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LinnCo Overview
Forward-Looking Statementsand Risk FactorsStatements made in these presentation slides and by representatives of LINNEnerg...
LINN Energy’s mission is to acquire,develop and maximize cash flowfrom a growing portfolio of long-lifeoil and natural gas...
LinnCo – Strategic Rationale Issues Form 1099-DIV rather than a Schedule K-1    Should appeal greatly to investors who d...
LINN Overview 8th largest public MLP/LLC and 12th largest  domestic independent oil & natural gas company     IPO in 200...
LINN’s Unique Business Strategy    Consolidate                                   LINN’s goal is to consolidate mature oil...
MLP and Independent E&P Rankings LINN is one of the largest MLP and independent E&P companies                  8th large...
Growth Through Accretive Acquisitions  ~$10 billion in acquisitions completed since the Company’s inception            I...
Jonah Field Acquisition From BP       On July 31, 2012, LINN closed a $1.025 billion                                      ...
Anadarko Salt Creek Joint-VentureOn April 3, 2012, LINN acquired 23% of Anadarko’s(“APC”) interest in the Salt Creek Field...
Hugoton Field Acquisition From BPOn March 30, 2012, LINN closed a $1.2 billion acquisition in     the liquids-rich Kansas ...
Granite Wash – Operated HorizontalDrilling Activity (Greater Stiles Ranch)                                                ...
LINN’s Unique Position In TheGranite Wash Produce from 8                    Granite Wash / Atoka Wash Stratigraphy  separ...
LINN Provides Both Organic& Acquisition Growth LINN is unique in that it provides investors with the potential for  signi...
LinnCo Structure andFinancial Highlights
LinnCo Structure                                             LINE                                                         ...
LinnCo Structure – Advantages                                            Shareholders receive Form 1099 rather than      ...
LinnCo Structure – OverviewLinnCo Overview          Provides a simple and fair structure                    o 1 LinnCo s...
Attractive Valuation LINN represents an attractive value relative to other yield segments                                ...
Financial Highlights Recently increased 2012 guidance(1)                    Increased Q3 guidance:                      ...
LINN Has Created an Acquisition Machine                                            2010                                   ...
Strong Performance and Growth                                       Reserves (Bcfe)                                       ...
Significant Hedge Position    LINN is hedged ~100% on expected natural gas production through 2017; and                  ...
Significant Hedge Position (Equivalent Basis)     LINN’s cash flow is notably more protected from oil and natural gas pri...
Distribution Stability and Growth         LINN has performed well through all kinds of commodity price cycles         Di...
Distribution History   Consistently paid the distribution for 26 quarters   81% increase in quarterly distribution since...
LINN Historical Return        LINN Total Return and Stock Price Appreciation (LINE IPO – Present of ~255%)                ...
Size Advantage in E&P MLP/LLC Market LINN has a significant size advantage in the                                        ...
Why Invest in LINN?                                                               High quality asset baseStable          ...
LINN Energy’s mission is to acquire,develop and maximize cash flowfrom a growing portfolio of long-lifeoil and natural gas...
LINN Overview                                                                          Salt Creek Field                   ...
LinnCo – Overview of Tax Considerations                    LinnCo subject to corporate-level taxation on income allocatio...
LINN Units vs. LinnCo Shares                                    LINN                                                 LinnC...
LINN Structure & Benefits                          LINN Energy      Typical      LinnCo, LLC    Typical Characteristic    ...
Ensuring Liquids Delivery In TheGranite Wash  Gathering system provides accessibility to numerous processing facilities  ...
