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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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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
x
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Emerging growth company
¨
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Page
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•
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On November 30, 2017, the Company completed the sale of its interest in properties located in the Williston Basin (the “Williston Assets Sale”). Cash proceeds received from the sale of these properties were approximately $255 million, net of costs to sell of approximately $3 million, and the Company recognized a net gain of approximately $116 million.
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On November 30, 2017, the Company completed the sale of its interest in properties located in Wyoming (the “Washakie Assets Sale”). Cash proceeds received from the sale of these properties were approximately $193 million, net of costs to sell of approximately $2 million, and the Company recognized a net gain of approximately $175 million.
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On September 12, 2017, August 1, 2017, and July 31, 2017, the Company completed the sales of its interest in certain properties located in south Texas (the “South Texas Assets Sales”). Combined cash proceeds received from the sale of these properties were approximately $48 million, net of costs to sell of approximately $1 million, and the Company recognized a combined net gain of approximately $14 million.
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On August 23, 2017, July 28, 2017, and May 9, 2017, the Company completed the sales of its interest in certain properties located in Texas and New Mexico (the “Permian Assets Sales”). Combined cash proceeds received from the sale of these properties were approximately $31 million and the Company recognized a combined net gain of approximately $29 million.
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On July 31, 2017, the Company completed the sale of its interest in properties located in the San Joaquin Basin in California (the “San Joaquin Basin Sale”). Cash proceeds received from the sale of these properties were
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On July 21, 2017, the Company completed the sale of its interest in properties located in the Los Angeles Basin in California (the “Los Angeles Basin Sale”). Cash proceeds received from the sale of these properties were approximately $93 million, net of costs to sell of approximately $2 million, and the Company recognized a net gain of approximately $2 million. The Company will receive an additional $7 million contingent payment if certain operational requirements are satisfied within one year from the date of sale.
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On June 30, 2017, the Company completed the sale of its interest in properties located in the Salt Creek Field in Wyoming (the “Salt Creek Assets Sale”). Cash proceeds received from the sale of these properties were approximately $73 million, net of costs to sell of approximately $1 million, and the Company recognized a net gain of approximately $30 million.
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On May 31, 2017, the Company completed the sale of its interest in properties located in western Wyoming (the “Jonah Assets Sale”). Cash proceeds received from the sale of these properties were approximately $559 million, net of costs to sell of approximately $6 million, and the Company recognized a net gain of approximately $277 million.
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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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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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Mid-Continent, which includes Oklahoma properties located in the Arkoma basin and the Northwest STACK, as well as waterfloods in the Central Oklahoma Platform;
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Permian Basin, which includes properties located in west Texas and southeast New Mexico; and
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Rockies, which includes Utah properties located in the Uinta Basin.
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Year Ended December 31,
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2017
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2016
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2015
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Gross wells:
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Productive
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90
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211
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388
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Dry
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—
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1
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5
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90
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212
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393
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Net development wells:
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Productive
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12
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26
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139
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Dry
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—
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—
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1
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12
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26
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140
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Net exploratory wells:
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Productive
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9
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7
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1
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Dry
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—
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—
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1
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9
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7
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2
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Total
(1)
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Proved undeveloped
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8
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Other locations
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4,202
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Total drilling locations
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4,210
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Leasehold interests – net acres (in thousands)
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2,254
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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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Operated
(1)
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7,232
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6,399
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3,313
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3,093
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10,545
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9,492
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Nonoperated
(2)
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4,438
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1,064
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935
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98
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5,373
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1,162
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11,670
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7,463
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4,248
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3,191
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15,918
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10,654
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(1)
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The Company had 5 operated wells with multiple completions at December 31, 2017.
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(2)
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The Company had 1 nonoperated wells with multiple completions at December 31, 2017.
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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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Leasehold acreage
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3,621
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2,245
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26
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9
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3,647
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2,254
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Successor
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Predecessor
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Ten Months Ended December 31, 2017
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Two Months Ended February 28, 2017
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Year Ended December 31, 2016
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Year Ended December 31, 2015
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Total production:
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Natural gas (MMcf)
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118,110
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29,223
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187,068
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200,488
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Oil (MBbls)
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5,442
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1,191
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8,088
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10,018
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NGL (MBbls)
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6,287
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1,263
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9,281
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9,347
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Total (MMcfe)
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188,481
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43,945
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291,285
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316,677
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Total production – Equity method investments:
(1)
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Total (MMcfe)
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9,235
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—
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—
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—
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Successor
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Predecessor
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Ten Months Ended December 31, 2017
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Two Months Ended February 28, 2017
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Year Ended December 31, 2016
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Year Ended December 31, 2015
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Average daily production:
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Natural gas (MMcf/d)
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386
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495
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511
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549
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Oil (MBbls/d)
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17.8
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20.2
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22.1
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27.4
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NGL (MBbls/d)
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20.5
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21.4
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25.4
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25.6
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Total (MMcfe/d)
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616
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745
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796
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867
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Average daily production
–
Equity method investments:
(1)
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Total (MMcfe/d)
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30
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—
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—
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—
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Weighted average prices:
(2)
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Natural gas (Mcf)
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$
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2.69
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$
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3.41
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$
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2.28
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$
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2.56
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Oil (Bbl)
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$
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47.42
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$
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49.16
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$
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39.00
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$
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43.42
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NGL (Bbl)
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$
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21.28
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$
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24.37
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$
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14.26
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$
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12.66
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Average NYMEX prices:
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Natural gas (MMBtu)
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$
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3.00
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$
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3.66
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$
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2.46
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$
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2.66
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Oil (Bbl)
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$
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50.53
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$
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53.04
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$
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43.32
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$
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48.80
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Costs per Mcfe of production:
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Lease operating expenses
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$
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1.11
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$
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1.13
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$
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1.02
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$
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1.11
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Transportation expenses
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$
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0.60
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$
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0.59
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$
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0.55
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$
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0.53
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General and administrative expenses
(3)
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$
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0.62
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$
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1.63
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$
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0.82
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$
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0.90
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Depreciation, depletion and amortization
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$
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0.71
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$
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1.07
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$
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1.18
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$
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1.64
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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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0.23
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$
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0.31
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Total production
–
Discontinued operations:
(4)
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Total (MMcfe)
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4,326
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1,755
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92,437
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116,909
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(1)
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Represents the Company’s 50% equity interest in Roan. Production of Roan for 2017 is for the period from September 1, 2017 through December 31, 2017.
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(2)
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Does not include the effect of gains (losses) on derivatives.
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(3)
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General and administrative expenses for the ten months ended December 31, 2017, the two months ended February 28, 2017, and the years ended December 31, 2016, and December 31, 2015, include approximately $41 million, $50 million, $34 million and $47 million, respectively, of noncash unit-based compensation expenses. In addition, general and administrative expenses for the two months ended February 28, 2017, and the years ended December 31, 2016, and December 31, 2015, include expenses 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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(4)
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Total production of the Company’s California properties reported as discontinued operations for 2017 is for the period from January 1, 2017 through July 31, 2017. Total production of Berry reported as 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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2017
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2016
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2015
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Total production:
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Hugoton Basin Field:
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Natural gas (MMcf)
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34,363
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38,501
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41,294
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Oil (MBbls)
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45
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27
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21
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NGL (MBbls)
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2,968
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2,983
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3,061
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Total (MMcfe)
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52,437
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56,566
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59,787
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Green River Basin Field:
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Natural gas (MMcf)
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*
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44,668
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*
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Oil (MBbls)
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*
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477
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*
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NGL (MBbls)
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*
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1,349
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*
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Total (MMcfe)
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*
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55,625
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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. The Company sold its properties in the Green River Basin Field in May 2017.
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Proved Reserves
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Natural Gas (Bcf)
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Oil (MMBbls)
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NGL (MMBbls)
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Total (Bcfe)
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Proved reserves – LINN Energy:
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Proved developed reserves
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1,323
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27.0
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70.5
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1,908
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Proved undeveloped reserves
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54
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0.1
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1.0
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60
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Total proved reserves
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1,377
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27.1
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71.5
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1,968
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Proved reserves – Equity method investments:
(1)
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Proved developed reserves
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130
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6.2
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12.0
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239
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Proved undeveloped reserves
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213
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12.5
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27.8
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455
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Total proved reserves
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343
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18.7
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39.8
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694
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(1)
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Represents the Company’s 50% equity interest in Roan.
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(2)
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This measure is not intended to represent the market value of estimated reserves.
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(3)
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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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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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•
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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”), 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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•
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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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•
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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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•
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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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•
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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;
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•
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Endangered Species Act (“ESA”), which restricts activities that may affect endangered and threatened species or their habitats; 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 and disposition strategy;
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•
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financial strategy;
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•
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plans to separate into three standalone companies;
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•
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ability to comply with covenants under the Revolving Credit 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;
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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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•
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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 and consuming 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 liens;
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•
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incur additional indebtedness;
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•
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merge, consolidate or sell 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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make certain investments; and
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•
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enter into transactions with our affiliates.
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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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•
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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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•
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actual prices we receive for oil, natural gas and NGL;
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•
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the amount and timing of actual production;
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•
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capital and operating expenditures;
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•
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the timing and success of development activities;
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•
|
supply of and demand for oil, natural gas and NGL; and
|
•
|
changes in governmental regulations or taxation.
|
•
|
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.
|
•
|
Roan may take actions contrary to our strategy or objectives;
|
•
|
we have limited ability to influence Roan’s financial performance or operating results;
|
•
|
we have limited ability to influence the day to day operations of Roan or its properties, including compliance with environmental, safety and other regulations; and
|
•
|
we are dependent on third parties for financial reporting matters upon which our financial statements are based.
|
•
|
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
|
•
|
limit the persons who may call special meetings of stockholders.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
|
Share/Unit Price Range
|
||||||
Period
|
|
High
|
|
Low
|
||||
2017:
|
|
|
|
|
||||
October 1 – December 31
|
|
$
|
40.25
|
|
|
$
|
36.50
|
|
July 1 – September 30
|
|
$
|
37.10
|
|
|
$
|
31.35
|
|
April 10 – June 30
|
|
$
|
31.65
|
|
|
$
|
26.28
|
|
January 1 – February 28
|
|
$
|
0.14
|
|
|
$
|
0.09
|
|
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
|
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Continued
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(1)
|
||||||
|
|
|
|
|
|
|
|
(in thousands)
|
||||||
|
|
|
|
|
|
|
|
|
||||||
October 1 – 31
|
|
590,118
|
|
|
$
|
38.09
|
|
|
590,118
|
|
|
$
|
220,572
|
|
November 1 – 30
|
|
373,615
|
|
|
$
|
38.63
|
|
|
373,615
|
|
|
$
|
206,139
|
|
December 1 – 31
|
|
118,861
|
|
|
$
|
37.25
|
|
|
118,861
|
|
|
$
|
201,712
|
|
Total
|
|
1,082,594
|
|
|
$
|
38.18
|
|
|
1,082,594
|
|
|
|
(1)
|
On June 1, 2017, the Company’s Board of Directors announced that it had authorized the repurchase of up to $75 million of the Company’s outstanding shares of Class A common stock. On June 28, 2017, the Company’s Board of Directors announced that it had authorized an increase in the previously announced share repurchase program to up to a total of $200 million of the Company’s outstanding shares of Class A common stock. On October 4, 2017, the Company’s Board of Directors announced that it had authorized an additional increase in the previously announced share repurchase program to up to a total of $400 million of the Company’s outstanding shares of Class A common stock. In accordance with SEC regulations regarding issuer tender offers, the Company’s share repurchase program was suspended as of December 14, 2017 and resumed in February 2018.
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
For the Year Ended December 31,
|
||||||||||||||||||
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||
|
|
|
|
(in thousands, except per share and per unit amounts)
|
||||||||||||||||||||
Statement of operations data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Oil, natural gas and natural gas liquids sales
|
$
|
709,363
|
|
|
|
$
|
188,885
|
|
|
$
|
874,161
|
|
|
$
|
1,065,795
|
|
|
$
|
2,305,573
|
|
|
$
|
2,022,916
|
|
Gains (losses) on oil and natural gas derivatives
|
13,533
|
|
|
|
92,691
|
|
|
(164,330
|
)
|
|
1,027,014
|
|
|
1,127,395
|
|
|
182,906
|
|
||||||
Depreciation, depletion and amortization
|
133,711
|
|
|
|
47,155
|
|
|
342,614
|
|
|
520,219
|
|
|
758,996
|
|
|
809,608
|
|
||||||
Interest expense, net of amounts capitalized
|
12,361
|
|
|
|
16,725
|
|
|
184,870
|
|
|
456,749
|
|
|
496,210
|
|
|
413,581
|
|
||||||
Income tax expense (benefit)
|
388,942
|
|
|
|
(166
|
)
|
|
11,194
|
|
|
(6,393
|
)
|
|
4,368
|
|
|
(2,199
|
)
|
||||||
Income (loss) from continuing operations
|
352,672
|
|
|
|
2,397,609
|
|
|
(367,343
|
)
|
|
(3,754,220
|
)
|
|
(462,024
|
)
|
|
(658,515
|
)
|
||||||
Income (loss) from discontinued operations
|
82,995
|
|
|
|
(548
|
)
|
|
(1,804,513
|
)
|
|
(1,005,591
|
)
|
|
10,215
|
|
|
(32,822
|
)
|
||||||
Net income (loss)
|
435,667
|
|
|
|
2,397,061
|
|
|
(2,171,856
|
)
|
|
(4,759,811
|
)
|
|
(451,809
|
)
|
|
(691,337
|
)
|
||||||
Net income (loss) attributable to common stockholders/ unitholders
|
432,860
|
|
|
|
2,397,061
|
|
|
(2,171,856
|
)
|
|
(4,759,811
|
)
|
|
(451,809
|
)
|
|
(691,337
|
)
|
||||||
Income (loss) from continuing operations per share/unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
3.99
|
|
|
|
6.80
|
|
|
(1.04
|
)
|
|
(10.94
|
)
|
|
(1.43
|
)
|
|
(2.80
|
)
|
||||||
Diluted
|
3.92
|
|
|
|
6.80
|
|
|
(1.04
|
)
|
|
(10.94
|
)
|
|
(1.43
|
)
|
|
(2.80
|
)
|
||||||
Income (loss) from discontinued operations per share/unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
0.95
|
|
|
|
(0.01
|
)
|
|
(5.12
|
)
|
|
(2.93
|
)
|
|
0.03
|
|
|
(0.14
|
)
|
||||||
Diluted
|
0.93
|
|
|
|
(0.01
|
)
|
|
(5.12
|
)
|
|
(2.93
|
)
|
|
0.03
|
|
|
(0.14
|
)
|
||||||
Net income (loss) per share/unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
4.94
|
|
|
|
6.79
|
|
|
(6.16
|
)
|
|
(13.87
|
)
|
|
(1.40
|
)
|
|
(2.94
|
)
|
||||||
Diluted
|
4.85
|
|
|
|
6.79
|
|
|
(6.16
|
)
|
|
(13.87
|
)
|
|
(1.40
|
)
|
|
(2.94
|
)
|
||||||
Dividends/distributions declared per share/unit
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.938
|
|
|
$
|
2.90
|
|
|
$
|
2.90
|
|
Weighted average shares/units outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic
|
87,646
|
|
|
|
352,792
|
|
|
352,653
|
|
|
343,323
|
|
|
328,918
|
|
|
237,544
|
|
||||||
Diluted
|
88,719
|
|
|
|
352,792
|
|
|
352,653
|
|
|
343,323
|
|
|
328,918
|
|
|
237,544
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
At or for the Year Ended December 31,
|
||||||||||||||||||
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||
|
|
|
|
(in thousands)
|
||||||||||||||||||||
Cash flow data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating activities
|
$
|
281,164
|
|
|
|
$
|
(20,814
|
)
|
|
$
|
880,514
|
|
|
$
|
1,249,457
|
|
|
$
|
1,711,890
|
|
|
$
|
1,166,212
|
|
Investing activities
|
1,242,018
|
|
|
|
(58,756
|
)
|
|
(235,840
|
)
|
|
(310,417
|
)
|
|
(2,021,025
|
)
|
|
(818,317
|
)
|
||||||
Financing activities
|
(1,113,029
|
)
|
|
|
(560,932
|
)
|
|
48,015
|
|
|
(938,681
|
)
|
|
258,773
|
|
|
(296,967
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total assets
|
$
|
2,881,123
|
|
|
|
|
|
$
|
4,660,591
|
|
|
$
|
9,936,880
|
|
|
$
|
16,632,820
|
|
|
$
|
16,436,499
|
|
||
Current portion of long-term debt, net
|
—
|
|
|
|
|
|
1,937,729
|
|
|
2,841,518
|
|
|
—
|
|
|
—
|
|
|||||||
Long-term debt, net
|
—
|
|
|
|
|
|
—
|
|
|
4,447,308
|
|
|
8,125,213
|
|
|
6,796,015
|
|
|||||||
Liabilities subject to compromise
|
—
|
|
|
|
|
|
4,305,005
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total equity (deficit)
|
2,351,557
|
|
|
|
|
|
(2,396,988
|
)
|
|
(268,901
|
)
|
|
4,543,605
|
|
|
5,891,427
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
At or for the Year Ended December 31,
|
||||||||||||
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||
Production data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Average daily production – Continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Natural gas (MMcf/d)
|
386
|
|
|
|
495
|
|
|
511
|
|
|
549
|
|
|
492
|
|
|
440
|
|
Oil (MBbls/d)
|
17.8
|
|
|
|
20.2
|
|
|
22.1
|
|
|
27.4
|
|
|
33.8
|
|
|
31.0
|
|
NGL (MBbls/d)
|
20.5
|
|
|
|
21.4
|
|
|
25.4
|
|
|
25.6
|
|
|
31.7
|
|
|
29.6
|
|
Total (MMcfe/d)
|
616
|
|
|
|
745
|
|
|
796
|
|
|
867
|
|
|
885
|
|
|
804
|
|
Average daily production – Equity method investments:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total (MMcfe/d)
|
30
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Average daily production – Discontinued operations:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total (MMcfe/d)
|
14
|
|
|
|
30
|
|
|
253
|
|
|
321
|
|
|
325
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Reserves data:
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Proved reserves – Continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Natural gas (Bcf)
|
1,377
|
|
|
|
|
|
2,290
|
|
|
2,212
|
|
|
3,552
|
|
|
2,715
|
|
|
Oil (MMBbls)
|
27
|
|
|
|
|
|
73
|
|
|
74
|
|
|
148
|
|
|
169
|
|
|
NGL (MMBbls)
|
72
|
|
|
|
|
|
104
|
|
|
97
|
|
|
146
|
|
|
184
|
|
|
Total (Bcfe)
|
1,968
|
|
|
|
|
|
3,350
|
|
|
3,240
|
|
|
5,318
|
|
|
4,827
|
|
|
Proved reserves – Equity method investments:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total (Bcfe)
|
694
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Proved reserves – Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total (Bcfe)
|
—
|
|
|
|
|
|
170
|
|
|
1,248
|
|
|
1,986
|
|
|
1,576
|
|
(1)
|
Represents the Company’s 50% equity interest in Roan.
