x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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81-5366183
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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600 Travis
Houston, Texas
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77002
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(Address of principal executive offices)
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(Zip Code)
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Page
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•
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Hugoton Basin, which includes properties located in Kansas, the Oklahoma Panhandle and the Shallow Texas Panhandle;
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Rockies, which includes properties located in Wyoming (Green River, Washakie and Powder River basins), Utah (Uinta Basin) and North Dakota (Williston Basin);
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Mid-Continent, which includes Oklahoma properties located in the Anadarko and Arkoma basins, as well as waterfloods in the Central Oklahoma Platform;
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TexLa, which includes properties located in east Texas and north Louisiana;
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Michigan/Illinois, which includes properties located in the Antrim Shale formation in north Michigan and oil properties in south Illinois;
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California, which includes properties located in the San Joaquin Valley and Los Angeles basins;
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Permian Basin, which includes properties located in west Texas and southeast New Mexico; and
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South Texas.
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Year Ended December 31,
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2016
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2015
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2014
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Gross wells:
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Productive
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211
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388
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506
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Dry
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1
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5
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1
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212
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393
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507
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Net development wells:
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Productive
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26
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139
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291
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Dry
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—
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1
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1
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26
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140
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292
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Net exploratory wells:
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Productive
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7
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1
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—
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Dry
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—
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1
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—
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7
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2
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—
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Total
(1)
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Proved undeveloped
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119
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Other locations
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5,096
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Total drilling locations
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5,215
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Leasehold interests – net acres (in thousands)
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2,640
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(1)
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Does not include optimization projects.
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Natural Gas Wells
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Oil Wells
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Total Wells
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Gross
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Net
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Gross
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Net
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Gross
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Net
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||||||
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Operated
(1)
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9,030
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8,012
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4,363
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4,039
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13,393
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12,051
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Nonoperated
(2)
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7,065
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2,299
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2,700
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308
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9,765
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2,607
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16,095
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10,311
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7,063
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4,347
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23,158
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14,658
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(1)
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The Company had 89 operated wells with multiple completions at December 31, 2016.
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(2)
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The Company had 2 nonoperated wells with multiple completions at December 31, 2016.
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Developed
Acreage
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Undeveloped
Acreage
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Total
Acreage
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Gross
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Net
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Gross
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Net
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Gross
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Net
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(in thousands)
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||||||||||||||||
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Leasehold acreage
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4,532
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2,617
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57
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23
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4,589
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2,640
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2017
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2018
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2019
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Gross
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Net
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Gross
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Net
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Gross
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Net
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(in thousands)
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||||||||||||||||
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Leasehold acreage
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4
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2
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9
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6
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4
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1
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Year Ended December 31,
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2016
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2015
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2014
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Total production:
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Natural gas (MMcf)
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187,068
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200,488
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179,670
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Oil (MBbls)
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10,047
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11,819
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13,212
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NGL (MBbls)
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9,297
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9,365
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11,569
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Total (MMcfe)
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303,134
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327,587
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328,353
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Average daily production:
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Natural gas (MMcf/d)
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511
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549
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492
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Oil (MBbls/d)
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27.5
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32.4
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36.2
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NGL (MBbls/d)
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25.4
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25.7
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31.7
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Total (MMcfe/d)
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828
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897
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900
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Weighted average prices:
(1)
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Natural gas (Mcf)
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$
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2.28
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$
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2.56
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$
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4.28
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Oil (Bbl)
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$
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39.12
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$
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44.00
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$
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87.00
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NGL (Bbl)
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$
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14.28
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$
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12.68
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$
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34.07
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Average NYMEX prices:
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Natural gas (MMBtu)
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$
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2.46
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$
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2.66
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$
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4.41
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Oil (Bbl)
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$
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43.32
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$
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48.80
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$
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93.00
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Costs per Mcfe of production:
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Lease operating expenses
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$
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1.05
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$
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1.15
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$
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1.35
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Transportation expenses
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$
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0.53
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$
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0.51
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$
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0.50
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General and administrative expenses
(2)
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$
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0.78
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$
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0.87
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$
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0.83
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Depreciation, depletion and amortization
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$
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1.33
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$
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1.69
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$
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2.35
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Taxes, other than income taxes
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$
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0.25
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$
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0.34
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$
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0.52
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Total production
–
discontinued operations:
(3)
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Total (MMcfe)
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80,588
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105,999
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113,331
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(1)
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Does not include the effect of gains (losses) on derivatives.
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(2)
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General and administrative expenses for the years ended December 31, 2016, December 31, 2015, and December 31, 2014, include approximately $34 million, $47 million and $45 million, respectively, of noncash unit-based compensation expenses. In addition, general and administrative expenses for the years ended December 31, 2016, December 31, 2015, and December 31, 2014, include costs incurred by LINN Energy associated with the operations of Berry. On February 28, 2017, LINN Energy and Berry emerged from bankruptcy as stand-alone, unaffiliated entities.
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(3)
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Total production of discontinued operations for 2016 is for the period from January 1, 2016 through December 3, 2016.
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Year Ended December 31,
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2016
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2015
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2014
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Total production:
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Hugoton Basin Field:
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Natural gas (MMcf)
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38,501
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41,294
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29,424
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Oil (MBbls)
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27
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21
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16
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NGL (MBbls)
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2,983
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3,061
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2,348
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Total (MMcfe)
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56,566
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59,787
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43,608
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Green River Basin Field:
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Natural gas (MMcf)
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44,668
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*
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*
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Oil (MBbls)
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477
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*
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*
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NGL (MBbls)
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1,349
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*
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*
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Total (MMcfe)
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55,625
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*
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*
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*
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Represented less than 15% of the Company’s total proved reserves for the year indicated.
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Estimated proved developed reserves:
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Natural gas (Bcf)
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2,128
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Oil (MMBbls)
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93
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NGL (MMBbls)
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94
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Total (Bcfe)
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3,254
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Estimated proved undeveloped reserves:
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Natural gas (Bcf)
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172
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Oil (MMBbls)
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6
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NGL (MMBbls)
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10
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Total (Bcfe)
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266
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Estimated total proved reserves:
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Natural gas (Bcf)
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2,300
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Oil (MMBbls)
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99
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NGL (MMBbls)
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104
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Total (Bcfe)
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3,520
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Proved developed reserves as a percentage of total proved reserves
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92
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%
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Standardized measure of discounted future net cash flows (in millions)
(1)
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$
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1,929
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Representative NYMEX prices:
(2)
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Natural gas (MMBtu)
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$
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2.48
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Oil (Bbl)
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$
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42.64
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(1)
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This measure is not intended to represent the market value of estimated reserves.
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(2)
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In accordance with Securities and Exchange Commission (“SEC”) regulations, reserves were estimated using the average price during the 12-month period, determined as an unweighted average of the first-day-of-the-month price for each month, excluding escalations based upon future conditions. The average price used to estimate reserves is held constant over the life of the reserves.
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•
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require the acquisition of various permits before drilling commences;
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require notice to stakeholders of proposed and ongoing operations;
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require the installation of expensive pollution control equipment;
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restrict the types, quantities and concentration of various substances that can be released into the environment in connection with drilling and production activities;
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limit or prohibit drilling activities on lands located within wilderness, wetlands, areas inhabited by endangered species and other protected areas;
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require remedial measures to prevent pollution from former operations, such as pit closure, reclamation and plugging and abandonment of wells;
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impose substantial liabilities for pollution resulting from operations; and
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require preparation of a Resource Management Plan, an Environmental Assessment, and/or an Environmental Impact Statement with respect to operations affecting federal lands or leases.
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•
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Clean Air Act (“CAA”), and its amendments, which governs air emissions;
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Clean Water Act (“CWA”), which governs discharges to and excavations within the waters of the U.S.;
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Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), which imposes liability where hazardous releases have occurred or are threatened to occur (commonly known as “Superfund”);
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The Oil Pollution Act of 1990, which amends and augments the CWA and imposes certain duties and liabilities related to the prevention of oil spills and damages resulting from such spills;
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Energy Independence and Security Act of 2007, which prescribes new fuel economy standards and other energy saving measures;
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National Environmental Policy Act (“NEPA”), which governs oil and natural gas production activities on federal lands;
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•
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Resource Conservation and Recovery Act (“RCRA”), which governs the management of solid waste;
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•
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Safe Drinking Water Act (“SDWA”), which governs the underground injection and disposal of wastewater; and
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•
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U.S. Department of Interior regulations, which impose liability for pollution cleanup and damages.
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•
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business strategy;
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acquisition strategy;
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•
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financial strategy;
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•
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new capital structure and the future adoption of fresh start accounting;
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•
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uncertainty of the Company’s ability to improve its financial results and profitability following emergence from bankruptcy and other risks and uncertainties related to the Company’s emergence from bankruptcy;
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•
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inability to maintain relationships with suppliers, customers, employees and other third parties following emergence from bankruptcy;
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failure to satisfy the Company’s short- or long-term liquidity needs, including its inability to generate sufficient cash flow from operations or to obtain adequate financing to fund its capital expenditures and meet working capital needs following emergence from bankruptcy;
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•
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large or multiple customer defaults on contractual obligations, including defaults resulting from actual or potential insolvencies;
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•
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ability to comply with covenants under the Exit Facility;
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•
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effects of legal proceedings;
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•
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drilling locations;
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•
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oil, natural gas and NGL reserves;
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•
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realized oil, natural gas and NGL prices;
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•
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production volumes;
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•
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capital expenditures;
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•
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economic and competitive advantages;
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•
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credit and capital market conditions;
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•
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regulatory changes;
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•
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lease operating expenses, general and administrative expenses and development costs;
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•
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future operating results, including results of acquired properties;
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•
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plans, objectives, expectations and intentions; and
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•
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taxes.
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•
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vendors or other contract counterparties could terminate their relationship or require financial assurances or enhanced performance;
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•
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the ability to renew existing contracts and compete for new business may be adversely affected;
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•
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the ability to attract, motivate and/or retain key executives and employees may be adversely affected;
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employees may be distracted from performance of their duties or more easily attracted to other employment opportunities; and
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•
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competitors may take business away from us, and our ability to attract and retain customers may be negatively impacted.
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•
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the domestic and foreign supply of and demand for oil, natural gas and NGL;
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•
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the price and level of foreign imports;
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•
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the level of consumer product demand;
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•
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weather conditions;
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•
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overall domestic and global economic conditions;
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•
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political and economic conditions in oil and natural gas producing countries;
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•
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the ability of members of the Organization of Petroleum Exporting Countries to agree to and maintain price and production controls;
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•
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the impact of the U.S. dollar exchange rates on oil, natural gas and NGL prices;
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•
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technological advances affecting energy consumption;
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•
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domestic and foreign governmental regulations and taxation;
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•
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the impact of energy conservation efforts;
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•
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the proximity and capacity of pipelines and other transportation facilities; and
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•
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the price and availability of alternative fuels.
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•
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incur additional indebtedness;
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•
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incur additional liens;
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•
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enter into sale and lease-back transactions;
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•
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make certain investments;
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•
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make certain capital expenditures;
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•
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consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets;
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•
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pay dividends or make other distributions or repurchase or redeem our stock;
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•
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enter into transactions with our affiliates;
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•
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engage or enter into any new lines of business;
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•
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enter into certain marketing activities for hydrocarbons;
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•
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create additional subsidiaries;
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•
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prepay, redeem, or repurchase certain of our indebtedness; and
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•
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amend or modify certain provisions of our organizational documents.
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•
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limit our ability to plan for, or react to, market conditions, to meet capital needs or otherwise restrict our activities or business plan; and
|
•
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adversely affect our ability to finance our operations, enter into acquisitions or to engage in other business activities that would be in our interest.
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•
|
actual prices we receive for oil, natural gas and NGL;
|
•
|
the amount and timing of actual production;
|
•
|
capital and operating expenditures;
|
•
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the timing and success of development activities;
|
•
|
supply of and demand for oil, natural gas and NGL; and
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•
|
changes in governmental regulations or taxation.
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•
|
our proved reserves;
|
•
|
the level of oil, natural gas and NGL we are able to produce from existing wells;
|
•
|
the prices at which we are able to sell our oil, natural gas and NGL;
|
•
|
the level of operating expenses; and
|
•
|
our ability to acquire, locate and produce new reserves.
|
•
|
the high cost, shortages or delivery delays of equipment and services;
|
•
|
unexpected operational events;
|
•
|
adverse weather conditions;
|
•
|
facility or equipment malfunctions;
|
•
|
title problems;
|
•
|
pipeline ruptures or spills;
|
•
|
compliance with environmental and other governmental requirements;
|
•
|
unusual or unexpected geological formations;
|
•
|
loss of drilling fluid circulation;
|
•
|
formations with abnormal pressures;
|
•
|
fires;
|
•
|
blowouts, craterings and explosions; and
|
•
|
uncontrollable flows of oil, natural gas and NGL or well fluids.
|
•
|
authorize our Board of Directors to issue preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval;
|
•
|
establish advance notice procedures for nominating directors or presenting matters at stockholder meetings; and
|
•
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limit the persons who may call special meetings of stockholders.
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
|
Unit Price Range
|
|
Cash
Distributions
Declared
Per Unit
|
||||||||
Quarter
|
|
High
|
|
Low
|
|
|||||||
2016:
|
|
|
|
|
|
|
||||||
October 1 – December 31
|
|
$
|
0.34
|
|
|
$
|
0.05
|
|
|
$
|
—
|
|
July 1 – September 30
|
|
$
|
0.10
|
|
|
$
|
0.05
|
|
|
$
|
—
|
|
April 1 – June 30
|
|
$
|
0.48
|
|
|
$
|
0.08
|
|
|
$
|
—
|
|
January 1 – March 31
|
|
$
|
1.95
|
|
|
$
|
0.33
|
|
|
$
|
—
|
|
2015:
|
|
|
|
|
|
|
||||||
October 1 – December 31
|
|
$
|
3.41
|
|
|
$
|
1.12
|
|
|
$
|
—
|
|
July 1 – September 30
|
|
$
|
9.16
|
|
|
$
|
2.11
|
|
|
$
|
0.313
|
|
April 1 – June 30
|
|
$
|
13.94
|
|
|
$
|
8.91
|
|
|
$
|
0.313
|
|
January 1 – March 31
|
|
$
|
14.25
|
|
|
$
|
9.22
|
|
|
$
|
0.313
|
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Continued
|
|
At or for the Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(in thousands, except per unit amounts)
|
||||||||||||||||||
Statement of operations data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil, natural gas and natural gas liquids sales
|
$
|
952,132
|
|
|
$
|
1,151,240
|
|
|
$
|
2,312,137
|
|
|
$
|
2,022,916
|
|
|
$
|
1,601,180
|
|
Gains (losses) on oil and natural gas derivatives
|
(164,330
|
)
|
|
1,027,014
|
|
|
1,127,395
|
|
|
182,906
|
|
|
124,762
|
|
|||||
Depreciation, depletion and amortization
|
404,237
|
|
|
554,386
|
|
|
771,549
|
|
|
818,466
|
|
|
606,150
|
|
|||||
Interest expense, net of amounts capitalized
|
192,862
|
|
|
460,635
|
|
|
499,890
|
|
|
417,174
|
|
|
379,937
|
|
|||||
Loss from continuing operations
|
(385,697
|
)
|
|
(3,744,634
|
)
|
|
(474,405
|
)
|
|
(671,364
|
)
|
|
(386,616
|
)
|
|||||
Income (loss) from discontinued operations
|
(1,786,159
|
)
|
|
(1,015,177
|
)
|
|
22,596
|
|
|
(19,973
|
)
|
|
—
|
|
|||||
Net loss
|
(2,171,856
|
)
|
|
(4,759,811
|
)
|
|
(451,809
|
)
|
|
(691,337
|
)
|
|
(386,616
|
)
|
|||||
Loss per unit – continuing operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
(1.10
|
)
|
|
(10.91
|
)
|
|
(1.47
|
)
|
|
(2.86
|
)
|
|
(1.92
|
)
|
|||||
Diluted
|
(1.10
|
)
|
|
(10.91
|
)
|
|
(1.47
|
)
|
|
(2.86
|
)
|
|
(1.92
|
)
|
|||||
Income (loss) per unit – discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
(5.06
|
)
|
|
(2.96
|
)
|
|
0.07
|
|
|
(0.08
|
)
|
|
—
|
|
|||||
Diluted
|
(5.06
|
)
|
|
(2.96
|
)
|
|
0.07
|
|
|
(0.08
|
)
|
|
—
|
|
|||||
Net loss per unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
(6.16
|
)
|
|
(13.87
|
)
|
|
(1.40
|
)
|
|
(2.94
|
)
|
|
(1.92
|
)
|
|||||
Diluted
|
(6.16
|
)
|
|
(13.87
|
)
|
|
(1.40
|
)
|
|
(2.94
|
)
|
|
(1.92
|
)
|
|||||
Distributions declared per unit
|
$
|
—
|
|
|
$
|
0.938
|
|
|
$
|
2.90
|
|
|
$
|
2.90
|
|
|
$
|
2.87
|
|
Weighted average units outstanding
|
352,653
|
|
|
343,323
|
|
|
328,918
|
|
|
237,544
|
|
|
203,775
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flow data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating activities
(1)
|
$
|
880,514
|
|
|
$
|
1,249,457
|
|
|
$
|
1,711,890
|
|
|
$
|
1,166,212
|
|
|
$
|
350,907
|
|
Investing activities
|
(235,840
|
)
|
|
(310,417
|
)
|
|
(2,021,025
|
)
|
|
(818,317
|
)
|
|
(3,684,829
|
)
|
|||||
Financing activities
|
48,015
|
|
|
(938,681
|
)
|
|
258,773
|
|
|
(296,967
|
)
|
|
3,334,051
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets
|
$
|
4,660,591
|
|
|
$
|
9,936,880
|
|
|
$
|
16,632,820
|
|
|
$
|
16,436,499
|
|
|
$
|
11,365,653
|
|
Current portion of long-term debt
|
1,937,729
|
|
|
2,841,518
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt, net
|
—
|
|
|
4,447,308
|
|
|
8,125,213
|
|
|
6,796,015
|
|
|
5,958,539
|
|
|||||
Liabilities subject to compromise
|
4,305,005
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Unitholders’ capital (deficit)
|
(2,396,988
|
)
|
|
(268,901
|
)
|
|
4,543,605
|
|
|
5,891,427
|
|
|
4,427,180
|
|
(1)
|
Net of payments made for commodity derivative premiums of approximately $583 million for the year ended December 31, 2012.