Linn Energy Overview
Linn Energy Overview
Linn Energy Overview
Linn Energy Overview
Linn Energy Overview
Linn Energy Overview
Linn Energy Overview
Linn Energy Overview
Linn Energy Overview
Linn Energy Overview
Linn Energy Overview
Linn Energy Overview
Linn Energy Overview
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Transcript of "Linn Energy Overview"

  1. 1. LinnCo Overview
  2. 2. Forward-Looking Statementsand Risk FactorsStatements made in these presentation slides and by representatives of LINNEnergy, LLC and LinnCo, LLC (collectively the “Company”) during the course of thispresentation that are not historical facts are forward-looking statements. Thesestatements are based on certain assumptions and expectations made by theCompany which reflect management’s experience, estimates and perception ofhistorical trends, current conditions, anticipated future developments, potential forreserves and drilling, completion of current and future acquisitions, futuredistributions, future growth, benefits of acquisitions, future competitive position andother factors believed to be appropriate. Such statements are subject to a numberof assumptions, risks and uncertainties, many of which are beyond the control ofthe Company, which may cause actual results to differ materially from thoseimplied or anticipated in the forward-looking statements. These include risksrelating to financial performance and results, indebtedness under LINN Energy’scredit facility and Senior Notes, access to capital markets, availability of sufficientcash flow to pay distributions and execute our business plan, prices and demandfor natural gas, oil and natural gas liquids, LINN Energy’s ability to replace reservesand efficiently develop LINN Energy’s current reserves, LINN Energy’s ability tomake acquisitions on economically acceptable terms, regulation, availability ofconnections and equipment and other important factors that could cause actualresults to differ materially from those anticipated or implied in the forward-lookingstatements. See “Risk Factors” in LINN Energy’s 2011 Annual Report on Form 10-K and any other public filings. We undertake no obligation to publicly update anyforward-looking statements, whether as a result of new information or futureevents. The market data in this presentation has been prepared as of September28, 2012, except otherwise noted.
  3. 3. LINN Energy’s mission is to acquire,develop and maximize cash flowfrom a growing portfolio of long-lifeoil and natural gas assets.
  4. 4. 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 LINN’s investor base  Institutions  Tax-exempt organizations  Incremental retail investors (including IRA accounts) 4
  5. 5. 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 Enterprise value $15.0 billion(1) ND Large, long-life diversified reserve base Jonah Field  ~5.1 Tcfe total proved reserves MI WY  64% proved developed CA Hugoton Field IL  45% oil and NGLs / 55% natural gas KS  ~21 year reserve-life index  >15,000 gross productive oil and natural gas wells(2) OK NM East Texas Large inventory of low risk and liquids-rich development opportunities TX Corporate LA  Jonah Field – ~650 locations LINN Operations Headquarters (Houston) 2012 Acquisitions /  Granite Wash – ~600 horizontal locations Joint Venture  Wolfberry – ~400 locations  Bakken – ~800 horizontal locations(3) Note: Market data as of September 28, 2012 (LINE closing price of $41.24). All operational and reserve data as of December 31, 2011, pro forma for closed 2012 acquisitions and joint venture (“JV”). Estimates of proved reserves for closed 2012 acquisitions and JV were calculated as of the effective date of the acquisitions  Cleveland – ~165 horizontal locations using forward strip oil and natural gas prices, which differ from estimates calculated in accordance with SEC rules and regulations. Estimates of proved reserves for closed 2012 acquisitions and JV based solely on data provided by seller. Source: Bloomberg.  Kansas Hugoton – ~800 locations (1) Pro forma for ~$1,250 million LNCO IPO (assumes proceeds used to repay debt) and Jonah Field acquisition.  Salt Creek Field – CO2 flood (2) Well count does not include ~2,500 royalty interest wells. (3) Average working interest of ~7%. 5
  6. 6. LINN’s Unique Business Strategy Consolidate  LINN’s goal is to consolidate mature oil and natural gas assets across the U.S. Mature Assets  Since 2003, we have made 54 acquisitions for ~$10 billion(1) Mitigate  Typically look to hedge ~100% of oil and natural gas production for 4 – 6 years in order to “lock-in” commodity prices and capture significant margins Commodity Risk  Unique hedging structure utilizing ~30% puts allows for significant upside potential  We efficiently operate and enhance our existing properties Operational o Include workovers, recompletions and other production enhancement activities Efficiency  >15,000 producing wells in 6 core operating areas  LINN provides investors with significant organic growth Organic Growth o ~30% growth from 2010 vs. 2011 Opportunities o ~20% growth from 2011 vs. 2012E  LINN has a unique cost of capital advantage Low Cost of o This allows us to consolidate low-risk assets and still generate significant returns Capital o Our structure gives us one of the lowest costs of equity capital in the E&P industry “LINN Energy’s mission is to acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets.”Note: Pro forma for closed 2012 acquisitions and joint venture. 6(1) Includes 15 acquisitions comprising the Appalachian Basin properties sold in July 2008.