|
(2)
|
Production of the Company’s California properties reported as discontinued operations for 2017 is for the period from January 1, 2017 through July 31, 2017. Production of Berry reported as 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.
|
(3)
|
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;
|
•
|
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;
|
•
|
Mid-Continent, which includes Oklahoma properties located in the Arkoma basin and the Northwest STACK, as well as waterfloods in the Central Oklahoma Platform;
|
•
|
Permian Basin, which includes properties located in west Texas and southeast New Mexico; and
|
•
|
Rockies, which includes Utah properties located in the Uinta Basin.
|
•
|
oil, natural gas and NGL sales of approximately $709 million and $189 million for the ten months ended December 31, 2017, and the two months ended February 28, 2017, respectively, compared to $874 million for 2016;
|
•
|
average daily production of approximately 616 MMcfe/d and 745 MMcfe/d for the ten months ended December 31, 2017, and the two months ended February 28, 2017, respectively, compared to 796 MMcfe/d for 2016;
|
•
|
net income attributable to common stockholders/unitholders of approximately $433 million and $2.4 billion for the ten months ended December 31, 2017, and the two months ended February 28, 2017, respectively, compared to net loss attributable to unitholders of approximately $2.2 billion for 2016;
|
•
|
net cash provided by operating activities from continuing operations of approximately $265 million and net cash used in operating activities of approximately $30 million for the ten months ended December 31, 2017, and the two months ended February 28, 2017, respectively, compared to net cash provided by operating activities of approximately $831 million for 2016;
|
•
|
capital expenditures of approximately $299 million and $46 million for the ten months ended December 31, 2017, and the two months ended February 28, 2017, respectively, compared to $172 million for 2016; and
|
•
|
90 wells drilled (all successful) compared to 212 wells drilled (211 successful) for 2016.
|
•
|
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 wholly owned subsidiary of the Predecessor and the
|
•
|
The holders of claims under the Predecessor’s Sixth Amended and Restated Credit Agreement (“Predecessor Credit Facility”) received a full recovery, consisting of a cash paydown and their pro rata share of the $1.7 billion Successor Credit Facility. As a result, all outstanding obligations under the Predecessor Credit Facility were canceled.
|
•
|
Holdco II, as borrower, entered into the Successor Credit Facility with the holders of claims under the Predecessor Credit Facility, as lenders, and Wells Fargo Bank, National Association, as administrative agent, providing for a new reserve-based revolving loan with up to $1.4 billion in borrowing commitments and a new 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 offerings, 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 offerings, 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 of the Predecessor that were issued and outstanding immediately prior to the Effective Date were extinguished without recovery. On the Effective Date, the Successor issued in the aggregate 89,229,892 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 Successor entered into a registration rights agreement with certain parties, 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 Plan and the Confirmation Order, the terms of the Predecessor’s board of directors expired as of the Effective Date. The Successor formed a new board of directors, consisting of the Chief Executive Officer of the Predecessor, one director selected by the Successor and five directors selected by a six-person selection committee.
|
•
|
On November 30, 2017, the Company completed the sale of its interest in properties located in the Williston Basin (the “Williston Assets Sale”). Cash proceeds received from the sale of these properties were approximately $255 million, net of costs to sell of approximately $3 million, and the Company recognized a net gain of approximately $116 million.
|
•
|
On November 30, 2017, the Company completed the sale of its interest in properties located in Wyoming (the “Washakie Assets Sale”). Cash proceeds received from the sale of these properties were approximately $193 million, net of costs to sell of approximately $2 million, and the Company recognized a net gain of approximately $175 million.
|
•
|
On September 12, 2017, August 1, 2017, and July 31, 2017, the Company completed the sales of its interest in certain properties located in south Texas (the “South Texas Assets Sales”). Combined cash proceeds received from the sale of these properties were approximately $48 million, net of costs to sell of approximately $1 million, and the Company recognized a combined net gain of approximately $14 million.
|
•
|
On August 23, 2017, July 28, 2017, and May 9, 2017, the Company completed the sales of its interest in certain properties located in Texas and New Mexico (the “Permian Assets Sales”). Combined cash proceeds received from the sale of these properties were approximately $31 million and the Company recognized a combined net gain of approximately $29 million.
|
•
|
On July 31, 2017, the Company completed the sale of its interest in properties located in the San Joaquin Basin in California (the “San Joaquin Basin Sale”). Cash proceeds received from the sale of these properties were approximately $253 million, net of costs to sell of approximately $4 million, and the Company recognized a net gain of approximately $120 million.
|
•
|
On July 21, 2017, the Company completed the sale of its interest in properties located in the Los Angeles Basin in California (the “Los Angeles Basin Sale”). Cash proceeds received from the sale of these properties were approximately $93 million, net of costs to sell of approximately $2 million, and the Company recognized a net gain of approximately $2 million. The Company will receive an additional $7 million contingent payment if certain operational requirements are satisfied within one year from the date of sale.
|
•
|
On June 30, 2017, the Company completed the sale of its interest in properties located in the Salt Creek Field in Wyoming (the “Salt Creek Assets Sale”). Cash proceeds received from the sale of these properties were approximately $73 million, net of costs to sell of approximately $1 million, and the Company recognized a net gain of approximately $30 million.
|
•
|
On May 31, 2017, the Company completed the sale of its interest in properties located in western Wyoming (the “Jonah Assets Sale”). Cash proceeds received from the sale of these properties were approximately $559 million, net of costs to sell of approximately $6 million, and the Company recognized a net gain of approximately $277 million.
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Revenues and other:
|
|
|
|
|
|
|
||||||
Natural gas sales
|
$
|
317,529
|
|
|
|
$
|
99,561
|
|
|
$
|
426,307
|
|
Oil sales
|
258,055
|
|
|
|
58,560
|
|
|
315,472
|
|
|||
NGL sales
|
133,779
|
|
|
|
30,764
|
|
|
132,382
|
|
|||
Total oil, natural gas and NGL sales
|
709,363
|
|
|
|
188,885
|
|
|
874,161
|
|
|||
Gains (losses) on oil and natural gas derivatives
|
13,533
|
|
|
|
92,691
|
|
|
(164,330
|
)
|
|||
Marketing and other revenues
(1)
|
103,782
|
|
|
|
16,551
|
|
|
129,813
|
|
|||
|
826,678
|
|
|
|
298,127
|
|
|
839,644
|
|
|||
Expenses:
|
|
|
|
|
|
|
||||||
Lease operating expenses
|
208,446
|
|
|
|
49,665
|
|
|
296,891
|
|
|||
Transportation expenses
|
113,128
|
|
|
|
25,972
|
|
|
161,574
|
|
|||
Marketing expenses
|
69,008
|
|
|
|
4,820
|
|
|
29,736
|
|
|||
General and administrative expenses
(2)
|
117,548
|
|
|
|
71,745
|
|
|
237,841
|
|
|||
Exploration costs
|
3,137
|
|
|
|
93
|
|
|
4,080
|
|
|||
Depreciation, depletion and amortization
|
133,711
|
|
|
|
47,155
|
|
|
342,614
|
|
|||
Impairment of long-lived assets
|
—
|
|
|
|
—
|
|
|
165,044
|
|
|||
Taxes, other than income taxes
|
47,553
|
|
|
|
14,877
|
|
|
67,648
|
|
|||
(Gains) losses on sale of assets and other, net
|
(623,072
|
)
|
|
|
829
|
|
|
16,257
|
|
|||
|
69,459
|
|
|
|
215,156
|
|
|
1,321,685
|
|
|||
Other income and (expenses)
|
(6,754
|
)
|
|
|
(16,717
|
)
|
|
(185,707
|
)
|
|||
Reorganization items, net
|
(8,851
|
)
|
|
|
2,331,189
|
|
|
311,599
|
|
|||
Income (loss) from continuing operations before income taxes
|
741,614
|
|
|
|
2,397,443
|
|
|
(356,149
|
)
|
|||
Income tax expense (benefit)
|
388,942
|
|
|
|
(166
|
)
|
|
11,194
|
|
|||
Income (loss) from continuing operations
|
352,672
|
|
|
|
2,397,609
|
|
|
(367,343
|
)
|
|||
Income (loss) from discontinued operations, net of income taxes
|
82,995
|
|
|
|
(548
|
)
|
|
(1,804,513
|
)
|
|||
Net income (loss)
|
435,667
|
|
|
|
2,397,061
|
|
|
(2,171,856
|
)
|
|||
Net income attributable to noncontrolling interests
|
2,807
|
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss) attributable to common stockholders/unitholders
|
$
|
432,860
|
|
|
|
$
|
2,397,061
|
|
|
$
|
(2,171,856
|
)
|
(1)
|
Marketing and other revenues for the two months ended February 28, 2017, and the year ended December 31, 2016, include approximately $6 million and $69 million, respectively, of management fee revenues recognized by the Company from Berry. Management fee revenues are included in “other revenues” on the consolidated statements of operations.
|
(2)
|
General and administrative expenses for the ten months ended December 31, 2017, the two months ended February 28, 2017, and the year ended December 31, 2016, include approximately $41 million, $50 million and $34 million, respectively, of noncash share-based compensation expenses. In addition, general and administrative expenses for the two months ended February 28, 2017, and the year ended December 31, 2016, include expenses 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.
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
||||||
Average daily production:
|
|
|
|
|
|
|
||||||
Natural gas (MMcf/d)
|
386
|
|
|
|
495
|
|
|
511
|
|
|||
Oil (MBbls/d)
|
17.8
|
|
|
|
20.2
|
|
|
22.1
|
|
|||
NGL (MBbls/d)
|
20.5
|
|
|
|
21.4
|
|
|
25.4
|
|
|||
Total (MMcfe/d)
|
616
|
|
|
|
745
|
|
|
796
|
|
|||
|
|
|
|
|
|
|
||||||
Average daily production – Equity method investments:
(1)
|
|
|
|
|
|
|
||||||
Total (MMcfe/d)
|
30
|
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Weighted average prices:
(2)
|
|
|
|
|
|
|
||||||
Natural gas (Mcf)
|
$
|
2.69
|
|
|
|
$
|
3.41
|
|
|
$
|
2.28
|
|
Oil (Bbl)
|
$
|
47.42
|
|
|
|
$
|
49.16
|
|
|
$
|
39.00
|
|
NGL (Bbl)
|
$
|
21.28
|
|
|
|
$
|
24.37
|
|
|
$
|
14.26
|
|
|
|
|
|
|
|
|
||||||
Average NYMEX prices:
|
|
|
|
|
|
|
||||||
Natural gas (MMBtu)
|
$
|
3.00
|
|
|
|
$
|
3.66
|
|
|
$
|
2.46
|
|
Oil (Bbl)
|
$
|
50.53
|
|
|
|
$
|
53.04
|
|
|
$
|
43.32
|
|
|
|
|
|
|
|
|
||||||
Costs per Mcfe of production:
|
|
|
|
|
|
|
||||||
Lease operating expenses
|
$
|
1.11
|
|
|
|
$
|
1.13
|
|
|
$
|
1.02
|
|
Transportation expenses
|
$
|
0.60
|
|
|
|
$
|
0.59
|
|
|
$
|
0.55
|
|
General and administrative expenses
(3)
|
$
|
0.62
|
|
|
|
$
|
1.63
|
|
|
$
|
0.82
|
|
Depreciation, depletion and amortization
|
$
|
0.71
|
|
|
|
$
|
1.07
|
|
|
$
|
1.18
|
|
Taxes, other than income taxes
|
$
|
0.25
|
|
|
|
$
|
0.34
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
||||||
Average daily production – Discontinued operations:
(4)
|
|
|
|
|
|
|
||||||
Total (MMcfe/d)
|
14
|
|
|
|
30
|
|
|
253
|
|
(1)
|
Represents the Company’s 50% equity interest in Roan. Production of Roan for 2017 is for the period from September 1, 2017 through December 31, 2017.
|
(2)
|
Does not include the effect of gains (losses) on derivatives.
|
(3)
|
General and administrative expenses for the ten months ended December 31, 2017, the two months ended February 28, 2017, and the year ended December 31, 2016, include approximately $41 million, $50 million and $34 million, respectively, of noncash share-based compensation expenses. In addition, general and administrative expenses for the two months ended February 28, 2017, and the year ended December 31, 2016, include expenses 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.
|
(4)
|
Production of the Company’s California properties reported as discontinued operations for 2017 is for the period from January 1, 2017 through July 31, 2017. Production of Berry reported as discontinued operations for 2016 is for the period from January 1, 2016 through December 3, 2016.
|
|
Successor
|
|
|
Predecessor
|
|||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|||
Average daily production (MMcfe/d):
|
|
|
|
|
|
|
|||
Rockies
|
184
|
|
|
|
294
|
|
|
330
|
|
Hugoton Basin
|
167
|
|
|
|
159
|
|
|
180
|
|
Mid-Continent
|
97
|
|
|
|
109
|
|
|
101
|
|
TexLa
|
82
|
|
|
|
80
|
|
|
72
|
|
Permian Basin
|
44
|
|
|
|
49
|
|
|
56
|
|
Michigan/Illinois
|
29
|
|
|
|
29
|
|
|
30
|
|
South Texas
|
13
|
|
|
|
25
|
|
|
27
|
|
|
616
|
|
|
|
745
|
|
|
796
|
|
Equity method investments
|
30
|
|
|
|
—
|
|
|
—
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Severance taxes
|
$
|
30,074
|
|
|
|
$
|
9,107
|
|
|
$
|
38,166
|
|
Ad valorem taxes
|
17,337
|
|
|
|
5,744
|
|
|
28,450
|
|
|||
Other
|
142
|
|
|
|
26
|
|
|
1,032
|
|
|||
|
$
|
47,553
|
|
|
|
$
|
14,877
|
|
|
$
|
67,648
|
|
•
|
Net gain of approximately $277 million, including costs to sell of approximately $6 million, on the Jonah Assets Sale;
|
•
|
Net gain of approximately $175 million, including costs to sell of approximately $2 million, on the Washakie Assets Sale;
|
•
|
Net gain of approximately $116 million, including costs to sell of approximately $3 million, on the Williston Assets Sale;
|
•
|
Net gain of approximately $30 million, including costs to sell of approximately $1 million, on the Salt Creek Assets Sale;
|
•
|
Net gain of approximately $29 million on the Permian Assets Sales;
|
•
|
Advisory fees of approximately $17 million associated with the Roan Contribution; and
|
•
|
Net gain of approximately $14 million, including costs to sell of approximately $1 million, on the South Texas Assets Sales.