|
|
At or for the Year Ended December 31,
|
|||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||
Production data:
|
|
|
|
|
|
|
|
|
|
|||||
Average daily production – continuing operations:
|
|
|
|
|
|
|
|
|
|
|||||
Natural gas (MMcf/d)
|
511
|
|
|
549
|
|
|
492
|
|
|
440
|
|
|
349
|
|
Oil (MBbls/d)
|
27.5
|
|
|
32.4
|
|
|
36.2
|
|
|
32.2
|
|
|
29.2
|
|
NGL (MBbls/d)
|
25.4
|
|
|
25.7
|
|
|
31.7
|
|
|
29.6
|
|
|
24.5
|
|
Total (MMcfe/d)
|
828
|
|
|
897
|
|
|
900
|
|
|
811
|
|
|
671
|
|
Average daily production – discontinued operations:
(1)
|
|
|
|
|
|
|
|
|
|
|||||
Total (MMcfe/d)
|
241
|
|
|
291
|
|
|
310
|
|
|
267
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Reserves data:
(2)
|
|
|
|
|
|
|
|
|
|
|||||
Estimated proved reserves – continuing operations:
|
|
|
|
|
|
|
|
|
|
|||||
Natural gas (Bcf)
|
2,300
|
|
|
2,231
|
|
|
3,568
|
|
|
2,730
|
|
|
2,571
|
|
Oil (MMBbls)
|
99
|
|
|
103
|
|
|
197
|
|
|
195
|
|
|
191
|
|
NGL (MMBbls)
|
104
|
|
|
97
|
|
|
146
|
|
|
184
|
|
|
179
|
|
Total (Bcfe)
|
3,520
|
|
|
3,435
|
|
|
5,631
|
|
|
4,999
|
|
|
4,796
|
|
Estimated proved reserves – discontinued operations:
|
|
|
|
|
|
|
|
|
|
|||||
Total (Bcfe)
|
—
|
|
|
1,053
|
|
|
1,673
|
|
|
1,404
|
|
|
—
|
|
(1)
|
Average daily production of discontinued operations for 2016 and 2013 is for the periods from January 1, 2016 through December 3, 2016, and December 17, 2013 through December 31, 2013, respectively.
|
(2)
|
In accordance with Securities and Exchange Commission regulations, reserves were estimated using the average price during the 12-month period, determined as an unweighted average of the first-day-of-the-month price for each month, excluding escalations based upon future conditions. The average price used to estimate reserves is held constant over the life of the reserves.
|
•
|
Hugoton Basin, which includes properties located in Kansas, the Oklahoma Panhandle and the Shallow Texas Panhandle;
|
•
|
Rockies, which includes properties located in Wyoming (Green River, Washakie and Powder River basins), Utah (Uinta Basin) and North Dakota (Williston Basin);
|
•
|
Mid-Continent, which includes Oklahoma properties located in the Anadarko and Arkoma basins, as well as waterfloods in the Central Oklahoma Platform;
|
•
|
TexLa, which includes properties located in east Texas and north Louisiana;
|
•
|
Michigan/Illinois, which includes properties located in the Antrim Shale formation in north Michigan and oil properties in south Illinois;
|
•
|
California, which includes properties located in the San Joaquin Valley and Los Angeles basins;
|
•
|
Permian Basin, which includes properties located in west Texas and southeast New Mexico; and
|
•
|
South Texas.
|
•
|
oil, natural gas and NGL sales of approximately $952 million compared to $1.2 billion for 2015;
|
•
|
average daily production of approximately 828 MMcfe/d compared to 897 MMcfe/d for 2015;
|
•
|
net loss of approximately $2.2 billion compared to $4.8 billion for 2015;
|
•
|
net cash provided by operating activities from continuing operations of approximately $874 million compared to $1.1 billion for 2015;
|
•
|
capital expenditures, excluding acquisitions, of approximately $173 million compared to $366 million for 2015; and
|
•
|
212 wells drilled (211 successful) compared to 393 wells drilled (388 successful) for 2015.
|
•
|
The Predecessor transferred all of its assets, including equity interests in its subsidiaries, other than LAC and Berry, to Linn Energy Holdco II LLC (“Holdco II”), a newly formed subsidiary of the Predecessor and the borrower under the Credit Agreement (“Exit Facility”) entered into in connection with the reorganization, in exchange for 100% of the equity of Holdco II and the issuance of interests in the Exit Facility to certain of the Predecessor’s creditors in partial satisfaction of their claims (the “Contribution”). Immediately following the Contribution, the Predecessor transferred 100% of the equity interests in Holdco II to the Successor in exchange for approximately $530 million in cash and an amount of equity securities in the Successor not to exceed 49.90% of the outstanding equity interests of the Successor (the “Disposition”), which the Predecessor distributed to certain of its creditors in satisfaction of their claims. Contemporaneously with the reorganization transactions and pursuant to the LINN Plan, (i) LAC assigned all of its rights, title and interest in the membership interests of Berry to Berry Petroleum Corporation, (ii) all of the equity interests in LAC and the Predecessor were canceled and (iii) LAC and the Predecessor commenced liquidation, which is expected to be completed following the resolution of the respective companies’ outstanding claims.
|
•
|
The holders of claims under the Predecessor’s Sixth Amended and Restated Credit Agreement (“LINN Credit Facility”) received a full recovery, consisting of a cash paydown and their pro rata share of the $1.7 billion Exit Facility. As a result, all outstanding obligations under the LINN Credit Facility were canceled.
|
•
|
Holdco II, as borrower, entered into the Exit Facility with the holders of claims under the LINN Credit Facility, as lenders, and Wells Fargo Bank, National Association, as administrative agent, providing for a new reserve-based revolving loan (the “Revolving Loan”) with up to $1.4 billion in borrowing commitments and a new term loan (the “Term Loan”) in an original principal amount of $300 million. For additional information, see “Financing Activities” below.
|
•
|
The holders of the Company’s 12.00% senior secured second lien notes due December 2020 (the “Second Lien Notes”) received their pro rata share of (i) 17,678,889 shares of Class A common stock; (ii) certain rights to purchase shares of Class A common stock in the rights offering, as described below; and (iii) $30 million in cash. The holders of the Company’s 6.50% senior notes due May 2019, 6.25% senior notes due November 2019, 8.625% senior notes due 2020, 7.75% senior notes due February 2021 and 6.50% senior notes due September 2021 (collectively, the “Unsecured Notes”) received their pro rata share of (i) 26,724,396 shares of Class A common stock; and (ii) certain rights to purchase shares of Class A common stock in the rights offering (as described below). As a result, all outstanding obligations under the Second Lien Notes and the Unsecured Notes and the indentures governing such obligations were canceled.
|
•
|
The holders of general unsecured claims (other than claims relating to the Second Lien Notes and the Unsecured Notes) against the LINN Debtors (the “LINN Unsecured Claims”) received their pro rata share of cash from two cash distribution pools totaling $40 million, as divided between a $2.3 million cash distribution pool for the payment in full of allowed LINN Unsecured Claims in an amount equal to $2,500 or less (and larger claims for which the holders irrevocably agreed to reduce such claims to $2,500), and a $37.7 million cash distribution pool for pro rata distributions to all remaining allowed general LINN Unsecured Claims. As a result, all outstanding LINN Unsecured Claims were fully satisfied, settled, released and discharged as of the Effective Date.
|
•
|
All units that were issued and outstanding immediately prior to the Effective Date were extinguished without recovery. On the Effective Date, the Reorganized LINN issued in the aggregate 91,708,500 shares of Class A common stock. No cash was raised from the issuance of the Class A common stock on account of claims held by the Predecessor’s creditors.
|
•
|
The Reorganized LINN entered into a registration rights agreement with the Backstop Parties (as defined below) and other recipients of shares of Class A common stock who own at least 10% of the shares of Class A common stock or are otherwise deemed to be an affiliate of the Reorganized LINN, pursuant to which the Company agreed to, among other things, file a registration statement with the Securities and Exchange Commission within 60 days of the Effective Date covering the offer and resale of “Registrable Securities” (as defined therein).
|
•
|
By operation of the LINN Plan and the Confirmation Order, the terms of the Predecessor’s board of directors expired as of the Effective Date. The Reorganized LINN formed a new board of directors, consisting of the Chief Executive Officer of the Predecessor, one director selected by the Reorganized LINN and five directors selected by a six-person selection committee.
|
•
|
LAC assigned all of its rights, title and interest in the membership interests of Berry to Berry Petroleum Corporation, and Berry became a wholly owned subsidiary of Berry Petroleum Corporation. All of the equity interests in LAC that were issued and outstanding immediately prior to the Effective Date were extinguished without recovery. Subsequently, LAC commenced liquidation, which is expected to be completed following the resolution of the outstanding claims. As a result, Berry Petroleum Corporation became a stand-alone company, separate from the Company and the LINN Debtors.
|
•
|
The holders of claims under Berry’s Second Amended and Restated Credit Agreement (“Berry Credit Facility”) received a full recovery, consisting of a cash paydown and their pro rata share of the new Berry credit facility (“Berry Exit Facility”). As a result, all outstanding obligations under the Berry Credit Facility were canceled.
|
•
|
Berry, as borrower, entered into the Berry Exit Facility with the holders of claims under the Berry Credit Facility, as lenders, and Wells Fargo Bank, National Association, as administrative agent, providing for a new reserve-based revolving loan with up to $550 million in borrowing commitments.
|
•
|
The holders of Berry’s 6.75% senior notes due 2020 and 6.375% senior notes due 2022 (collectively, the “Berry Unsecured Notes”) received their pro rata share of either (i) shares of common stock in Berry Petroleum Corporation or, for those non-accredited investors holding the Berry Unsecured Notes that irrevocably elected to receive a cash recovery, cash distributions from a $35 million cash distribution pool (the “Berry Cash Distribution Pool”), and (ii) certain rights to purchase shares of preferred stock in Berry Petroleum Corporation.
|
•
|
The holders of unsecured claims against Berry (other than the Berry Unsecured Notes) (the “Berry Unsecured Claims”) received their pro rata share of either (i) shares of common stock in Berry Petroleum Corporation or (ii) in the event that such holder irrevocably elected to receive a cash recovery, cash distributions from the Berry Cash Distribution Pool. As a result, all outstanding obligations under the Berry Unsecured Notes and the indentures governing such obligations were canceled and all outstanding Berry Unsecured Claims were fully satisfied, settled, released and discharged as of the Effective Date.
|
•
|
Berry and LAC settled all intercompany claims against the LINN Debtors pursuant to a settlement agreement approved as part of the Berry Plan and the Confirmation Order, which settlement provided Berry and LAC with a $25 million general unsecured claim against the Company.
|
•
|
Holders of Unsecured Notes as of the record date set therefor were granted rights entitling each such holder to subscribe to the rights offering in an amount up to its pro rata share of Class A common stock (the “Unsecured Rights Offering,” and such Class A common stock offered for purchase thereunder, the “Unsecured Rights Offering Shares”), which Unsecured Rights Offering Shares, collectively, reflected an aggregate purchase price of $319,004,408 at the per share price set forth in the Backstop Commitment Agreement.
|
•
|
Holders of Second Lien Notes as of the record date set therefor were granted rights entitling each such holder to subscribe to the rights offering in an amount up to its pro rata share of Class A common stock (the “Secured Rights Offering,” and such Class A common stock offered for purchase thereunder, the “Secured Rights Offering Shares”), which Secured Rights Offering Shares, collectively, reflected an aggregate purchase price of $210,995,592 at the per share price set forth in the Backstop Commitment Agreement.
|
|
Year Ended December 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
Variance
|
||||||
|
(in thousands)
|
||||||||||
Revenues and other:
|
|
|
|
|
|
||||||
Natural gas sales
|
$
|
426,307
|
|
|
$
|
512,538
|
|
|
$
|
(86,231
|
)
|
Oil sales
|
393,021
|
|
|
519,968
|
|
|
(126,947
|
)
|
|||
NGL sales
|
132,804
|
|
|
118,734
|
|
|
14,070
|
|
|||
Total oil, natural gas and NGL sales
|
952,132
|
|
|
1,151,240
|
|
|
(199,108
|
)
|
|||
Gains (losses) on oil and natural gas derivatives
|
(164,330
|
)
|
|
1,027,014
|
|
|
(1,191,344
|
)
|
|||
Marketing and other revenues
(1)
|
129,911
|
|
|
141,759
|
|
|
(11,848
|
)
|
|||
|
917,713
|
|
|
2,320,013
|
|
|
(1,402,300
|
)
|
|||
Expenses:
|
|
|
|
|
|
||||||
Lease operating expenses
|
317,046
|
|
|
375,840
|
|
|
(58,794
|
)
|
|||
Transportation expenses
|
161,037
|
|
|
167,561
|
|
|
(6,524
|
)
|
|||
Marketing expenses
|
29,736
|
|
|
35,278
|
|
|
(5,542
|
)
|
|||
General and administrative expenses
(2)
|
237,841
|
|
|
285,996
|
|
|
(48,155
|
)
|
|||
Exploration costs
|
4,080
|
|
|
9,473
|
|
|
(5,393
|
)
|
|||
Depreciation, depletion and amortization
|
404,237
|
|
|
554,386
|
|
|
(150,149
|
)
|
|||
Impairment of long-lived assets
|
165,044
|
|
|
4,960,144
|
|
|
(4,795,100
|
)
|
|||
Taxes, other than income taxes
|
74,838
|
|
|
111,302
|
|
|
(36,464
|
)
|
|||
(Gains) losses on sale of assets and other, net
|
15,558
|
|
|
(195,490
|
)
|
|
211,048
|
|
|||
|
1,409,417
|
|
|
6,304,490
|
|
|
(4,895,073
|
)
|
|||
Other income and (expenses)
|
(194,398
|
)
|
|
233,450
|
|
|
(427,848
|
)
|
|||
Reorganization items, net
|
311,599
|
|
|
—
|
|
|
311,599
|
|
|||
Loss from continuing operations before income taxes
|
(374,503
|
)
|
|
(3,751,027
|
)
|
|
3,376,524
|
|
|||
Income tax expense (benefit)
|
11,194
|
|
|
(6,393
|
)
|
|
17,587
|
|
|||
Loss from continuing operations
|
(385,697
|
)
|
|
(3,744,634
|
)
|
|
3,358,937
|
|
|||
Loss from discontinued operations, net of income taxes
|
(1,786,159
|
)
|
|
(1,015,177
|
)
|
|
(770,982
|
)
|
|||
Net loss
|
$
|
(2,171,856
|
)
|
|
$
|
(4,759,811
|
)
|
|
$
|
2,587,955
|
|
(1)
|
For the years ended December 31, 2016, and December 31, 2015, approximately $69 million and $78 million, respectively, of general and administrative expenses were incurred by Berry through a management fee charged by the Company. Management fee revenues are included in “other revenues” on the consolidated statements of operations.