  7. 7. MLP and Independent E&P Rankings LINN is one of the largest MLP and independent E&P companies  8th largest public MLP/LLC  12th largest domestic independent oil & natural gas company Rank Master Limited Partnership Enterprise Value ($MM) Rank Independent E&Ps Enterprise Value ($MM) 1. Enterprise Products Partners $63,392 1. ConocoPhillips $91,884 2. Kinder Morgan Energy Partners $41,982 2. Occidental Petroleum Corp. $72,914 3. Energy Transfer Equity $38,716 3. Anadarko Petroleum Corp. $48,018 4. Williams Partners $26,901 4. Apache Corp. $44,932 5. Plains All American Pipeline $21,746 5. EOG Resources Inc. $34,988 6. Energy Transfer Partners $20,598 6. Chesapeake Energy Corp. $31,284 7. ONEOK Partners $16,537 7. Devon Energy Corporation $28,030 (1) 8. LINN Energy LLC $14,976 8. Marathon Oil Corporation $25,658 9. Enbridge Energy Partners $14,600 9. Noble Energy Inc. $19,858 10. El Paso Pipeline Partners $12,565 10. Continental Resources Inc. $16,155 11. Magellan Midstream Partners $11,806 11. Pioneer Natural Resources Co. $15,995 12. Boardwalk Pipeline Partners $9,576 12. LINN Energy LLC(1) $14,976 13. Markwest Energy Partners $8,293 13. Range Resources Corp. $13,976 14. Buckeye Partners $6,745 14. Southwestern Energy Co. $13,771 15. Nustar Energy LP $6,534 15. Concho Resources Inc. $12,438 16. Amerigas Partners $6,382 16. EQT Corp. $11,048 17. Sunoco Logistics Partners $6,304 17. Cabot Oil & Gas Corp. $10,352 18. Access Midstream Partners $6,137 18. Murphy Oil Corp. $10,079 19. Cheniere Energy Partners $6,099 19. Denbury Resources Inc. $9,272 20. Regency Energy Partners $5,848 20. Plains Exploration & Production $8,323 21. Western Gas Partners $5,778 21. Cobalt International Energy $8,277 22. Targa Resources Partners $5,444 22. Sandridge Energy Inc. $8,140 23. Teekay LNG Partners $4,981 23. QEP Resources Inc. $7,398 24. Inergy LP $4,318 24. Newfield Exploration Co. $7,167 25. Teekay Offshore Partners $4,075 25. Whiting Petroleum Corp. $6,995Note: Market data as of September 28, 2012 (LINE closing price of $41.24). Source: Bloomberg. 7(1) Pro forma for ~$1,250 million LNCO IPO and Jonah Field acquisition.
  8. 8. Growth Through Accretive Acquisitions  ~$10 billion in acquisitions completed since the Company’s 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 millions) $6,000 $1,513 $5,367 $5,000 $1,367 $3,882 $4,000 $4,000 $3,281 $601 $3,000 $2,000 $2,627 $654 $1,000 $202 $52 $78 $452 $0 (2) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD Cumulative Acquisitions Acquisitions Completed In Year(1) Includes 15 acquisitions comprising the Appalachian Basin properties sold in July 2008.(2) Based on contract price for closed 2012 acquisitions and $400 million of Anadarko’s development costs related to the Salt Creek JV. 8
  9. 9. Jonah Field Acquisition From BP On July 31, 2012, LINN closed a $1.025 billion Sheridan Park acquisition in Wyoming’s Jonah Field from BP. Big Horn Campbell Crook Strategic Rationale Wyoming Washakie Weston Teton  Significant operated entry into the Green River Basin Jonah Hot Springs Johnson Salt Creek Natrona  Long-life, low-decline natural gas asset Sublette  Significant future drilling inventory Lincoln Niobrara Fremont Converse  ~1.2 Tcfe of identified resource potential from ~650 future drilling locations Platte Goshen  Hedged ~100% of net expected oil and natural gas Carbon Albany Fields production through 2017 Oil Laramie Natural Gas Fields  Sweetwater Immediately accretive to DCF / unit(1) Uinta Asset Overview Sublette County  Production of ~145 MMcfe/d  55% operated by production  Low decline rate of ~14%  Proved reserves of approximately 730 Bcfe (56% PDP)  73% natural gas, 23% NGL and 4% oil  ~750 gross wells on >12,500 net acres Acquisition Acreage Field Area(1) Distributable cash flow per unit. 9
