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LINN Energy Announces Fourth Quarter And Full-Year 2013 Results And 2014 Outlook

Stocks in this article: LINE LNCO

The Company reported a net loss of approximately $785 million for the fourth quarter 2013 compared to a net loss of approximately $187 million for the fourth quarter 2012. The fourth quarter 2013 net loss includes higher impairment charges and lower gains on oil and natural gas derivatives, partially offset by higher production revenues. On a per-unit basis, the net loss for the fourth quarter 2013 was $3.15 per-unit compared to a net loss of $0.83 per unit in the fourth quarter 2012.

Full-Year 2013 Results

LINN increased year-over-year production by 22 percent to 822 MMcfe/d in 2013, compared to 671 MMcfe/d in 2012. Production was positively impacted by acquisitions and operating results.

For 2013, the Company reported a net loss of approximately $691 million compared to a net loss of approximately $387 million in 2012. The 2013 net loss includes higher impairment charges, partially offset by higher production revenues and higher gains on oil and natural gas derivatives. On a per-unit basis, the net loss for 2013 was $2.94 per-unit compared to a net loss of $1.92 per unit in 2012.

During the year ended December 31, 2013, the Company recorded noncash impairment charges, before and after tax, of approximately $828 million. Impairment charges consist of approximately $791 million associated with proved oil and natural gas properties in the Granite Wash formation related to reserve revisions and a decline in commodity price as well as approximately $37 million associated with the write-down of the carrying value of the Panther Properties sold in May 2013. Impairment charges are calculated at strip prices, holding prices flat after year-five. At year-end 2013, year-five oil, natural gas and NGL prices were all approximately ten percent lower compared to the year-five prices at year-end 2012.

Supplemental information on the Company's financial and operational results can be found under Presentations at .

Acquisitions & Divestitures

On December 16, 2013, the Company completed the previously-announced transactions contemplated by the merger agreement between the Company, LinnCo and Berry under which LinnCo acquired all of the outstanding common shares of Berry and the contribution agreement between LinnCo and the Company, under which LinnCo contributed Berry to the Company in exchange for LINN Energy units. Under the merger agreement, as amended, Berry's shareholders received 1.68 LinnCo common shares for each Berry common share they owned, totaling approximately 93.8 million LinnCo common shares. Under the contribution agreement, LinnCo contributed Berry to LINN Energy in exchange for 93.8 million newly issued LINN Energy units, after which Berry became an indirect wholly owned subsidiary of LINN Energy. The transaction has a preliminary value of approximately $4.6 billion, including the assumption of approximately $2.3 billion of debt and net of approximately $451 million of cash. The acquisition included approximately 1,408 Bcfe of proved reserves as of the acquisition date.

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