 2011 2010 (in thousands) Net…
  34. IPAA OGIS Conference – Linn Energy, Llc – slide 34
    Historical Financial Statements Adjusted Net Income h The following presents a reconciliation of net income (loss) to adjusted net income: Three Months Ended Six Months Ended June 30, 30 June 30, 30 2011 2010 2011 2010 (in…
  35. IPAA OGIS Conference – Linn Energy, Llc – slide 35
    Reserve Replacement / F&D Calculations Reconciliation of Non-GAAP Non GAAP Measures Year Ended December 31, 2010 2009 Costs incurred (in thousands): Costs incurred in oil and natural gas property acquisition, exploration and…
  36. IPAA OGIS Conference – Linn Energy, Llc – slide 36
    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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