|
(2)
|
General and administrative expenses for the years ended December 31, 2016, and December 31, 2015, include approximately $34 million and $47 million, respectively, of noncash unit-based compensation expenses. In addition, general and administrative expenses for the years ended December 31, 2016, and December 31, 2015, include costs incurred by LINN Energy associated with the operations of Berry. On February 28, 2017, LINN Energy and Berry emerged from bankruptcy as stand-alone, unaffiliated entities.
|
|
Year Ended December 31,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Variance
|
|||||
Average daily production:
|
|
|
|
|
|
|||||
Natural gas (MMcf/d)
|
511
|
|
|
549
|
|
|
(7
|
)%
|
||
Oil (MBbls/d)
|
27.5
|
|
|
32.4
|
|
|
(15
|
)%
|
||
NGL (MBbls/d)
|
25.4
|
|
|
25.7
|
|
|
(1
|
)%
|
||
Total (MMcfe/d)
|
828
|
|
|
897
|
|
|
(8
|
)%
|
||
|
|
|
|
|
|
|||||
Weighted average prices:
(1)
|
|
|
|
|
|
|||||
Natural gas (Mcf)
|
$
|
2.28
|
|
|
$
|
2.56
|
|
|
(11
|
)%
|
Oil (Bbl)
|
$
|
39.12
|
|
|
$
|
44.00
|
|
|
(11
|
)%
|
NGL (Bbl)
|
$
|
14.28
|
|
|
$
|
12.68
|
|
|
13
|
%
|
|
|
|
|
|
|
|||||
Average NYMEX prices:
|
|
|
|
|
|
|||||
Natural gas (MMBtu)
|
$
|
2.46
|
|
|
$
|
2.66
|
|
|
(8
|
)%
|
Oil (Bbl)
|
$
|
43.32
|
|
|
$
|
48.80
|
|
|
(11
|
)%
|
|
|
|
|
|
|
|||||
Costs per Mcfe of production:
|
|
|
|
|
|
|||||
Lease operating expenses
|
$
|
1.05
|
|
|
$
|
1.15
|
|
|
(9
|
)%
|
Transportation expenses
|
$
|
0.53
|
|
|
$
|
0.51
|
|
|
4
|
%
|
General and administrative expenses
(2)
|
$
|
0.78
|
|
|
$
|
0.87
|
|
|
(10
|
)%
|
Depreciation, depletion and amortization
|
$
|
1.33
|
|
|
$
|
1.69
|
|
|
(21
|
)%
|
Taxes, other than income taxes
|
$
|
0.25
|
|
|
$
|
0.34
|
|
|
(26
|
)%
|
|
|
|
|
|
|
|||||
Average daily production – discontinued operations:
(3)
|
|
|
|
|
|
|||||
Total (MMcfe/d)
|
241
|
|
|
291
|
|
|
(17
|
)%
|
(1)
|
Does not include the effect of gains (losses) on derivatives.
|
(2)
|
General and administrative expenses for the years ended December 31, 2016, and December 31, 2015, include approximately $34 million and $47 million, respectively, of noncash unit-based compensation expenses. In addition, general and administrative expenses for the years ended December 31, 2016, and December 31, 2015, include costs incurred by LINN Energy associated with the operations of Berry. On February 28, 2017, LINN Energy and Berry emerged from bankruptcy as stand-alone, unaffiliated entities.
|
(3)
|
Average daily production of discontinued operations for 2016 is for the period from January 1, 2016 through December 3, 2016.
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
|
|
|
|
||||
Mid-Continent region
|
$
|
141,902
|
|
|
$
|
405,370
|
|
Rockies region
|
23,142
|
|
|
1,592,256
|
|
||
Hugoton Basin region
|
—
|
|
|
1,667,768
|
|
||
TexLa region
|
—
|
|
|
352,422
|
|
||
Permian Basin region
|
—
|
|
|
71,990
|
|
||
South Texas region
|
—
|
|
|
42,433
|
|
||
Proved oil and natural gas properties
|
165,044
|
|
|
4,132,239
|
|
||
TexLa region
|
—
|
|
|
416,846
|
|
||
Permian Basin region
|
—
|
|
|
226,922
|
|
||
Rockies region
|
—
|
|
|
184,137
|
|
||
Unproved oil and natural gas properties
|
—
|
|
|
827,905
|
|
||
Impairment of long-lived assets
|
$
|
165,044
|
|
|
$
|
4,960,144
|
|
|
Year Ended December 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
Variance
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
Severance taxes
|
$
|
38,800
|
|
|
$
|
53,752
|
|
|
$
|
(14,952
|
)
|
Ad valorem taxes
|
33,883
|
|
|
54,388
|
|
|
(20,505
|
)
|
|||
California carbon allowances
|
1,123
|
|
|
3,210
|
|
|
(2,087
|
)
|
|||
Other
|
1,032
|
|
|
(48
|
)
|
|
1,080
|
|
|||
|
$
|
74,838
|
|
|
$
|
111,302
|
|
|
$
|
(36,464
|
)
|
|
Year Ended December 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
Variance
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
Interest expense, net of amounts capitalized
|
$
|
(192,862
|
)
|
|
$
|
(460,635
|
)
|
|
$
|
267,773
|
|
Gain on extinguishment of debt
|
—
|
|
|
708,050
|
|
|
(708,050
|
)
|
|||
Other, net
|
(1,536
|
)
|
|
(13,965
|
)
|
|
12,429
|
|
|||
|
$
|
(194,398
|
)
|
|
$
|
233,450
|
|
|
$
|
(427,848
|
)
|
|
Year Ended December 31, 2016
|
||
|
(in thousands)
|
||
|
|
||
Legal and other professional advisory fees
|
$
|
(56,656
|
)
|
Unamortized deferred financing fees, discounts and premiums
|
(52,045
|
)
|
|
Gain related to interest payable on the 12.00% senior secured second lien notes due December 2020
(1)
|
551,000
|
|
|
Terminated contracts
|
(66,052
|
)
|
|
Other
|
(64,648
|
)
|
|
Reorganization items, net
|
$
|
311,599
|
|
(1)
|
Represents a noncash gain on the write-off of postpetition contractual interest through maturity
,
recorded to reflect the carrying value of the liability subject to compromise at its estimated allowed claim amount.
|
|
Year Ended December 31,
|
|
|
||||||||
|
2015
|
|
2014
|
|
Variance
|
||||||
|
(in thousands)
|
||||||||||
Revenues and other:
|
|
|
|
|
|
||||||
Natural gas sales
|
$
|
512,538
|
|
|
$
|
768,504
|
|
|
$
|
(255,966
|
)
|
Oil sales
|
519,968
|
|
|
1,149,444
|
|
|
(629,476
|
)
|
|||
NGL sales
|
118,734
|
|
|
394,189
|
|
|
(275,455
|
)
|
|||
Total oil, natural gas and NGL sales
|
1,151,240
|
|
|
2,312,137
|
|
|
(1,160,897
|
)
|
|||
Gains on oil and natural gas derivatives
|
1,027,014
|
|
|
1,127,395
|
|
|
(100,381
|
)
|
|||
Marketing and other revenues
(1)
|
141,759
|
|
|
198,735
|
|
|
(56,976
|
)
|
|||
|
2,320,013
|
|
|
3,638,267
|
|
|
(1,318,254
|
)
|
|||
Expenses:
|
|
|
|
|
|
||||||
Lease operating expenses
|
375,840
|
|
|
443,157
|
|
|
(67,317
|
)
|
|||
Transportation expenses
|
167,561
|
|
|
165,489
|
|
|
2,072
|
|
|||
Marketing expenses
|
35,278
|
|
|
81,210
|
|
|
(45,932
|
)
|
|||
General and administrative expenses
(2)
|
285,996
|
|
|
274,006
|
|
|
11,990
|
|
|||
Exploration costs
|
9,473
|
|
|
125,037
|
|
|
(115,564
|
)
|
|||
Depreciation, depletion and amortization
|
554,386
|
|
|
771,549
|
|
|
(217,163
|
)
|
|||
Impairment of long-lived assets
|
4,960,144
|
|
|
2,050,387
|
|
|
2,909,757
|
|
|||
Taxes, other than income taxes
|
111,302
|
|
|
169,695
|
|
|
(58,393
|
)
|
|||
Gains on sale of assets and other, net
|
(195,490
|
)
|
|
(487,286
|
)
|
|
291,796
|
|
|||
|
6,304,490
|
|
|
3,593,244
|
|
|
2,711,246
|
|
|||
Other income and (expenses)
|
233,450
|
|
|
(515,060
|
)
|
|
748,510
|
|
|||
Loss from continuing operations before income taxes
|
(3,751,027
|
)
|
|
(470,037
|
)
|
|
(3,280,990
|
)
|
|||
Income tax expense (benefit)
|
(6,393
|
)
|
|
4,368
|
|
|
(10,761
|
)
|
|||
Loss from continuing operations
|
(3,744,634
|
)
|
|
(474,405
|
)
|
|
(3,270,229
|
)
|
|||
Income (loss) from discontinued operations, net of income taxes
|
(1,015,177
|
)
|
|
22,596
|
|
|
(1,037,773
|
)
|
|||
Net loss
|
$
|
(4,759,811
|
)
|
|
$
|
(451,809
|
)
|
|
$
|
(4,308,002
|
)
|
(1)
|
For the years ended December 31, 2015, and December 31, 2014, approximately $78 million and $86 million, respectively, of general and administrative expenses were incurred by Berry through a management fee charged by the Company. Management fee revenues are included in “other revenues” on the consolidated statements of operations.
|
(2)
|
General and administrative expenses for the years ended December 31, 2015, and December 31, 2014, include approximately $47 million and $45 million, respectively, of noncash unit-based compensation expenses. In addition, general and administrative expenses for the years ended December 31, 2015, and December 31, 2014, include costs incurred by LINN Energy associated with the operations of Berry. On February 28, 2017, LINN Energy and Berry emerged from bankruptcy as stand-alone, unaffiliated entities.
|
|
Year Ended December 31,
|
|
|
|||||||
|
2015
|
|
2014
|
|
Variance
|
|||||
Average daily production:
|
|
|
|
|
|
|||||
Natural gas (MMcf/d)
|
549
|
|
|
492
|
|
|
12
|
%
|
||
Oil (MBbls/d)
|
32.4
|
|
|
36.2
|
|
|
(10
|
)%
|
||
NGL (MBbls/d)
|
25.7
|
|
|
31.7
|
|
|
(19
|
)%
|
||
Total (MMcfe/d)
|
897
|
|
|
900
|
|
|
—
|
|
||
|
|
|
|
|
|
|||||
Weighted average prices:
(1)
|
|
|
|
|
|
|||||
Natural gas (Mcf)
|
$
|
2.56
|
|
|
$
|
4.28
|
|
|
(40
|
)%
|
Oil (Bbl)
|
$
|
44.00
|
|
|
$
|
87.00
|
|
|
(49
|
)%
|
NGL (Bbl)
|
$
|
12.68
|
|
|
$
|
34.07
|
|
|
(63
|
)%
|
|
|
|
|
|
|
|||||
Average NYMEX prices:
|
|
|
|
|
|
|||||
Natural gas (MMBtu)
|
$
|
2.66
|
|
|
$
|
4.41
|
|
|
(40
|
)%
|
Oil (Bbl)
|
$
|
48.80
|
|
|
$
|
93.00
|
|
|
(48
|
)%
|
|
|
|
|
|
|
|||||
Costs per Mcfe of production:
|
|
|
|
|
|
|||||
Lease operating expenses
|
$
|
1.15
|
|
|
$
|
1.35
|
|
|
(15
|
)%
|
Transportation expenses
|
$
|
0.51
|
|
|
$
|
0.50
|
|
|
2
|
%
|
General and administrative expenses
(2)
|
$
|
0.87
|
|
|
$
|
0.83
|
|
|
5
|
%
|
Depreciation, depletion and amortization
|
$
|
1.69
|
|
|
$
|
2.35
|
|
|
(28
|
)%
|
Taxes, other than income taxes
|
$
|
0.34
|
|
|
$
|
0.52
|
|
|
(35
|
)%
|
|
|
|
|
|
|
|||||
Average daily production – discontinued operations:
|
|
|
|
|
|
|||||
Total (MMcfe/d)
|
291
|
|
|
310
|
|
|
(6
|
)%
|
(1)
|
Does not include the effect of gains (losses) on derivatives.
|
(2)
|
General and administrative expenses for the years ended December 31, 2015, and December 31, 2014, include approximately $47 million and $45 million, respectively, of noncash unit-based compensation expenses. In addition, general and administrative expenses for the years ended December 31, 2015, and December 31, 2014, include costs incurred by LINN Energy associated with the operations of Berry. On February 28, 2017, LINN Energy and Berry emerged from bankruptcy as stand-alone, unaffiliated entities.
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(in thousands)
|
||||||
|
|
|
|
||||
Hugoton Basin region
|
$
|
1,667,768
|
|
|
$
|
—
|
|
Rockies region
|
1,592,256
|
|
|
332,365
|
|
||
Mid-Continent region
|
405,370
|
|
|
244,413
|
|
||
TexLa region
|
352,422
|
|
|
4,836
|
|
||
Permian Basin region
|
71,990
|
|
|
1,337,444
|
|
||
South Texas region
|
42,433
|
|
|
131,329
|
|
||
Proved oil and natural gas properties
|
4,132,239
|
|
|
2,050,387
|
|
||
TexLa region
|
416,846
|
|
|
—
|
|
||
Permian Basin region
|
226,922
|
|
|
—
|
|
||
Rockies region
|
184,137
|
|
|
—
|
|
||
Unproved oil and natural gas properties
|
827,905
|
|
|
—
|
|
||
Impairment of long-lived assets
|
$
|
4,960,144
|
|
|
$
|
2,050,387
|
|
•
|
Net gain of approximately $294 million, including costs to sell of approximately $10 million, on the Granite Wash Assets Sale;
|
•
|
Net gain of approximately $50 million, including costs to sell of approximately $3 million, on the noncash exchange of a portion of its Permian Basin properties to ExxonMobil for properties in California’s South Belridge Field;
|
•
|
Net gain of approximately $99 million, including costs to sell of approximately $3 million, on the noncash exchange of a portion of its Permian Basin properties to Exxon XTO for properties in the Hugoton Basin; and
|
•
|
Net gain of approximately $36 million on the sale of the Company’s interests in certain non-producing oil and natural gas properties located in the Mid-Continent region.