  10. 10. Anadarko Salt Creek Joint-VentureOn April 3, 2012, LINN acquired 23% of Anadarko’s(“APC”) interest in the Salt Creek Field, one of the Sheridan largest CO2 EOR projects in North America. Park Campbell Big Horn Crook Strategic Rationale Wyoming Salt Creek Washakie Weston  Unique, high growth asset with low decline rate Teton Hot Springs Johnson  Expect steady production growth for ~10 years Natrona  Expect to greatly benefit from APC’s extensive CO2 Sublette Fremont Lincoln experience Niobrara Converse  Potential to transfer enhanced oil recovery (“EOR”) EXXON technology to LINN’s existing asset base LaBarge Platte Goshen Field  Immediately accretive to DCF / unit EXXON Shute Carbon Albany Oil Fields Natural Creek Plant Gas Fields Laramie Asset Overview Uinta Sweetwater CO2 Pipelines Natural Gas  Expect to invest ~$600 million over the next 3-6 years Pipelines 100,000  $400 million of APC’s development costs Primary Secondary  $200 million net to LINN’s interest Tertiary Barrels Oil per Day  Net production ~1,600 BOPD (first 12 months)(1) 10,000  Expect to double net production by 2016  Low decline rate of <7% and reserve life of ~28 years 19.9% 24.4% 9.9%  Estimated ~1 billion gross barrels of oil remaining in 1,000 place 1910 1930 1950 1970 1990 2010 Year(1) LINN Energy, LLC estimates. 10
  11. 11. Hugoton Field Acquisition From BPOn 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% natural gas Kansas Kearny  Excellent MLP Asset  Low decline rate of ~7% Haskell  Reserve life of ~18 years Stanton Grant  Proved reserves of ~730 Bcfe, with 81% PDP  Platform For Growth Jayhawk Gas Plant  ~800 future drilling locations on >600,000 contiguous net Stevens acres Morton Seward  ~500 identified recompletion opportunities in the Chase Acquisition Acreage formation  100% ownership of Jayhawk Gas Processing Plant KS o Significant excess capacity; currently 41% utilized OK  Strategic-Fit With LINN’s Business Model TX  Immediately accretive to DCF / unit  Little requirement for capital investment  Steady stream of predictable cash flow 11
  12. 12. Granite Wash – Operated HorizontalDrilling 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 OKLAHOMA Hemphill  Successfully completed 12 BUFFALO County DYCO WALLOW 2 STEP DYCO Hogshooter oil wells YTD MAYFIELD Wheeler County FRYE RANCH  Average IP rates of ~2,110 TEXAS STILES RANCH Bbls/d of oil LINN Acreage Beckham  8 rig drilling program currently Acquisition Acreage County focused primarily on Hogshooter Wheeler County Current  Plan to drill an additional 11 Hogshooter STILES RANCH Hogshooter wells by year-end Development Non- Well Status Operated Operated LINN Acreage ~23,000 Gross ~12,000 Net Producing 111 32 Acquisition Drilling 8 2 Acreage ~21,000 Net Waiting on Drilled Wells FRYE Completion 10 2 RANCH 2012 Proposed Drilling Activity Feet Completing 1 1 0 8,260’ Total 130 37 12Note: Well counts as of July 8, 2012.
  13. 13. LINN’s Unique Position In TheGranite 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 (Hogshooter)  Oil Cleveland Carr  Liquids-rich gas D G R Britt E A  Dry gas S N “A” I M “B” Enables LINN to adapt O I T E “C” its drilling program N E S W  Focus on highest I A A “D” N S “E” returns H “F” Recently shifted entire Oil Natural Gas & A “A” Condensate Rich T thru W drilling program to Natural Gas & O A “C" Condensate Lean K S Lwr “C” focus on oil LINN horizontal A H thru “E" tested zone 15,000’ 13
  14. 14. 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 Growth(2)Production (MMcfe/d) 700 600 $2.8 billion of ~425 MMcfe/d YE Acquisitions 2011 Exit Rate 500 in 2012(4) ~320 MMcfe/d YE 2010 Exit Rate 400 ~$1.5 LINN 300 billion(3) of acquisitions Base impact in addition to 30% organic Assets growth 200 YE09 YE10 YE11 2012E 2013E 2014E 2015E LINN Base Closed 2012 Acquisitions Potential Organic Growth(1) LINN Energy, LLC estimate.(2) Based on the company’s estimated 3-year forward-looking budget and assuming the wells produce at rates consistent with historical average for wells in their respective regions.(3) Based on total consideration. 14(4) Based on contract price for closed 2012 acquisitions and $400 million of Anadarko’s development costs related to the Salt Creek JV.
