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LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company

Berry Petroleum Company · Nov 25, 2013 · 50 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. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 1
    BERRY PETROLEUM COMPANY LINN Energy and LinnCo offer to acquire Berry Title SubTitle November 2013
  2. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 2
    Table of contents 1. Overview of LINN Energy / LinnCo and Berry Petroleum transaction 2. Berry Petroleum company profile 3. Attractiveness of the merger for Berry shareholders Appendix 2
  3. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 3
    1. Overview of LINN Energy / LinnCo and Berry Petroleum transaction 3
  4. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 4
    LINN Energy / LinnCo and Berry Petroleum transaction overview On November 4th, 2013, the boards of directors of LINN Energy (LINN) , LinnCo and Berry Petroleum (Berry) Company announced the unanimous approval of an amendment to the…
  5. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 5
    Wall Street commentary on LINN / LinnCo / Berry transaction The price represents around 18.00 per Boe proved (versus 15.50 per Boe in the original deal), and 118,000 per flowing Boe (versus 107,500 per flowing Boe originally).…
  6. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 6
    Chronology: LINN / LinnCo and Berry merger Summer, 2011: Berry engaged in discussions with an independent publicly traded oil and natural gas exploration and production company regarding the possibility of an acquisition of Berry.…
  7. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 7
    Chronology: LINN / LinnCo and Berry merger (contd) March 22, 2013: LINN and LinnCo filed with the SEC a registration statement on Form S4. Spring Fall, 2013: Berry, LINN and LinnCo worked to address comments from the staff of the…
  8. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 8
    Summary of LinnCo proposal / agreements Initial Initial Revised Proposal Agreement Agreement 1/29/2013 2/20/2013 11/1/2013 Berry closing share price at time of proposal / agreement 35.53 38.59 48.75 (1) Berry 2013E EBITDA…
  9. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 9
    The implied transaction price is at a premium to Berrys 52week high 100% Implied Berry transaction price at announcement(1): 55.79 90% Implied Berry transaction price as of 11/22/13(2): 52.85 80% 70% Berry average / closing…
  10. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 10
    LINN is offering compelling value for Berry shareholders The implied transaction price is at a premium to Berrys 52week high Premium to 52week high closing share price prior to announcement Acquiror / target Apache / Mariner…
  11. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 11
    2. Berry Petroleum company profile 11
  12. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 12
    Berry Petroleum Company Profile Developing Oil Assets in 3 Major Basins Overview Key Statistics Berry Petroleum is a Denverbased independent E&P company focused on developing its oil assets in the 2011 2012 2013E San Joaquin Basin…
  13. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 13
    Production Summary Strong Growth Execution in 3 Oil Basins Highlights from Last 12 Months Production of 5 Oily Asset Teams, Q3 12 to Q3 13 Oil production has grown 20% since Q3 2012 with total 40,000 corporate production growing…
  14. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 14
    Berrys TopTier Margins Berry has increased its operating margin since 2009 as oil TopTier Operating Margins prices have risen and the Company has concentrated its capital 49 49 50 investment into oil assets, while remaining…
  15. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 15
    2013 Update Focus on Oil Growth Driving Company Performance 2013 Accomplishments Invest in Consistent Oil Growth 40,000 1. Continuously developed the Diatomite and delivered Oil consecutive quarterly growth 80% Gas 75% 30,000 2.…
  16. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 16
    3. A LINN / Berry combination provides compelling value for Berry shareholders 16
  17. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 17
    A LINN / Berry combination provides compelling value for Berry shareholders 1 Berrys assets fit well in a MLP / yield structure 2 Significantly increases Berrys per share dividend 3 All-stock transaction provides Berry…
  18. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 18
