Skip to main content LINNCO OVERVIEW – Linn Energy, Llc Investor Presentation | Shale Experts
Loading...
Pm

LINNCO OVERVIEW – Linn Energy, Llc

Linn Energy, Llc · Apr 21, 2014 · 47 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. LINNCO OVERVIEW – Linn Energy, Llc – slide 1
    LinnCo Overview
  2. LINNCO OVERVIEW – Linn Energy, Llc – slide 2
    LINN Energys mission is to acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets.
  3. LINNCO OVERVIEW – Linn Energy, Llc – slide 3
    LinnCo Strategic Rationale Issues Form 1099-DIV rather than a Schedule K-1 Should appeal greatly to investors who do not want the tax reporting burdens associated with owning a partnership security Significantly expands LINNs…
  4. LINNCO OVERVIEW – Linn Energy, Llc – slide 4
    LINN Overview 8th largest public MLP/LLC and 12th largest domestic independent oil & natural gas company IPO in 2006 with enterprise value of 713 million Equity market cap 9.5 billion Total net debt 5.5 billion Salt Creek Field…
  5. LINNCO OVERVIEW – Linn Energy, Llc – slide 5
    LINNs Unique Business Strategy Consolidate LINNs goal is to consolidate mature oil and natural gas assets across the U.S. Mature Assets Since 2003, we have made 54 acquisitions for 10 billion(1) Mitigate Typically look to hedge…
  6. LINNCO OVERVIEW – Linn Energy, Llc – slide 6
    MLP and Independent E&P Rankings LINN is one of the largest MLP and independent E&P companies 8th largest public MLP/LLC 12th largest domestic independent oil & natural gas company Rank Master Limited Partnership Enterprise Value (MM)…
  7. LINNCO OVERVIEW – Linn Energy, Llc – slide 7
    Growth Through Accretive Acquisitions 10 billion in acquisitions completed since the Companys inception Includes 54 separate transactions(1) Value of Acquisitions Per Year (1) 9,680 10,000 9,000 2,800 8,000 6,880 7,000 ('s in…
  8. LINNCO OVERVIEW – Linn Energy, Llc – slide 8
    Jonah Field Acquisition From BP On July 31, 2012, LINN closed a 1.025 billion Sheridan Park acquisition in Wyomings Jonah Field from BP. Big Horn Campbell Crook Strategic Rationale Wyoming Washakie Weston Teton Significant…
  9. LINNCO OVERVIEW – Linn Energy, Llc – slide 9
    Anadarko Salt Creek Joint-Venture On April 3, 2012, LINN acquired 23% of Anadarkos (APC) interest in the Salt Creek Field, one of the Sheridan largest CO2 EOR projects in North America. Park Campbell Big Horn Crook Strategic…
  10. LINNCO OVERVIEW – Linn Energy, Llc – slide 10
    Hugoton Field Acquisition From BP On March 30, 2012, LINN closed a 1.2 billion acquisition in the liquids-rich Kansas Hugoton Field from BP. Liquids-Rich Finney Hamilton Liquids-rich production of 110 MMcfe/d 37% NGLs / 63%…
  11. LINNCO OVERVIEW – Linn Energy, Llc – slide 11
    Granite Wash Operated Horizontal Drilling Activity (Greater Stiles Ranch) Over 600 horizontal locations 7TH STEP MENDOTA TWIN CHANNELS Roger Mills Expect to drill or participate in 81 County Hemphill County horizontal wells in 2012…
  12. LINNCO OVERVIEW – Linn Energy, Llc – slide 12
    LINNs Unique Position In The Granite Wash Produce from 8 Granite Wash / Atoka Wash Stratigraphy separate zones Each zone bears a LATERAL BOREHOLES VIR- 9,400 Tonkawa GILIAN unique production Lansing profile Kansas City…
  13. LINNCO OVERVIEW – Linn Energy, Llc – slide 13
    LINN Provides Both Organic & Acquisition Growth LINN is unique in that it provides investors with the potential for significant organic and acquisition growth 1,000 2012E Exit Rate of 900 800 MMcfe/d(1) Potential 800 Organic…
  14. LINNCO OVERVIEW – Linn Energy, Llc – slide 14
    LinnCo Structure and Financial Highlights
  15. LINNCO OVERVIEW – Linn Energy, Llc – slide 15