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Interest expense, net of amounts capitalized
|
$
|
(12,361
|
)
|
|
|
$
|
(16,725
|
)
|
|
$
|
(184,870
|
)
|
Earnings from equity method investments
|
11,840
|
|
|
|
157
|
|
|
699
|
|
|||
Other, net
|
(6,233
|
)
|
|
|
(149
|
)
|
|
(1,536
|
)
|
|||
|
$
|
(6,754
|
)
|
|
|
$
|
(16,717
|
)
|
|
$
|
(185,707
|
)
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Gain on settlement of liabilities subject to compromise
|
$
|
—
|
|
|
|
$
|
3,724,750
|
|
|
$
|
—
|
|
Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement
|
—
|
|
|
|
(1,000,000
|
)
|
|
—
|
|
|||
Fresh start valuation adjustments
|
—
|
|
|
|
(591,525
|
)
|
|
—
|
|
|||
Income tax benefit related to implementation of the Plan
|
—
|
|
|
|
264,889
|
|
|
—
|
|
|||
Legal and other professional advisory fees
|
(8,902
|
)
|
|
|
(46,961
|
)
|
|
(56,656
|
)
|
|||
Unamortized deferred financing fees, discounts and premiums
|
—
|
|
|
|
—
|
|
|
(52,045
|
)
|
|||
Gains related to interest payable on Predecessor’s Second Lien Notes
|
—
|
|
|
|
—
|
|
|
551,000
|
|
|||
Terminated contracts
|
—
|
|
|
|
(6,915
|
)
|
|
(66,052
|
)
|
|||
Other
|
51
|
|
|
|
(13,049
|
)
|
|
(64,648
|
)
|
|||
Reorganization items, net
|
$
|
(8,851
|
)
|
|
|
$
|
2,331,189
|
|
|
$
|
311,599
|
|
|
Predecessor
|
|
|
||||||||
|
Year Ended December 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
Variance
|
||||||
|
(in thousands)
|
||||||||||
Revenues and other:
|
|
|
|
|
|
||||||
Natural gas sales
|
$
|
426,307
|
|
|
$
|
512,538
|
|
|
$
|
(86,231
|
)
|
Oil sales
|
315,472
|
|
|
434,961
|
|
|
(119,489
|
)
|
|||
NGL sales
|
132,382
|
|
|
118,296
|
|
|
14,086
|
|
|||
Total oil, natural gas and NGL sales
|
874,161
|
|
|
1,065,795
|
|
|
(191,634
|
)
|
|||
Gains (losses) on oil and natural gas derivatives
|
(164,330
|
)
|
|
1,027,014
|
|
|
(1,191,344
|
)
|
|||
Marketing and other revenues
(1)
|
129,813
|
|
|
141,647
|
|
|
(11,834
|
)
|
|||
|
839,644
|
|
|
2,234,456
|
|
|
(1,394,812
|
)
|
|||
Expenses:
|
|
|
|
|
|
||||||
Lease operating expenses
|
296,891
|
|
|
352,077
|
|
|
(55,186
|
)
|
|||
Transportation expenses
|
161,574
|
|
|
167,023
|
|
|
(5,449
|
)
|
|||
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
|
342,614
|
|
|
520,219
|
|
|
(177,605
|
)
|
|||
Impairment of long-lived assets
|
165,044
|
|
|
4,960,144
|
|
|
(4,795,100
|
)
|
|||
Taxes, other than income taxes
|
67,648
|
|
|
97,685
|
|
|
(30,037
|
)
|
|||
(Gains) losses on sale of assets and other, net
|
16,257
|
|
|
(194,805
|
)
|
|
211,062
|
|
|||
|
1,321,685
|
|
|
6,233,090
|
|
|
(4,911,405
|
)
|
|||
Other income and (expenses)
|
(185,707
|
)
|
|
238,021
|
|
|
(423,728
|
)
|
|||
Reorganization items, net
|
311,599
|
|
|
—
|
|
|
311,599
|
|
|||
Loss from continuing operations before income taxes
|
(356,149
|
)
|
|
(3,760,613
|
)
|
|
3,404,464
|
|
|||
Income tax expense (benefit)
|
11,194
|
|
|
(6,393
|
)
|
|
17,587
|
|
|||
Loss from continuing operations
|
(367,343
|
)
|
|
(3,754,220
|
)
|
|
3,386,877
|
|
|||
Loss from discontinued operations, net of income taxes
|
(1,804,513
|
)
|
|
(1,005,591
|
)
|
|
(798,922
|
)
|
|||
Net loss
|
$
|
(2,171,856
|
)
|
|
$
|
(4,759,811
|
)
|
|
$
|
2,587,955
|
|
(1)
|
Marketing and other revenues for the years ended December 31, 2016, and December 31, 2015 include approximately $69 million and $78 million, respectively, of management fee revenues recognized by the Company from Berry. 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 expenses 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.
|
|
Predecessor
|
|
|
|||||||
|
Year Ended December 31,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Variance
|
|||||
Average daily production:
|
|
|
|
|
|
|||||
Natural gas (MMcf/d)
|
511
|
|
|
549
|
|
|
(7
|
)%
|
||
Oil (MBbls/d)
|
22.1
|
|
|
27.4
|
|
|
(19
|
)%
|
||
NGL (MBbls/d)
|
25.4
|
|
|
25.6
|
|
|
(1
|
)%
|
||
Total (MMcfe/d)
|
796
|
|
|
867
|
|
|
(8
|
)%
|
||
|
|
|
|
|
|
|||||
Weighted average prices:
(1)
|
|
|
|
|
|
|||||
Natural gas (Mcf)
|
$
|
2.28
|
|
|
$
|
2.56
|
|
|
(11
|
)%
|
Oil (Bbl)
|
$
|
39.00
|
|
|
$
|
43.42
|
|
|
(10
|
)%
|
NGL (Bbl)
|
$
|
14.26
|
|
|
$
|
12.66
|
|
|
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
|
$
|
1.02
|
|
|
$
|
1.11
|
|
|
(8
|
)%
|
Transportation expenses
|
$
|
0.55
|
|
|
$
|
0.53
|
|
|
4
|
%
|
General and administrative expenses
(2)
|
$
|
0.82
|
|
|
$
|
0.90
|
|
|
(9
|
)%
|
Depreciation, depletion and amortization
|
$
|
1.18
|
|
|
$
|
1.64
|
|
|
(28
|
)%
|
Taxes, other than income taxes
|
$
|
0.23
|
|
|
$
|
0.31
|
|
|
(26
|
)%
|
|
|
|
|
|
|
|||||
Average daily production – Discontinued operations:
(3)
|
|
|
|
|
|
|||||
Total (MMcfe/d)
|
253
|
|
|
321
|
|
|
(21
|
)%
|
(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 expenses 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)
|
Production of Berry reported as discontinued operations for 2016 is for the period from January 1, 2016 through December 3, 2016.
|
|
Predecessor
|
||||||
|
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
|
|
|
Predecessor
|
|
|
||||||||
|
Year Ended December 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
Variance
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
Interest expense, net of amounts capitalized
|
$
|
(184,870
|
)
|
|
$
|
(456,749
|
)
|
|
$
|
271,879
|
|
Gain on extinguishment of debt
|
—
|
|
|
708,050
|
|
|
(708,050
|
)
|
|||
Earnings from equity method investments
|
699
|
|
|
685
|
|
|
14
|
|
|||
Other, net
|
(1,536
|
)
|
|
(13,965
|
)
|
|
12,429
|
|
|||
|
$
|
(185,707
|
)
|
|
$
|
238,021
|
|
|
$
|
(423,728
|
)
|
|
Predecessor
|
||
|
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 Predecessor’s Second Lien Notes
|
551,000
|
|
|
Terminated contracts
|
(66,052
|
)
|
|
Other
|
(64,648
|
)
|
|
Reorganization items, net
|
$
|
311,599
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Oil and natural gas
|
$
|
199,866
|
|
|
|
$
|
39,409
|
|
|
$
|
126,876
|
|
|
$
|
286,028
|
|
Plant and pipeline
|
93,318
|
|
|
|
4,990
|
|
|
36,433
|
|
|
2,539
|
|
||||
Other
|
5,626
|
|
|
|
1,243
|
|
|
8,315
|
|
|
45,387
|
|
||||
Capital expenditures, excluding acquisitions
|
$
|
298,810
|
|
|
|
$
|
45,642
|
|
|
$
|
171,624
|
|
|
$
|
333,954
|
|
Capital expenditures, excluding acquisitions – discontinued operations
|
$
|
2,033
|
|
|
|
$
|
436
|
|
|
$
|
23,128
|
|
|
$
|
183,741
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Net cash:
|
|
|
|
|
|
|
|
|
||||||||
Provided by (used in) operating activities
|
$
|
281,164
|
|
|
|
$
|
(20,814
|
)
|
|
$
|
880,514
|
|
|
$
|
1,249,457
|
|
Provided by (used in) investing activities
|
1,242,018
|
|
|
|
(58,756
|
)
|
|
(235,840
|
)
|
|
(310,417
|
)
|
||||
Provided by (used in) financing activities
|
(1,113,029
|
)
|
|
|
(560,932
|
)
|
|
48,015
|
|
|
(938,681
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
$
|
410,153
|
|
|
|
$
|
(640,502
|
)
|
|
$
|
692,689
|
|
|
$
|
359
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Cash flow from investing activities:
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
$
|
(260,316
|
)
|
|
|
$
|
(58,006
|
)
|
|
$
|
(215,857
|
)
|
|
$
|
(599,050
|
)
|
Deconsolidation of Berry Petroleum Company, LLC
|
—
|
|
|
|
—
|
|
|
(28,549
|
)
|
|
—
|
|
||||
Investment in discontinued operations
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(132,332
|
)
|
||||
Proceeds from sale of properties and equipment and other
|
1,156,691
|
|
|
|
(166
|
)
|
|
(4,690
|
)
|
|
345,770
|
|
||||
Net cash provided by (used in) investing activities – continuing operations
|
896,375
|
|
|
|
(58,172
|
)
|
|
(249,096
|
)
|
|
(385,612
|
)
|
||||
Net cash provided by (used in) investing activities – discontinued operations
|
345,643
|
|
|
|
(584
|
)
|
|
13,256
|
|
|
75,195
|
|
||||
Net cash provided by (used in) investing activities
|
$
|
1,242,018
|
|
|
|
$
|
(58,756
|
)
|
|
$
|
(235,840
|
)
|
|
$
|
(310,417
|
)
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from borrowings:
|
|
|
|
|
|
|
|
|
||||||||
Successor Credit Facility
|
$
|
190,000
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Predecessor Credit Facility
|
—
|
|
|
|
—
|
|
|
978,500
|
|
|
1,445,000
|
|
||||
|
$
|
190,000
|
|
|
|
$
|
—
|
|
|
$
|
978,500
|
|
|
$
|
1,445,000
|
|
Repayments of debt:
|
|
|
|
|
|
|
|
|
||||||||
Successor Credit Facility
|
$
|
(790,000
|
)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Successor Term Loan
|
(300,000
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Predecessor Credit Facility
|
—
|
|
|
|
(1,038,986
|
)
|
|
(814,298
|
)
|
|
(1,275,000
|
)
|
||||
Predecessor senior notes
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(553,461
|
)
|
||||
Predecessor bridge loan and term loan
|
—
|
|
|
|
—
|
|
|
(98,911
|
)
|
|
—
|
|
||||
|
$
|
(1,090,000
|
)
|
|
|
$
|
(1,038,986
|
)
|
|
$
|
(913,209
|
)
|
|
$
|
(1,828,461
|
)
|
|
Successor
|
|
|
Predecessor
|
||||
|
December 31, 2017
|
|
|
December 31, 2016
|
||||
(in thousands, except percentages)
|
|
|
|
|
||||
Revolving credit facility
|
$
|
—
|
|
|
|
$
|
—
|
|
Predecessor credit facility
|
—
|
|
|
|
1,654,745
|
|
||
Predecessor term loan
|
—
|
|
|
|
284,241
|
|
||
6.50% senior notes due May 2019
|
—
|
|
|
|
562,234
|
|
||
6.25% senior notes due November 2019
|
—
|
|
|
|
581,402
|
|
||
8.625% senior notes due April 2020
|
—
|
|
|
|
718,596
|
|
||
12.00% senior secured second lien notes due December 2020
|
—
|
|
|
|
1,000,000
|
|
||
7.75% senior notes due February 2021
|
—
|
|
|
|
779,474
|
|
||
6.50% senior notes due September 2021
|
—
|
|
|
|
381,423
|
|
||
Net unamortized deferred financing fees
|
—
|
|
|
|
(1,257
|
)
|
||
Total debt, net
|
—
|
|
|
|
5,960,858
|
|
||
Less current portion, net
(1)
|
—
|
|
|
|
(1,937,729
|
)
|
||
Less liabilities subject to compromise
(2)
|
—
|
|
|
|
(4,023,129
|
)
|
||
Long-term debt
|
$
|
—
|
|
|
|
$
|
—
|
|
(1)
|
Due to covenant violations, the Predecessor’s credit facility and term loan were classified as current at December 31, 2016.
|
(2)
|
The Predecessor’s senior notes and Second Lien Notes were classified as liabilities subject to compromise at December 31, 2016. On the Effective Date, pursuant to the terms of the Plan, all outstanding amounts under these debt instruments were canceled.