  15. 15. LinnCo Structure andFinancial Highlights
  16. 16. 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 $2.90 Distribution LinnCo $2.90 Distribution LLC LLC Units Units LINN Energy, LLC Investors now have the ability to own LINN Energy two ways:  LINE (Partnership for tax purposes / K-1)  LNCO (C-Corp. for tax purposes / 1099)(1) Represents annualized distribution based on Q2’12 distribution of $0.725 per unit paid August 14, 2012. 16(2) Represents annualized dividend based on current projections for the period ending December 31, 2013.
  17. 17. 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 100%+ from 2010 – 2011 (actual) Efficient Tax o 100%+ from 2012 – 2013 (estimated)(2) Structure  Estimated tax at LNCO o ~1.5¢ / quarter from Q4’12 through Q4’13(2)(1) Unrelated business taxable income. 17(2) Based on current projections.
  18. 18. 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 Cannot own oil and natural gas assets or incur debt  LinnCo will distribute LINN distributions it receives to LinnCo shareholders in the form of a dividend, net of reserves for corporate income taxTransaction Overview  Net proceeds will be used to purchase an equal number of LINN units o LINN will use net proceeds to repay debt outstanding under its revolving credit facility  Post IPO, LinnCo shareholders will own ~13% of LINN(1)(1) Based on ~$1,250 million offering and LNCO price of $41.24 (LINN’s closing price as of September 28, 2012). 18
  19. 19. 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% LINE E&P (1) 10-Yr. S&P 500 TRGP FTSE KMI S&P 500 Alerian Treasury NAREIT Utilities MLP Index Index IndexNote: Market data as of September 28, 2012 (LINE closing price of $41.24). Source: Bloomberg.(1) E&P yield represents average for domestic, independent oil and natural gas companies traded on the NYSE and NASDAQ Global Select Market (excluding MLPs and Royalty Trusts). 19
  20. 20. 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 results Distribution growth of ~15% since 2010; 81% increase since IPO Excellent acquisition track record (~$5.7 billion since 2010)  ~$1.4 billion(2) in 2010  ~$1.5 billion(2) in 2011  ~$2.8 billion(3) in 2012 Significant organic growth  ~30% growth from 2010 vs. 2011  ~20% growth from 2011 vs. 2012E LinnCo IPO has the potential to be a game-changer in terms of access to equity capital  Pro forma balance sheet positioned for future growth Industry leading hedge position  Hedged ~100% of expected natural gas production through 2017 at attractive prices  Hedged ~100% of expected oil production through 2016 at attractive prices(1) Estimates based on third quarter and full-year 2012 guidance updated on September 27, 2012.(2) Based on total consideration. 20(3) Based on contract price for closed 2012 acquisitions and $400 million of Anadarko’s development costs related to the Salt Creek JV.
  21. 21. 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 billion(1)  Closed 12 for ~$1.5 billion(1)  Closed 4 for ~$2.8 billion(2) Historical Acquisitions and Joint Venture $3,000 Total ~$5.7 Billion Since 2010 $2,500 ($s in millions) $2,000 $1,500 $2,800 $1,000 $1,367 $1,513 $500 $0 2010 (1) 2011 (1) 2012 YTD (2)(1) Based on total consideration.(2) Based on contract price for closed 2012 acquisitions and $400 million of Anadarko’s development costs related to the Salt Creek JV. 21(3) As of September 21, 2012.