|
|
Year Ended December 31,
|
|
|
||||||||
|
2015
|
|
2014
|
|
Variance
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
Severance taxes
|
$
|
53,752
|
|
|
$
|
108,820
|
|
|
$
|
(55,068
|
)
|
Ad valorem taxes
|
54,388
|
|
|
60,136
|
|
|
(5,748
|
)
|
|||
California carbon allowances
|
3,210
|
|
|
461
|
|
|
2,749
|
|
|||
Other
|
(48
|
)
|
|
278
|
|
|
(326
|
)
|
|||
|
$
|
111,302
|
|
|
$
|
169,695
|
|
|
$
|
(58,393
|
)
|
|
Year Ended December 31,
|
|
|
||||||||
|
2015
|
|
2014
|
|
Variance
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
Interest expense, net of amounts capitalized
|
$
|
(460,635
|
)
|
|
$
|
(499,890
|
)
|
|
$
|
39,255
|
|
Gain on extinguishment of debt
|
708,050
|
|
|
—
|
|
|
708,050
|
|
|||
Other, net
|
(13,965
|
)
|
|
(15,170
|
)
|
|
1,205
|
|
|||
|
$
|
233,450
|
|
|
$
|
(515,060
|
)
|
|
$
|
748,510
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
Oil and natural gas
|
$
|
126,127
|
|
|
$
|
317,957
|
|
|
$
|
926,394
|
|
Plant and pipeline
|
38,384
|
|
|
2,539
|
|
|
12,851
|
|
|||
Other
|
8,222
|
|
|
45,610
|
|
|
42,621
|
|
|||
Capital expenditures, excluding acquisitions
|
$
|
172,733
|
|
|
$
|
366,106
|
|
|
$
|
981,866
|
|
Capital expenditures, excluding acquisitions – discontinued operations
|
$
|
22,019
|
|
|
$
|
151,589
|
|
|
$
|
574,068
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net cash:
|
|
|
|
|
|
||||||
Provided by operating activities
|
$
|
880,514
|
|
|
$
|
1,249,457
|
|
|
$
|
1,711,890
|
|
Used in investing activities
|
(235,840
|
)
|
|
(310,417
|
)
|
|
(2,021,025
|
)
|
|||
Provided by (used in) financing activities
|
48,015
|
|
|
(938,681
|
)
|
|
258,773
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
692,689
|
|
|
$
|
359
|
|
|
$
|
(50,362
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Cash flow from investing activities:
|
|
|
|
|
|
||||||
Deconsolidation of Berry Petroleum Company, LLC
|
$
|
(28,549
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquisition of oil and natural gas properties and joint-venture funding, net of cash acquired
|
—
|
|
|
—
|
|
|
(2,475,315
|
)
|
|||
Capital expenditures
|
(225,748
|
)
|
|
(625,223
|
)
|
|
(1,124,465
|
)
|
|||
Investment in discontinued operations
|
—
|
|
|
(132,332
|
)
|
|
(100,921
|
)
|
|||
Proceeds from sale of properties and equipment and other
|
(4,690
|
)
|
|
345,770
|
|
|
2,195,898
|
|
|||
Net cash used in investing activities – continuing operations
|
(258,987
|
)
|
|
(411,785
|
)
|
|
(1,504,803
|
)
|
|||
Net cash provided by (used in) investing activities – discontinued operations
|
23,147
|
|
|
101,368
|
|
|
(516,222
|
)
|
|||
Net cash used in investing activities
|
$
|
(235,840
|
)
|
|
$
|
(310,417
|
)
|
|
$
|
(2,021,025
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Proceeds from borrowings:
|
|
|
|
|
|
||||||
LINN Credit Facility
|
$
|
978,500
|
|
|
$
|
1,445,000
|
|
|
$
|
2,540,000
|
|
Senior notes
|
—
|
|
|
—
|
|
|
1,100,024
|
|
|||
Bridge loan and term loans
|
—
|
|
|
—
|
|
|
2,300,000
|
|
|||
|
$
|
978,500
|
|
|
$
|
1,445,000
|
|
|
$
|
5,940,024
|
|
Repayments of debt:
|
|
|
|
|
|
||||||
LINN Credit Facility
|
$
|
(814,298
|
)
|
|
$
|
(1,275,000
|
)
|
|
$
|
(2,305,000
|
)
|
Senior notes
|
—
|
|
|
(553,461
|
)
|
|
—
|
|
|||
Bridge loan and term loan
|
(98,911
|
)
|
|
—
|
|
|
(2,300,000
|
)
|
|||
|
$
|
(913,209
|
)
|
|
$
|
(1,828,461
|
)
|
|
$
|
(4,605,000
|
)
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands, except percentages)
|
||||||
|
|
|
|
||||
LINN credit facility
|
$
|
1,654,745
|
|
|
$
|
2,215,000
|
|
Berry credit facility
|
—
|
|
|
873,175
|
|
||
Term loan
|
284,241
|
|
|
500,000
|
|
||
6.50% senior notes due May 2019
|
562,234
|
|
|
562,234
|
|
||
6.25% senior notes due November 2019
|
581,402
|
|
|
581,402
|
|
||
8.625% senior notes due April 2020
|
718,596
|
|
|
718,596
|
|
||
6.75% Berry senior notes due November 2020
|
—
|
|
|
261,100
|
|
||
12.00% senior secured second lien notes due December 2020
(1)
|
1,000,000
|
|
|
1,000,000
|
|
||
Interest payable on senior secured second lien notes due December 2020
(1)
|
—
|
|
|
608,333
|
|
||
7.75% senior notes due February 2021
|
779,474
|
|
|
779,474
|
|
||
6.50% senior notes due September 2021
|
381,423
|
|
|
381,423
|
|
||
6.375% Berry senior notes due September 2022
|
—
|
|
|
572,700
|
|
||
Net unamortized discounts and premiums
(2)
|
—
|
|
|
(8,694
|
)
|
||
Net unamortized deferred financing fees
(2)
|
(1,257
|
)
|
|
(37,374
|
)
|
||
Total debt, net
|
5,960,858
|
|
|
9,007,369
|
|
||
Less current portion, net
(3)
|
(1,937,729
|
)
|
|
(2,841,518
|
)
|
||
Less liabilities subject to compromise
(4)
|
(4,023,129
|
)
|
|
—
|
|
||
Less debt and unamortized premiums of discontinued operations
|
—
|
|
|
(1,718,543
|
)
|
||
Long-term debt, net
|
$
|
—
|
|
|
$
|
4,447,308
|
|
(1)
|
The issuance of the Second Lien Notes was accounted for as a troubled debt restructuring which requires that interest payments on the Second Lien Notes reduce the carrying value of the debt with no interest expense recognized. During the year ended December 31, 2016, $551 million was written off to reorganization items in connection with the filing of the Bankruptcy Petitions. The remaining amount of approximately $57 million was classified as liabilities subject to compromise at December 31, 2016.
|
(2)
|
Approximately $52 million in net discounts, premiums and deferred financing fees were written off to reorganization items in connection with the filing of the Bankruptcy Petitions.
|
(3)
|
Due to existing and anticipated covenant violations, the Company’s Credit Facilities and term loan were classified as current at December 31, 2016, and December 31, 2015. The current portion as of December 31, 2015, also includes approximately $128 million of interest payable on the Second Lien Notes due within one year.
|
(4)
|
The Company’s senior notes and Second Lien Notes were classified as liabilities subject to compromise at December 31, 2016.
|
•
|
6.50% senior notes due May 2019 – $53 million;
|
•
|
6.25% senior notes due November 2019 – $395 million;
|
•
|
8.625% senior notes due April 2020 – $295 million;
|
•
|
7.75% senior notes due February 2021 – $36 million; and
|
•
|
6.50% senior notes due September 2021 – $148 million.
|
|
|
Payments Due
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
2017
|
|
2018 – 2019
|
|
2020 – 2021
|
|
2022 and Beyond
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Debt obligations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Credit facility
(1)
|
|
$
|
1,654,745
|
|
|
$
|
1,654,745
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loan
(1)
|
|
284,241
|
|
|
284,241
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Second lien notes
(2)
|
|
1,000,000
|
|
|
—
|
|
|
—
|
|
|
1,000,000
|
|
|
—
|
|
|||||
Senior notes
|
|
3,023,129
|
|
|
—
|
|
|
1,143,636
|
|
|
1,879,493
|
|
|
—
|
|
|||||
Interest
(3)
|
|
1,507,337
|
|
|
446,708
|
|
|
776,991
|
|
|
283,638
|
|
|
—
|
|
|||||
Operating lease obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Office, property and equipment leases
|
|
9,019
|
|
|
3,627
|
|
|
4,860
|
|
|
472
|
|
|
60
|
|
|||||
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commodity derivatives
|
|
93,857
|
|
|
82,508
|
|
|
11,349
|
|
|
—
|
|
|
—
|
|
|||||
Asset retirement obligations
|
|
402,162
|
|
|
9,686
|
|
|
12,704
|
|
|
14,791
|
|
|
364,981
|
|
|||||
Other
|
|
961
|
|
|
61
|
|
|
122
|
|
|
122
|
|
|
656
|
|
|||||
|
|
$
|
7,975,451
|
|
|
$
|
2,481,576
|
|
|
$
|
1,949,662
|
|
|
$
|
3,178,516
|
|
|
$
|
365,697
|
|
(1)
|
The contractual maturity date for the LINN Credit Facility and term loan was April 2019; however, the LINN Credit Facility and term loan were subject to springing maturities based on the maturity of any outstanding LINN Energy junior lien debt. Due to covenant violations, the LINN Credit Facility and term loan were classified as current at December 31, 2016.
|
(2)
|
The contractual maturity date for the Second Lien Notes is December 2020; however, these notes were subject to a springing maturity based on the maturity of any outstanding LINN Energy unsecured debt.
|
(3)
|
Represents interest on the LINN Credit Facility and term loan computed at 5.50% through contractual maturity in April 2019. Interest on the December 2020 Second Lien Notes computed at a fixed rate of 12.00%. Interest on the May 2019 senior notes, November 2019 senior notes, April 2020 senior notes, February 2021 senior notes and September 2021 senior notes computed at fixed rates of 6.50%, 6.25%, 8.625%, 7.75% and 6.50%, respectively.
|
|
Page
|
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands,
except unit amounts)
|
||||||
ASSETS
|
|
||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
694,857
|
|
|
$
|
1,145
|
|
Accounts receivable – trade, net
|
198,064
|
|
|
179,124
|
|
||
Derivative instruments
|
—
|
|
|
1,207,012
|
|
||
Other current assets
|
107,613
|
|
|
74,696
|
|
||
Current assets of discontinued operations
|
—
|
|
|
81,191
|
|
||
Total current assets
|
1,000,534
|
|
|
1,543,168
|
|
||
|
|
|
|
||||
Noncurrent assets:
|
|
|
|
||||
Oil and natural gas properties (successful efforts method)
|
13,232,959
|
|
|
13,110,094
|
|
||
Less accumulated depletion and amortization
|
(9,999,560
|
)
|
|
(9,501,327
|
)
|
||
|
3,233,399
|
|
|
3,608,767
|
|
||
|
|
|
|
||||
Other property and equipment
|
636,487
|
|
|
597,216
|
|
||
Less accumulated depreciation
|
(224,547
|
)
|
|
(183,139
|
)
|
||
|
411,940
|
|
|
414,077
|
|
||
|
|
|
|
||||
Derivative instruments
|
—
|
|
|
566,401
|
|
||
Other noncurrent assets
|
14,718
|
|
|
24,182
|
|
||
Noncurrent assets of discontinued operations
|
—
|
|
|
3,780,285
|
|
||
|
14,718
|
|
|
4,370,868
|
|
||
Total noncurrent assets
|
3,660,057
|
|
|
8,393,712
|
|
||
Total assets
|
$
|
4,660,591
|
|
|
$
|
9,936,880
|
|
|
|
|
|
||||
LIABILITIES AND UNITHOLDERS’ DEFICIT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
295,077
|
|
|
$
|
338,247
|
|
Derivative instruments
|
82,508
|
|
|
—
|
|
||
Current portion of long-term debt, net
|
1,937,729
|
|
|
2,841,518
|
|
||
Other accrued liabilities
|
26,304
|
|
|
102,858
|
|
||
Current liabilities of discontinued operations
|
—
|
|
|
1,017,899
|
|
||
Total current liabilities
|
2,341,618
|
|
|
4,300,522
|
|
||
|
|
|
|
||||
Derivative instruments
|
11,349
|
|
|
857
|
|
||
Long-term debt, net
|
—
|
|
|
4,447,308
|
|
||
Other noncurrent liabilities
|
399,607
|
|
|
399,676
|
|
||
Liabilities subject to compromise
|
4,305,005
|
|
|
—
|
|
||
Noncurrent liabilities of discontinued operations
|
—
|
|
|
1,057,418
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
|
|
|
|
||||
Unitholders’ deficit:
|
|
|
|
||||
352,792,474 units and 355,017,428 units issued and outstanding at December 31, 2016, and December 31, 2015, respectively
|
5,386,885
|
|
|
5,343,116
|
|
||
Accumulated deficit
|
(7,783,873
|
)
|
|
(5,612,017
|
)
|
||
|
(2,396,988
|
)
|
|
(268,901
|
)
|
||
Total liabilities and unitholders’ deficit
|
$
|
4,660,591
|
|
|
$
|
9,936,880
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except per unit amounts)
|
||||||||||
Revenues and other:
|
|
|
|
|
|
||||||
Oil, natural gas and natural gas liquids sales
|
$
|
952,132
|
|
|
$
|
1,151,240
|
|
|
$
|
2,312,137
|
|
Gains (losses) on oil and natural gas derivatives
|
(164,330
|
)
|
|
1,027,014
|
|
|
1,127,395
|
|
|||
Marketing revenues
|
36,505
|
|
|
43,876
|
|
|
84,349
|
|
|||
Other revenues
|
93,406
|
|
|
97,883
|
|
|
114,386
|
|
|||
|
917,713
|
|
|
2,320,013
|
|
|
3,638,267
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Lease operating expenses
|
317,046
|
|
|
375,840
|
|
|
443,157
|
|
|||
Transportation expenses
|
161,037
|
|
|
167,561
|
|
|
165,489
|
|
|||
Marketing expenses
|
29,736
|
|
|
35,278
|
|
|
81,210
|
|
|||
General and administrative expenses
|
237,841
|
|
|
285,996
|
|
|
274,006
|
|
|||
Exploration costs
|
4,080
|
|
|
9,473
|
|
|
125,037
|
|
|||
Depreciation, depletion and amortization
|
404,237
|
|
|
554,386
|
|
|
771,549
|
|
|||
Impairment of long-lived assets
|
165,044
|
|
|
4,960,144
|
|
|
2,050,387
|
|
|||
Taxes, other than income taxes
|
74,838
|
|
|
111,302
|
|
|
169,695
|
|
|||
(Gains) losses on sale of assets and other, net
|
15,558
|
|
|
(195,490
|
)
|
|
(487,286
|
)
|
|||
|
1,409,417
|
|
|
6,304,490
|
|
|
3,593,244
|
|
|||
Other income and (expenses):
|
|
|
|
|
|
|
|
|
|||
Interest expense, net of amounts capitalized
|
(192,862
|
)
|
|
(460,635
|
)
|
|
(499,890
|
)
|
|||
Gain on extinguishment of debt
|
—
|
|
|
708,050
|
|
|
—
|
|
|||
Other, net
|
(1,536
|
)
|
|
(13,965
|
)
|
|
(15,170
|
)
|
|||
|
(194,398
|
)
|
|
233,450
|
|
|
(515,060
|
)
|
|||
Reorganization items, net
|
311,599
|
|
|
—
|
|
|
—
|
|
|||
Loss from continuing operations before income taxes
|
(374,503
|
)
|
|
(3,751,027
|
)
|
|
(470,037
|
)
|
|||
Income tax expense (benefit)
|
11,194
|
|
|
(6,393
|
)
|
|
4,368
|
|
|||
Loss from continuing operations
|
(385,697
|
)
|
|
(3,744,634
|
)
|
|
(474,405
|
)
|
|||
Income (loss) from discontinued operations, net of income taxes
|
(1,786,159
|
)
|
|
(1,015,177
|
)
|
|
22,596
|
|
|||
Net loss
|
$
|
(2,171,856
|
)
|
|
$
|
(4,759,811
|
)
|
|
$
|
(451,809
|
)
|
|
|
|
|
|
|
||||||
Loss per unit – continuing operations:
|
|
|
|
|
|
||||||
Basic
|
$
|
(1.10
|
)
|
|
$
|
(10.91
|
)
|
|
$
|
(1.47
|
)
|
Diluted
|
$
|
(1.10
|
)
|
|
$
|
(10.91
|
)
|
|
$
|
(1.47
|
)
|
Income (loss) per unit – discontinued operations:
|
|
|
|
|
|
||||||
Basic
|
$
|
(5.06
|
)
|
|
$
|
(2.96
|
)
|
|
$
|
0.07
|
|
Diluted
|
$
|
(5.06
|
)
|
|
$
|
(2.96
|
)
|
|
$
|
0.07
|
|
Net loss per unit:
|
|
|
|
|
|
||||||
Basic
|
$
|
(6.16
|
)
|
|
$
|
(13.87
|
)
|
|
$
|
(1.40
|
)
|
Diluted
|
$
|
(6.16
|
)
|
|
$
|
(13.87
|
)
|
|
$
|
(1.40
|
)
|
Weighted average units outstanding:
|
|
|
|
|
|
||||||
Basic
|
352,653
|
|
|
343,323
|
|
|
328,918
|
|
|||
Diluted
|
352,653
|
|
|
343,323
|
|
|
328,918
|
|
|||
|
|
|
|
|
|
||||||
Distributions declared per unit
|
$
|
—
|
|
|
$
|
0.938
|
|
|
$
|
2.90
|
|
|
Units
|
|
Unitholders’
Capital
|
|
Accumulated
Deficit
|
|
Treasury Units (at Cost)
|
|
Total Unitholders’
Capital (Deficit)
|
|||||||||
|
(in thousands)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
December 31, 2013
|
329,661
|
|
|
$
|
6,291,824
|
|
|
$
|
(400,397
|
)
|
|
$
|
—
|
|
|
$
|
5,891,427
|
|
Issuance of units
|
2,314
|
|
|
13,354
|
|
|
—
|
|
|
—
|
|
|
13,354
|
|
||||
Distributions to unitholders
|
|
|
(962,048
|
)
|
|
—
|
|
|
—
|
|
|
(962,048
|
)
|
|||||
Unit-based compensation expenses
|
|
|
53,284
|
|
|
—
|
|
|
—
|
|
|
53,284
|
|
|||||
Reclassification of distributions paid on forfeited restricted units
|
|
|
602
|
|
|
—
|
|
|
—
|
|
|
602
|
|
|||||
Excess tax benefit from unit-based compensation and other
|
|
|
347
|
|
|
—
|
|
|
—
|
|
|
347
|
|
|||||
Deferred tax on capital contribution
|
|
|
(1,552
|
)
|
|
—
|
|
|
—
|
|
|
(1,552
|
)
|
|||||
Net loss
|
|
|
—
|
|
|
(451,809
|
)
|
|
—
|
|
|
(451,809
|
)
|
|||||
December 31, 2014
|
331,975
|
|