|
•
|
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
|
|
2018
|
|
2019 – 2020
|
|
2021 – 2022
|
|
2023 and Beyond
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Operating lease obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Office, property and equipment leases
|
|
$
|
5,292
|
|
|
$
|
2,812
|
|
|
$
|
2,468
|
|
|
$
|
12
|
|
|
$
|
—
|
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commodity derivatives
|
|
12,952
|
|
|
10,103
|
|
|
2,849
|
|
|
—
|
|
|
—
|
|
|||||
Asset retirement obligations
|
|
164,553
|
|
|
3,926
|
|
|
8,613
|
|
|
7,731
|
|
|
144,283
|
|
|||||
Capital commitments
|
|
36,035
|
|
|
36,020
|
|
|
10
|
|
|
5
|
|
|
—
|
|
|||||
|
|
$
|
218,832
|
|
|
$
|
52,861
|
|
|
$
|
13,940
|
|
|
$
|
7,748
|
|
|
$
|
144,283
|
|
|
Page
|
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
December 31,
2017 |
|
|
December 31,
2016 |
||||
(in thousands, except share and unit amounts)
|
|
|
|
|
||||
Equity (deficit):
|
|
|
|
|
||||
Predecessor units issued and outstanding (no units issued or outstanding at December 31, 2017; 352,792,474 units issued and outstanding at December 31, 2016)
|
—
|
|
|
|
5,386,885
|
|
||
Predecessor accumulated deficit
|
—
|
|
|
|
(7,783,873
|
)
|
||
Successor preferred stock ($0.001 par value, 30,000,000 shares authorized and no shares issued at December 31, 2017; no shares authorized or issued at December 31, 2016)
|
—
|
|
|
|
—
|
|
||
Successor Class A common stock ($0.001 par value, 270,000,000 shares authorized and 83,582,176 shares issued at December 31, 2017; no shares authorized or issued at December 31, 2016)
|
84
|
|
|
|
—
|
|
||
Successor additional paid-in capital
|
1,899,642
|
|
|
|
—
|
|
||
Successor retained earnings
|
432,860
|
|
|
|
—
|
|
||
Total common stockholders’/unitholders’ equity (deficit)
|
2,332,586
|
|
|
|
(2,396,988
|
)
|
||
Noncontrolling interests
|
18,971
|
|
|
|
—
|
|
||
Total equity (deficit)
|
2,351,557
|
|
|
|
(2,396,988
|
)
|
||
Total liabilities and equity (deficit)
|
$
|
2,881,123
|
|
|
|
$
|
4,660,591
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands, except per share and per unit amounts)
|
|
|
|
|
|
|
|
|||||||||
Revenues and other:
|
|
|
|
|
|
|
|
|
||||||||
Oil, natural gas and natural gas liquids sales
|
$
|
709,363
|
|
|
|
$
|
188,885
|
|
|
$
|
874,161
|
|
|
$
|
1,065,795
|
|
Gains (losses) on oil and natural gas derivatives
|
13,533
|
|
|
|
92,691
|
|
|
(164,330
|
)
|
|
1,027,014
|
|
||||
Marketing revenues
|
82,943
|
|
|
|
6,636
|
|
|
36,505
|
|
|
43,876
|
|
||||
Other revenues
|
20,839
|
|
|
|
9,915
|
|
|
93,308
|
|
|
97,771
|
|
||||
|
826,678
|
|
|
|
298,127
|
|
|
839,644
|
|
|
2,234,456
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses
|
208,446
|
|
|
|
49,665
|
|
|
296,891
|
|
|
352,077
|
|
||||
Transportation expenses
|
113,128
|
|
|
|
25,972
|
|
|
161,574
|
|
|
167,023
|
|
||||
Marketing expenses
|
69,008
|
|
|
|
4,820
|
|
|
29,736
|
|
|
35,278
|
|
||||
General and administrative expenses
|
117,548
|
|
|
|
71,745
|
|
|
237,841
|
|
|
285,996
|
|
||||
Exploration costs
|
3,137
|
|
|
|
93
|
|
|
4,080
|
|
|
9,473
|
|
||||
Depreciation, depletion and amortization
|
133,711
|
|
|
|
47,155
|
|
|
342,614
|
|
|
520,219
|
|
||||
Impairment of long-lived assets
|
—
|
|
|
|
—
|
|
|
165,044
|
|
|
4,960,144
|
|
||||
Taxes, other than income taxes
|
47,553
|
|
|
|
14,877
|
|
|
67,648
|
|
|
97,685
|
|
||||
(Gains) losses on sale of assets and other, net
|
(623,072
|
)
|
|
|
829
|
|
|
16,257
|
|
|
(194,805
|
)
|
||||
|
69,459
|
|
|
|
215,156
|
|
|
1,321,685
|
|
|
6,233,090
|
|
||||
Other income and (expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net of amounts capitalized
|
(12,361
|
)
|
|
|
(16,725
|
)
|
|
(184,870
|
)
|
|
(456,749
|
)
|
||||
Gain on extinguishment of debt
|
—
|
|
|
|
—
|
|
|
—
|
|
|
708,050
|
|
||||
Earnings from equity method investments
|
11,840
|
|
|
|
157
|
|
|
699
|
|
|
685
|
|
||||
Other, net
|
(6,233
|
)
|
|
|
(149
|
)
|
|
(1,536
|
)
|
|
(13,965
|
)
|
||||
|
(6,754
|
)
|
|
|
(16,717
|
)
|
|
(185,707
|
)
|
|
238,021
|
|
||||
Reorganization items, net
|
(8,851
|
)
|
|
|
2,331,189
|
|
|
311,599
|
|
|
—
|
|
||||
Income (loss) from continuing operations before income taxes
|
741,614
|
|
|
|
2,397,443
|
|
|
(356,149
|
)
|
|
(3,760,613
|
)
|
||||
Income tax expense (benefit)
|
388,942
|
|
|
|
(166
|
)
|
|
11,194
|
|
|
(6,393
|
)
|
||||
Income (loss) from continuing operations
|
352,672
|
|
|
|
2,397,609
|
|
|
(367,343
|
)
|
|
(3,754,220
|
)
|
||||
Income (loss) from discontinued operations, net of income taxes
|
82,995
|
|
|
|
(548
|
)
|
|
(1,804,513
|
)
|
|
(1,005,591
|
)
|
||||
Net income (loss)
|
435,667
|
|
|
|
2,397,061
|
|
|
(2,171,856
|
)
|
|
(4,759,811
|
)
|
||||
Net income attributable to noncontrolling interests
|
2,807
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) attributable to common stockholders/unitholders
|
$
|
432,860
|
|
|
|
$
|
2,397,061
|
|
|
$
|
(2,171,856
|
)
|
|
$
|
(4,759,811
|
)
|
|
|
|
|
|
|
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands, except per share and per unit amounts)
|
|
|
|
|
|
|
|
|||||||||
Income (loss) per share/unit attributable to common stockholders/unitholders:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations per share/unit – Basic
|
$
|
3.99
|
|
|
|
$
|
6.80
|
|
|
$
|
(1.04
|
)
|
|
$
|
(10.94
|
)
|
Income (loss) from continuing operations per share/unit – Diluted
|
$
|
3.92
|
|
|
|
$
|
6.80
|
|
|
$
|
(1.04
|
)
|
|
$
|
(10.94
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from discontinued operations per share/unit – Basic
|
$
|
0.95
|
|
|
|
$
|
(0.01
|
)
|
|
$
|
(5.12
|
)
|
|
$
|
(2.93
|
)
|
Income (loss) from discontinued operations per share/unit – Diluted
|
$
|
0.93
|
|
|
|
$
|
(0.01
|
)
|
|
$
|
(5.12
|
)
|
|
$
|
(2.93
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share/unit – Basic
|
$
|
4.94
|
|
|
|
$
|
6.79
|
|
|
$
|
(6.16
|
)
|
|
$
|
(13.87
|
)
|
Net income (loss) per share/unit – Diluted
|
$
|
4.85
|
|
|
|
$
|
6.79
|
|
|
$
|
(6.16
|
)
|
|
$
|
(13.87
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares/units outstanding – Basic
|
87,646
|
|
|
|
352,792
|
|
|
352,653
|
|
|
343,323
|
|
||||
Weighted average shares/units outstanding – Diluted
|
88,719
|
|
|
|
352,792
|
|
|
352,653
|
|
|
343,323
|
|
|
Units
|
|
Unitholders’ Capital
|
|
Accumulated Deficit
|
|
Treasury Units (at Cost)
|
|
Total Unitholders’ Capital (Deficit)
|
|||||||||
|
(in thousands)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
December 31, 2014
(Predecessor)
|
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
(Predecessor)
|
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
(Predecessor)
|
352,792
|
|
|
5,386,885
|
|
|
(7,783,873
|
)
|
|
—
|
|
|
(2,396,988
|
)
|
||||
Net income
|
|
|
—
|
|
|
2,397,061
|
|
|
—
|
|
|
2,397,061
|
|
|||||
Other
|
|
|
(73
|
)
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|||||
February 28, 2017
(Predecessor)
|
352,792
|
|
|
5,386,812
|
|
|
(5,386,812
|
)
|
|
—
|
|
|
—
|
|
||||
Cancellation of predecessor equity
|
(352,792
|
)
|
|
(5,386,812
|
)
|
|
5,386,812
|
|
|
—
|
|
|
—
|
|
||||
February 28, 2017
(Predecessor)
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Class A Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Total Common Stockholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Issuances of successor Class A common stock
|
89,230
|
|
|
$
|
89
|
|
|
$
|
2,021,142
|
|
|
$
|
—
|
|
|
$
|
2,021,231
|
|
|
$
|
—
|
|
|
$
|
2,021,231
|
|
Share-based compensation expenses
|
|
|
—
|
|
|
13,750
|
|
|
—
|
|
|
13,750
|
|
|
—
|
|
|
13,750
|
|
|||||||
February 28, 2017
(Successor)
|
89,230
|
|
|
89
|
|
|
2,034,892
|
|
|
—
|
|
|
2,034,981
|
|
|
—
|
|
|
2,034,981
|
|
||||||
Net income
|
|
|
—
|
|
|
—
|
|
|
432,860
|
|
|
432,860
|
|
|
2,807
|
|
|
435,667
|
|
|||||||
Issuances of successor Class A common stock
|
42
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchases of successor Class A common stock
|
(5,690
|
)
|
|
(5
|
)
|
|
(198,283
|
)
|
|
—
|
|
|
(198,288
|
)
|
|
—
|
|
|
(198,288
|
)
|
||||||
Share-based compensation expenses
|
|
|
—
|
|
|
77,790
|
|
|
—
|
|
|
77,790
|
|
|
—
|
|
|
77,790
|
|
|||||||
Initial allocation of noncontrolling interests upon conversion of subsidiary units
|
|
|
—
|
|
|
(17,605
|
)
|
|
—
|
|
|
(17,605
|
)
|
|
17,605
|
|
|
—
|
|
|||||||
Distributions to noncontrolling interests
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,596
|
)
|
|
(1,596
|
)
|
|||||||
Subsidiary equity transactions
|
|
|
—
|
|
|
(155
|
)
|
|
—
|
|
|
(155
|
)
|
|
155
|
|
|
—
|
|
|||||||
Other
|
|
|
—
|
|
|
3,003
|
|
|
—
|
|
|
3,003
|
|
|
—
|
|
|
3,003
|
|
|||||||
December 31, 2017
(Successor)
|
83,582
|
|
|
$
|
84
|
|
|
$
|
1,899,642
|
|
|
$
|
432,860
|
|
|
$
|
2,332,586
|
|
|
$
|
18,971
|
|
|
$
|
2,351,557
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Cash flow from operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
435,667
|
|
|
|
$
|
2,397,061
|
|
|
$
|
(2,171,856
|
)
|
|
$
|
(4,759,811
|
)
|
Adjustments to
reconcile net income (
loss)
to net cash
provided by (used in) operatin
g activities:
|
|
|
|
|
|
|
|
|
||||||||
(Income) loss from discontinued operations
|
(82,995
|
)
|
|
|
548
|
|
|
1,804,513
|
|
|
1,005,591
|
|
||||
Depreciation, depletion and amortization
|
133,711
|
|
|
|
47,155
|
|
|
342,614
|
|
|
520,219
|
|
||||
Impairment of long-lived assets
|
—
|
|
|
|
—
|
|
|
165,044
|
|
|
4,960,144
|
|
||||
Deferred income taxes
|
381,313
|
|
|
|
(166
|
)
|
|
11,367
|
|
|
4,606
|
|
||||
Total (gains) losses on derivatives, net
|
(13,533
|
)
|
|
|
(92,691
|
)
|
|
164,330
|
|
|
(1,027,014
|
)
|
||||
Cash settlements on derivatives
|
26,793
|
|
|
|
(11,572
|
)
|
|
860,778
|
|
|
1,135,319
|
|
||||
Share-based compensation expenses
|
41,285
|
|
|
|
50,255
|
|
|
44,218
|
|
|
56,136
|
|
||||
Gain on extinguishment of debt
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(708,050
|
)
|
||||
Amortization and write-off of deferred financing fees
|
3,711
|
|
|
|
1,338
|
|
|
13,356
|
|
|
30,993
|
|
||||
(Gains) losses on sale of assets and other, net
|
(667,549
|
)
|
|
|
1,069
|
|
|
13,007
|
|
|
(188,200
|
)
|
||||
Reorganization items, net
|
—
|
|
|
|
(2,359,364
|
)
|
|
(365,367
|
)
|
|
—
|
|
||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
||||||||
(Increase) decrease in accounts receivable – trade, net
|
41,094
|
|
|
|
(7,216
|
)
|
|
(71,059
|
)
|
|
211,884
|
|
||||
(Increase) decrease in other assets
|
4,548
|
|
|
|
402
|
|
|
(17,733
|
)
|
|
(9,142
|
)
|
||||
(Increase) decrease in restricted cash
|
2,151
|
|
|
|
(80,164
|
)
|
|
—
|
|
|
—
|
|
||||
Increase (decrease) in accounts payable and accrued expenses
|
(48,963
|
)
|
|
|
20,949
|
|
|
38,468
|
|
|
(98,223
|
)
|
||||
Increase (decrease) in other liabilities
|
7,740
|
|
|
|
2,801
|
|
|
(515
|
)
|
|
(51,266
|
)
|
||||
Net cash provided by (used in) operating activities – continuing operations
|
264,973
|
|
|
|
(29,595
|
)
|
|
831,165
|
|
|
1,083,186
|
|
||||
Net cash provided by operating activities – discontinued operations
|
16,191
|
|
|
|
8,781
|
|
|
49,349
|
|
|
166,271
|
|
||||
Net cash provided by (used in) operating activities
|
281,164
|
|
|
|
(20,814
|
)
|
|
880,514
|
|
|
1,249,457
|
|
||||
|
|
|
|
|
|
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Cash flow from investing activities:
|
|
|
|
|
|
|
|
|
||||||||
Development of oil and natural gas properties
|
(171,721
|
)
|
|
|
(50,597
|
)
|
|
(172,298
|
)
|
|
(550,083
|
)
|
||||
Purchases of other property and equipment
|
(88,595
|
)
|
|
|
(7,409
|
)
|
|
(43,559
|
)
|
|
(48,967
|
)
|
||||
Deconsolidation of Berry Petroleum Company, LLC cash
|
—
|
|
|
|
—
|
|
|
(28,549
|
)
|
|
—
|
|
||||
Investment in discontinued operations
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(132,332
|
)
|
||||
Proceeds from sale of properties and equipment and other
|
1,156,691
|
|
|
|
(166
|
)
|
|
(4,690
|
)
|
|
345,770
|
|
||||
Net cash provided by (used in) investing activities – continuing operations
|
896,375
|
|
|
|
(58,172
|
)
|
|
(249,096
|
)
|
|
(385,612
|
)
|
||||
Net cash provided by (used in) investing activities – discontinued operations
|
345,643
|
|
|
|
(584
|
)
|
|
13,256
|
|
|
75,195
|
|
||||
Net cash provided by (used in) investing activities
|
1,242,018
|
|
|
|
(58,756
|
)
|
|
(235,840
|
)
|
|
(310,417
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash flow from financing activities:
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from rights offerings, net
|
—
|
|
|
|
514,069
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from sale of units
|
—
|
|
|
|
—
|
|
|
—
|
|
|
224,665
|
|
||||
Repurchases of shares
|
(198,288
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from borrowings
|
190,000
|
|
|
|
—
|
|
|
978,500
|
|
|
1,445,000
|
|
||||
Repayments of debt
|
(1,090,000
|
)
|
|
|
(1,038,986
|
)
|
|
(913,209
|
)
|
|
(1,828,461
|
)
|
||||
Payment to holders of claims under the second lien notes
|
—
|
|
|
|
(30,000
|
)
|
|
—
|
|
|
—
|
|
||||
Distributions to unitholders
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(323,878
|
)
|
||||
Debt issuance costs paid
|
(7,729
|
)
|
|
|
—
|
|
|
(752
|
)
|
|
(17,916
|
)
|
||||
Settlement of advance from discontinued operations
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(129,217
|
)
|
||||
Excess tax benefit from unit-based compensation
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(9,467
|
)
|
||||
Other
|
(7,012
|
)
|
|
|
(6,015
|
)
|
|
(14,823
|
)
|
|
(74,958
|
)
|
||||
Net cash provided by (used in) financing activities – continuing operations
|
(1,113,029
|
)
|
|
|
(560,932
|
)
|
|
49,716
|
|
|
(714,232
|
)
|
||||
Net cash used in financing activities – discontinued operations
|
—
|
|
|
|
—
|
|
|
(1,701
|
)
|
|
(224,449
|
)
|
||||
Net cash provided by (used in) financing activities
|
(1,113,029
|
)
|
|
|
(560,932
|
)
|
|
48,015
|
|
|
(938,681
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
410,153
|
|
|
|
(640,502
|
)
|
|
692,689
|
|
|
359
|
|
||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Beginning
|
54,355
|
|
|
|
694,857
|
|
|
2,168
|
|
|
1,809
|
|
||||
Ending
|
464,508
|
|
|
|
54,355
|
|
|
694,857
|
|
|
2,168
|
|
||||
Less cash and cash equivalents of discontinued operations at end of year
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(1,023
|
)
|
||||
Ending – continuing operations
|
$
|
464,508
|
|
|
|
$
|
54,355
|
|
|
$
|
694,857
|
|
|
$
|
1,145
|
|
|
Predecessor
|
||||||
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 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
|
|
||
|
$
|
165,044
|
|
|
$
|
4,132,239
|
|
•
|
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 wholly owned subsidiary of the Predecessor and the borrower under the Credit Agreement (as amended, the “Successor Credit Facility”) entered into in connection with the reorganization, in exchange for equity interests in Holdco II and the issuance of interests in the Successor Credit Facility to certain of the Predecessor’s creditors in partial satisfaction of their claims (the “Contribution”). Immediately following the Contribution, the Predecessor transferred equity interests in Holdco II to the Successor in exchange for approximately
$530 million
in cash, an amount of equity securities in the Successor not to exceed
49.90%
of the outstanding equity interests of the Successor, which the Predecessor distributed to certain of its creditors in satisfaction of their claims, and the Successor’s agreement to honor certain obligations of the Predecessor under the Plan. In connection with this transfer, certain entities composing the Successor guaranteed the Successor Credit Facility. Contemporaneously with the reorganization transactions and pursuant to the 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 (“Predecessor Credit Facility”) received a full recovery, consisting of a cash paydown and their pro rata share of the
$1.7 billion
Successor Credit Facility. As a result, all outstanding obligations under the Predecessor Credit Facility were canceled.
|
•
|
Holdco II, as borrower, entered into the Successor Credit Facility with the holders of claims under the Predecessor Credit Facility, as lenders, and Wells Fargo Bank, National Association, as administrative agent, providing for a new reserve-based revolving loan with up to
$1.4 billion
in borrowing commitments and a new term loan in an original principal amount of
$300 million
. For additional information about the Successor Credit Facility, see Note 6.
|
•
|
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 offerings, 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 offerings, 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 of the Predecessor that were issued and outstanding immediately prior to the Effective Date were extinguished without recovery. On the Effective Date, the Successor issued in the aggregate
89,229,892
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 Successor entered into a registration rights agreement with certain parties, pursuant to which the Company agreed to, among other things, file a registration statement with the SEC within 60 days of the Effective Date covering the offer and resale of “Registrable Securities” (as defined therein).
|
•
|
By operation of the Plan and the Confirmation Order, the terms of the Predecessor’s board of directors expired as of the Effective Date. The Successor formed a new board of directors, consisting of the Chief Executive Officer of the Predecessor, one director selected by the Successor and five directors selected by a six-person selection committee.