  22. 22. Strong Performance and Growth Reserves (Bcfe) Production (MMcfe/d) 6,000 800 (1) (2) 5,067 700 673 5,000 600 4,000 3,370 500 400 369 3,000 2,597 300 265 2,000 1,660 1,712 212 218 1,419 200 1,000 87 255 100 8 0 0 2006 2007 2008 2009 2010 2011 2012PF 2006 2007 2008 2009 2010 2011 2012E Adjusted EBITDA ($ in millions) Annualized Distributions ($ per unit) $1,600 $1,365 (3) $1,400 $2.90 $3.00 $2.76 $1,200 $998 $2.52 $2.52 $2.52 $1,000 $2.50 $2.28 $800 $732 $566 $2.00 $600 $514 $1.60 $400 $1.50 $200 $0 $1.00 (4) 2008 2009 2010 2011 2012E Q2 06 Q2 07 Q2 08 Q2 09 Q2 10 Q2 11 Q2 12Note: Data reflects continuing operations only. The results of the Company’s Appalachian Basin and Mid Atlantic operations are classified as discontinued.(1) As of December 31, 2011, pro forma (“PF”) for closed 2012 acquisitions and joint venture.(2) Production estimate based on the mid-point of full-year 2012 guidance updated on September 27, 2012.(3) Adjusted EBITDA based on full-year 2012 guidance updated on September 27, 2012. 22(4) Annualized distribution based on Q2’12 distribution of $0.725 per unit paid August 14, 2012.
  23. 23. 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 45,000 $92.52 $4.48 $4.48 $5.12 $95.57 $94.81 500 $90.44 $5.14 40,000 $91.30 $5.31 $97.86 $90.00 $90.00 450 $5.27 $5.00 $4.88 25% $5.00Volumes (MMcf/d) 35,000 21% Volumes (Bbls/d) $97.09 23% 22% 400 $5.00 34% 35% 36% $5.46 $5.42 $99.19 350 30,000 41% 21% 43% 46% 300 25,000 $4.20 $4.26 $94.97 $92.92 $96.23 $90.56 250 $5.19 20,000 200 $5.25 $96.54 15,000 $5.12 $5.22 150 10,000 100 50 5,000 - - 2012 (1) 2013 2014 2015 2016 2017 2012 (1) 2013 2014 2015 2016 Swaps Puts (2) Percent Puts (3) Swaps (4) Puts Percent Puts (3)Note: Except as otherwise indicated, illustrations represent full-year natural gas hedge positions through 2017 and oil positions through 2016, as of August 1, 2012.(1) Represents the average daily hedged volume for the period August-December 2012.(2) Excludes natural gas puts used to hedge NGL revenues associated with BP Hugoton acquisition.(3) Calculated as percentage of hedged volume in the form of puts.(4) Includes certain outstanding fixed price oil swaps of approximately 5,384 MBbls which may be extended annually at a price of $100 per Bbl for each of the years ending December 31, 2017, and December 31, 2018, and $90 per Bbl for the year ending December 31, 2019, if the counterparties determine that the strike prices are in-the-money on a designated date in each respective preceding year. The extension for each year is exercisable without respect to the other years. 23
  24. 24. Significant Hedge Position (Equivalent Basis)  LINN’s 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 pressure on E&P C-Corps. 100% 100% 100% 100% 100% 100% 88% 37% 35% 30% 31% 79% 80% 36% Expected Production Hedged 71% 66% 70% 25% 69% 60% 64% 63% 65% 47% 49% 54% 40% 29% 20% 20% 16% 9% 4% 1% 1% 0% 2012 2013 2014 2015 2016 2017 C-Corp. Peers Upstream MLP % Swaps % Puts (1) (2) % Hedged Peers % HedgedNote: LINN’s hedge percentages based on internal estimates. Excludes NGL production and natural gas puts used to hedge NGL revenues associated with BP Hugoton acquisition.Source: Production estimates based on Bloomberg consensus, and hedge information based on publicly available sources.(1) Represents simple average and peer group includes: CLR, FST, XEC, KWK, NFX, PXD, PXP, RRC, SWN and WLL. 24(2) Represents simple average and peer group includes: BBEP, EVEP, LGCY, LRE, MEMP, MCEP, PSE, QRE and VNR.