    1 Berry assets fit well in a MLP / yield structure Berry Longlived reserves with shallow decline profile Heavy oil assets Expected to generate significant free cash flow High margin / high return assets Multiyear drilling…
  19. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 19
    2 Significantly increases Berrys per share dividend Berry vs. LINN Berry dividends LINN distributions ( per share) ( per unit) 4.87 20.11 17.21 2.90 2.90 14.31 2.52 2.52 2.58 2.29 11.58 2.73 1.67 9.00 6.48…
  20. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 20
    3 Allstock transaction provides Berry shareholders with upside in a strong pro forma combined company Combined company will be one of the largest independent oil and natural gas companies in North America Pro forma production of more…
  21. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 21
    3 Allstock transaction provides Berry shareholders with upside in a strong pro forma combined company ( in millions) Enterprise value Enterprise value Rank Selected independent E&Ps (11/22/13) Rank Selected MLPs (11/22/13) 1…
  22. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 22
    4 Greater asset and commodity diversification ND Uinta Basin MI WY Piceance Basin IL CA UT KS CO OK East Texas NM San Joaquin TX Corporate Berry assets Permian Basin LINN assets LINNs size and diversity…
  23. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 23
    4 Greater asset and commodity diversification Provides diversification away from Berrys concentrated position in California Q3 2013 daily production Berry Pro forma LINN Piceance Piceance E. Texas 6% Uinta Uinta 1% Mid 4% 20%…
  24. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 24
    5 LINN is the most logical buyer Berry's assets are an excellent fit for LINN LINN looks for predictable and stable production and cash flow to support the distribution with low geological risk Growth to LINN's portfolio with…
  25. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 25
    6 LINN is offering compelling value for Berry shareholders The implied transaction price of 55.79 at announcement is a premium to Berrys historical share price Berrys share price significantly increased YTD 2013 and closed at its…
  26. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 26
    6 LINN is offering compelling value for Berry shareholders The implied transaction price is at a premium to Berrys 52week high Premium to 52week high closing share price prior to announcement Acquiror / target Apache / Mariner…
  27. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 27
    6 LINN is offering compelling value for Berry shareholders The offer price is at a premium to Berrys historical share price performance The implied transaction price at announcement of 55.79(1) is higher than any closing price that has…
  28. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 28
    6 LINN is offering compelling value for Berry shareholders Implied daily production multiples for selected E&P transactions Implied current daily production multiple at announcement ( per Boe/d) 323,648 173,597 138,095 Implied…
  29. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 29
    6 LINN is offering compelling value for Berry shareholders Implied LTM EBITDA multiples for selected E&P transactions Implied LTM EBITDA multiple at announcement 19.2x 11.8x 11.0x 9.9x Implied transaction value(1): 7.4x 7.4x…
  30. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 30
    6 LINN is offering compelling value for Berry shareholders Implied 2013E / 2014E EBITDA multiples vs. selected E&P companies EV / 2013E EBITDA EV / 2014E EBITDA 10.1x 9.0x 8.3x 6.8x Berry at transaction 6.8x 6.4x 6.4x 6.3x…
  31. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 31
    6 LINN is offering compelling value for Berry shareholders Comparison of selected E&P companies operating data Berry Bill Barrett Cimarex Comstock Denbury Laredo Operating Gulf Coast / Gulf Coast Non areas Piceance Other Other…
  32. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 32
    6 LINN is offering compelling value for Berry shareholders LINN is acquiring Berry at high oil prices and Brent / WTI spread Approximately half of Berrys production is priced off of Brent Brent is currently trading at a significant…
  33. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 33
    6 LINN is offering compelling value for Berry shareholders Selected E&P companies share prices have decreased since November 1, 2013 R2 with (2) Commodities / Indices / companies Berry(1) % change since 11/1/13 WTI Crude Oil…
  34. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 34
