Linn Energy, LLC: Nasdaq: Line
Linn Energy, LLC: Nasdaq: Line
Linn Energy, LLC: Nasdaq: Line
NASDAQ: LINE
Forward-Looking Statements
Statements made by representatives of Linn Energy, LLC during the course of this presentation that are not historical facts are forward-looking statements. These statements are based on certain assumptions made by the Company based on managements experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include risks relating to financial performance and results and our indebtedness under our revolving credit facility, availability of sufficient cash flow to pay distributions and execute our business plan, prices and demand for natural gas, oil and natural gas liquids, our ability to replace reserves and efficiently develop our current reserves, our ability to make acquisitions on economically acceptable terms, and other important factors that could cause actual results to differ materially from those projected as described in the Companys reports filed with the Securities and Exchange Commission. Linn Energy undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information or future events.
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Michael C. Linn
Chairman, President & Chief Executive Officer
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(1) Pro forma for pending Texas and Appalachia acquisitions and equity private placement. Reserve data based on Linn Energys December 31, 2005 reserve report and Company estimates of acquired reserves. Equity value as of January 5, 2007 (LINE closing price of $30.26).
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Appalachia 193.2 Bcfe (December 2005) 99% natural gas 2,441 producing wells 1,037+ drilling locations 29+ year reserve life index
NY
PA WV
VA
CA
55.0 MMBoe (2006E) 55% NGL, 35% natural gas 30+ year reserve life index
Premium pricing
Close to major consuming markets Basis differential ($0.20-$0.60) High Btu gas (6%-10% premium)
Favorable pricing
~100% of expected revenues hedged NGLs merged into oil stream to realize $1.75-$2.00 per barrel premium
Operated by Kaiser-Francis
Large private oil and gas company
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153 90 110
161
2004
2005
2006E
2007E
(1) Represents capital expenditures associated with drilling activities in Appalachia and Oklahoma and production optimization and enhancement projects in California. Does not include expected additional capital expenditures associated with pending Texas and Appalachia acquisitions.
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Seller
Emax Oil Company Lenape Resources, Inc. Cabot Oil & Gas Corporation Waco Oil & Gas Company Mountain V Oil & Gas, Inc. Pentex Energy, Inc. Columbia Natural Resources, LLC GasSearch Corporation Exploration Partners, LLC Excel Energy, Inc. T&F Exploration LP Devonian Gas Production, Inc. Blacksand Energy, LLC (1) Kaiser-Francis Oil Company (1) Texas Acquisition (2) Two Appalachian Acquisitions (2)
Location
West Virginia New York Pennsylvania West Virginia, Virginia Pennsylvania Pennsylvania West Virginia, Virginia West Virginia West Virginia, Virginia West Virginia West Virginia West Virginia California Oklahoma Texas West Virginia Total
Wells
34 61 50 353 251 447 38 130 550 106 13 81 388 842 820 55 4,219
17 acquisitions = 796 Bcfe acquired at average cost of $1.39 per Mcfe 2007 YTD: 3 (pending) acquisitions = 355 Bcfe acquired at $1.28 per Mcfe
(1) Purchase prices subject to customary post-closing adjustments. (2) Purchase prices subject to customary pre-closing adjustments.
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800+
400.0 300.0 200.0 100.0 0.0
2003 2004 2005 2006 (1) Q1 2007 (2)
(1) Reflects Linn Energys December 31, 2005 reserve report and Company-estimated reserves acquired in the Excel, T&F, Devonian, Blacksand and Kaiser-Francis transactions. (2) Pro forma for pending Texas and Appalachia acquisitions.
474 193
70
120
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Financial Overview
(1) Represents weighted average strip price as of the closing date of each acquisition. Source: Citigroup. (2) Reflects natural gas forward strip price on the day of announcement of pending Texas and Appalachia acquisitions (December 13, 2006).
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Fully funded concurrent $360 million equity private placement and increased bank capacity Hedge a significant amount of additional production for 5 years Proved reserves increase 70% from 474 Bcfe to 800+ Bcfe
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0.0%
Note: Market data as of January 5, 2007. Source: RBC Capital Markets, Bloomberg. (1) As previously announced, management intends to recommend to the Board of Directors an increase in the annualized distribution to $2.08 per unit for Q4 2006.
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60.3%
8.2%
52.1%
21.3%
6.4% 14.9% 7.9%
(5.4)%
(3.2)% 0.2% (3.5)%
Price Appreciation
Note: Market data as of December 29, 2006 (LINE closing price of $31.95). Source: RBC Capital Markets, Bloomberg. (1) San Juan Basin, Hugoton, Permian Basin, Sabine, Dominion Resources, Cross Timbers, Santa Fe Energy, Williams Coal Seam Gas, Mesa, Torch Energy, LL&E. (2) S&P 400 Oil & Gas Exploration & Production Index.
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40.0%
20.0%
0.0%
(20.0)%
(40.0)%
(60.0)%
11 /8 /0 6
12 /3 /0 6
12 /0 6
28 /0 6
22 /0 6
17 /0 6
11 /0 6
31 /0 6
25 /0 6
19 /0 6
4/ 06
6/ 06
3/ 06
6/ 06
10 /1
LINE +52.1%
Oil (4.5)%
Note: Market data as of December 29, 2006 (LINE closing price of $31.95). Source: RBC Capital Markets, Bloomberg.
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12 /2
2/
3/
1/
3/
4/
5/
6/
7/
7/
8/
9/
8/ 06
Geographic diversification
Active hedging
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