Linn Energy

Linn Energy, LLC
Public
Traded as NASDAQ: LINE
Industry Oil and gas
Founded 2003
Founder Michael Linn
Headquarters Houston, United States
Key people
 Mark E. Ellis, CEO
Michael C. Linn, founder and director
David B. Rottino, Senior Vice President and CAO
Kolja Rockov, Executive Vice President and CFO
Products Petroleum
Natural gas
Revenue Increase$1.601 billion[1]
Decrease$386.6 million[1]
Total assets Increase$11.451 billion[1]
Number of employees
 1,136[1]
Subsidiaries LinnCo (NASDAQ: LNCO)
Website www.linnenergy.com

Linn Energy, LLC is an independent oil and natural gas company based in Houston, Texas. It holds oil and gas producing assets in many parts of the United States: Mid-Continent, including properties in Texas, Louisiana, and Oklahoma; the Hugoton Basin in Kansas; the Green River Basin in Wyoming; East Texas; California, including the Brea-Olinda Oil Field in Los Angeles and Orange Counties; the Williston/Powder River Basin, which includes a position in the Bakken Formation; Michigan/Illinois; and the Permian Basin in Texas.[1] At the end of 2012, the firm reported proved reserves of 4,796 bcfe (billion cubic feet equivalent) of oil and gas combined. Of this total, 24% was crude oil, 54% natural gas, and 22% natural gas liquids.[1]

Structured as a master limited partnership for tax purposes, the firm is required to pay out most of its cash reserve to unitholders (stockholders) each quarter as distributions. However Linn retains some attributes of a limited liability corporation, including giving voting rights to its unitholders. Linn Energy also operates a subsidiary, LinnCo, a C Corporation which is subject to different tax rules from its parent company.[2]

History

Linn Energy was founded in 2003 and went public in 2006, with an IPO that raised $261 million. Initial market capitalization following the offering was $584 million. Since then the company has expanded to an approximate value of $10 billion, through a series of strategic acquisitions, all in the United States.[3]

In 2007 Linn doubled its holdings by purchasing many of the oil and gas assets of Dominion Energy, mainly in Oklahoma, for $2.05 billion.[4]

Linn bought the holdings of BP in the Hugoton Basin, the large gas-producing region from southwestern Kansas into the Texas Panhandle, in March 2012 for $1.2 billion. The purchase included not only 2,400 active wells on 600,000 acres, but a gas processing plant.[5]

On April 30, 2012, Linn Energy created LinnCo, an affiliate whose only purpose is to own units of Linn Energy, incorporating it in Delaware as a limited liability corporation (an "LLC"). As of the end of 2012 it owned 15% of Linn Energy units, and its own stock was held publicly. LinnCo's IPO took place on October 17, 2012.[1]

Linn expanded its holdings in the Rockies in June 2012 with the purchase of 12,500 acres in the Jonah Field in southwest Wyoming from BP for approximately $1 billion. The field contains around 750 active natural gas wells which produce, in addition to natural gas, approximately one-quarter natural gas liquids such as butane and propane.[6]

In February 2013, Linn Energy acquired Denver-based Berry Petroleum in a stock deal valued at $4.3 billion. The merger of the two firms increases Linn's holdings in California, particularly in the Midway-Sunset field, as well as in Texas, Utah, and Colorado. The acquisition changes the mix of Linn's assets from mostly natural gas to mostly oil, a more profitable position for the firm given the historically low prices of natural gas at the time of the merger, and the relatively high price of oil.[6]

Controversies

On April 3, 2006, Linn Energy announced to delay its filing of Form 10-K to allow restatement of 2003 and 2004 results.The restatement related to adjustments identified by the company relating to the accounting for the price of acquisitions.[7]

On February 8, 2015, the U.S. Securities and Exchange Commission closed its probe into Linn Energy’s $4.6 billion acquisition of Berry Petroleum and decided to take no enforcement actions.[8]

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 "Linn Energy 2012 Annual Report, Form 10-K, Filing Date Feb 21, 2013". EdgarOnline. Retrieved February 26, 2013.
  2. ↑ "Linn Energy Investor FAQ". Retrieved February 26, 2013.
  3. ↑ "Linn Energy, LLC: History". Retrieved February 26, 2013.
  4. ↑ "Dominion Sells Some Ops to Linn Energy". AP Online. Retrieved February 26, 2013.
  5. ↑ "Linn energy buying BP's Hugoton Basin conventional Natgas assets". Natural Gas Week. Retrieved February 26, 2013.
  6. ↑ 6.0 6.1 Michael J. De La Merced. "Linn Energy to Buy BP Property in Wyoming for $1 Billion". New York Times. Retrieved February 26, 2013.
  7. ↑ "LINN ENERGY TO DELAY FILING OF FORM 10-K TO ALLOW RESTATEMENT OF 2003 AND 2004 RESULTS".
  8. ↑ "SEC closes Linn Energy probe with no enforcement action". Petro Global News. Retrieved 18 February 2015.

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