    LinnCo Structure LINE LNCO Current distribution of 2.90 / unit(1) Estimated dividend of 2.84 / share(2) Schedule K-1 (partnership) Form 1099 (C-Corp.) Existing LINE LinnCo Unitholders Shareholders 2.84 Common Dividend Shares…
  16. LINNCO OVERVIEW – Linn Energy, Llc – slide 16
    LinnCo Structure Advantages Shareholders receive Form 1099 rather than Reduces Tax a Schedule K-1 Reporting No state income tax filing requirements Burdens Generally, no UBTI(1) implications Tax-shield at LINN Energy, LLC o…
  17. LINNCO OVERVIEW – Linn Energy, Llc – slide 17
    LinnCo Structure Overview LinnCo Overview Provides a simple and fair structure o 1 LinnCo share = 1 vote of LINN unit o Similar economic interest o LinnCo Board and officers mirror LINN Sole purpose of LinnCo is to own LINN units o…
  18. LINNCO OVERVIEW – Linn Energy, Llc – slide 18
    Attractive Valuation LINN represents an attractive value relative to other yield segments Current Yields 8.0% 7.0% 7.0% 5.8% 6.0% 5.0% Current Yield 3.9% 4.0% 4.0% 3.1% 3.3% 3.0% 2.1% 2.0% 1.6% 1.0% 0.4% 0.0%…
  19. LINNCO OVERVIEW – Linn Energy, Llc – slide 19
    Financial Highlights Recently increased 2012 guidance(1) Increased Q3 guidance: o Production +2% o EBITDA +4% o Distribution coverage ratio +12% to 1.25x Estimates positively impacted by NGL prices and recent organic drilling…
  20. LINNCO OVERVIEW – Linn Energy, Llc – slide 20
    LINN Has Created an Acquisition Machine 2010 2011 2012 YTD(3) Screened 189 opportunities Screened 122 opportunities Screened 186 opportunities Bid 41 for 10.1 billion Bid 31 for 7.5 billion Bid 12 for 6.2 billion Closed 13 for 1.4…
  21. LINNCO OVERVIEW – Linn Energy, Llc – slide 21
    Strong Performance and Growth Reserves (Bcfe) Production (MMcfe/d) 6,000 800 (1) (2) 5,067 700 673 5,000 600 4,000 3,370 500 400 369 3,000 2,597 300 265 2,000 1,660 1,712 212 218 1,419 200 1,000 87 255 100 8 0 0 2006…
  22. LINNCO OVERVIEW – Linn Energy, Llc – slide 22
    Significant Hedge Position LINN is hedged 100% on expected natural gas production through 2017; and 100% on expected oil production through 2016 Puts provide price upside opportunity Natural Gas Positions Oil Positions 550…
  23. LINNCO OVERVIEW – Linn Energy, Llc – slide 23
    Significant Hedge Position (Equivalent Basis) LINNs cash flow is notably more protected from oil and natural gas price uncertainty than its C-Corp. and Upstream MLP peers Prolonged periods of weak commodity prices could put further…
  24. LINNCO OVERVIEW – Linn Energy, Llc – slide 24
    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 (or 23%) were forced to reduce or…
  25. LINNCO OVERVIEW – Linn Energy, Llc – slide 25
    Distribution History Consistently paid the distribution for 26 quarters 81% increase in quarterly distribution since IPO Distribution History 15.84 16.00 15.12 0.73 14.39 0.73 13.70 0.69 14.00 13.01 0.69 12.32 0.69 12.00…
  26. LINNCO OVERVIEW – Linn Energy, Llc – slide 26
    LINN Historical Return LINN Total Return and Stock Price Appreciation (LINE IPO Present of 255%) 255% 250% 200% 156% 150% 100% 96% 50% 29% 18% 0% (50%) 2006 2007 2008 2009 2010 2011 2012 Line Total Return (TR)…
  27. LINNCO OVERVIEW – Linn Energy, Llc – slide 27
    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…
  28. LINNCO OVERVIEW – Linn Energy, Llc – slide 28
    Why Invest in LINN High quality asset base Stable o Multi-year inventory of high-return development opportunities Distributions o Long-life reserves (21 years) o Diversified asset base (6 core areas / 15,000 gross producing wells)…
  29. LINNCO OVERVIEW – Linn Energy, Llc – slide 29
    LINN Energys mission is to acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets.