|
5,395,811
|
|
|
(852,206
|
)
|
|
—
|
|
|
4,543,605
|
|
||||
Sale of units, net of offering costs of $8,762
|
19,622
|
|
|
224,665
|
|
|
—
|
|
|
—
|
|
|
224,665
|
|
||||
Issuance of units
|
3,611
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cancellation of units
|
(191
|
)
|
|
(672
|
)
|
|
—
|
|
|
672
|
|
|
—
|
|
||||
Purchase of units
|
|
|
—
|
|
|
—
|
|
|
(672
|
)
|
|
(672
|
)
|
|||||
Distributions to unitholders
|
|
|
(323,878
|
)
|
|
—
|
|
|
—
|
|
|
(323,878
|
)
|
|||||
Unit-based compensation expenses
|
|
|
56,136
|
|
|
—
|
|
|
—
|
|
|
56,136
|
|
|||||
Reclassification of distributions paid on forfeited restricted units
|
|
|
865
|
|
|
—
|
|
|
—
|
|
|
865
|
|
|||||
Excess tax benefit from unit-based compensation and other
|
|
|
(9,811
|
)
|
|
—
|
|
|
—
|
|
|
(9,811
|
)
|
|||||
Net loss
|
|
|
—
|
|
|
(4,759,811
|
)
|
|
—
|
|
|
(4,759,811
|
)
|
|||||
December 31, 2015
|
355,017
|
|
|
5,343,116
|
|
|
(5,612,017
|
)
|
|
—
|
|
|
(268,901
|
)
|
||||
Issuance of units
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cancellation of units
|
(2,230
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Unit-based compensation expenses
|
|
|
44,218
|
|
|
—
|
|
|
—
|
|
|
44,218
|
|
|||||
Other
|
|
|
(449
|
)
|
|
—
|
|
|
—
|
|
|
(449
|
)
|
|||||
Net loss
|
|
|
—
|
|
|
(2,171,856
|
)
|
|
—
|
|
|
(2,171,856
|
)
|
|||||
December 31, 2016
|
352,792
|
|
|
$
|
5,386,885
|
|
|
$
|
(7,783,873
|
)
|
|
$
|
—
|
|
|
$
|
(2,396,988
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Cash flow from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(2,171,856
|
)
|
|
$
|
(4,759,811
|
)
|
|
$
|
(451,809
|
)
|
Adjustments to
reconcile net loss to net cash provided by operating activities – continuing operations:
|
|
|
|
|
|
||||||
(Income) loss from discontinued operations
|
1,786,159
|
|
|
1,015,177
|
|
|
(22,596
|
)
|
|||
Depreciation, depletion and amortization
|
404,237
|
|
|
554,386
|
|
|
771,549
|
|
|||
Impairment of long-lived assets
|
165,044
|
|
|
4,960,144
|
|
|
2,050,387
|
|
|||
Unit-based compensation expenses
|
44,218
|
|
|
56,136
|
|
|
53,284
|
|
|||
Gain on extinguishment of debt
|
—
|
|
|
(708,050
|
)
|
|
—
|
|
|||
Amortization and write-off of deferred financing fees
|
13,356
|
|
|
30,993
|
|
|
55,839
|
|
|||
(Gains) losses on sale of assets and other, net
|
13,007
|
|
|
(188,200
|
)
|
|
(372,945
|
)
|
|||
Deferred income taxes
|
11,367
|
|
|
4,606
|
|
|
3,874
|
|
|||
Reorganization items, net
|
(365,367
|
)
|
|
—
|
|
|
—
|
|
|||
Derivatives activities:
|
|
|
|
|
|
||||||
Total (gains) losses
|
164,330
|
|
|
(1,027,014
|
)
|
|
(1,127,395
|
)
|
|||
Cash settlements
|
503,943
|
|
|
1,130,640
|
|
|
88,776
|
|
|||
Cash settlements on canceled derivatives
|
356,835
|
|
|
4,679
|
|
|
—
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
(Increase) decrease in accounts receivable – trade, net
|
(71,059
|
)
|
|
211,884
|
|
|
(7,674
|
)
|
|||
Increase in other assets
|
(17,733
|
)
|
|
(9,142
|
)
|
|
(1,875
|
)
|
|||
Increase (decrease) in accounts payable and accrued expenses
|
38,468
|
|
|
(98,223
|
)
|
|
99,003
|
|
|||
Decrease in other liabilities
|
(515
|
)
|
|
(51,266
|
)
|
|
(10,008
|
)
|
|||
Net cash provided by operating activities – continuing operations
|
874,434
|
|
|
1,126,939
|
|
|
1,128,410
|
|
|||
Net cash provided by operating activities – discontinued operations
|
6,080
|
|
|
122,518
|
|
|
583,480
|
|
|||
Net cash provided by operating activities
|
880,514
|
|
|
1,249,457
|
|
|
1,711,890
|
|
|||
|
|
|
|
|
|
||||||
Cash flow from investing activities:
|
|
|
|
|
|
||||||
Deconsolidation of Berry Petroleum Company, LLC cash
|
(28,549
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition of oil and natural gas properties and joint-venture funding, net of cash acquired
|
—
|
|
|
—
|
|
|
(2,475,315
|
)
|
|||
Development of oil and natural gas properties
|
(180,313
|
)
|
|
(576,256
|
)
|
|
(1,061,395
|
)
|
|||
Purchases of other property and equipment
|
(45,435
|
)
|
|
(48,967
|
)
|
|
(63,070
|
)
|
|||
Investment in discontinued operations
|
—
|
|
|
(132,332
|
)
|
|
(100,921
|
)
|
|||
Proceeds from sale of properties and equipment and other
|
(4,690
|
)
|
|
345,770
|
|
|
2,195,898
|
|
|||
Net cash used in investing activities – continuing operations
|
(258,987
|
)
|
|
(411,785
|
)
|
|
(1,504,803
|
)
|
|||
Net cash provided by (used in) investing activities – discontinued operations
|
23,147
|
|
|
101,368
|
|
|
(516,222
|
)
|
|||
Net cash used in investing activities
|
(235,840
|
)
|
|
(310,417
|
)
|
|
(2,021,025
|
)
|
|||
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Cash flow from financing activities:
|
|
|
|
|
|
||||||
Proceeds from sale of units
|
—
|
|
|
233,427
|
|
|
—
|
|
|||
Proceeds from borrowings
|
978,500
|
|
|
1,445,000
|
|
|
5,940,024
|
|
|||
Repayments of debt
|
(913,209
|
)
|
|
(1,828,461
|
)
|
|
(4,605,000
|
)
|
|||
Distributions to unitholders
|
—
|
|
|
(323,878
|
)
|
|
(962,048
|
)
|
|||
Financing fees and offering costs
|
(752
|
)
|
|
(26,678
|
)
|
|
(59,048
|
)
|
|||
Settlement of advance from discontinued operations
|
—
|
|
|
(129,217
|
)
|
|
—
|
|
|||
Excess tax benefit from unit-based compensation
|
—
|
|
|
(9,467
|
)
|
|
766
|
|
|||
Other
|
(14,823
|
)
|
|
(74,958
|
)
|
|
60,792
|
|
|||
Net cash provided by (used in) financing activities – continuing operations
|
49,716
|
|
|
(714,232
|
)
|
|
375,486
|
|
|||
Net cash used in financing activities – discontinued operations
|
(1,701
|
)
|
|
(224,449
|
)
|
|
(116,713
|
)
|
|||
Net cash provided by (used in) financing activities
|
48,015
|
|
|
(938,681
|
)
|
|
258,773
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
692,689
|
|
|
359
|
|
|
(50,362
|
)
|
|||
Cash and cash equivalents:
|
|
|
|
|
|
||||||
Beginning
|
2,168
|
|
|
1,809
|
|
|
52,171
|
|
|||
Ending
|
694,857
|
|
|
2,168
|
|
|
1,809
|
|
|||
Less cash and cash equivalents of discontinued operations at end of year
|
—
|
|
|
(1,023
|
)
|
|
(1,586
|
)
|
|||
Ending – continuing operations
|
$
|
694,857
|
|
|
$
|
1,145
|
|
|
$
|
223
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
Mid-Continent region
|
$
|
141,902
|
|
|
$
|
405,370
|
|
|
$
|
244,413
|
|
Rockies region
|
23,142
|
|
|
1,592,256
|
|
|
332,365
|
|
|||
Hugoton Basin region
|
—
|
|
|
1,667,768
|
|
|
—
|
|
|||
TexLa region
|
—
|
|
|
352,422
|
|
|
4,836
|
|
|||
Permian Basin region
|
—
|
|
|
71,990
|
|
|
1,337,444
|
|
|||
South Texas region
|
—
|
|
|
42,433
|
|
|
131,329
|
|
|||
|
$
|
165,044
|
|
|
$
|
4,132,239
|
|
|
$
|
2,050,387
|
|
•
|
The Predecessor transferred all of its assets, including equity interests in its subsidiaries, other than LAC and Berry, to Linn Energy Holdco II LLC (“Holdco II”), a newly formed subsidiary of the Predecessor and the borrower under the Credit Agreement (“Exit Facility”) entered into in connection with the reorganization, in exchange for
100%
of the equity of Holdco II and the issuance of interests in the Exit Facility to certain of the Predecessor’s creditors in partial satisfaction of their claims (the “Contribution”). Immediately following the Contribution, the Predecessor transferred
100%
of the equity interests in Holdco II to the Successor in exchange for approximately
$530 million
in cash and an amount of equity securities in the Successor not to exceed
49.90%
of the outstanding equity interests of the Successor (the “Disposition”), which the Predecessor distributed to certain of its creditors in satisfaction of their claims. Contemporaneously with the reorganization transactions and pursuant to the LINN Plan, (i) LAC assigned all of its rights, title and interest in the membership interests of Berry to Berry Petroleum Corporation, (ii) all of the equity interests in LAC and the Predecessor were canceled and (iii) LAC and the Predecessor commenced liquidation, which is expected to be completed following the resolution of the respective companies’ outstanding claims.
|
•
|
The holders of claims under the Predecessor’s Sixth Amended and Restated Credit Agreement (“LINN Credit Facility”) received a full recovery, consisting of a cash paydown and their pro rata share of the
$1.7 billion
Exit Facility. As a result, all outstanding obligations under the LINN Credit Facility were canceled.
|
•
|
Holdco II, as borrower, entered into the Exit Facility with the holders of claims under the LINN Credit Facility, as lenders, and Wells Fargo Bank, National Association, as administrative agent, providing for a new reserve-based revolving loan (the “Revolving Loan”) with up to
$1.4 billion
in borrowing commitments and a new term loan (the “Term Loan”) in an original principal amount of
$300 million
. For additional information about the Exit Facility, see “Financing Activities” in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
|
•
|
The holders of the Company’s
12.00%
senior secured second lien notes due December 2020 (the “Second Lien Notes”) received their pro rata share of (i)
17,678,889
shares of Class A common stock; (ii) certain rights to purchase shares of Class A common stock in the rights offering, as described below; and (iii)
$30 million
in cash. The holders of the Company’s
6.50%
senior notes due May 2019,
6.25%
senior notes due November 2019,
8.625%
senior notes due 2020,
7.75%
senior notes due February 2021 and
6.50%
senior notes due September 2021 (collectively, the “Unsecured Notes”) received their pro rata share of (i)
26,724,396
shares of Class A common stock; and (ii) certain rights to purchase shares of Class A common stock in the rights offering (as described below). As a result, all outstanding obligations under the Second Lien Notes and the Unsecured Notes and the indentures governing such obligations were canceled.
|
•
|
The holders of general unsecured claims (other than claims relating to the Second Lien Notes and the Unsecured Notes) against the LINN Debtors (the “LINN Unsecured Claims”) received their pro rata share of cash from two cash distribution pools totaling
$40 million
, as divided between a
$2.3 million
cash distribution pool for the payment
|
•
|
All units that were issued and outstanding immediately prior to the Effective Date were extinguished without recovery. On the Effective Date, the Reorganized LINN issued in the aggregate
91,708,500
shares of Class A common stock. No cash was raised from the issuance of the Class A common stock on account of claims held by the Predecessor’s creditors.
|
•
|
The Reorganized LINN entered into a registration rights agreement with certain parties to the Backstop Commitment Agreement and other recipients of shares of Class A common stock who own at least
10%
of the shares of Class A common stock or are otherwise deemed to be an affiliate of the Reorganized LINN, pursuant to which the Company agreed to, among other things, file a registration statement with the Securities and Exchange Commission within 60 days of the Effective Date covering the offer and resale of “Registrable Securities” (as defined therein).
|
•
|
By operation of the LINN Plan and the Confirmation Order, the terms of the Predecessor’s board of directors expired as of the Effective Date. The Reorganized LINN formed a new board of directors, consisting of the Chief Executive Officer of the Predecessor, one director selected by the Reorganized LINN and five directors selected by a six-person selection committee.
|
•
|
LAC assigned all of its rights, title and interest in the membership interests of Berry to Berry Petroleum Corporation, and Berry became a wholly owned subsidiary of Berry Petroleum Corporation. All of the equity interests in LAC that were issued and outstanding immediately prior to the Effective Date were extinguished without recovery. Subsequently, LAC commenced liquidation, which is expected to be completed following the resolution of the outstanding claims. As a result, Berry Petroleum Corporation became a stand-alone company, separate from the Company and the LINN Debtors.
|
•
|
The holders of claims under Berry’s Second Amended and Restated Credit Agreement (“Berry Credit Facility”) received a full recovery, consisting of a cash paydown and their pro rata share of the new Berry credit facility (“Berry Exit Facility”). As a result, all outstanding obligations under the Berry Credit Facility were canceled.
|
•
|
Berry, as borrower, entered into the Berry Exit Facility with the holders of claims under the Berry Credit Facility, as lenders, and Wells Fargo Bank, National Association, as administrative agent, providing for a new reserve-based revolving loan with up to
$550 million
in borrowing commitments.
|
•
|
The holders of Berry’s
6.75%
senior notes due 2020 and
6.375%
senior notes due 2022 (collectively, the “Berry Unsecured Notes”) received their pro rata share of either (i) shares of common stock in Berry Petroleum Corporation or, for those non-accredited investors holding the Berry Unsecured Notes that irrevocably elected to receive a cash recovery, cash distributions from a
$35 million
cash distribution pool (the “Berry Cash Distribution Pool”), and (ii) certain rights to purchase shares of preferred stock in Berry Petroleum Corporation.
|
•
|
The holders of unsecured claims against Berry (other than the Berry Unsecured Notes) (the “Berry Unsecured Claims”) received their pro rata share of either (i) shares of common stock in Berry Petroleum Corporation or (ii) in the event that such holder irrevocably elected to receive a cash recovery, cash distributions from the Berry Cash Distribution Pool. As a result, all outstanding obligations under the Berry Unsecured Notes and the indentures governing such obligations were canceled and all outstanding Berry Unsecured Claims were fully satisfied, settled, released and discharged as of the Effective Date.
|
•
|
Berry and LAC settled all intercompany claims against the LINN Debtors pursuant to a settlement agreement approved as part of the Berry Plan and the Confirmation Order, which settlement provided Berry and LAC with a
$25 million
general unsecured claim against the Company.
|
|
December 31, 2016
|
||
|
(in thousands)
|
||
|
|
||
Accounts payable and accrued expenses
|
$
|
137,692
|
|
Accrued interest payable
|
144,184
|
|
|
Debt
|
4,023,129
|
|
|
Liabilities subject to compromise
|
$
|
4,305,005
|
|
|
Year Ended December 31, 2016
|
||
|
(in thousands)
|
||
|
|
||
Legal and other professional advisory fees
|
$
|
(56,656
|
)
|
Unamortized deferred financing fees, discounts and premiums
|
(52,045
|
)
|
|
Gain related to interest payable on the 12.00% senior secured second lien notes due December 2020
(1)
|
551,000
|
|
|
Terminated contracts
|
(66,052
|
)
|
|
Other
|
(64,648
|
)
|
|
Reorganization items, net
|
$
|
311,599
|
|
(1)
|
Represents a noncash gain on the write-off of postpetition contractual interest through maturity
,
recorded to reflect the carrying value of the liability subject to compromise at its estimated allowed claim amount.