|
|
Predecessor
|
||
|
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
|
|
|
Successor
|
|
|
|
Predecessor
|
||||||||
|
Ten Months Ended December 31, 2017
|
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||
Gain on settlement of liabilities subject to compromise
|
$
|
—
|
|
|
|
|
$
|
3,724,750
|
|
|
$
|
—
|
|
Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement
|
—
|
|
|
|
|
(1,000,000
|
)
|
|
—
|
|
|||
Fresh start valuation adjustments
|
—
|
|
|
|
|
(591,525
|
)
|
|
—
|
|
|||
Income tax benefit related to implementation of the Plan
|
—
|
|
|
|
|
264,889
|
|
|
—
|
|
|||
Legal and other professional advisory fees
|
(8,902
|
)
|
|
|
|
(46,961
|
)
|
|
(56,656
|
)
|
|||
Unamortized deferred financing fees, discounts and premiums
|
—
|
|
|
|
|
—
|
|
|
(52,045
|
)
|
|||
Gain related to interest payable on Predecessor’s Second Lien Notes
|
—
|
|
|
|
|
—
|
|
|
551,000
|
|
|||
Terminated contracts
|
—
|
|
|
|
|
(6,915
|
)
|
|
(66,052
|
)
|
|||
Other
|
51
|
|
|
|
|
(13,049
|
)
|
|
(64,648
|
)
|
|||
Reorganization items, net
|
$
|
(8,851
|
)
|
|
|
|
$
|
2,331,189
|
|
|
$
|
311,599
|
|
Plan confirmed enterprise value
|
$
|
2,350,000
|
|
Fair value of debt
|
(900,000
|
)
|
|
Fair value of subsequently determined tax attributes
|
621,486
|
|
|
Fair value of vested Class B units
|
(36,505
|
)
|
|
Value of Successor’s stockholders’ equity
|
$
|
2,034,981
|
|
|
As of February 28, 2017
|
||||||||||||||||
|
Predecessor
|
|
Reorganization Adjustments
(1)
|
|
|
Fresh Start Adjustments
|
|
|
Successor
|
||||||||
|
(in thousands)
|
||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
734,166
|
|
|
$
|
(679,811
|
)
|
(2)
|
|
$
|
—
|
|
|
|
$
|
54,355
|
|
Accounts receivable – trade, net
|
212,099
|
|
|
—
|
|
|
|
(7,808
|
)
|
(16)
|
|
204,291
|
|
||||
Derivative instruments
|
15,391
|
|
|
—
|
|
|
|
—
|
|
|
|
15,391
|
|
||||
Restricted cash
|
1,602
|
|
|
80,164
|
|
(3)
|
|
—
|
|
|
|
81,766
|
|
||||
Other current assets
|
106,426
|
|
|
(15,983
|
)
|
(4)
|
|
1,780
|
|
(17)
|
|
92,223
|
|
||||
Total current assets
|
1,069,684
|
|
|
(615,630
|
)
|
|
|
(6,028
|
)
|
|
|
448,026
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Noncurrent assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Oil and natural gas properties (successful efforts method)
|
13,269,035
|
|
|
—
|
|
|
|
(11,082,258
|
)
|
(18)
|
|
2,186,777
|
|
||||
Less accumulated depletion and amortization
|
(10,044,240
|
)
|
|
—
|
|
|
|
10,044,240
|
|
(18)
|
|
—
|
|
||||
|
3,224,795
|
|
|
—
|
|
|
|
(1,038,018
|
)
|
|
|
2,186,777
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Other property and equipment
|
641,586
|
|
|
—
|
|
|
|
(197,653
|
)
|
(19)
|
|
443,933
|
|
||||
Less accumulated depreciation
|
(230,952
|
)
|
|
—
|
|
|
|
230,952
|
|
(19)
|
|
—
|
|
||||
|
410,634
|
|
|
—
|
|
|
|
33,299
|
|
|
|
443,933
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
4,492
|
|
|
—
|
|
|
|
—
|
|
|
|
4,492
|
|
||||
Deferred income taxes
|
—
|
|
|
264,889
|
|
(5)
|
|
356,597
|
|
(5)
|
|
621,486
|
|
||||
Other noncurrent assets
|
15,003
|
|
|
151
|
|
(6)
|
|
8,139
|
|
(20)
|
|
23,293
|
|
||||
|
19,495
|
|
|
265,040
|
|
|
|
364,736
|
|
|
|
649,271
|
|
||||
Total noncurrent assets
|
3,654,924
|
|
|
265,040
|
|
|
|
(639,983
|
)
|
|
|
3,279,981
|
|
||||
Total assets
|
$
|
4,724,608
|
|
|
$
|
(350,590
|
)
|
|
|
$
|
(646,011
|
)
|
|
|
$
|
3,728,007
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable and accrued expenses
|
$
|
324,585
|
|
|
$
|
41,266
|
|
(7)
|
|
$
|
(2,351
|
)
|
(21)
|
|
$
|
363,500
|
|
Derivative instruments
|
7,361
|
|
|
—
|
|
|
|
—
|
|
|
|
7,361
|
|
||||
Current portion of long-term debt, net
|
1,937,822
|
|
|
(1,912,822
|
)
|
(8)
|
|
—
|
|
|
|
25,000
|
|
||||
Other accrued liabilities
|
41,251
|
|
|
(1,026
|
)
|
(9)
|
|
1,104
|
|
(22)
|
|
41,329
|
|
||||
Total current liabilities
|
2,311,019
|
|
|
(1,872,582
|
)
|
|
|
(1,247
|
)
|
|
|
437,190
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
2,116
|
|
|
—
|
|
|
|
—
|
|
|
|
2,116
|
|
||||
Long-term debt
|
—
|
|
|
875,000
|
|
(10)
|
|
—
|
|
|
|
875,000
|
|
||||
Other noncurrent liabilities
|
402,776
|
|
|
(167
|
)
|
(11)
|
|
(53,239
|
)
|
(23)
|
|
349,370
|
|
||||
Liabilities subject to compromise
|
4,301,912
|
|
|
(4,301,912
|
)
|
(12)
|
|
—
|
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Temporary equity:
|
|
|
|
|
|
|
|
|
|
||||||||
Redeemable noncontrolling interests
|
—
|
|
|
29,350
|
|
(13)
|
|
—
|
|
|
|
29,350
|
|
|
As of February 28, 2017
|
||||||||||||||||
|
Predecessor
|
|
Reorganization Adjustments
(1)
|
|
|
Fresh Start Adjustments
|
|
|
Successor
|
||||||||
Stockholders’/unitholders’ equity (deficit):
|
|
|
|
|
|
|
|
|
|
||||||||
Predecessor units issued and outstanding
|
5,386,812
|
|
|
(5,386,812
|
)
|
(14)
|
|
—
|
|
|
|
—
|
|
||||
Predecessor accumulated deficit
|
(7,680,027
|
)
|
|
2,884,740
|
|
(15)
|
|
4,795,287
|
|
(24)
|
|
—
|
|
||||
Successor Class A common stock
|
—
|
|
|
89
|
|
(14)
|
|
—
|
|
|
|
89
|
|
||||
Successor additional paid-in capital
|
—
|
|
|
7,421,704
|
|
(14)
|
|
(5,386,812
|
)
|
(24)
|
|
2,034,892
|
|
||||
Successor retained earnings
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||||
Total stockholders’/unitholders’ equity (deficit)
|
(2,293,215
|
)
|
|
4,919,721
|
|
|
|
(591,525
|
)
|
|
|
2,034,981
|
|
||||
Total liabilities and equity (deficit)
|
$
|
4,724,608
|
|
|
$
|
(350,590
|
)
|
|
|
$
|
(646,011
|
)
|
|
|
$
|
3,728,007
|
|
1)
|
Represent amounts recorded as of the Effective Date for the implementation of the Plan, including, among other items, settlement of the Predecessor’s liabilities subject to compromise, repayment of certain of the Predecessor’s debt, cancellation of the Predecessor’s equity, issuances of the Successor’s Class A common stock, proceeds received from the Successor’s rights offerings and issuance of the Successor’s debt.
|
2)
|
Changes in cash and cash equivalents included the following:
|
(in thousands)
|
|
||
Borrowings under the Successor’s revolving loan
|
$
|
600,000
|
|
Borrowings under the Successor’s term loan
|
300,000
|
|
|
Proceeds from rights offerings
|
530,019
|
|
|
Removal of restriction on cash balance
|
1,602
|
|
|
Payment to holders of claims under the Predecessor Credit Facility
|
(1,947,357
|
)
|
|
Payment to holders of claims under the Second Lien Notes
|
(30,000
|
)
|
|
Payment of Berry’s ad valorem taxes
|
(23,366
|
)
|
|
Payment of the rights offerings backstop commitment premium
|
(15,900
|
)
|
|
Payment of professional fees
|
(13,043
|
)
|
|
Funding of the professional fees escrow account
|
(41,766
|
)
|
|
Funding of the general unsecured claims cash distribution pool
|
(40,000
|
)
|
|
Changes in cash and cash equivalents
|
$
|
(679,811
|
)
|
3)
|
Primarily reflects the transfer to restricted cash to fund the Predecessor’s professional fees escrow account and general unsecured claims cash distribution pool.
|
4)
|
Primarily reflects the write-off of the Predecessor’s deferred financing fees.
|
5)
|
Reflects deferred tax assets recorded as of the Effective Date as determined in accordance with ASC 740. The deferred tax assets were primarily the result of the conversion from a limited liability company to a C corporation and differences in the accounting basis and tax basis of the Company’s oil and natural gas properties as of the Effective Date.
|
6)
|
Reflects the capitalization of deferred financing fees related to the Successor’s revolving loan.
|
7)
|
Net increase in accounts payable and accrued expenses reflects:
|
(in thousands)
|
|
||
Recognition of payables for the professional fees escrow account
|
$
|
41,766
|
|
Recognition of payables for the general unsecured claims cash distribution pool
|
40,000
|
|
|
Payment of professional fees
|
(17,130
|
)
|
|
Payment of Berry’s ad valorem taxes
|
(23,366
|
)
|
|
Other
|
(4
|
)
|
|
Net increase in accounts payable and accrued expenses
|
$
|
41,266
|
|
8)
|
Reflects the settlement of the Predecessor Credit Facility through repayment of approximately
$1.9 billion
, net of the write-off of deferred financing fees and an increase of
$25 million
for the current portion of the Successor’s term loan.
|
9)
|
Reflects a decrease of approximately
$8 million
for the payment of accrued interest on the Predecessor Credit Facility partially offset by an increase of approximately
$7 million
related to noncash share-based compensation classified as a liability related to the incentive interest awards issued by Holdco to certain members of its management (see Note 15).
|
10)
|
Reflects borrowings of
$900 million
under the Successor Credit Facility, which includes a
$600 million
revolving loan and a
$300 million
term loan, net of
$25 million
for the current portion of the Successor’s term loan.
|
11)
|
Reflects a reduction in deferred tax liabilities as determined in accordance with ASC 740.
|
12)
|
Settlement of liabilities subject to compromise and the resulting net gain were determined as follows:
|
(in thousands)
|
|
||
Accounts payable and accrued expenses
|
$
|
134,599
|
|
Accrued interest payable
|
144,184
|
|
|
Debt
|
4,023,129
|
|
|
Total liabilities subject to compromise
|
4,301,912
|
|
|
Recognition of an additional claim for the Predecessor’s Second Lien Notes settlement
|
1,000,000
|
|
|
Funding of the general unsecured claims cash distribution pool
|
(40,000
|
)
|
|
Payment to holders of claims under the Second Lien Notes
|
(30,000
|
)
|
|
Issuance of Class A common stock to creditors
|
(1,507,162
|
)
|
|
Gain on settlement of liabilities subject to compromise
|
$
|
3,724,750
|
|
13)
|
Reflects redeemable noncontrolling interests classified as temporary equity related to the incentive interest awards issued by Holdco to certain members of its management. See Note 15 for additional information.
|
14)
|
Net increase in capital accounts reflects:
|
(in thousands)
|
|
||
Issuance of Class A common stock to creditors
|
$
|
1,507,162
|
|
Issuance of Class A common stock pursuant to the rights offerings
|
530,019
|
|
|
Payment of the rights offerings backstop commitment premium
|
(15,900
|
)
|
|
Payment of issuance costs
|
(50
|
)
|
|
Share-based compensation expenses
|
13,750
|
|
|
Cancellation of the Predecessor’s units issued and outstanding
|
5,386,812
|
|
|
Par value of Class A common stock
|
(89
|
)
|
|
Change in additional paid-in capital
|
7,421,704
|
|
|
Par value of Class A common stock
|
89
|
|
|
Predecessor’s units issued and outstanding
|
(5,386,812
|
)
|
|
Net increase in capital accounts
|
$
|
2,034,981
|
|
15)
|
Net decrease in accumulated deficit reflects:
|
16)
|
Reflects a change in accounting policy from the entitlements method to the sales method for natural gas production imbalances.
|
17)
|
Reflects the recognition of intangible assets for the current portion of favorable leases, partially offset by decreases for well equipment inventory and the write-off of historical intangible assets.
|
18)
|
Reflects a decrease of oil and natural gas properties, based on the methodology discussed above, and the elimination of accumulated depletion and amortization. The following table summarizes the components of oil and natural gas properties as of the Effective Date:
|
|
Successor
|
|
|
Predecessor
|
||||
|
Fair Value
|
|
|
Historical Book Value
|
||||
(in thousands)
|
|
|
|
|
||||
Proved properties
|
$
|
1,727,834
|
|
|
|
$
|
12,258,835
|
|
Unproved properties
|
458,943
|
|
|
|
1,010,200
|
|
||
|
2,186,777
|
|
|
|
13,269,035
|
|
||
Less accumulated depletion and amortization
|
—
|
|
|
|
(10,044,240
|
)
|
||
|
$
|
2,186,777
|
|
|
|
$
|
3,224,795
|
|
19)
|
Reflects a decrease of other property and equipment and the elimination of accumulated depreciation. The following table summarizes the components of other property and equipment as of the Effective Date:
|
|
Successor
|
|
|
Predecessor
|
||||
|
Fair Value
|
|
|
Historical Book Value
|
||||
(in thousands)
|
|
|
|
|
||||
Natural gas plants and pipelines
|
$
|
342,924
|
|
|
|
$
|
426,914
|
|
Office equipment and furniture
|
39,211
|
|
|
|
106,059
|
|
||
Buildings and leasehold improvements
|
32,817
|
|
|
|
66,023
|
|
||
Vehicles
|
16,980
|
|
|
|
30,760
|
|
||
Land
|
7,747
|
|
|
|
3,727
|
|
||
Drilling and other equipment
|
4,254
|
|
|
|
8,103
|
|
||
|
443,933
|
|
|
|
641,586
|
|
||
Less accumulated depreciation
|
—
|
|
|
|
(230,952
|
)
|
||
|
$
|
443,933
|
|
|
|
$
|
410,634
|
|
20)
|
Reflects the recognition of intangible assets for the noncurrent portion of favorable leases, as well as increases in equity method investments and carbon credit allowances. Assets and liabilities for out-of-market contracts were valued based on market terms as of February 28, 2017, and will be amortized over the remaining life of the respective lease. The Company’s equity method investments were valued based on a market approach using a market EBITDA multiple. Carbon credit allowances were valued using a market approach based on trading prices for carbon credits on February 28, 2017.
|
21)
|
Primarily reflects the write-off of deferred rent partially offset by an increase in carbon emissions liabilities.
|
22)
|
Reflects an increase of the current portion of asset retirement obligations.
|
23)
|
Primarily reflects a decrease of approximately
$49 million
for asset retirement obligations and approximately
$5 million
for deferred rent, partially offset by an increase of approximately
$1 million
for carbon emissions liabilities. The fair value of asset retirement obligations were estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plug and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. Carbon emissions liabilities were valued using a market approach based on trading prices for carbon credits on February 28, 2017.
|
24)
|
Reflects the cumulative impact of the fresh start accounting adjustments discussed above and the elimination of the Predecessor’s accumulated deficit.
|
|
Predecessor
|
||
|
December 31, 2016
|
||
(in thousands)
|
|
||
Assets:
|
|
||
Oil and natural gas properties
|
$
|
728,190
|
|
Other property and equipment
|
11,402
|
|
|
Other
|
1,435
|
|
|
Total assets of discontinued operations
|
$
|
741,027
|
|
Liabilities:
|
|
||
Asset retirement obligations
|
$
|
38,042
|
|
Other
|
1,481
|
|
|
Total liabilities of discontinued operations
|
$
|
39,523
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Revenues and other
|
$
|
34,096
|
|
|
|
$
|
14,891
|
|
|
$
|
465,775
|
|
|
$
|
727,211
|
|
Expenses
|
19,479
|
|
|
|
13,758
|
|
|
1,612,727
|
|
|
1,651,114
|
|
||||
Other income and (expenses)
|
(3,541
|
)
|
|
|
(1,681
|
)
|
|
(65,022
|
)
|
|
(81,756
|
)
|
||||
Reorganization items, net
|
—
|
|
|
|
—
|
|
|
(46,127
|
)
|
|
—
|
|
||||
Income (loss) from discontinued operations before income taxes
|
11,076
|
|
|
|
(548
|
)
|
|
(1,258,101
|
)
|
|
(1,005,659
|
)
|
||||
Income tax expense (benefit)
|
4,165
|
|
|
|
—
|
|
|
196
|
|
|
(68
|
)
|
||||
Income (loss) from discontinued operations, net of income taxes
|
$
|
6,911
|
|
|
|
$
|
(548
|
)
|
|
$
|
(1,258,297
|
)
|
|
$
|
(1,005,591
|
)
|
|
Successor
|
||
|
December 31, 2017
|
||
(in thousands)
|
|
||
Assets:
|
|
||
Oil and natural gas properties
|
$
|
92,245
|
|
Other property and equipment
|
12,983
|
|
|
Other
|
1,735
|
|
|
Total assets held for sale
|
$
|
106,963
|
|
Liabilities:
|
|
||
Asset retirement obligations
|
$
|
42,001
|
|
Other
|
1,301
|
|
|
Total liabilities held for sale
|
$
|
43,302
|
|
|
Four Months Ended December 31, 2017
|
||
|
(in thousands)
|
||
|
|
||
Revenues and other
|
$
|
75,461
|
|
Expenses
|
61,790
|
|
|
Other income and (expenses)
|
(1,180
|
)
|
|
Net income
|
$
|
12,491
|
|
|
December 31, 2017
|
||
|
(in thousands)
|
||
|
|
||
Current assets
|
$
|
27,465
|
|
Noncurrent assets
|
1,826,741
|
|
|
|
1,854,206
|
|
|
Current liabilities
|
149,409
|
|
|
Noncurrent liabilities
|
97,480
|
|
|
Members’ equity
|
$
|
1,607,317
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
December 31, 2017
|
|
|
December 31, 2016
|
||||
(in thousands, except percentages)
|
|
|
|
|
||||
Revolving credit facility
|
$
|
—
|
|
|
|
$
|
—
|
|
Predecessor credit facility
(1)
|
—
|
|
|
|
1,654,745
|
|
||
Predecessor term loan
(1)
|
—
|
|
|
|
284,241
|
|
||
6.50% senior notes due May 2019
|
—
|
|
|
|
562,234
|
|
||
6.25% senior notes due November 2019
|
—
|
|
|
|
581,402
|
|
||
8.625% senior notes due April 2020
|
—
|
|
|
|
718,596
|
|
||
12.00% senior secured second lien notes due December 2020
|
—
|
|
|
|
1,000,000
|
|
||
7.75% senior notes due February 2021
|
—
|
|
|
|
779,474
|
|
||
6.50% senior notes due September 2021
|
—
|
|
|
|
381,423
|
|
||
Net unamortized deferred financing fees
|
—
|
|
|
|
(1,257
|
)
|
||
Total debt, net
|
—
|
|
|
|
5,960,858
|
|
||
Less current portion, net
(2)
|
—
|
|
|
|
(1,937,729
|
)
|
||
Less liabilities subject to compromise
(3)
|
—
|
|
|
|
(4,023,129
|
)
|
||
Long-term debt
|
$
|
—
|
|
|
|
$
|
—
|
|
(1)
|
Variable interest rate of
5.50%
at
December 31, 2016
.