  25. 25. 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 suspend distributions(1) Distribution History Stability During Credit Crisis $180 $0.73 $0.73 $18 $0.69 $0.69 $0.69 $160 $0.66 $0.66 $0.66 $16 $0.63 $0.63 $0.63 $0.63 $0.63 $0.63 $0.63 $0.63 $0.63 $0.63 $0.63 $140 $0.57 $0.57 $14 Natural Gas ($/MMBtu) $0.52 $0.52 $120 $12Oil ($/Bbl) $0.43 $100 $0.40 $0.40 $10 $80 $8 $60 $6 $40 $4 $20 $2 $0 $0 (2) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2006 2007 2008 2009 2010 2011 2012 Quarterly Distributions WTI Crude Oil Henry Hub Natural Gas Source for commodity prices: Bloomberg. (1) Source: Wells Fargo Securities, LLC research note entitled “MLP Primer - - Fourth Edition” published on November 19, 2010. (2) The Q1 2006 distribution, adjusted for the partial period from the Companys closing of the IPO on January 19, 2006 through March 31, 2006, equates to $0.32 per unit. 25
  26. 26. 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 $11.66 0.66 $11.00 0.66 $10.34 0.66 $9.71 0.63 $10.00 $9.08 0.63 $8.45 0.63 $7.82 0.63 $8.00 $7.19 0.63 $6.56 0.63 $5.93 0.63 $6.00 $5.30 0.63 $4.67 0.63 $4.04 0.63 $4.00 $3.41 0.63 $2.84 0.57 $2.27 0.57 $1.75 $2.00 $1.23 0.52 $0.80 0.52 $0.40 0.43 0.40 $- (1) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2006 2007 2008 2009 2010 2011 2012 Quarterly Distribution Cumulative Distribution 26(1) The Q1 2006 distribution, adjusted for the partial period from the Companys closing of the IPO on January 19, 2006 through March 31, 2006, equates to $0.32 per unit.
  27. 27. 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) Line Price Appreciation Alerian MLP TR Index S&P Mid-Cap E&P TR Index S&P 500 TR IndexNote: Market data as of September 28, 2012 (LINE closing price of $41.24). Source: Bloomberg. 27
  28. 28. 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 to complete larger transactions  E&P Sector has room to grow; $31 billion versus $447 billion for all other sectors LINE vs. Other Upstream MLPs(1) MLP/LLC Total EV: $478 Billion(3) $15.7 Billion $16.0 $15.0 Billion Memorial Production E&P Mid-Con Energy $14.0 LRR Energy MLP/LLC Pioneer 6% Atlas Resources $12.0 $31 Enterprise Value ($B) QR Energy Billion $10.0 Legacy $8.0 BreitBurn $6.0 Vanguard $447 $4.0 Billion $2.0 EV Energy $0.0 LINE (2) All Others (10 MLPs) All OthersNote: Market data as of September 28, 2012 (LINE closing price of $41.24). Source: Bloomberg. 94%(1) Excludes Constellation Energy Partners and Dorchester Minerals LP.(2) Pro forma for ~$1,250 million LNCO IPO and Jonah Field acquisition. 28(3) Includes all U.S. energy MLPs recognized by the National Association of Publically Traded Partnerships (NAPTP).
  29. 29. Why Invest in LINN?  High quality asset baseStable o Multi-year inventory of high-return development opportunitiesDistributions o Long-life reserves (~21 years) o Diversified asset base (6 core areas / >15,000 gross producing wells)  Extensive hedge positions; reduced commodity risk  Organic growth (YOY ~20% in 2012E vs. 2011)  Acquisitions Distributions o Excellent acquisition track record (54 transactions for ~$10 billion) o ~$1.4 billion(1) completed in 2010 Growth Drivers o ~$1.5 billion(1) completed in 2011 o ~$2.8 billion(2) completed in 2012  LinnCo IPO has the potential to be a game-changer in terms of access to equity capital  First in class track record in capital marketsFinancial Strength o Total capital raised since IPO: $6.4 billion of equity(3) $5.4 billion of bonds $11.8 billion totalNote: All operational and reserve data as of December 31, 2011, pro forma for closed 2012 acquisitions and joint venture. Estimates of proved reserves for closed 2012 acquisitions and joint venture were calculated as of the effective date of the acquisitions using forward strip oil and natural gas prices, which differ from estimates calculated in accordance with SEC rules and regulations.(1) Based on total consideration.(2) Based on contract price for closed 2012 acquisitions and $400 million of Anadarko’s development costs related to the Salt Creek JV. 29(3) Pro forma for ~$1,250 million LNCO IPO.