|
|
Year Ended December 31,
|
||||||||||
|
2016
(1)
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
Revenues and other
|
$
|
387,706
|
|
|
$
|
641,654
|
|
|
$
|
1,431,289
|
|
Expenses
|
1,524,296
|
|
|
1,579,029
|
|
|
1,319,633
|
|
|||
Other income and (expenses)
|
(57,030
|
)
|
|
(77,870
|
)
|
|
(88,991
|
)
|
|||
Reorganization items, net
|
(46,127
|
)
|
|
—
|
|
|
—
|
|
|||
Income (loss) from discontinued operations before income taxes
|
(1,239,747
|
)
|
|
(1,015,245
|
)
|
|
22,665
|
|
|||
Income tax expense (benefit)
|
196
|
|
|
(68
|
)
|
|
69
|
|
|||
Income (loss) from discontinued operations, net of income taxes
|
$
|
(1,239,943
|
)
|
|
$
|
(1,015,177
|
)
|
|
$
|
22,596
|
|
(1)
|
Results of discontinued operations for 2016 is for the period from January 1, 2016 through December 3, 2016.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
General and administrative expenses
|
$
|
34,268
|
|
|
$
|
47,312
|
|
|
$
|
45,195
|
|
Lease operating expenses
|
9,950
|
|
|
8,824
|
|
|
8,089
|
|
|||
Total unit-based compensation expenses
|
$
|
44,218
|
|
|
$
|
56,136
|
|
|
$
|
53,284
|
|
Income tax benefit
|
$
|
16,339
|
|
|
$
|
20,742
|
|
|
$
|
19,688
|
|
|
Number of
Nonvested
Units
|
|
Weighted Average Grant-Date
Fair Value
Per Unit
|
|||
|
|
|
|
|||
Nonvested units at December 31, 2015
|
4,926,572
|
|
|
$
|
16.22
|
|
Vested
|
(2,069,004
|
)
|
|
$
|
19.66
|
|
Forfeited
|
(349,243
|
)
|
|
$
|
14.29
|
|
Canceled
|
(2,508,325
|
)
|
|
$
|
13.95
|
|
Nonvested units at December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
Number of
Units Underlying Options
|
|
Weighted Average
Exercise Price Per Unit
|
|
Weighted Average Remaining Contractual Life in Years
|
|
Aggregate Intrinsic Value
|
||||||
|
|
|
|
|
|
|
|
||||||
Outstanding at December 31, 2015
|
824,711
|
|
|
$
|
22.72
|
|
|
2.27
|
|
|
$
|
—
|
|
Forfeited or expired
|
(184,498
|
)
|
|
$
|
25.80
|
|
|
|
|
|
|||
Canceled
|
(640,213
|
)
|
|
$
|
21.83
|
|
|
|
|
|
|||
Outstanding at December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||
Exercisable at December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands, except percentages)
|
||||||
|
|
|
|
||||
LINN credit facility
(1)
|
$
|
1,654,745
|
|
|
$
|
2,215,000
|
|
Berry credit facility
(2)
|
—
|
|
|
873,175
|
|
||
Term loan
(2)
|
284,241
|
|
|
500,000
|
|
||
6.50% senior notes due May 2019
|
562,234
|
|
|
562,234
|
|
||
6.25% senior notes due November 2019
|
581,402
|
|
|
581,402
|
|
||
8.625% senior notes due April 2020
|
718,596
|
|
|
718,596
|
|
||
6.75% Berry senior notes due November 2020
|
—
|
|
|
261,100
|
|
||
12.00% senior secured second lien notes due December 2020
(3)
|
1,000,000
|
|
|
1,000,000
|
|
||
Interest payable on senior secured second lien notes due December 2020
(3)
|
—
|
|
|
608,333
|
|
||
7.75% senior notes due February 2021
|
779,474
|
|
|
779,474
|
|
||
6.50% senior notes due September 2021
|
381,423
|
|
|
381,423
|
|
||
6.375% Berry senior notes due September 2022
|
—
|
|
|
572,700
|
|
||
Net unamortized discounts and premiums
(4)
|
—
|
|
|
(8,694
|
)
|
||
Net unamortized deferred financing fees
(4)
|
(1,257
|
)
|
|
(37,374
|
)
|
||
Total debt, net
|
5,960,858
|
|
|
9,007,369
|
|
||
Less current portion, net
(5)
|
(1,937,729
|
)
|
|
(2,841,518
|
)
|
||
Less liabilities subject to compromise
(6)
|
(4,023,129
|
)
|
|
—
|
|
||
Less debt and unamortized premiums of discontinued operations
|
—
|
|
|
(1,718,543
|
)
|
||
Long-term debt, net
|
$
|
—
|
|
|
$
|
4,447,308
|
|
(1)
|
Variable interest rates of
5.50%
and
2.66%
at
December 31, 2016
, and
December 31, 2015
, respectively.
|
(2)
|
Variable interest rates of
5.50%
and
3.17%
at
December 31, 2016
, and
December 31, 2015
, respectively.
|
(3)
|
The issuance of the Second Lien Notes was accounted for as a troubled debt restructuring which requires that interest payments on the Second Lien Notes reduce the carrying value of the debt with no interest expense recognized. During the year ended December 31, 2016,
$551 million
was written off to reorganization items in connection with the filing of the Bankruptcy Petitions. The remaining amount of approximately
$57 million
was classified as liabilities subject to compromise at
December 31, 2016
.
|
(4)
|
Approximately
$52 million
in net discounts, premiums and deferred financing fees were written off to reorganization items in connection with the filing of the Bankruptcy Petitions.
|
(5)
|
Due to existing and anticipated covenant violations, the Company’s Credit Facilities and term loan were classified as current at
December 31, 2016
, and
December 31, 2015
. The current portion as of
December 31, 2015
, also includes approximately
$128 million
of interest payable on the Second Lien Notes that was due within one year.
|
(6)
|
The Company’s senior notes and Second Lien Notes were classified as liabilities subject to compromise at
December 31, 2016
.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying
Value
|
|
Fair Value
|
|
Carrying
Value
|
|
Fair Value
|
||||||||
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Senior secured second lien notes
|
$
|
1,000,000
|
|
|
$
|
863,750
|
|
|
$
|
1,000,000
|
|
|
$
|
501,250
|
|
Senior notes, net
|
3,023,129
|
|
|
1,179,224
|
|
|
2,967,308
|
|
|
461,930
|
|
|
Par Value of Senior Notes Exchanged
|
||
|
(in thousands)
|
||
|
|
||
6.50% senior notes due May 2019
|
$
|
584,422
|
|
6.25% senior notes due November 2019
|
824,348
|
|
|
8.625% senior notes due April 2020
|
286,344
|
|
|
7.75% senior notes due February 2021
|
184,300
|
|
|
6.50% senior notes due September 2021
|
120,586
|
|
|
|
$
|
2,000,000
|
|
•
|
6.50%
senior notes due May 2019 –
$53 million
;
|
•
|
6.25%
senior notes due November 2019 –
$395 million
;
|
•
|
8.625%
senior notes due April 2020 –
$295 million
;
|
•
|
7.75%
senior notes due February 2021 –
$36 million
; and
|
•
|
6.50%
senior notes due September 2021 –
$148 million
.
|
|
2017
|
|
2018
|
|
2019
|
||||||
Natural gas positions:
|
|
|
|
|
|
||||||
Fixed price swaps (NYMEX Henry Hub):
|
|
|
|
|
|
||||||
Hedged volume (MMMBtu)
|
135,050
|
|
|
40,150
|
|
|
3,650
|
|
|||
Average price ($/MMBtu)
|
$
|
3.17
|
|
|
$
|
3.02
|
|
|
$
|
3.08
|
|
Oil positions:
|
|
|
|
|
|
||||||
Fixed price swaps (NYMEX WTI):
|
|
|
|
|
|
||||||
Hedged volume (MBbls)
|
4,380
|
|
|
—
|
|
|
—
|
|
|||
Average price ($/Bbl)
|
$
|
52.13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collars (NYMEX WTI):
|
|
|
|
|
|
||||||
Hedged volume (MBbls)
|
—
|
|
|
1,825
|
|
|
1,825
|
|
|||
Average floor price ($/Bbl)
|
$
|
—
|
|
|
$
|
50.00
|
|
|
$
|
50.00
|
|
Average ceiling price ($/Bbl)
|
$
|
—
|
|
|
$
|
55.50
|
|
|
$
|
55.50
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Assets:
|
|
|
|
||||
Commodity derivatives
|
$
|
19,369
|
|
|
$
|
1,798,568
|
|
Liabilities:
|
|
|
|
||||
Commodity derivatives
|
$
|
113,226
|
|
|
$
|
26,012
|
|
Level 1
|
Financial assets and liabilities for which values are based on unadjusted quoted prices for identical assets or liabilities in an active market that management has the ability to access.
|
Level 2
|
Financial assets and liabilities for which values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability (commodity derivatives).
|
Level 3
|
Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.
|
|
December 31, 2016
|
||||||||||
|
Level 2
|
|
Netting
(1)
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Commodity derivatives
|
$
|
19,369
|
|
|
$
|
(19,369
|
)
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Commodity derivatives
|
$
|
113,226
|
|
|
$
|
(19,369
|
)
|
|
$
|
93,857
|
|
|
December 31, 2015
|
||||||||||
|
Level 2
|
|
Netting
(1)
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Commodity derivatives
|
$
|
1,798,568
|
|
|
$
|
(25,155
|
)
|
|
$
|
1,773,413
|
|
Liabilities:
|
|
|
|
|
|
||||||
Commodity derivatives
|
$
|
26,012
|
|
|
$
|
(25,155
|
)
|
|
$
|
857
|
|
(1)
|
Represents counterparty netting under agreements governing such derivatives.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
|
|
|
|
||||
Natural gas plant and pipeline
|
$
|
421,806
|
|
|
$
|
480,161
|
|
Furniture and office equipment
|
105,353
|
|
|
106,462
|
|
||
Buildings and leasehold improvements
|
66,014
|
|
|
72,976
|
|
||
Vehicles
|
31,496
|
|
|
37,641
|
|
||
Drilling and other equipment
|
8,082
|
|
|
7,934
|
|
||
Land
|
3,736
|
|
|
3,537
|
|
||
|
636,487
|
|
|
708,711
|
|
||
Less accumulated depreciation
|
(224,547
|
)
|
|
(195,661
|
)
|
||
Less other property and equipment, net – discontinued operations
|
—
|
|
|
(98,973
|
)
|
||
|
$
|
411,940
|
|
|
$
|
414,077
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
|
|
|
|
||||
Asset retirement obligations at beginning of year
|
$
|
523,541
|
|
|
$
|
497,570
|
|
Liabilities added from drilling
|
546
|
|
|
3,574
|
|
||
Liabilities added from acquisitions
|
1,416
|
|
|
—
|
|
||
Liabilities associated with assets divested
|
—
|
|
|
(3,306
|
)
|
||
Deconsolidation of Berry Petroleum Company, LLC asset retirement obligations
|
(141,612
|
)
|
|
—
|
|
||
Current year accretion expense
|
30,498
|
|
|
30,016
|
|
||
Settlements
|
(12,823
|
)
|
|
(6,336
|
)
|
||
Revision of estimates
|
596
|
|
|
2,023
|
|
||
|
402,162
|
|
|
523,541
|
|
||
Less asset retirement obligations of discontinued operations
|
—
|
|
|
(137,563
|
)
|
||
Asset retirement obligations at end of year
|
$
|
402,162
|
|
|
$
|
385,978
|
|
2017
|
$
|
3,627
|
|
2018
|
2,852
|
|
|
2019
|
2,008
|
|
|
2020
|
468
|
|
|
2021
|
4
|
|
|
Thereafter
|
60
|
|
|
|
$
|
9,019
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except per unit data)
|
||||||||||
|
|
|
|
||||||||
Loss from continuing operations
|
$
|
(385,697
|
)
|
|
$
|
(3,744,634
|
)
|
|
$
|
(474,405
|
)
|
Allocated to participating securities
|
—
|
|
|
(3,039
|
)
|
|
(7,117
|
)
|
|||
|
$
|
(385,697
|
)
|
|
$
|
(3,747,673
|
)
|
|
$
|
(481,522
|
)
|
|
|
|
|
|
|
||||||
Income (loss) from discontinued operations, net of income taxes
|
$
|
(1,786,159
|
)
|
|
$
|
(1,015,177
|
)
|
|
$
|
22,596
|
|
|
|
|
|
|
|
||||||
Net loss
|
$
|
(2,171,856
|
)
|
|
$
|
(4,759,811
|
)
|
|
$
|
(451,809
|
)
|
Allocated to participating securities
|
—
|
|
|
(3,039
|
)
|
|
(7,117
|
)
|
|||
|
$
|
(2,171,856
|
)
|
|
$
|
(4,762,850
|
)
|
|
$
|
(458,926
|
)
|
|
|
|
|
|
|
||||||
Basic loss per unit – continuing operations
|
$
|
(1.10
|
)
|
|
$
|
(10.91
|
)
|
|
$
|
(1.47
|
)
|
Diluted loss per unit – continuing operations
|
$
|
(1.10
|
)
|
|
$
|
(10.91
|
)
|
|
$
|
(1.47
|
)
|
|
|
|
|
|
|
||||||
Basic income (loss) per unit – discontinued operations
|
$
|
(5.06
|
)
|
|
$
|
(2.96
|
)
|
|
$
|
0.07
|
|
Diluted income (loss) per unit – discontinued operations
|
$
|
(5.06
|
)
|
|
$
|
(2.96
|
)
|
|
$
|
0.07
|
|
|
|
|
|
|
|
||||||
Basic net loss per unit
|
$
|
(6.16
|
)
|
|
$
|
(13.87
|
)
|
|
$
|
(1.40
|
)
|
Diluted net loss per unit
|
$
|
(6.16
|
)
|
|
$
|
(13.87
|
)
|
|
$
|
(1.40
|
)
|
|
|
|
|
|
|
||||||
Basic weighted average units outstanding
|
352,653
|
|
|
343,323
|
|
|
328,918
|
|
|||
Dilutive effect of unit equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted weighted average units outstanding
|
352,653
|
|
|
343,323
|
|
|
328,918
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
1,730
|
|
|
$
|
370
|
|
Reorganization items
|
14,932
|
|
|
—
|
|
||
Unit-based compensation
|
—
|
|
|
18,214
|
|
||
Valuation allowance
|
(19,558
|
)
|
|
(2,159
|
)
|
||
Other
|
10,030
|
|
|
7,300
|
|
||
Total deferred tax assets
|
7,134
|
|
|
23,725
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property and equipment principally due to differences in depreciation
|
(7,021
|
)
|
|
(12,534
|
)
|
||
Other
|
(279
|
)
|
|
10
|
|
||
Total deferred tax liabilities
|
(7,300
|
)
|
|
(12,524
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
(166
|
)
|
|
$
|
11,201
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
|
|
|
|
||||
Prepaid expenses
|
$
|
70,116
|
|
|
$
|
29,237
|
|
Inventories
|
15,798
|
|
|
19,184
|
|
||
Deferred financing fees
|
16,809
|
|
|
25,090
|
|
||
Other
|
4,890
|
|
|
1,185
|
|
||
Other current assets
|
$
|
107,613
|
|
|
$
|
74,696
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
Cash payments for interest, net of amounts capitalized
|
$
|
143,305
|
|
|
$
|
476,077
|
|
|
$
|
446,860
|
|
Cash payments for income taxes
|
$
|
4,427
|
|
|
$
|
643
|
|
|
$
|
—
|
|
Cash payments for reorganization items, net
|
$
|
37,748
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Noncash investing activities:
|
|
|
|
|
|
||||||
In connection with the acquisition of oil and natural gas properties and joint-venture funding, assets were acquired and liabilities were assumed as follow:
|
|
|
|
|
|
||||||
Fair value of assets acquired
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,733,814
|
|
Cash paid, net of cash acquired
|
—
|
|
|
—
|
|
|
(2,398,763
|
)
|
|||
Noncash gains on exchanges of properties
|
—
|
|
|
—
|
|
|
(149,195
|
)
|
|||
Receivables from sellers
|
—
|
|
|
—
|
|
|
10,369
|
|
|||
Liabilities assumed
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
196,225
|
|
Accrued capital expenditures
|
$
|
31,128
|
|
|
$
|
71,105
|
|
|
$
|
180,447
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Property acquisition costs:
(1)
|
|
|
|
|
|
||||||
Proved
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,306,541
|
|
Unproved
|
—
|
|
|
—
|
|
|
793,742
|
|
|||
Exploration costs
|
40,074
|
|
|
19,929
|
|
|
644
|
|
|||
Development costs
|
86,053
|
|
|
298,028
|
|
|
925,750
|
|
|||
Asset retirement costs
|
419
|
|
|
4,152
|
|
|
14,855
|
|
|||
Total costs incurred – continuing operations
|
$
|
126,546
|
|
|
$
|
322,109
|
|
|
$
|
4,041,532
|
|
Total costs incurred – discontinued operations
|
$
|
11,147
|
|
|
$
|
132,427
|
|
|
$
|
1,040,152
|
|
(1)
|
See Note 3 for details about the Company’s acquisitions.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
|
|
|
|
||||
Proved properties
|
$
|
12,234,099
|
|
|
$
|
16,337,814
|
|
Unproved properties
|
998,860
|
|
|
1,783,341
|
|
||
|
13,232,959
|
|
|
18,121,155
|
|
||
Less accumulated depletion and amortization
|
(9,999,560
|
)
|
|
(11,097,492
|
)
|
||
|
3,233,399
|
|
|
7,023,663
|
|
||
Less oil and natural gas capitalized costs, net – discontinued operations
|
—
|
|
|
(3,414,896
|
)
|
||
|
$
|
3,233,399
|
|
|
$
|
3,608,767
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Revenues and other:
|
|
|
|
|
|
||||||
Oil, natural gas and natural gas liquids sales
|
$
|
952,132
|
|
|
$
|
1,151,240
|
|
|
$
|
2,312,137
|
|
Gains (losses) on oil and natural gas derivatives
|
(164,330
|
)
|
|
1,027,014
|
|
|
1,127,395
|
|
|||
|
787,802
|
|
|
2,178,254
|
|
|
3,439,532
|
|
|||
Production costs:
|
|
|
|
|
|
|
|
|
|||
Lease operating expenses
|
317,046
|
|
|
375,840
|
|
|
443,157
|
|
|||
Transportation expenses
|
161,037
|
|
|
167,561
|
|
|
165,489
|
|
|||
Severance taxes, ad valorem taxes and California carbon allowances
|
73,806
|
|
|
111,350
|
|
|
169,417
|
|
|||
|
551,889
|
|
|
654,751
|
|
|
778,063
|
|
|||
Other costs:
|
|
|
|
|
|
||||||
Exploration costs
|
4,080
|
|
|
9,473
|
|
|
125,037
|
|
|||
Depletion and amortization
|
356,825
|
|
|
504,493
|
|
|
726,567
|
|
|||
Impairment of long-lived assets
|
165,044
|
|
|
4,960,144
|
|
|
2,050,387
|
|
|||
(Gains) losses on sale of assets and other, net
|
417
|
|
|
(199,296
|
)
|
|
(501,036
|
)
|
|||
Texas margin tax expense (benefit)
|
(649
|
)
|
|
(2,721
|
)
|
|
3,984
|
|
|||
|
525,717
|
|
|
5,272,093
|
|
|
2,404,939
|
|
|||
Results of operations – continuing operations
|
$
|
(289,804
|
)
|
|
$
|
(3,748,590
|
)
|
|
$
|
256,530
|
|
Results of operations – discontinued operations
(1)
|
$
|
(1,066,634
|
)
|
|
$
|
(858,833
|
)
|
|
$
|
213,280
|
|
(1)
|
The results of discontinued operations for 2016 is for the period from January 1, 2016 through December 3, 2016.