|
(2)
|
Due to covenant violations, the Predecessor’s credit facility and term loan were classified as current at
December 31, 2016
.
|
(3)
|
The Predecessor’s senior notes and Second Lien Notes were classified as liabilities subject to compromise at
December 31, 2016
. On the Effective Date, pursuant to the terms of the Plan, all outstanding amounts under these debt instruments were canceled.
|
|
Predecessor
|
||||||
|
December 31, 2016
|
||||||
|
Carrying Value
|
|
Fair Value
|
||||
(in thousands)
|
|
|
|
||||
Senior secured second lien notes
|
$
|
1,000,000
|
|
|
$
|
863,750
|
|
Senior notes, net
|
3,023,129
|
|
|
1,179,224
|
|
|
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
.
|
|
Successor
|
|
|
Predecessor
|
||||
|
December 31, 2017
|
|
|
December 31, 2016
|
||||
(in thousands)
|
|
|
|
|
||||
Assets:
|
|
|
|
|
||||
Commodity derivatives
|
$
|
22,589
|
|
|
|
$
|
19,369
|
|
Liabilities:
|
|
|
|
|
||||
Commodity derivatives
|
$
|
25,443
|
|
|
|
$
|
113,226
|
|
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.
|
|
Successor
|
||||||||||
|
December 31, 2017
|
||||||||||
|
Level 2
|
|
Netting
(1)
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Commodity derivatives
|
$
|
22,589
|
|
|
$
|
(12,491
|
)
|
|
$
|
10,098
|
|
Liabilities:
|
|
|
|
|
|
||||||
Commodity derivatives
|
$
|
25,443
|
|
|
$
|
(12,491
|
)
|
|
$
|
12,952
|
|
|
Predecessor
|
||||||||||
|
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
|
|
(1)
|
Represents counterparty netting under agreements governing such derivatives.
|
|
Successor
|
|
|
Predecessor
|
||||
|
December 31, 2017
|
|
|
December 31, 2016
|
||||
(in thousands)
|
|
|
|
|
||||
Natural gas plant and pipeline
|
$
|
392,999
|
|
|
|
$
|
421,806
|
|
Furniture and office equipment
|
39,551
|
|
|
|
105,353
|
|
||
Buildings and leasehold improvements
|
27,301
|
|
|
|
66,014
|
|
||
Vehicles
|
10,811
|
|
|
|
31,496
|
|
||
Land
|
6,776
|
|
|
|
3,736
|
|
||
Drilling and other equipment
|
3,291
|
|
|
|
8,082
|
|
||
|
480,729
|
|
|
|
636,487
|
|
||
Less accumulated depreciation
|
(28,658
|
)
|
|
|
(224,547
|
)
|
||
Less other property and equipment, net – discontinued operations
|
—
|
|
|
|
(11,402
|
)
|
||
|
$
|
452,071
|
|
|
|
$
|
400,538
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
||||||
(in thousands)
|
|
|
|
|
|
|
||||||
Asset retirement obligations at beginning of period
|
$
|
357,397
|
|
|
|
$
|
402,162
|
|
|
$
|
523,541
|
|
Liabilities added from drilling
|
551
|
|
|
|
146
|
|
|
546
|
|
|||
Liabilities added from acquisitions
|
—
|
|
|
|
—
|
|
|
1,416
|
|
|||
Liabilities associated with assets divested
|
(158,228
|
)
|
|
|
—
|
|
|
—
|
|
|||
Liabilities associated with assets held for sale
|
(42,001
|
)
|
|
|
—
|
|
|
—
|
|
|||
Deconsolidation of Berry Petroleum Company, LLC asset retirement obligations
|
—
|
|
|
|
—
|
|
|
(141,612
|
)
|
|||
Current year accretion expense
|
14,995
|
|
|
|
4,024
|
|
|
30,498
|
|
|||
Settlements
|
(8,189
|
)
|
|
|
(618
|
)
|
|
(12,823
|
)
|
|||
Revision of estimates
|
28
|
|
|
|
—
|
|
|
596
|
|
|||
Fresh start adjustment
(1)
|
—
|
|
|
|
(48,317
|
)
|
|
—
|
|
|||
|
164,553
|
|
|
|
357,397
|
|
|
402,162
|
|
|||
Less asset retirement obligations – discontinued operations
|
—
|
|
|
|
(26,978
|
)
|
|
(38,042
|
)
|
|||
Asset retirement obligations at end of period
|
$
|
164,553
|
|
|
|
$
|
330,419
|
|
|
$
|
364,120
|
|
(1)
|
As a result of the application of fresh start accounting, the Successor recorded its asset retirement obligations at fair value as of the Effective Date.
|
2018
|
$
|
2,812
|
|
2019
|
2,005
|
|
|
2020
|
463
|
|
|
2021
|
12
|
|
|
2022
|
—
|
|
|
Thereafter
|
—
|
|
|
|
$
|
5,292
|
|
•
|
All units in the Predecessor that were issued and outstanding immediately prior to the Effective Date were extinguished without recovery;
|
•
|
17,678,889
shares of Class A common stock were issued pro rata to holders of the Second Lien Notes with claims allowed under the Plan;
|
•
|
26,724,396
shares of Class A common stock were issued pro rata to holders of Unsecured Notes with claims allowed under the Plan;
|
•
|
471,110
shares of Class A common stock were issued to commitment parties under the Backstop Commitment Agreement in respect of the premium due thereunder;
|
•
|
2,995,691
shares of Class A common stock were issued to commitment parties under the Backstop Commitment Agreement in connection with their backstop obligation thereunder; and
|
•
|
41,359,806
shares of Class A common stock were issued to participants in the rights offerings extended by the Company to certain holders of claims arising under the Second Lien Notes and the Unsecured Notes (including, in each case, certain of the commitment parties party to the Backstop Commitment Agreement).
|
|
Successor
|
|
|
|
|
|
Predecessor
|
||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||
General and administrative expenses
|
$
|
41,285
|
|
|
|
|
$
|
50,255
|
|
|
$
|
34,268
|
|
|
$
|
47,312
|
|
Lease operating expenses
|
—
|
|
|
|
|
—
|
|
|
9,950
|
|
|
8,824
|
|
||||
Total share-based compensation expenses
|
$
|
41,285
|
|
|
|
|
$
|
50,255
|
|
|
$
|
44,218
|
|
|
$
|
56,136
|
|
Income tax benefit
|
$
|
9,861
|
|
|
|
|
$
|
5,170
|
|
|
$
|
16,339
|
|
|
$
|
20,742
|
|
|
Number of Nonvested Units
|
|
Weighted Average Grant-Date Fair Value Per Unit
|
|||
|
|
|
|
|||
Nonvested units at February 28, 2017 (Predecessor)
|
—
|
|
|
$
|
—
|
|
Granted
|
2,478,606
|
|
|
$
|
22.19
|
|
Vested
|
(619,665
|
)
|
|
$
|
22.19
|
|
Nonvested units at February 28, 2017 (Successor)
|
1,858,941
|
|
|
$
|
22.19
|
|
Granted
|
1,340,350
|
|
|
$
|
29.29
|
|
Vested
|
(51,839
|
)
|
|
$
|
27.86
|
|
Forfeited
|
(187,148
|
)
|
|
$
|
28.38
|
|
Nonvested units at December 31, 2017 (Successor)
|
2,960,304
|
|
|
$
|
24.92
|
|
|
Successor
|
|||||||||
|
Ten Months Ended December 31, 2017
|
|||||||||
|
Income
|
|
Shares
|
|
Per Share
|
|||||
|
(in thousands, except per share data)
|
|||||||||
|
|
|
|
|
|
|||||
Basic:
|
|
|
|
|
|
|||||
Income from continuing operations
|
$
|
349,865
|
|
|
87,646
|
|
|
$
|
3.99
|
|
Income from discontinued operations, net of income taxes
|
82,995
|
|
|
87,646
|
|
|
0.95
|
|
||
Net income attributable to common stockholders
|
$
|
432,860
|
|
|
87,646
|
|
|
$
|
4.94
|
|
|
|
|
|
|
|
|||||
Effect of Dilutive Securities:
|
|
|
|
|
|
|||||
Dilutive effect of restricted stock units
|
$
|
—
|
|
|
1,073
|
|
|
|
||
Dilutive effect of unvested Class A-2 units of Holdco
|
$
|
(2,180
|
)
|
|
—
|
|
|
|
||
|
|
|
|
|
|
|||||
Diluted:
|
|
|
|
|
|
|||||
Income from continuing operations
|
$
|
347,685
|
|
|
88,719
|
|
|
$
|
3.92
|
|
Income from discontinued operations
|
82,995
|
|
|
88,719
|
|
|
0.93
|
|
||
Net income attributable to common stockholders
|
$
|
430,680
|
|
|
88,719
|
|
|
$
|
4.85
|
|
|
Predecessor
|
|||||||||
|
Two Months Ended February 28, 2017
|
|||||||||
|
Income (Loss)
|
|
Units
|
|
Per Unit
|
|||||
|
(in thousands, except per unit data)
|
|||||||||
|
|
|
|
|
|
|||||
Basic and Diluted:
|
|
|
|
|
|
|||||
Income from continuing operations
|
$
|
2,397,609
|
|
|
352,792
|
|
|
$
|
6.80
|
|
Loss from discontinued operations, net of income taxes
|
(548
|
)
|
|
352,792
|
|
|
(0.01
|
)
|
||
Net income attributable to common unitholders
|
$
|
2,397,061
|
|
|
352,792
|
|
|
$
|
6.79
|
|
|
Predecessor
|
|||||||||
|
Year Ended December 31, 2016
|
|||||||||
|
Loss
|
|
Units
|
|
Per Unit
|
|||||
|
(in thousands, except per unit data)
|
|||||||||
|
|
|
|
|
|
|||||
Basic and Diluted:
|
|
|
|
|
|
|||||
Loss from continuing operations
|
$
|
(367,343
|
)
|
|
352,653
|
|
|
$
|
(1.04
|
)
|
Loss from discontinued operations, net of income taxes
|
(1,804,513
|
)
|
|
352,653
|
|
|
(5.12
|
)
|
||
Net loss attributable to common unitholders
|
$
|
(2,171,856
|
)
|
|
352,653
|
|
|
$
|
(6.16
|
)
|
|
Predecessor
|
|||||||||
|
Year Ended December 31, 2015
|
|||||||||
|
Loss
|
|
Units
|
|
Per Unit
|
|||||
|
(in thousands, except per unit data)
|
|||||||||
|
|
|
|
|
|
|||||
Basic and Diluted:
|
|
|
|
|
|
|||||
Loss from continuing operations
|
$
|
(3,754,220
|
)
|
|
|
|
|
|||
Allocated to participating securities
|
(3,039
|
)
|
|
|
|
|
||||
|
(3,757,259
|
)
|
|
343,323
|
|
|
$
|
(10.94
|
)
|
|
Loss from discontinued operations, net of income taxes
|
(1,005,591
|
)
|
|
343,323
|
|
|
(2.93
|
)
|
||
Net loss attributable to common unitholders
|
$
|
(4,762,850
|
)
|
|
343,323
|
|
|
$
|
(13.87
|
)
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Current taxes:
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
$
|
7,140
|
|
|
|
$
|
—
|
|
|
$
|
(494
|
)
|
|
$
|
(12,021
|
)
|
State
|
489
|
|
|
|
—
|
|
|
321
|
|
|
1,022
|
|
||||
Deferred taxes:
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
366,243
|
|
|
|
—
|
|
|
11,582
|
|
|
8,237
|
|
||||
State
|
15,070
|
|
|
|
(166
|
)
|
|
(215
|
)
|
|
(3,631
|
)
|
||||
|
$
|
388,942
|
|
|
|
$
|
(166
|
)
|
|
$
|
11,194
|
|
|
$
|
(6,393
|
)
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||
|
|
|
|
|
|
|
|
|
||||
Federal statutory rate
|
35.0
|
%
|
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Federal statutory rate change
|
14.3
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
State, net of federal tax benefit
|
2.6
|
|
|
|
—
|
|
|
0.7
|
|
|
0.1
|
|
Loss excluded from nontaxable entities
|
—
|
|
|
|
(35.0
|
)
|
|
(24.7
|
)
|
|
(34.7
|
)
|
Other
|
0.5
|
|
|
|
—
|
|
|
(14.1
|
)
|
|
(0.2
|
)
|
Effective rate
|
52.4
|
%
|
|
|
—
|
%
|
|
(3.1
|
)%
|
|
0.2
|
%
|
|
Successor
|
|
|
Predecessor
|
||||
|
December 31, 2017
|
|
|
December 31, 2016
|
||||
(in thousands)
|
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
14,615
|
|
|
|
$
|
1,730
|
|
Reorganization items
|
—
|
|
|
|
14,932
|
|
||
Investment in Linn Energy Holdco LLC
|
176,662
|
|
|
|
—
|
|
||
Valuation allowance
|
—
|
|
|
|
(19,558
|
)
|
||
Other
|
7,140
|
|
|
|
10,030
|
|
||
Total deferred tax assets
|
198,417
|
|
|
|
7,134
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Property and equipment principally due to differences in depreciation
|
—
|
|
|
|
(7,021
|
)
|
||
Other
|
—
|
|
|
|
(279
|
)
|
||
Total deferred tax liabilities
|
—
|
|
|
|
(7,300
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
198,417
|
|
|
|
$
|
(166
|
)
|
|
Successor
|
|
|
Predecessor
|
||||
|
December 31, 2017
|
|
|
December 31, 2016
|
||||
(in thousands)
|
|
|
|
|
||||
Prepaids
|
$
|
46,238
|
|
|
|
$
|
70,116
|
|
Receivable from related party
|
23,163
|
|
|
|
—
|
|
||
Inventories
|
7,667
|
|
|
|
15,097
|
|
||
Deferred financing fees
|
—
|
|
|
|
16,809
|
|
||
Other
|
2,703
|
|
|
|
3,288
|
|
||
Other current assets
|
$
|
79,771
|
|
|
|
$
|
105,310
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
December 31, 2017
|
|
|
December 31, 2016
|
||||
(in thousands)
|
|
|
|
|
||||
Accrued compensation
|
$
|
29,089
|
|
|
|
$
|
16,443
|
|
Asset retirement obligations (current portion)
|
3,926
|
|
|
|
9,361
|
|
||
Deposits
|
15,349
|
|
|
|
—
|
|
||
Income taxes payable
|
7,496
|
|
|
|
—
|
|
||
Other
|
2,757
|
|
|
|
175
|
|
||
Other accrued liabilities
|
$
|
58,617
|
|
|
|
$
|
25,979
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Cash payments for interest, net of amounts capitalized
|
$
|
15,165
|
|
|
|
$
|
17,651
|
|
|
$
|
143,305
|
|
|
$
|
476,077
|
|
Cash payments for income taxes
|
$
|
275
|
|
|
|
$
|
—
|
|
|
$
|
4,427
|
|
|
$
|
643
|
|
Cash payments for reorganization items, net
|
$
|
11,889
|
|
|
|
$
|
21,571
|
|
|
$
|
37,748
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Noncash investing activities:
|
|
|
|
|
|
|
|
|
||||||||
Accrued capital expenditures
|
$
|
31,447
|
|
|
|
$
|
22,191
|
|
|
$
|
31,128
|
|
|
$
|
71,105
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
LINN Energy:
|
|
|
|
|
|
|
|
|
||||||||
Property acquisition costs:
|
|
|
|
|
|
|
|
|
||||||||
Proved
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unproved
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Exploration costs
|
103,689
|
|
|
|
15,153
|
|
|
40,074
|
|
|
19,929
|
|
||||
Development costs
|
96,178
|
|
|
|
24,256
|
|
|
86,053
|
|
|
264,227
|
|
||||
Asset retirement costs
|
376
|
|
|
|
312
|
|
|
112
|
|
|
3,331
|
|
||||
Total costs incurred – continuing operations
|
$
|
200,243
|
|
|
|
$
|
39,721
|
|
|
$
|
126,239
|
|
|
$
|
287,487
|
|
Total costs incurred – discontinued operations
|
$
|
1,313
|
|
|
|
$
|
269
|
|
|
$
|
11,453
|
|
|
$
|
167,049
|
|
|
Four Months Ended December 31, 2017
|
||
|
(in thousands)
|
||
|
|
||
Equity method investments
(1)
|
|
||
Property acquisition costs:
|
|
||
Proved
|
$
|
—
|
|
Unproved
|
6,851
|
|
|
Exploration costs
|
3,626
|
|
|
Development costs
|
89,585
|
|
|
Total costs incurred
|
$
|
100,062
|
|
(1)
|
Represents the Company’s
50%
equity interest in Roan. Costs incurred of Roan for 2017 is for the period from September 1, 2017 through
December 31, 2017
.
