Management Presenters Clay Jeansonne Vice President Investor Relations Kolja Rockov Executive Vice President and Chief Financial Officer Mark Ellis President and Chief Executive Officer 3
2010 Highlights Total unitholder return of 47% Cash paid in 2010 to unitholders totaled 2.55 per unit Increased quarterly distribution by 5% Production estimated to grow 20% (2009 2010)(1) Adjusted EBITDA estimated to grow 27%…
LINN Overview h Top 20 largest domestic independent oil & natural gas company and largest public E&P MLP/LLC (1) Founded in 2003, IPO in 2006 (NASDAQ: LINE) Michigan LEGEND h 296 Bcfe proved reserves Equity k t cap 6.1 E it market 6…
MLP and Independent E&P Rankings h LINN is quickly becoming one of the largest MLP and Independent E&P companies Rank Master Limited Partnership Enterprise Value (MM) Rank Independent E&Ps Enterprise Value (MM) 1 Enterprise Products 49…
LINN Investment Highlights Stable High quality asset base 50% liquids Distributions Long-life reserves (20 years) Diversified asset base (4 core areas) Reduced commodity risk; extensive hedge positions Acquisitions Distribution…
Granite Wash Operated Horizontal Activity (Greater Stiles Ranch) Hemphill Greater Stiles Ranch Status DYCO DYCO County 2010 (11) 2011 Locations P r ear 5-28H Puryear 5 28H 18 5 MMcfe/d I.P. 18.5 IP Mc Mahan 22-2H 19.4 MMcfe/d…
Granite Wash Trend Area h Granite Wash trend also extends into Oklahoma h LINNs potential from its Oklahoma acreage is not included in the estimated 100 locations Buffalo Wallow - 2 Step p GreaterELLIS Stiles Ranch OKLAHOMA 7th Step…
Granite Wash h Typical Granite Wash rig and fracture stimulation 10
Granite Wash / Atoka Wash Stratigraphy h Current inventory of 100 well locations includes only 1 lateral per drill unit h Multiple laterals per location would significantly increase LINNs horizontal inventory PRODUCING VERTICAL LATERAL…
Most Economic Play in the U.S. h Granite Wash horizontal drilling assumptions: Price deck at 80 oil / 4.00 natural gas 100% working interest and 25% royalty burden Total well cost of 9.0 million Rate of Return Sensitivities…
Organic Growth is a Game Changer h Significant potential for rapid organic growth Horizontal Granite Wash Permian Basin (Wolfberry) Successful granite wash program underway Over 130 operated wells planned in 2011 4 rigs active in 2011…
Financial Overview 14
2010 Financial Accomplishments Excellent access to capital Raised 2.3 billion in bonds and 844 million in equity q y throughout g 2010 December 2010 - 413 million of equity September 2010 - 1.0 billion of bonds March / April…
Significant Hedge Position h LINN is hedged 100% on expected oil and natural gas production through 2013(1) and 80% in 2014(1) Natural Gas Positions Oil Positions h Puts provide upside on hedged volumes h Puts and collars provide…
Distribution Growth h 65% increase in quarterly distribution since IPO h Distribution held constant through economic downturn Distribution History Growth Growth (58%) Stability 0.75 0 66 0.66 0.66 0 66 0.63 0.63 0.63 0.63 0.63…
Distribution History h Consistently paid the distribution for 19 quarters h Consistent yield generates long-term returns Distribution History 12.00 11.66 11.00 0.66 11.00 10.34 0.66 10.00 9.71 0.63 9 08 0.63 9.08 0 63 9.00 8.45 0.63…
LINN Historical Return LINN Total Return and Stock Price Appreciation (LINE IPO Present of 193%) 210% 193.04% 180% 150% 120% 90% 83.86% 60% 51.10% 30% 10.36% 0% -30% -60% 1/12/06 6/29/06 12/14/06 5/31/07 11/15/07 5/1/08…
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…
Attractive Valuation h LINN represents an attractive valuation relative to other MLP segments Current MLP Yields By Sector 6.8% 7.0% 6.4% 6.1% 6.1% 5.8% 6.0% 5.0% 4.5% 4.0% 3.0% 2.0% 1.0% 0.0% Coal United States…
Attractive Value & Liquidity in MLP Sector LINN Energy offers: h Significant trading liquidity compared to MLP/LLC sector (60+ total) h No IDRs (no general partner burden on cash flow) h E&P sector provides more acquisition…
Why Invest in LINN Significant organic growth rate which is amongst the highest in both E&P C-Corp and E&P MLP markets Current yield of 6.8% vs. average midstream yield of 6.1% Tax-deferred income Strong balance sheet with 1 5…
LINN Energys Energ s mission is to acquire, acq ire de develop elop and maximize cash flow from a growing portfolio off long- long l -life lif oil il and d natural t l gas assets. t
Appendix
Commodity Hedge Positions Full-Year Positions as of October 25, 2010 Natural Gas Positions 2010 2011 2012 2013 2014 2015 Fixed Price Swaps: Hedged Volume (MMMBtu) 39,566 31,901 49,410 50,278 54,202 53,837 Average Price (/MMBtu) 8.90…
The following table sets forth certain information with respect to our estimated Pro Forma Proved Reserves and average daily production. Average Daily Production for Pro Forma the Nine Months Proved Reserves % Natural % Proved Ended…
Historical Financial Statements Reconciliation of Non- Non-GAAP Measures h The Company defines adjusted EBITDA as income (loss) from continuing operations plus the following adjustments: Net operating cash flow from acquisitions and…
Historical Financial Statements Adjusted EBITDA h The following presents a reconciliation of income (loss) from continuing operations to adjusted EBITDA: Three Months Ended Nine Months Ended September 30, September 30, 2010 2009 2010…
Historical Financial Statements Adjusted Net Income h The following presents a reconciliation of income (loss) from continuing operations to adjusted net income: Three Months Ended Nine Months Ended p September 30,, p September 30,,…
Reserve Replacement / F&D Calculations Reconciliation of Non- Non-GAAP Measures Year Ended December 31, 2009 2008 Costs incurred continuing operations (in thousands): Costs incurred in oil and natural gas property acquisition,…
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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