|
|
Year Ended December 31, 2016
|
|
|
|
|
||||||||||||
|
Natural Gas
(Bcf)
|
|
Oil
(MMBbls)
|
|
NGL
(MMBbls)
|
|
Total Continuing Operations
(Bcfe)
|
|
Total Discontinued Operations
(Bcfe)
|
|
Total (Bcfe)
|
||||||
Proved developed and undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
2,231
|
|
|
103.4
|
|
|
97.3
|
|
|
3,435
|
|
|
1,053
|
|
|
4,488
|
|
Revisions of previous estimates
|
(9
|
)
|
|
(4.3
|
)
|
|
0.9
|
|
|
(29
|
)
|
|
(179
|
)
|
|
(208
|
)
|
Extensions, discoveries and other additions
|
265
|
|
|
10.1
|
|
|
15.2
|
|
|
417
|
|
|
11
|
|
|
428
|
|
Production
|
(187
|
)
|
|
(10.0
|
)
|
|
(9.3
|
)
|
|
(303
|
)
|
|
(81
|
)
|
|
(384
|
)
|
Deconsolidation of Berry Petroleum Company, LLC proved reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(804
|
)
|
|
(804
|
)
|
End of year
|
2,300
|
|
|
99.2
|
|
|
104.1
|
|
|
3,520
|
|
|
—
|
|
|
3,520
|
|
Proved developed reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
2,231
|
|
|
103.4
|
|
|
97.3
|
|
|
3,435
|
|
|
1,053
|
|
|
4,488
|
|
End of year
|
2,128
|
|
|
93.3
|
|
|
94.4
|
|
|
3,254
|
|
|
—
|
|
|
3,254
|
|
Proved undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
End of year
|
172
|
|
|
5.9
|
|
|
9.7
|
|
|
266
|
|
|
—
|
|
|
266
|
|
|
Year Ended December 31, 2015
|
||||||||||||||||
|
Natural Gas
(Bcf)
|
|
Oil
(MMBbls)
|
|
NGL
(MMBbls)
|
|
Total Continuing Operations
(Bcfe)
|
|
Total Discontinued Operations
(Bcfe)
|
|
Total (Bcfe)
|
||||||
Proved developed and undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
3,568
|
|
|
197.4
|
|
|
146.3
|
|
|
5,631
|
|
|
1,673
|
|
|
7,304
|
|
Revisions of previous estimates
|
(1,134
|
)
|
|
(81.9
|
)
|
|
(38.4
|
)
|
|
(1,855
|
)
|
|
(524
|
)
|
|
(2,379
|
)
|
Sales of minerals in place
|
(13
|
)
|
|
(4.1
|
)
|
|
(2.0
|
)
|
|
(50
|
)
|
|
—
|
|
|
(50
|
)
|
Extensions, discoveries and other additions
|
10
|
|
|
3.8
|
|
|
0.8
|
|
|
37
|
|
|
10
|
|
|
47
|
|
Production
|
(200
|
)
|
|
(11.8
|
)
|
|
(9.4
|
)
|
|
(328
|
)
|
|
(106
|
)
|
|
(434
|
)
|
End of year
|
2,231
|
|
|
103.4
|
|
|
97.3
|
|
|
3,435
|
|
|
1,053
|
|
|
4,488
|
|
Proved developed reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
2,997
|
|
|
141.7
|
|
|
117.5
|
|
|
4,552
|
|
|
1,266
|
|
|
5,818
|
|
End of year
|
2,231
|
|
|
103.4
|
|
|
97.3
|
|
|
3,435
|
|
|
1,053
|
|
|
4,488
|
|
Proved undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
571
|
|
|
55.7
|
|
|
28.8
|
|
|
1,079
|
|
|
407
|
|
|
1,486
|
|
End of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Year Ended December 31, 2014
|
||||||||||||||||
|
Natural Gas (Bcf)
|
|
Oil
(MMBbls)
|
|
NGL (MMBbls)
|
|
Total Continuing Operations
(Bcfe)
|
|
Total Discontinued Operations
(Bcfe)
|
|
Total (Bcfe)
|
||||||
Proved developed and undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
2,730
|
|
|
194.7
|
|
|
183.5
|
|
|
4,999
|
|
|
1,404
|
|
|
6,403
|
|
Revisions of previous estimates
|
54
|
|
|
(13.0
|
)
|
|
(45.3
|
)
|
|
(297
|
)
|
|
(21
|
)
|
|
(318
|
)
|
Purchases of minerals in place
|
1,354
|
|
|
45.0
|
|
|
54.4
|
|
|
1,951
|
|
|
544
|
|
|
2,495
|
|
Sales of minerals in place
|
(426
|
)
|
|
(22.8
|
)
|
|
(37.2
|
)
|
|
(786
|
)
|
|
(298
|
)
|
|
(1,084
|
)
|
Extensions, discoveries and other additions
|
36
|
|
|
6.7
|
|
|
2.5
|
|
|
92
|
|
|
158
|
|
|
250
|
|
Production
|
(180
|
)
|
|
(13.2
|
)
|
|
(11.6
|
)
|
|
(328
|
)
|
|
(114
|
)
|
|
(442
|
)
|
End of year
|
3,568
|
|
|
197.4
|
|
|
146.3
|
|
|
5,631
|
|
|
1,673
|
|
|
7,304
|
|
Proved developed reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
1,824
|
|
|
138.7
|
|
|
125.2
|
|
|
3,407
|
|
|
933
|
|
|
4,340
|
|
End of year
|
2,997
|
|
|
141.7
|
|
|
117.5
|
|
|
4,552
|
|
|
1,266
|
|
|
5,818
|
|
Proved undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
906
|
|
|
56.0
|
|
|
58.3
|
|
|
1,592
|
|
|
471
|
|
|
2,063
|
|
End of year
|
571
|
|
|
55.7
|
|
|
28.8
|
|
|
1,079
|
|
|
407
|
|
|
1,486
|
|
|
December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
Future estimated revenues
|
$
|
10,876,241
|
|
|
$
|
11,810,044
|
|
|
$
|
38,350,590
|
|
Future estimated production costs
|
(6,286,264
|
)
|
|
(7,276,564
|
)
|
|
(16,358,433
|
)
|
|||
Future estimated development costs
|
(971,055
|
)
|
|
(775,328
|
)
|
|
(2,899,781
|
)
|
|||
Future net cash flows
|
3,618,922
|
|
|
3,758,152
|
|
|
19,092,376
|
|
|||
10% annual discount for estimated timing of cash flows
|
(1,690,224
|
)
|
|
(1,719,979
|
)
|
|
(10,910,462
|
)
|
|||
Standardized measure of discounted future net cash flows – continuing operations
|
$
|
1,928,698
|
|
|
$
|
2,038,173
|
|
|
$
|
8,181,914
|
|
Standardized measure of discounted future net cash flows – discontinued operations
|
$
|
—
|
|
|
$
|
995,372
|
|
|
$
|
4,330,377
|
|
|
|
|
|
|
|
||||||
Representative NYMEX prices:
(1)
|
|
|
|
|
|
||||||
Natural gas (MMBtu)
|
$
|
2.48
|
|
|
$
|
2.59
|
|
|
$
|
4.35
|
|
Oil (Bbl)
|
$
|
42.64
|
|
|
$
|
50.16
|
|
|
$
|
95.27
|
|
(1)
|
In accordance with SEC regulations, reserves were estimated using the average price during the 12-month period, determined as an unweighted average of the first-day-of-the-month price for each month, excluding escalations based upon future conditions. The average price used to estimate reserves is held constant over the life of the reserves.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Sales and transfers of oil, natural gas and NGL produced during the period
|
$
|
(400,243
|
)
|
|
$
|
(496,489
|
)
|
|
$
|
(1,534,074
|
)
|
Changes in estimated future development costs
|
18,843
|
|
|
1,069,971
|
|
|
88,324
|
|
|||
Net change in sales and transfer prices and production costs related to future production
|
(162,460
|
)
|
|
(6,105,531
|
)
|
|
421,484
|
|
|||
Purchases of minerals in place
|
—
|
|
|
—
|
|
|
2,473,512
|
|
|||
Sales of minerals in place
|
—
|
|
|
(97,785
|
)
|
|
(1,194,601
|
)
|
|||
Extensions, discoveries and improved recovery
|
221,765
|
|
|
69,745
|
|
|
236,395
|
|
|||
Previously estimated development costs incurred during the period
|
—
|
|
|
91,719
|
|
|
550,514
|
|
|||
Net change due to revisions in quantity estimates
|
(9,291
|
)
|
|
(1,089,624
|
)
|
|
(606,104
|
)
|
|||
Accretion of discount
|
203,817
|
|
|
818,191
|
|
|
726,400
|
|
|||
Changes in production rates and other
|
18,094
|
|
|
(403,938
|
)
|
|
(243,933
|
)
|
|||
Change – continuing operations
|
$
|
(109,475
|
)
|
|
$
|
(6,143,741
|
)
|
|
$
|
917,917
|
|
Change – discontinued operations
|
$
|
(995,372
|
)
|
|
$
|
(3,335,005
|
)
|
|
$
|
(304,955
|
)
|
|
Quarters Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
(in thousands, except per unit amounts)
|
||||||||||||||
2016:
|
|
|
|
|
|
|
|
||||||||
Oil, natural gas and natural gas liquids sales
|
$
|
199,849
|
|
|
$
|
216,426
|
|
|
$
|
257,902
|
|
|
$
|
277,955
|
|
Gains (losses) on oil and natural gas derivatives
|
109,453
|
|
|
(183,794
|
)
|
|
166
|
|
|
(90,155
|
)
|
||||
Total revenues and other
|
346,699
|
|
|
64,851
|
|
|
286,913
|
|
|
219,250
|
|
||||
Total expenses
(1)
|
472,912
|
|
|
296,824
|
|
|
331,929
|
|
|
292,194
|
|
||||
Losses on sale of assets and other, net
|
1,269
|
|
|
2,517
|
|
|
2,310
|
|
|
9,462
|
|
||||
Reorganization items, net
|
—
|
|
|
485,798
|
|
|
(28,361
|
)
|
|
(145,838
|
)
|
||||
Income (loss) from continuing operations
|
(222,927
|
)
|
|
201,652
|
|
|
(99,927
|
)
|
|
(264,495
|
)
|
||||
Income (loss) from discontinued operations, net of income taxes
|
(1,124,819
|
)
|
|
6,840
|
|
|
(98,438
|
)
|
|
(569,742
|
)
|
||||
Net income (loss)
|
(1,347,746
|
)
|
|
208,492
|
|
|
(198,365
|
)
|
|
(834,237
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) per unit – continuing operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.64
|
)
|
|
$
|
0.57
|
|
|
$
|
(0.28
|
)
|
|
$
|
(0.75
|
)
|
Diluted
|
$
|
(0.64
|
)
|
|
$
|
0.57
|
|
|
$
|
(0.28
|
)
|
|
$
|
(0.75
|
)
|
Income (loss) per unit – discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(3.19
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.28
|
)
|
|
$
|
(1.61
|
)
|
Diluted
|
$
|
(3.19
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.28
|
)
|
|
$
|
(1.61
|
)
|
Net income (loss) per unit:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(3.83
|
)
|
|
$
|
0.59
|
|
|
$
|
(0.56
|
)
|
|
$
|
(2.36
|
)
|
Diluted
|
$
|
(3.83
|
)
|
|
$
|
0.59
|
|
|
$
|
(0.56
|
)
|
|
$
|
(2.36
|
)
|
(1)
|
Includes the following expenses: lease operating, transportation, marketing, general and administrative, exploration, depreciation, depletion and amortization, impairment of long-lived assets and taxes, other than income taxes.
|
|
Quarters Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
(in thousands, except per unit amounts)
|
||||||||||||||
2015:
|
|
|
|
|
|
|
|
||||||||
Oil, natural gas and natural gas liquids sales
|
$
|
293,983
|
|
|
$
|
323,038
|
|
|
$
|
286,993
|
|
|
$
|
247,226
|
|
Gains (losses) on oil and natural gas derivatives
|
421,514
|
|
|
(186,714
|
)
|
|
521,365
|
|
|
270,849
|
|
||||
Total revenues and other
|
766,984
|
|
|
177,068
|
|
|
839,441
|
|
|
536,520
|
|
||||
Total expenses
(1)
|
681,222
|
|
|
420,494
|
|
|
2,113,892
|
|
|
3,284,372
|
|
||||
Gains on sale of assets and other, net
|
(7,814
|
)
|
|
(17,185
|
)
|
|
(169,613
|
)
|
|
(878
|
)
|
||||
Loss from continuing operations
|
(16,435
|
)
|
|
(350,295
|
)
|
|
(1,032,159
|
)
|
|
(2,345,745
|
)
|
||||
Loss from discontinued operations, net of income taxes
|
(322,725
|
)
|
|
(28,832
|
)
|
|
(537,158
|
)
|
|
(126,462
|
)
|
||||
Net loss
|
(339,160
|
)
|
|
(379,127
|
)
|
|
(1,569,317
|
)
|
|
(2,472,207
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss per unit – continuing operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.05
|
)
|
|
$
|
(1.04
|
)
|
|
$
|
(2.94
|
)
|
|
$
|
(6.69
|
)
|
Diluted
|
$
|
(0.05
|
)
|
|
$
|
(1.04
|
)
|
|
$
|
(2.94
|
)
|
|
$
|
(6.69
|
)
|
Loss per unit – discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.98
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.53
|
)
|
|
$
|
(0.36
|
)
|
Diluted
|
$
|
(0.98
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.53
|
)
|
|
$
|
(0.36
|
)
|
Net loss per unit:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(1.03
|
)
|
|
$
|
(1.12
|
)
|
|
$
|
(4.47
|
)
|
|
$
|
(7.05
|
)
|
Diluted
|
$
|
(1.03
|
)
|
|
$
|
(1.12
|
)
|
|
$
|
(4.47
|
)
|
|
$
|
(7.05
|
)
|
(1)
|
Includes the following expenses: lease operating, transportation, marketing, general and administrative, exploration, depreciation, depletion and amortization, impairment of long-lived assets and taxes, other than income taxes.