|
|
Successor
|
|
|
Predecessor
|
||||
|
December 31, 2017
|
|
|
December 31, 2016
|
||||
(in thousands)
|
|
|
|
|
||||
LINN Energy:
|
|
|
|
|
||||
Proved properties
|
$
|
904,390
|
|
|
|
$
|
12,234,099
|
|
Unproved properties
|
45,693
|
|
|
|
998,860
|
|
||
|
950,083
|
|
|
|
13,232,959
|
|
||
Less accumulated depletion and amortization
|
(49,619
|
)
|
|
|
(9,999,560
|
)
|
||
|
900,464
|
|
|
|
3,233,399
|
|
||
Less oil and natural gas capitalized costs, net – discontinued operations
|
—
|
|
|
|
(728,190
|
)
|
||
|
$
|
900,464
|
|
|
|
$
|
2,505,209
|
|
|
December 31, 2017
|
||
|
(in thousands)
|
||
|
|
||
Equity Method Investments:
(1)
|
|
||
Proved properties
|
$
|
400,682
|
|
Unproved properties
|
538,703
|
|
|
|
939,385
|
|
|
Less accumulated depletion and amortization
|
(28,441
|
)
|
|
|
$
|
910,944
|
|
(1)
|
Represents the Company’s
50%
equity interest in Roan.
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Ten Months Ended December 31, 2017
|
|
|
Two Months Ended February 28, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
LINN Energy:
|
|
|
|
|
|
|
|
|
||||||||
Revenues and other:
|
|
|
|
|
|
|
|
|
||||||||
Oil, natural gas and natural gas liquids sales
|
$
|
709,363
|
|
|
|
$
|
188,885
|
|
|
$
|
874,161
|
|
|
$
|
1,065,795
|
|
Gains (losses) on oil and natural gas derivatives
|
13,533
|
|
|
|
92,691
|
|
|
(164,330
|
)
|
|
1,027,014
|
|
||||
|
722,896
|
|
|
|
281,576
|
|
|
709,831
|
|
|
2,092,809
|
|
||||
Production costs:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Lease operating expenses
|
208,446
|
|
|
|
49,665
|
|
|
296,891
|
|
|
352,077
|
|
||||
Transportation expenses
|
113,128
|
|
|
|
25,972
|
|
|
161,574
|
|
|
167,023
|
|
||||
Severance taxes, ad valorem taxes and California carbon allowances
|
47,411
|
|
|
|
14,851
|
|
|
66,616
|
|
|
97,732
|
|
||||
|
368,985
|
|
|
|
90,488
|
|
|
525,081
|
|
|
616,832
|
|
||||
Other costs:
|
|
|
|
|
|
|
|
|
||||||||
Exploration costs
|
3,137
|
|
|
|
93
|
|
|
4,080
|
|
|
9,473
|
|
||||
Depletion and amortization
|
101,360
|
|
|
|
39,689
|
|
|
295,889
|
|
|
471,046
|
|
||||
Impairment of long-lived assets
|
—
|
|
|
|
—
|
|
|
165,044
|
|
|
4,960,144
|
|
||||
(Gains) losses on sale of assets and other, net
|
(678,200
|
)
|
|
|
18
|
|
|
417
|
|
|
(199,296
|
)
|
||||
Income tax benefit
|
(4,640
|
)
|
|
|
(166
|
)
|
|
(649
|
)
|
|
(2,721
|
)
|
||||
|
(578,343
|
)
|
|
|
39,634
|
|
|
464,781
|
|
|
5,238,646
|
|
||||
Results of operations – continuing operations
|
$
|
932,254
|
|
|
|
$
|
151,454
|
|
|
$
|
(280,031
|
)
|
|
$
|
(3,762,669
|
)
|
Results of operations – discontinued operations
|
$
|
142,175
|
|
|
|
$
|
1,246
|
|
|
$
|
(1,076,407
|
)
|
|
$
|
(844,754
|
)
|
|
Four Months Ended December 31, 2017
|
||
|
(in thousands)
|
||
|
|
||
Equity Method Investments:
(1)
|
|
||
Revenues and other:
|
|
||
Oil, natural gas and natural gas liquids sales
|
$
|
42,322
|
|
Losses on oil and natural gas derivatives
|
(4,591
|
)
|
|
|
37,731
|
|
|
Production costs:
|
|
||
Lease operating expenses
|
4,102
|
|
|
Transportation expenses
|
4,576
|
|
|
Severance taxes and ad valorem taxes
|
1,026
|
|
|
|
9,704
|
|
|
Other costs:
|
|
||
Exploration costs
|
3,626
|
|
|
Depletion and amortization
|
11,371
|
|
|
|
14,997
|
|
|
Results of operations
|
$
|
13,030
|
|
(1)
|
Represents the Company’s
50%
equity interest in Roan. Results of oil and natural gas producing activities of Roan for 2017 is for the period from September 1, 2017 through
December 31, 2017
.
|
|
Successor
|
||||||||||||||||
|
Year Ended December 31, 2017
|
||||||||||||||||
|
Natural Gas
(Bcf)
|
|
Oil
(MMBbls)
|
|
NGL
(MMBbls)
|
|
Total Continuing Operations
(Bcfe)
|
|
Total Discontinued Operations
(Bcfe)
|
|
Total (Bcfe)
|
||||||
LINN Energy:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Proved developed and undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
2,290
|
|
|
72.6
|
|
|
104.1
|
|
|
3,350
|
|
|
170
|
|
|
3,520
|
|
Revisions of previous estimates
|
(102
|
)
|
|
(5.6
|
)
|
|
9.7
|
|
|
(78
|
)
|
|
—
|
|
|
(78
|
)
|
Sales of minerals in place
|
(754
|
)
|
|
(37.0
|
)
|
|
(39.6
|
)
|
|
(1,213
|
)
|
|
(164
|
)
|
|
(1,377
|
)
|
Extensions and discoveries
|
90
|
|
|
3.7
|
|
|
4.9
|
|
|
142
|
|
|
—
|
|
|
142
|
|
Production
|
(147
|
)
|
|
(6.6
|
)
|
|
(7.6
|
)
|
|
(233
|
)
|
|
(6
|
)
|
|
(239
|
)
|
End of year
|
1,377
|
|
|
27.1
|
|
|
71.5
|
|
|
1,968
|
|
|
—
|
|
|
1,968
|
|
Proved developed reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
2,118
|
|
|
66.7
|
|
|
94.4
|
|
|
3,084
|
|
|
170
|
|
|
3,254
|
|
End of year
|
1,323
|
|
|
27.0
|
|
|
70.5
|
|
|
1,908
|
|
|
—
|
|
|
1,908
|
|
Proved undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
172
|
|
|
5.9
|
|
|
9.7
|
|
|
266
|
|
|
—
|
|
|
266
|
|
End of year
|
54
|
|
|
0.1
|
|
|
1.0
|
|
|
60
|
|
|
—
|
|
|
60
|
|
|
Four Months Ended December 31, 2017
|
||||||||||
|
Natural Gas (Bcf)
|
|
Oil (MMBbls)
|
|
NGL (MMBbls)
|
|
Total (Bcfe)
|
||||
|
|
|
|
|
|
|
|
||||
Equity Method Investments:
(1)
|
|
|
|
|
|
|
|
||||
Proved developed and undeveloped reserves:
|
|
|
|
|
|
|
|
||||
Beginning of period
|
173
|
|
|
10.3
|
|
|
17.8
|
|
|
342
|
|
Revisions of previous estimates
|
(14
|
)
|
|
(2.6
|
)
|
|
(1.9
|
)
|
|
(42
|
)
|
Extensions and discoveries
|
189
|
|
|
11.4
|
|
|
24.3
|
|
|
403
|
|
Production
|
(5
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
(9
|
)
|
End of year
|
343
|
|
|
18.7
|
|
|
39.8
|
|
|
694
|
|
Proved developed reserves:
|
|
|
|
|
|
|
|
||||
Beginning of year
|
95
|
|
|
4.5
|
|
|
7.9
|
|
|
169
|
|
End of year
|
130
|
|
|
6.2
|
|
|
12.0
|
|
|
239
|
|
Proved undeveloped reserves:
|
|
|
|
|
|
|
|
||||
Beginning of year
|
78
|
|
|
5.8
|
|
|
9.9
|
|
|
173
|
|
End of year
|
213
|
|
|
12.5
|
|
|
27.8
|
|
|
455
|
|
(1)
|
Represents the Company’s
50%
equity interest in Roan.
|
|
Predecessor
|
||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||
|
Natural Gas
(Bcf)
|
|
Oil
(MMBbls)
|
|
NGL
(MMBbls)
|
|
Total Continuing Operations
(Bcfe)
|
|
Total Discontinued Operations
(Bcfe)
|
|
Total (Bcfe)
|
||||||
LINN Energy:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Proved developed and undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
2,212
|
|
|
74.3
|
|
|
97.0
|
|
|
3,240
|
|
|
1,248
|
|
|
4,488
|
|
Revisions of previous estimates
|
—
|
|
|
(3.8
|
)
|
|
1.2
|
|
|
(16
|
)
|
|
(192
|
)
|
|
(208
|
)
|
Extensions and discoveries
|
265
|
|
|
10.1
|
|
|
15.2
|
|
|
417
|
|
|
11
|
|
|
428
|
|
Production
|
(187
|
)
|
|
(8.0
|
)
|
|
(9.3
|
)
|
|
(291
|
)
|
|
(93
|
)
|
|
(384
|
)
|
Deconsolidation of Berry Petroleum, LLC proved reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(804
|
)
|
|
(804
|
)
|
End of year
|
2,290
|
|
|
72.6
|
|
|
104.1
|
|
|
3,350
|
|
|
170
|
|
|
3,520
|
|
Proved developed reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
2,212
|
|
|
74.3
|
|
|
97.0
|
|
|
3,240
|
|
|
1,248
|
|
|
4,488
|
|
End of year
|
2,118
|
|
|
66.7
|
|
|
94.4
|
|
|
3,084
|
|
|
170
|
|
|
3,254
|
|
Proved undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
End of year
|
172
|
|
|
5.9
|
|
|
9.7
|
|
|
266
|
|
|
—
|
|
|
266
|
|
|
Predecessor
|
||||||||||||||||
|
Year Ended December 31, 2015
|
||||||||||||||||
|
Natural Gas (Bcf)
|
|
Oil
(MMBbls)
|
|
NGL (MMBbls)
|
|
Total Continuing Operations
(Bcfe)
|
|
Total Discontinued Operations
(Bcfe)
|
|
Total (Bcfe)
|
||||||
LINN Energy:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Proved developed and undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
3,552
|
|
|
147.8
|
|
|
146.3
|
|
|
5,318
|
|
|
1,986
|
|
|
7,304
|
|
Revisions of previous estimates
|
(1,137
|
)
|
|
(62.4
|
)
|
|
(38.7
|
)
|
|
(1,743
|
)
|
|
(636
|
)
|
|
(2,379
|
)
|
Sales of minerals in place
|
(13
|
)
|
|
(4.1
|
)
|
|
(2.0
|
)
|
|
(50
|
)
|
|
—
|
|
|
(50
|
)
|
Extensions and discoveries
|
10
|
|
|
3.0
|
|
|
0.8
|
|
|
32
|
|
|
15
|
|
|
47
|
|
Production
|
(200
|
)
|
|
(10.0
|
)
|
|
(9.4
|
)
|
|
(317
|
)
|
|
(117
|
)
|
|
(434
|
)
|
End of year
|
2,212
|
|
|
74.3
|
|
|
97.0
|
|
|
3,240
|
|
|
1,248
|
|
|
4,488
|
|
Proved developed reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
2,981
|
|
|
104.2
|
|
|
117.5
|
|
|
4,312
|
|
|
1,506
|
|
|
5,818
|
|
End of year
|
2,212
|
|
|
74.3
|
|
|
97.0
|
|
|
3,240
|
|
|
1,248
|
|
|
4,488
|
|
Proved undeveloped reserves:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning of year
|
571
|
|
|
43.6
|
|
|
28.8
|
|
|
1,006
|
|
|
480
|
|
|
1,486
|
|
End of year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
LINN Energy:
|
|
|
|
|
|
||||||
Future cash inflows
|
$
|
6,730,186
|
|
|
$
|
9,856,698
|
|
|
$
|
10,396,598
|
|
Future production costs
|
(3,810,932
|
)
|
|
(5,755,460
|
)
|
|
(6,576,424
|
)
|
|||
Future development costs
|
(486,989
|
)
|
|
(917,262
|
)
|
|
(722,685
|
)
|
|||
Future income tax expenses
|
(303,803
|
)
|
|
—
|
|
|
—
|
|
|||
Future net cash flows
|
2,128,462
|
|
|
3,183,976
|
|
|
3,097,489
|
|
|||
10% annual discount for estimated timing of cash flows
|
(1,083,331
|
)
|
|
(1,488,219
|
)
|
|
(1,404,304
|
)
|
|||
Standardized measure of discounted future net cash flows – continuing operations
|
$
|
1,045,131
|
|
|
$
|
1,695,757
|
|
|
$
|
1,693,185
|
|
Standardized measure of discounted future net cash flows – discontinued operations
|
$
|
—
|
|
|
$
|
232,941
|
|
|
$
|
1,340,360
|
|
|
|
|
|
|
|
||||||
Representative NYMEX prices:
(1)
|
|
|
|
|
|
||||||
Natural gas (MMBtu)
|
$
|
2.98
|
|
|
$
|
2.48
|
|
|
$
|
2.59
|
|
Oil (Bbl)
|
$
|
51.34
|
|
|
$
|
42.64
|
|
|
$
|
50.16
|
|
(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.
|
|
December 31, 2017
|
||
|
(in thousands)
|
||
|
|
||
Equity Method Investments:
(1)
|
|
||
Future cash inflows
|
$
|
2,635,233
|
|
Future production costs
|
(832,362
|
)
|
|
Future development costs
|
(372,884
|
)
|
|
Future net cash flows
|
1,429,987
|
|
|
10% annual discount for estimated timing of cash flows
|
(832,152
|
)
|
|
Standardized measure of discounted future net cash flows
|
$
|
597,835
|
|
|
|
||
Representative NYMEX prices:
(2)
|
|
||
Natural gas (MMBtu)
|
$
|
2.98
|
|
Oil (Bbl)
|
$
|
51.34
|
|
(1)
|
Represents the Company’s
50%
equity interest in Roan.
|
(2)
|
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,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
||||||
LINN Energy:
|
|
|
|
|
|
||||||
Sales and transfers of oil, natural gas and NGL produced during the period
|
$
|
(438,775
|
)
|
|
$
|
(349,080
|
)
|
|
$
|
(448,963
|
)
|
Changes in estimated future development costs
|
(5,276
|
)
|
|
19,460
|
|
|
953,393
|
|
|||
Net change in sales and transfer prices and production costs related to future production
|
400,411
|
|
|
(92,236
|
)
|
|
(5,313,449
|
)
|
|||
Sales of minerals in place
|
(685,050
|
)
|
|
—
|
|
|
(97,785
|
)
|
|||
Extensions, discoveries and improved recovery
|
187,223
|
|
|
221,765
|
|
|
46,487
|
|
|||
Previously estimated development costs incurred during the period
|
9,704
|
|
|
—
|
|
|
84,329
|
|
|||
Net change due to revisions in quantity estimates
|
(65,935
|
)
|
|
10,387
|
|
|
(939,030
|
)
|
|||
Net change in income taxes
|
(155,257
|
)
|
|
—
|
|
|
—
|
|
|||
Accretion of discount
|
169,576
|
|
|
169,318
|
|
|
707,085
|
|
|||
Changes in production rates and other
|
(67,247
|
)
|
|
22,958
|
|
|
(369,736
|
)
|
|||
Change – continuing operations
|
$
|
(650,626
|
)
|
|
$
|
2,572
|
|
|
$
|
(5,377,669
|
)
|
Change – discontinued operations
|
$
|
(232,941
|
)
|
|
$
|
(1,107,419
|
)
|
|
$
|
(4,101,077
|
)
|
|
Four Months Ended December 31, 2017
|
||
|
(in thousands)
|
||
|
|
||
Equity Method Investments
(1)
|
|
||
Standardized measure – Beginning of period
|
$
|
304,900
|
|
Sales and transfers of oil, natural gas and NGL produced during the period
|
(32,618
|
)
|
|
Changes in estimated future development costs
|
(14,617
|
)
|
|
Net change in sales and transfer prices and production costs related to future production
|
33,912
|
|
|
Extensions, discoveries and improved recovery
|
270,737
|
|
|
Previously estimated development costs incurred during the period
|
89,457
|
|
|
Net change due to revisions in quantity estimates
|
(47,222
|
)
|
|
Accretion of discount
|
10,163
|
|
|
Changes in production rates and other
|
(16,877
|
)
|
|
Net increase
|
292,935
|
|
|
Standardized measure – End of year
|
$
|
597,835
|
|
(1)
|
Represents the Company’s
50%
equity interest in Roan. Changes in the standardized measure of discounted future net cash flows of Roan for 2017 is for the period from September 1, 2017 through
December 31, 2017
.