  30. LINNCO OVERVIEW – Linn Energy, Llc – slide 30
    LINN Overview Salt Creek Field ND Jonah 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 2012 Acquisitions /…
  31. LINNCO OVERVIEW – Linn Energy, Llc – slide 31
    LinnCo Overview of Tax Considerations LinnCo subject to corporate-level taxation on income allocation from LINN (35%) Taxation at LinnCo expected to receive tax shield in excess of 100% LinnCo Level However, LinnCo expected to pay…
  32. LINNCO OVERVIEW – Linn Energy, Llc – slide 32
    LINN Units vs. LinnCo Shares LINN LinnCo LinnCos sole purpose is to own LINN units Will not own any other assets besides LINN Business & LINN is in the business of acquiring and units and reserves for income taxes payable Assets…
  33. LINNCO OVERVIEW – Linn Energy, Llc – slide 33
    LINN Structure & Benefits LINN Energy Typical LinnCo, LLC Typical Characteristic (LINE) MLP (LNCO) C-Corp. Non-Taxable Entity Payout Distribution Distribution Dividend Dividend Tax Reporting Schedule K-1 Schedule K-1 Form 1099…
  34. LINNCO OVERVIEW – Linn Energy, Llc – slide 34
    Ensuring Liquids Delivery In The Granite Wash Gathering system provides accessibility to numerous processing facilities Multiple interconnects ensures take-away capacity Exposure to multiple processing plants leads to superior pricing…
  35. LINNCO OVERVIEW – Linn Energy, Llc – slide 35
    Permian Basin Permian Production Growth Strategic entry in 2009 16 14 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 Growth…
  36. LINNCO OVERVIEW – Linn Energy, Llc – slide 36
    Drilling in the Wolfberry Vertical well development Multi-stage fracture stimulation Emerging horizontal well development Targeting deeper zones Infill potential A Central Basin Platform WESTERN WELL EASTERN WELL Eastern Shelf B…
  37. LINNCO OVERVIEW – Linn Energy, Llc – slide 37
    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 Mountrail Additional consolidation…
  38. LINNCO OVERVIEW – Linn Energy, Llc – slide 38
    California Overview 10 Brea-Olinda field of the Los Angeles Basin Los Angeles Brea-Olinda Field Discovered in 1880 Cumulative production of over 400 MMBoe Long-life, low-risk reserves 4% of total proved reserves 93% oil (93%…
  39. LINNCO OVERVIEW – Linn Energy, Llc – slide 39
    Michigan Overview Long-life, low-decline natural gas asset Lewiston 317 Bcfe of proved reserves Traverse City Mont- morency Alpena Antrim Otsego 91% proved developed Grand Crawford Oscoda Alcona Traverse 6% decline rate…
  40. LINNCO OVERVIEW – Linn Energy, Llc – slide 40
    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 Strategic entry into East Texas natural gas…
  41. LINNCO OVERVIEW – Linn Energy, Llc – slide 41
    Financial Appendix
  42. LINNCO OVERVIEW – Linn Energy, Llc – slide 42
    Proved Reserves The following table sets forth certain information with respect to LINNs proved reserves at December 31, 2011 and pro forma proved reserves calculated on the basis required by SEC rules: Proved Proved Reserves At…
  43. LINNCO OVERVIEW – Linn Energy, Llc – slide 43
    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…
  44. LINNCO OVERVIEW – Linn Energy, Llc – slide 44
    Historical Financial Statements Adjusted EBITDA The following presents a reconciliation of net loss to adjusted EBITDA: The following presents a reconciliation of net income (loss) to adjusted EBITDA: Three Months Ended Six Months…
  45. LINNCO OVERVIEW – Linn Energy, Llc – slide 45
    Historical Financial Statements Adjusted Net Income The following presents a reconciliation of net loss to adjusted net income: Three Months Ended Six Months Ended June 30, June 30, 2012 2011 2012 2011 (in thousands, except per…
  46. LINNCO OVERVIEW – Linn Energy, Llc – slide 46
    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…
  47. LINNCO OVERVIEW – Linn Energy, Llc – slide 47
    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…

From the store

Browse maps, data & reports in the Shale Experts store