|
Name
|
|
Age
|
|
Position with the Company
|
|
|
|
|
|
Mark E. Ellis
|
|
60
|
|
President and Chief Executive Officer
|
David B. Rottino
|
|
50
|
|
Executive Vice President and Chief Financial Officer
|
Arden L. Walker, Jr.
|
|
57
|
|
Executive Vice President and Chief Operating Officer
|
Thomas E. Emmons
|
|
48
|
|
Senior Vice President – Corporate Services
|
Jamin B. McNeil
|
|
51
|
|
Senior Vice President – Houston Division Operations
|
Candice J. Wells
|
|
42
|
|
Senior Vice President, General Counsel and Corporate Secretary
|
|
LINN ENERGY, INC.
|
|
|
|
|
|
|
|
Date: March 23, 2017
|
By:
|
/s/ Mark E. Ellis
|
|
|
Mark E. Ellis
President and Chief Executive Officer
|
|
|
|
|
|
|
Date: March 23, 2017
|
By:
|
/s/ David B. Rottino
|
|
|
David B. Rottino
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
Date: March 23, 2017
|
By:
|
/s/ Darren R. Schluter
|
|
|
Darren R. Schluter
Vice President and Controller
(Duly Authorized Officer and Principal Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Mark E. Ellis
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
March 23, 2017
|
Mark E. Ellis
|
|
|
|
|
|
|
|
|
|
/s/ David B. Rottino
|
|
Executive Vice President, Chief Financial Officer and Director
(Principal Financial Officer)
|
|
March 23, 2017
|
David B. Rottino
|
|
|
|
|
|
|
|
|
|
/s/ Darren R. Schluter
|
|
Vice President and Controller
(Principal Accounting Officer)
|
|
March 23, 2017
|
Darren R. Schluter
|
|
|
|
|
|
|
|
|
|
/s/ Matthew Bonanno
|
|
Director
|
|
March 23, 2017
|
Matthew Bonanno
|
|
|
|
|
|
|
|
|
|
/s/ Philip Brown
|
|
Director
|
|
March 23, 2017
|
Philip Brown
|
|
|
|
|
|
|
|
|
|
/s/ Evan Lederman
|
|
Chairman and Director
|
|
March 23, 2017
|
Evan Lederman
|
|
|
|
|
|
|
|
|
|
/s/ Kevin Mahony
|
|
Director
|
|
March 23, 2017
|
Kevin Mahony
|
|
|
|
|
|
|
|
|
|
/s/ Andrew Taylor
|
|
Director
|
|
March 23, 2017
|
Andrew Taylor
|
|
|
|
|
Exhibit Number
|
|
Description
|
2.1
|
—
|
Amended Joint Chapter 11 Plan of Reorganization of Linn Energy, LLC and Its Debtor Affiliates Other Than Linn Acquisition Company, LLC and Berry Petroleum Company, LLC, dated January 25, 2017 (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on January 31, 2017 (Case No. 16-60040))
|
3.1
|
—
|
Amended and Restated Certificate of Incorporation of Linn Energy, Inc. (incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-8 filed on February 28, 2017)
|
3.2
|
—
|
Bylaws of Linn Energy, Inc. (incorporated by reference to Exhibit 3.2 to Registration Statement on Form S-8 filed on February 28, 2017)
|
4.1
|
—
|
Form of specimen New Common Stock certificate of Linn Energy, Inc. (incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K filed on March 3, 2017)
|
10.1
|
—
|
Credit Agreement dated as of February 28, 2017, among Linn Energy Holdco II LLC, as borrower, Linn Energy Holdco LLC, as parent, Linn Energy, Inc. as holdings, subsidiary guarantors party thereto, Wells Fargo Bank, National Association, as administrative agent and the lenders party thereto (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on March 3, 2017)
|
10.2
|
—
|
Registration Rights Agreement dated as of February 28, 2017, among Linn Energy, Inc. and the holders party thereto (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on March 3, 2017)
|
10.3*
|
—
|
Linn Energy, Inc. 2017 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-8 filed on February 28, 2017)
|
10.4*
|
—
|
Form of Restricted Stock Unit Agreement (for executive officers with employment agreements) (incorporated by reference to Exhibit 10.2 to Registration Statement on Form S-8 filed on February 28, 2017)
|
10.5*
|
—
|
Form of Restricted Stock Unit Agreement (for employees) (incorporated by reference to Exhibit 10.3 to Registration Statement on Form S-8 filed on February 28, 2017)
|
10.6* **
|
—
|
Linn Energy Holdco LLC Incentive Interest Plan
|
10.7* **
|
—
|
Form of Award Agreement (base interests)
|
10.8* **
|
—
|
Form of Award Agreement (appreciation interests)
|
10.9
|
—
|
Membership Interest Purchase Agreement, dated as of February 28, 2017, by and between Linn Energy, LLC and Linn Energy, Inc. (incorporated by reference to Exhibit 10.6 to Current Report on Form 8-K filed on March 3, 2017)
|
10.10
|
—
|
Transition Services and Separation Agreement, dated as of February 28, 2017, by and between Linn Energy, LLC, LinnCo, LLC, and certain subsidiaries of Linn Energy, Inc. party thereto and Berry Petroleum Company, LLC (incorporated by reference to Exhibit 10.7 to Current Report on Form 8-K filed on March 3, 2017)
|
10.11
|
—
|
Joint Operating Agreement, dated February 28, 2017, between Linn Operating, Inc., as operator, and Berry Petroleum Company, LLC, as non-operator (Hugoton) (incorporated by reference to Exhibit 10.8 to Current Report on Form 8-K filed on March 3, 2017)
|
10.12
|
—
|
Joint Operating Agreement, dated February 28, 2017, between Berry Petroleum Company, LLC, as operator, and Linn Energy Holdings, LLC, as non-operator (Hill) (incorporated by reference to Exhibit 10.9 to Current Report on Form 8-K filed on March 3, 2017)
|
10.13*
|
—
|
Form of Indemnity Agreement between Linn Energy, Inc. and the directors and officers of Linn Energy, Inc. (incorporated by reference to Exhibit 10.4 to Registration Statement on Form S-8 filed on February 28, 2017)
|
10.14*
|
—
|
Second Amended and Restated Employment Agreement of Mark E. Ellis, dated February 28, 2017 (incorporated by reference to Exhibit 10.11 to Current Report on Form 8-K filed on March 3, 2017)
|
10.15*
|
—
|
Third Amended and Restated Employment Agreement of David B. Rottino, dated February 28, 2017 (incorporated by reference to Exhibit 10.12 to Current Report on Form 8-K filed on March 3, 2017)
|
10.16*
|
—
|
Second Amended and Restated Employment Agreement of Arden L. Walker, Jr., dated February 28, 2017 (incorporated by reference to Exhibit 10.13 to Current Report on Form 8-K filed on March 3, 2017)
|
10.17*
|
—
|
Employment Agreement of Jamin B. McNeil, dated February 28, 2017 (incorporated by reference to Exhibit 10.14 to Current Report on Form 8-K filed on March 3, 2017)
|
Exhibit Number
|
|
Description
|
10.18*
|
—
|
Employment Agreement of Thomas E. Emmons, dated February 28, 2017 (incorporated by reference to Exhibit 10.15 to Current Report on Form 8-K filed on March 3, 2017)
|
10.19*
|
—
|
Employment Agreement of Candice J. Wells, dated February 28, 2017 (incorporated by reference to Exhibit 10.16 to Current Report on Form 8-K filed on March 3, 2017)
|
12.1**
|
—
|
Computation of Ratio of Earnings to Fixed Charges
|
21.1**
|
—
|
List of Significant Subsidiaries
|
23.1**
|
—
|
Consent of KPMG LLP
|
23.2**
|
—
|
Consent of DeGolyer and MacNaughton
|
31.1**
|
—
|
Section 302 Certification of Chief Executive Officer
|
31.2**
|
—
|
Section 302 Certification of Chief Financial Officer
|
32.1**
|
—
|
Section 906 Certification of Chief Executive Officer
|
32.2**
|
—
|
Section 906 Certification of Chief Financial Officer
|
99.1**
|
—
|
2016 Report of DeGolyer and MacNaughton
|
101.INS†
|
—
|
XBRL Instance Document
|
101.SCH†
|
—
|
XBRL Taxonomy Extension Schema Document
|
101.CAL†
|
—
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF†
|
—
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB†
|
—
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE†
|
—
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Management Contract or Compensatory Plan or Arrangement required to be filed as an Exhibit hereto pursuant to Item 601 of Regulation S-K.
|
**
|
Filed herewith.
|
†
|
Furnished herewith.
|
Vesting Date
|
Percentage of Interests
|
Emergence Date
First Anniversary of Emergence Date
Second Anniversary of Emergence Date
Third Anniversary of Emergence Date
|
25%
25%
25%
25%
|
|
LINN ENERGY HOLDCO LLC
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
[__________]
|
|
|
|
Number of Interests
|
|
_____________________________
Print Name of Participant
_____________________________
Signature of Participant |
|
|
Address for Notices
:
|
|
|
_____________________________
Address – Line 1
_____________________________
Address – Line 2
_____________________________
Address – Line 3
_____________________________
Attention
_____________________________
Facsimile
_____________________________
Telephone
|
|
Vesting Date
|
Percentage of Interests
|
Emergence Date
First Anniversary of Emergence Date
Second Anniversary of Emergence Date
Third Anniversary of Emergence Date
|
25%
25%
25%
25%
|
|
LINN ENERGY HOLDCO LLC
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
[__________]
|
|
|
|
Number of Interests
|
|
_____________________________
Print Name of Participant
_____________________________
Signature of Participant |
|
|
Address for Notices
:
|
|
|
_____________________________
Address – Line 1
_____________________________
Address – Line 2
_____________________________
Address – Line 3
_____________________________
Attention
_____________________________
Facsimile
_____________________________
Telephone
|
|
|
Year Ended December 31,
|
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
||||||||||
|
(dollars in thousands)
|
|
||||||||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss from continuing operations before income taxes and adjustment for income from equity investees
|
$
|
(374,503
|
)
|
|
$
|
(3,751,027
|
)
|
|
$
|
(470,037
|
)
|
|
$
|
(673,563
|
)
|
|
$
|
(383,826
|
)
|
|
Income from equity investees
|
(699
|
)
|
|
(685
|
)
|
|
(140
|
)
|
|
(969
|
)
|
|
(1,497
|
)
|
|
|||||
Loss from continuing operations before income taxes but after adjustment for income from equity investees
|
(375,202
|
)
|
|
(3,751,712
|
)
|
|
(470,177
|
)
|
|
(674,532
|
)
|
|
(385,323
|
)
|
|
|||||
Fixed charges
|
193,772
|
|
|
464,437
|
|
|
503,980
|
|
|
419,637
|
|
|
382,751
|
|
|
|||||
Distributed income of equity investees
|
—
|
|
|
500
|
|
|
—
|
|
|
300
|
|
|
1,265
|
|
|
|||||
Capitalized interest
|
(257
|
)
|
|
(2,765
|
)
|
|
(3,567
|
)
|
|
(2,019
|
)
|
|
(2,326
|
)
|
|
|||||
Total earnings available for fixed charges
|
$
|
(181,687
|
)
|
|
$
|
(3,289,540
|
)
|
|
$
|
30,236
|
|
|
$
|
(256,614
|
)
|
|
$
|
(3,633
|
)
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
192,862
|
|
|
$
|
460,635
|
|
|
$
|
499,890
|
|
|
$
|
417,174
|
|
|
$
|
379,937
|
|
|
Capitalized interest
|
257
|
|
|
2,765
|
|
|
3,567
|
|
|
2,019
|
|
|
2,326
|
|
|
|||||
Interest portion of rental expense
|
653
|
|
|
1,037
|
|
|
523
|
|
|
444
|
|
|
488
|
|
|
|||||
Total fixed charges
|
$
|
193,772
|
|
|
$
|
464,437
|
|
|
$
|
503,980
|
|
|
$
|
419,637
|
|
|
$
|
382,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
—
|
|
(1)
|
—
|
|
(1)
|
—
|
|
(1)
|
—
|
|
(1)
|
—
|
|
(1)
|
(1)
|
Earnings for the year ended December 31, 2016, were insufficient to cover fixed charges by approximately $375 million, primarily due to noncash impairment charges of approximately $165 million associated with oil and natural gas properties related to a decline in commodity prices, changes in expected capital development and a decline in the Company’s estimates of proved reserves and losses on commodity derivatives of approximately $164 million. Earnings for the year ended December 31, 2015, were insufficient to cover fixed charges by approximately $3.8 billion, primarily due to noncash impairment charges of approximately $5.0 billion associated with oil and natural gas properties primarily related to a decline in commodity prices, changes in expected capital development and a decline in the Company’s estimates of proved reserves. Earnings for the year ended December 31, 2014, were insufficient to cover fixed charges by approximately $474 million, primarily due to noncash impairment charges of approximately $2.1 billion associated with proved oil and natural gas properties primarily related to a decline in commodity prices. Earnings for the year ended December 31, 2013, were insufficient to cover fixed charges by approximately $676 million, primarily due to noncash impairment charges of approximately $791 million associated with proved oil and natural gas properties in the Granite Wash formation related to asset performance resulting in reserve revisions and a decline in commodity prices as well as approximately $37 million associated with the write-down of the carrying value of the Panther Operated Cleveland Properties sold in May 2013. Earnings for the year ended December 31, 2012, were insufficient to cover fixed charges by approximately $386 million, primarily due to noncash impairment charges of approximately $422 million associated with proved oil and natural gas properties related to the SEC five-year development limitation on PUDs and a decline in commodity prices and approximately $278 million associated with changes in fair value on unsettled derivative contracts.
|
Name of Subsidiary
|
|
Jurisdiction of
Incorporation or Organization
|
Linn Acquisition Company, LLC
|
|
Delaware
|
Berry Petroleum Company, LLC
|
|
Delaware
|
Linn Energy Holdings, LLC
|
|
Delaware
|
•
|
Report as of December 31, 2016 on Reserves and Revenue of Certain Properties owned by Linn Energy, LLC;
|
•
|
Report as of December 31, 2015 on Reserves and Revenue owned by Linn Energy, LLC; and
|
•
|
Appraisal Report as of December 31, 2014 on Certain Properties owned by Linn Energy, LLC.
|
/s/ Mark E. Ellis
|
|
Mark E. Ellis
|
|
President and Chief Executive Officer
|
|
/s/ David B. Rottino
|
|
David B. Rottino
|
|
Executive Vice President and Chief Financial Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 23, 2017
|
/s/ Mark E. Ellis
|
|
Mark E. Ellis
|
|
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 23, 2017
|
/s/ David B. Rottino
|
|
David B. Rottino
|
|
Executive Vice President and Chief Financial Officer
|
|
|
Estimated by DeGolyer and MacNaughton
Net Proved Reserves
as of
December 31, 2016
|
||||||
|
|
Oil and Condensate
(Mbbl)
|
|
NGL
(Mbbl)
|
|
Sales
Gas
(MMcf)
|
|
Gas Equivalent (MMcfe)
|
|
|
|
|
|
|
|
|
|
Proved
|
|
|
|
|
|
|
|
|
Developed Producing
|
|
88,231
|
|
92,075
|
|
2,017,068
|
|
3,098,906
|
Developed Non-Producing
|
|
5,091
|
|
2,370
|
|
110,793
|
|
155,560
|
Undeveloped
|
|
5,855
|
|
9,685
|
|
172,428
|
|
265,667
|
|
|
|
|
|
|
|
|
|
Total Proved
|
|
99,177
|
|
104,130
|
|
2,300,289
|
|
3,520,133
|
|
|
|
|
|
|
|
|
|
Note: Liquids are converted to gas equivalent using an energy equivalent factor of 1 barrel of liquids to 6,000 cubic feet of gas equivalent.
|
|
Submitted,
|
|
|
|
|
|
/s/
DeGOLYER and MacNAUGHTON
|
|
DeGOLYER and MacNAUGHTON
Texas Registered Engineering Firm F-716
|
|
/s/
Gregory K. Graves, P.E.
|
|
Gregory K. Graves, P.E.
Senior Vice President
DeGolyer and MacNaughton
|
1.
|
That I am a Senior Vice President with DeGolyer and MacNaughton, which company did prepare the letter report addressed to Linn dated February 1, 2017, and that I, as Senior Vice President, was responsible for the preparation of this letter report.
|
2.
|
That I attended the University of Texas at Austin, and that I graduated with a Bachelor of Science degree in Petroleum Engineering in the year 1984; that I am a Registered Professional Engineer in the State of Texas; that I am a member of the International Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers; and that I have in excess of 32 years of experience in oil and gas reservoir studies and reserves evaluations.
|
|
/s/
Gregory K. Graves, P.E.
|
|
Gregory K. Graves, P.E.
Senior Vice President
DeGolyer and MacNaughton
|