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10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc

Linn Energy, Llc · Dec 6, 2011 · 33 slides

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Slides

  1. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 1
    10th Annual Pipeline, MLP, and E&P, Services and Utility Symposium December 6, 2011 DISTRIBUTION GROWTH ACQUISITIONS ASSETS PEOPLE
  2. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 2
  3. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 3
    LINN Overview Top 10 largest public MLP/LLC and top 20 largest domestic independent oil & natural gas company(1) Williston Basin Bakken Founded in 2003, IPO in 2006 (NASDAQ: LINE) 16 MMBoe proved reserves Michigan 3% of total…
  4. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 4
    MLP and Independent E&P Rankings 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…
  5. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 5
    Continued Success in Acquisition Activity Record amount of 2011 year-to-date activity on- negotiations during 2010 pace for strong results (1) Screened 189 opportunities Screened 122 opportunities Bid 41 for 10.1 billion Bid 31 for…
  6. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 6
    Growth Through Accretive Acquisitions 7 billion in acquisitions completed since the Companys inception Includes 50 separate transactions (1) in millions 6,919 7,000 Value Of Acquisitions Per Year (3) 1,563 6,000 5,356 5,000…
  7. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 7
    Texas Panhandle Pending Acquisition Acquisition Summary 600 million contract price Mendota NW Marvin Lake Highly accretive HEMPHILL Twin Channel Doubles LINNs Granite Wash inventory 7th Step Buffalo Wallow More than 200 low-risk…
  8. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 8
    Granite Wash Operated Horizontal Drilling Activity (Greater Stiles Ranch) 7TH STEP MENDOTA TWIN Over 400 horizontal locations, CHANNELS Roger Mills County Hemphill County including 200 from recently Hemphill BUFFALO OKLAHOMA…
  9. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 9
    Organic Growth is a Game Changer 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 5 rigs…
  10. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 10
    Significant Hedge Position 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 In September, unwound 2016 positions, increased swap prices for…
  11. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 11
    Significant Hedge Position (Equivalent Basis) LINNs cash flow is notably more protected from oil and natural gas price uncertainty than its C-Corp peers 120% % Production Hedged 100% 99% 98% 100% 92% 88% 28% 26% 14% 80%…
  12. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 12
    Size Advantage in E&P MLP/LLC Market LINN has a significant size advantage in the E&P market presents significantly more E&P MLP/LLC market acquisition opportunities than rest of MLP Greater access to capital markets market Ability…
  13. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 13
    LINN Historical Return LINN Total Return and Stock Price Appreciation (LINE IPO Present of 202%) 240% 210% 202% 180% 150% 120% 124% 90% 60% 50% 30% 10% 0% -30% -60% 1/12/06 7/24/06 2/2/07 8/14/07 2/23/08 9/3/08 3/15/09…
  14. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 14
    Distribution Stability and Growth 73% increase in quarterly distribution since IPO Distribution stability maintained through difficult market conditions (i.e. 2008) Distribution History Growth (10%) Stability 0.75 Growth (58%)…
  15. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 15
    Attractive Valuation LINN represents an attractive value relative to other yield segments Current Yields By Sector 9.0% 8.0% 7.4% 7.5% 7.1% 7.1% 7.0% 6.1% 6.1% 6.0% 5.0% 4.0% 3.0% 2.0% 2.0% 1.0% 0.0% 10-Year…
  16. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 16
    Stability and Growth High quality asset base Multi-year inventory of liquids rich development opportunities 50% liquids Stable Long-life reserves (19 years) Diversified asset base (5 core areas / 12,000 producing wells)…
  17. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 17
  18. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 18
    Appendix
  19. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 19
    Recent Highlights 3rd Quarter Highlights Average daily production of 379 MMcfe/d, an increase of more than 30 percent over third quarter 2010 Adjusted EBITDA of 243 million; an increase of more than 30 percent over third quarter…
  20. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 20
    Hedging Counterparty Diversification 20+ counterparties No significant concentration Percent of Outstanding Counterparty Value Held RBC Capital Markets 12% Scotia Bank Barclays 11% Societe Wells Credit Agricole Citigroup 11%…
  21. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 21
    Capturing Robust Margins Accelerating production towards crude oil and NGL volumes allows LINN to realize significantly higher margins Growth In Crude Oil and NGL Volumes 35 58% Average Daily Production Volumes (MBbl/d) 30…
  22. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 22
    Capturing Margins Is The Name Of The Game Acquisition margins remain strong 110.00 NYMEX Five Year WAVG Forward Strip For Commodity Type Acquired ( per Boe) (1) 100.00 LINN Weighted Average Acquisition Costs ( per Boe) 90.00 86.05…
  23. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 23
    Granite Wash / Atoka Wash Stratigraphy 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 3,000…
  24. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 24
    LINN in the Permian Basin Permian Production Growth 14 Strategic entry in 2009 12 Thousand Bbls/Day Long-life, low-risk reserves 10 Grayburg Unit 8 97 MMBoe proved reserves 6 78% liquids (43% proved developed) 4 Production…
  25. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 25
    Williston Basin Bakken Play 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 Additional consolidation…
  26. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 26
    Drilling in the Wolfberry Vertical well development LINN Activity Current net production 9,000 Boe/d Multi-stage fracture stimulation EURs of 100 160 MBoe Emerging horizontal well development 5+ rigs running 130 wells in 2011…
  27. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 27
    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,…
  28. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 28
    Coverage Ratio Calculation Three Months Ended September 30, June 30, 2011 2011 (in thousands, except unit and ratio amounts) (1) Adjusted EBITDA 243,266 263,606 (2) Less: interest expense (61,266) (57,798) Less: maintenance…
  29. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 29
    Historical Financial Statements Reconciliation of Non-GAAP Measures The Company defines adjusted EBITDA as net income (loss) plus the following adjustments: Net operating cash flow from acquisitions and divestitures, effective date…
  30. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 30
    Historical Financial Statements Adjusted EBITDA The following presents a reconciliation of net income to adjusted EBITDA: Three Months Ended Nine Months Ended September 30, September 30, 2011 2010 2011 2010 (in thousands) Net…
  31. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 31
    Historical Financial Statements Adjusted Net Income The following presents a reconciliation of net income to adjusted net income: Three Months Ended Nine Months Ended September 30, September 30, 2011 2010 2011 2010 (in thousands,…
  32. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 32
    Reserve Replacement / F&D Calculations Reconciliation of Non-GAAP Measures Year Ended December 31, 2010 2009 Costs incurred (in thousands): Costs incurred in oil and natural gas property acquisition, exploration and development…
  33. 10TH ANNUAL PIPELINE MLP E&P SERVICES AND UTILITY SYMPOSIUM – Linn Energy, Llc – slide 33
    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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