    6 LINN is offering compelling value for Berry shareholders The transaction price is within the range of fairness per financial advisors Current implied Net Asset Value Analysis(2) transaction price of 52.85(1) Credit Suisse…
  35. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 35
    6 LINN is offering compelling value for Berry shareholders Berry shareholders are receiving full value for Permian Permian Asset Highlights Permian Basin Stratigraphic Column Berrys Permian assets have performed well Production of…
  36. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 36
    7 LINNs tax attributes and unique structure benefit Berry shareholders in pro forma company The transaction is expected to be taxfree to Berry shareholders Structured as a stockforstock merger of Berry with LinnCo followed by a…
  37. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 37
    Why Does Berry Like the LINN Merger Observations Berry Heavy Oil Assets Fit MLP Profile Combined size and scale can fully maximize the value of Berrys 15,000 assets and lower capital intensity 12,000 Berrys longlived reserves…
  38. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 38
    Why Invest in the Merger of LINN and Berry Strong Business Fundamentals Focus on Delivering Value Longlived reserves with shallow decline profile Merger is accretive to LINNs cash available for Diverse development opportunities…
  39. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 39
    Appendix 39
  40. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 40
    California Crude Oil Fundamentals Strong Margins at Current Prices Brent / MidwaySunset / WTI Crude Pricing CA Gross Operated Oil Production (MBbl/D) 130 2011 2012 2013 BRENT 120 Chevron 160 156 156 B/Barrel 110 Aera…
  41. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 41
    Berrys California Assets Significant Oil Resource Under Development Poso Creek McKittrick 21Z One of 5 early stage Steam Floods N. Midway Diatomite Berrys largest development project S. Midway Sunset Berrys…
  42. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 42
    S. MidwaySunset Free Cash Flow Funds Berrys Development Asset Highlights S. MidwaySunset Field Map Stable production from legacy assets in the 9th largest field in the U.S. Produced 12,275 BOPD in Q3, 92% NRI S. Midway Produce…
  43. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 43
    Poso Creek Successful Conversion from Cyclic Steam to Steam Flood Asset Highlights Poso Creek Field Map 800 acres, 100% working interest, 86% NRI Approximately 200 producing wells with an average depth of 1,300 feet…
  44. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 44
    New Steam Floods Accelerating 21z Conversion from Cyclic to Steam Flood Asset Highlights Project Locator Map Accelerating conversion to steam flooding from cyclic steaming at McKittrick 21Z should enhance performance, drive…
  45. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 45
    Diatomite Consistently Growing a HighMargin Asset Asset Highlights Diatomite Field Map 360 million barrels of oil in place on 540 acres, targeting 23% 40% recovery or 83 144 MMBOE 100% working interest, 90% NRI Average drilling…
  46. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 46
    Berrys Uinta Assets Adding Value From Higher Production, Lower Costs, Improved Margins Asset Highlights Uinta Resource Development Compiled 122,000 net acres with 75 MMBOE of risked resource since entering basin in 2003 Current…
  47. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 47
    Berry analyst views PreFebruary announcement 2/21/13 11/1/13 November announcement current Broker Date Rating Target Date Rating Target Date Rating Target Wunderlich Securities 11/02/12 Hold 40.00 10/24/13 Buy 55.00 11/06/13 Hold…
  48. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 48
    Selected E&P CCorps 1day share price performance Before market open on November 1, 2013 LINN issued a press release stating the SEC had no further comments to the S-4 Share price as of 10/31/13 11/1/13 % change Denbury Resources…
  49. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 49
    LinnCo share price performance since IPO 2/20/13: Initial 5/6/13: S4 6/4/13: S4 11/14/13: Revised Agreement went Agreement announced amendment 1 filed amendment 2 filed effective 11/4/13: Revised Agreement 44 announced 20,000…
  50. LINN Energy and Linn Co offer to acquire Berry – Berry Petroleum Company – slide 50
    S&P Commodity Producers Oil & Gas Exploration & Production Index constituents Afren Plc Cobalt International Energy Inc Gulfport Energy Corp Pioneer Natural Anadarko Petroleum Corp Comstock Res Inc INPEX Corp Resources Apache Corp…

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