  30. 30. LINN Energy’s mission is to acquire,develop and maximize cash flowfrom a growing portfolio of long-lifeoil and natural gas assets.
  31. 31. 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 / (Houston) Joint Venture Williston / Powder River Basins Jonah Field California • 32 MMBoe proved reserves • 730 Bcfe proved reserves • 32 MMBoe proved reserves • 4% of total reserves • 15% of total reserves • 4% of total reserves • 92% liquids • 73% natural gas • 93% liquids Permian Basin Mid-Continent(1) Michigan / Illinois • 88 MMBoe proved reserves • 3.1 Tcfe proved reserves • 317 Bcfe proved reserves • 10% of total reserves • 61% of total reserves • 6% of total reserves • 79% liquids • 59% natural gas • 96% natural gasNote: All operational and reserve data as of December 31, 2011, pro forma for closed 2012 acquisitions and joint venture (“JV”). Estimates of proved reserves for closed 2012 acquisitions and JV were calculated as of the effective date of the acquisitions using forward strip oil and natural gas prices, which differ from estimates calculated in accordance with SEC rules and regulations. Estimates of proved reserves for closed 2012 acquisitions and JV based solely on data provided by seller. 31(1) Includes Mid-Continent, Hugoton Basin and East Texas.
  32. 32. 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 taxes due to alternative minimum tax (AMT)  Income tax liability estimated to be between 2% – 5% of LINN’s cash distribution to LinnCo for the next 3 years (2012 – 2015)  Distributions from LinnCo to its shareholders treated as dividends to the extent that LinnCo has earnings and profits o Taxed at dividend tax rate (currently 15%) Taxation at  Distributions in excess of earnings and profits, treated as return of capital and reduce the basis in LinnCo shares LinnCo o Percentage of distributions treated as return of capital expected to be Shareholder between 40% – 100% through 2015 Level  Calculation of earnings and profits different from income allocation (on traditional MLP unit) o Generally higher than income allocation as items such as accelerated depreciation and current deduction of IDC’s not allowed 32
  33. 33. LINN Units vs. LinnCo Shares LINN LinnCo  LinnCo’s 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 developing oil and natural gas assets by LinnCo  No leverage allowed Taxation  Unitholders receive a Schedule K-1  Shareholders receive a Form 1099-DIV Schedule  Unitholders have the right to vote with respect to:  LinnCo will submit to a vote of its o LINN’s Board of Directors shareholders any matter submitted by LINN o Certain amendments to its limited to a vote of its unitholders (including election Voting liability company agreement of LINN’s Board of Directors) o Potential merger of LINN or the sale  LinnCo will vote the LINN units which it holds of all or substantially all of its assets in the same manner as the owners of LinnCo o Potential dissolution and / or winding- shares vote up of LINN  LINN Board of Directors provides oversight to  LINN, as the holder of LinnCo’s sole voting Board of LINN’s management and has the power to share, will have the sole right to elect the Directors appoint LINN’s officers members of LinnCo’s Board of Directors 33
  34. 34. 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 Form 1099 General Partner     Incentive Distribution Rights (IDRs)     (Up to 50%) Voting Rights     34
  35. 35. Ensuring Liquids Delivery In TheGranite Wash  Gathering system provides accessibility to numerous processing facilities  Multiple interconnects ensures take-away capacity  Exposure to multiple processing plants leads to superior pricing  Extending 43 miles in 2012 Hemphill County TWO STEP Eagle Rock Enbridge Woodall Plant TX Eagle Rock BUFFALO WALLOW Enbridge DYCO Enbridge Allison Plant Eagle Rock Enbridge Wheeler County STILES RANCH Enbridge Markwest Enbridge LINN Acreage FRYE RANCH Frontier & PVR Completed Pipeline DCP Markwest 2012 Pipeline Expanding GW Capacity Eagle Rock Enogex Markwest Wheeler Plant Fort Elliott Plant 2012 Compressor Stations Enogex Enbridge Interconnect Frontier 0 1 mile Crestwood Ajax Plant 35
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