|
|
Predecessor
|
|
|
Successor
|
||||||||||||||||
|
January 1, 2017 to February 28, 2017
|
|
|
March 1, 2017 to March 31, 2017
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||||
(in thousands, except per share and per unit amounts)
|
|
|
|
|
|
|
|
|
|
|||||||||||
2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil, natural gas and natural gas liquids sales
|
$
|
188,885
|
|
|
|
$
|
80,325
|
|
|
$
|
243,167
|
|
|
$
|
206,318
|
|
|
$
|
179,553
|
|
Gains (losses) on oil and natural gas derivatives
|
92,691
|
|
|
|
(11,959
|
)
|
|
45,714
|
|
|
(14,497
|
)
|
|
(5,725
|
)
|
|||||
Total revenues and other
|
298,127
|
|
|
|
73,308
|
|
|
307,819
|
|
|
236,682
|
|
|
208,869
|
|
|||||
Total expenses
(1)
|
214,327
|
|
|
|
78,349
|
|
|
220,548
|
|
|
202,143
|
|
|
191,491
|
|
|||||
(Gains) losses on sale of assets and other, net
|
829
|
|
|
|
484
|
|
|
(306,878
|
)
|
|
(26,977
|
)
|
|
(289,701
|
)
|
|||||
Reorganization items, net
|
2,331,189
|
|
|
|
(2,565
|
)
|
|
(3,377
|
)
|
|
(2,605
|
)
|
|
(304
|
)
|
|||||
Income (loss) from continuing operations
|
2,397,609
|
|
|
|
(7,324
|
)
|
|
223,379
|
|
|
51,030
|
|
|
85,587
|
|
|||||
Income (loss) from discontinued operations, net of income taxes
|
(548
|
)
|
|
|
68
|
|
|
(3,322
|
)
|
|
86,099
|
|
|
150
|
|
|||||
Net income (loss)
|
2,397,061
|
|
|
|
(7,256
|
)
|
|
220,057
|
|
|
137,129
|
|
|
85,737
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|
2,741
|
|
|||||
Net income attributable to stockholders/unitholders
|
2,397,061
|
|
|
|
(7,256
|
)
|
|
220,057
|
|
|
137,063
|
|
|
82,996
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) per share/unit – continuing operations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
6.80
|
|
|
|
$
|
(0.08
|
)
|
|
$
|
2.49
|
|
|
$
|
0.58
|
|
|
$
|
0.98
|
|
Diluted
|
$
|
6.80
|
|
|
|
$
|
(0.08
|
)
|
|
$
|
2.47
|
|
|
$
|
0.57
|
|
|
$
|
0.94
|
|
Income (loss) per share/unit – discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.01
|
)
|
|
|
$
|
—
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.98
|
|
|
$
|
—
|
|
Diluted
|
$
|
(0.01
|
)
|
|
|
$
|
—
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.97
|
|
|
$
|
—
|
|
Net income (loss) per share/unit:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
6.79
|
|
|
|
$
|
(0.08
|
)
|
|
$
|
2.45
|
|
|
$
|
1.56
|
|
|
$
|
0.98
|
|
Diluted
|
$
|
6.79
|
|
|
|
$
|
(0.08
|
)
|
|
$
|
2.43
|
|
|
$
|
1.54
|
|
|
$
|
0.94
|
|
(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.
|
|
Predecessor
|
||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
|
(in thousands, except per unit amounts)
|
||||||||||||||
2016:
|
|
|
|
|
|
|
|
||||||||
Oil, natural gas and natural gas liquids sales
|
$
|
184,441
|
|
|
$
|
195,847
|
|
|
$
|
237,986
|
|
|
$
|
255,887
|
|
Gains (losses) on oil and natural gas derivatives
|
109,453
|
|
|
(183,794
|
)
|
|
166
|
|
|
(90,155
|
)
|
||||
Total revenues and other
|
331,261
|
|
|
44,245
|
|
|
266,975
|
|
|
197,163
|
|
||||
Total expenses
(1)
|
449,809
|
|
|
274,941
|
|
|
310,772
|
|
|
269,906
|
|
||||
Losses on sale of assets and other, net
|
1,468
|
|
|
2,607
|
|
|
2,532
|
|
|
9,650
|
|
||||
Reorganization items, net
|
—
|
|
|
485,798
|
|
|
(28,361
|
)
|
|
(145,838
|
)
|
||||
Income (loss) from continuing operations
|
(213,868
|
)
|
|
204,691
|
|
|
(96,301
|
)
|
|
(261,865
|
)
|
||||
Income (loss) from discontinued operations, net of income taxes
|
(1,133,878
|
)
|
|
3,801
|
|
|
(102,064
|
)
|
|
(572,372
|
)
|
||||
Net income (loss)
|
(1,347,746
|
)
|
|
208,492
|
|
|
(198,365
|
)
|
|
(834,237
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) per unit – continuing operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.61
|
)
|
|
$
|
0.58
|
|
|
$
|
(0.27
|
)
|
|
$
|
(0.74
|
)
|
Diluted
|
$
|
(0.61
|
)
|
|
$
|
0.58
|
|
|
$
|
(0.27
|
)
|
|
$
|
(0.74
|
)
|
Income (loss) per unit – discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(3.22
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.29
|
)
|
|
$
|
(1.62
|
)
|
Diluted
|
$
|
(3.22
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.29
|
)
|
|
$
|
(1.62
|
)
|
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.
|
Name
|
|
Age
|
|
Position with the Company
|
|
|
|
|
|
Mark E. Ellis
|
|
61
|
|
President and Chief Executive Officer
|
David B. Rottino
|
|
51
|
|
Executive Vice President and Chief Financial Officer
|
Arden L. Walker, Jr.
|
|
58
|
|
Executive Vice President and Chief Operating Officer
|
Thomas E. Emmons
|
|
49
|
|
Senior Vice President – Corporate Services
|
Jamin B. McNeil
|
|
52
|
|
Senior Vice President – Houston Division Operations
|
Candice J. Wells
|
|
43
|
|
Senior Vice President, General Counsel and Corporate Secretary
|
Plan Category
|
|
Number of Securities to be
Issued Upon Exercise of Outstanding Unit Options, Warrants and Rights |
|
Weighted Average Exercise
Price of Outstanding Unit Options, Warrants and Rights |
|
Number of Securities
Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) |
||||
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
|
|
|
|
|
|
|
||||
Equity compensation plans approved by security holders
|
|
—
|
|
|
$
|
—
|
|
|
2,831,696
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
$
|
—
|
|
|
2,831,696
|
|
|
LINN ENERGY, INC.
|
|
|
|
|
|
|
|
Date: February 27, 2018
|
By:
|
/s/ Mark E. Ellis
|
|
|
Mark E. Ellis
President and Chief Executive Officer
|
|
|
|
|
|
|
Date: February 27, 2018
|
By:
|
/s/ David B. Rottino
|
|
|
David B. Rottino
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
Date: February 27, 2018
|
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)
|
|
February 27, 2018
|
Mark E. Ellis
|
|
|
|
|
|
|
|
|
|
/s/ David B. Rottino
|
|
Executive Vice President, Chief Financial Officer and Director
(Principal Financial Officer)
|
|
February 27, 2018
|
David B. Rottino
|
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|
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|
|
/s/ Darren R. Schluter
|
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Vice President and Controller
(Principal Accounting Officer)
|
|
February 27, 2018
|
Darren R. Schluter
|
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|
|
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/s/ Matthew Bonanno
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Director
|
|
February 27, 2018
|
Matthew Bonanno
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/s/ Philip Brown
|
|
Director
|
|
February 27, 2018
|
Philip Brown
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/s/ Evan Lederman
|
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Chairman and Director
|
|
February 27, 2018
|
Evan Lederman
|
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|
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/s/ Andrew Taylor
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|
Director
|
|
February 27, 2018
|
Andrew Taylor
|
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Exhibit Number
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Description
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Exhibit Number
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Description
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Exhibit Number
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Description
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101.INS†
|
—
|
XBRL Instance Document
|
101.SCH†
|
—
|
XBRL Taxonomy Extension Schema Document
|
Exhibit Number
|
|
Description
|
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.
|
|
SELLER
:
|
|
|
|
|
|
Linn Energy Holdings, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ David B. Rottino
|
|
Name:
|
David B. Rottino
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
Linn Operating, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ David B. Rottino
|
|
Name:
|
David B. Rottino
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
BUYER
:
|
|
|
|
|
|
Washakie Exaro Opportunities, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ Robb E. Turner
|
|
Name:
|
Robb E. Turner
|
|
Title:
|
Authorized Signatory
|
ARTICLE 1 DEFINITIONS
|
1
|
||
|
|
||
ARTICLE 2 SALE AND TRANSFER OF ASSETS; CLOSING
|
20
|
||
|
2.01
|
Assets
|
20
|
|
2.02
|
Purchase Price; Deposit
|
20
|
|
2.03
|
Closing; Preliminary Settlement Statement
|
20
|
|
2.04
|
Closing Obligations
|
21
|
|
2.05
|
Allocations and Adjustments
|
22
|
|
2.06
|
Assumption
|
25
|
|
2.07
|
Allocation of Purchase Price
|
26
|
|
|
|
|
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER
|
27
|
||
|
3.01
|
Organization and Good Standing
|
27
|
|
3.02
|
Authority; No Conflict
|
27
|
|
3.03
|
Bankruptcy
|
28
|
|
3.04
|
Taxes
|
28
|
|
3.05
|
Legal Proceedings
|
28
|
|
3.06
|
Brokers
|
29
|
|
3.07
|
Compliance with Legal Requirements
|
29
|
|
3.08
|
Prepayments
|
29
|
|
3.09
|
Imbalances
|
29
|
|
3.10
|
Material Contracts
|
29
|
|
3.11
|
Consents and Preferential Purchase Rights
|
30
|
|
3.12
|
Permits
|
30
|
|
3.13
|
Current Commitments
|
30
|
|
3.14
|
Environmental Laws
|
30
|
|
3.15
|
Wells
|
30
|
|
3.16
|
Employee Benefits
|
30
|
|
3.17
|
Knowledge Qualifier for Non-Operated Assets
|
31
|
|
3.18
|
Disclosures with Multiple Applicability; Materiality
|
31
|
|
|
|
|
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER
|
31
|
||
|
4.01
|
Organization and Good Standing
|
31
|
|
4.02
|
Authority; No Conflict
|
31
|
|
4.03
|
Certain Proceedings
|
32
|
|
4.04
|
Knowledgeable Investor
|
32
|
|
4.05
|
Qualification
|
32
|
|
4.06
|
Brokers
|
33
|
|
4.07
|
Financial Ability
|
33
|
|
4.08
|
Securities Laws
|
33
|
|
4.09
|
Due Diligence
|
33
|
|
4.10
|
Basis of Buyer’s Decision
|
33
|
|
4.11
|
Business Use, Bargaining Position
|
34
|
|
4.12
|
Bankruptcy
|
34
|
|
|
|
|
ARTICLE 5 COVENANTS OF SELLER
|
34
|
||
|
5.01
|
Access and Investigation
|
34
|
|
5.02
|
Operation of the Assets
|
35
|
|
5.03
|
Insurance
|
36
|
|
5.04
|
Consent and Waivers
|
36
|
|
5.05
|
Amendment to Schedules
|
36
|
|
5.06
|
Successor Operator
|
37
|
|
|
|
|
ARTICLE 6 OTHER COVENANTS
|
37
|
||
|
6.01
|
Notification and Cure
|
37
|
|
6.02
|
Satisfaction of Conditions
|
37
|
|
6.03
|
Replacement of Insurance, Bonds, Letters of Credit, and Guaranties
|
37
|
|
6.04
|
Governmental Reviews
|
38
|
|
6.05
|
HSR Act
|
38
|
|
|
|
|
ARTICLE 7 CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE
|
39
|
||
|
7.01
|
Accuracy of Representations
|
39
|
|
7.02
|
Seller’s Performance
|
39
|
|
7.03
|
No Proceedings
|
39
|
|
7.04
|
No Orders
|
39
|
|
7.05
|
Necessary Consents and Approvals
|
39
|
|
7.06
|
HSR Act
|
40
|
|
7.07
|
Closing Deliverables
|
40
|
|
7.08
|
Title Defect Values, Environmental Defect Values, etc
|
40
|
|
|
|
|
ARTICLE 8 CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO CLOSE
|
40
|
||
|
8.01
|
Accuracy of Representations
|
40
|
|
8.02
|
Buyer’s Performance
|
40
|
|
8.03
|
No Proceedings
|
40
|
|
8.04
|
No Orders
|
40
|
|
8.05
|
Necessary Consents and Approvals
|
41
|
|
8.06
|
HSR Act
|
41
|
|
8.07
|
Closing Deliverables
|
41
|
|
8.08
|
Title Defect Values, Environmental Defect Values, etc
|
41
|
|
8.09
|
Qualifications
|
41
|
|
|
|
|
ARTICLE 9 TERMINATION
|
41
|
||
|
9.01
|
Termination Events
|
41
|
|
9.02
|
Effect of Termination; Distribution of the Deposit Amount
|
42
|
|
9.03
|
Return of Records Upon Termination
|
44
|
|
|
|
|
ARTICLE 10 INDEMNIFICATION; REMEDIES
|
44
|
||
|
10.01
|
Survival
|
44
|
|
10.02
|
Indemnification and Payment of Damages by Seller
|
44
|
|
10.03
|
Indemnification and Payment of Damages by Buyer
|
45
|
|
10.04
|
Indemnity Net of Insurance
|
46
|
|
10.05
|
Limitations on Liability
|
46
|
|
10.06
|
Procedure for Indemnification‑‑Third Party Claims
|
46
|
|
10.07
|
Procedure for Indemnification - Other Claims
|
47
|
|
10.08
|
Indemnification of Group Members
|
47
|
|
10.09
|
Extent of Representations and Warranties
|
47
|
|
10.10
|
Compliance With Express Negligence Test
|
48
|
|
10.11
|
Limitations of Liability
|
49
|
|
10.12
|
No Duplication
|
49
|
|
10.13
|
Disclaimer of Application of Anti-Indemnity Statutes
|
49
|
|
10.14
|
Waiver of Right to Rescission
|
49
|
|
|
|
|
ARTICLE 11 TITLE MATTERS AND ENVIRONMENTAL MATTERS; PREFERENTIAL PURCHASE RIGHTS; CONSENTS
|
49
|
||
|
11.01
|
Title Examination and Access
|
49
|
|
11.02
|
Preferential Purchase Rights
|
50
|
|
11.03
|
Consents
|
50
|
|
11.04
|
Title Defects
|
51
|
|
11.05
|
Title Defect Value
|
51
|
|
11.06
|
Seller’s Cure or Contest of Title Defects
|
52
|
|
11.07
|
Limitations on Adjustments for Title Defects
|
53
|
|
11.08
|
Title Benefits
|
53
|
|
11.09
|
Buyer’s Environmental Assessment
|
54
|
|
11.10
|
Environmental Defect Notice
|
55
|
|
11.11
|
Seller’s Exclusion, Cure or Contest of Environmental Defects
|
55
|
|
11.12
|
Limitations
|
56
|
|
11.13
|
Exclusive Remedies
|
56
|
|
11.14
|
Casualty Loss and Condemnation
|
56
|
|
11.15
|
Expert Proceedings
|
57
|
|
|
|
|
ARTICLE 12 EMPLOYMENT MATTERS
|
58
|
||
|
12.01
|
Available Employees’ Offers and Post-Employee Start Date Employment and Benefits
|
58
|
|
12.02
|
Responsibility for Employee Matters
|
59
|
|
12.03
|
WARN Act
|
59
|
|
12.04
|
Severance Obligation
|
59
|
|
|
|
|
ARTICLE 13 GENERAL PROVISIONS
|
60
|
||
|
13.01
|
Records
|
60
|
|
13.02
|
Expenses
|
60
|
|
13.03
|
Notices
|
62
|
|
13.04
|
Governing Law; Jurisdiction; Service of Process; Jury Waiver
|
63
|
|
13.05
|
Further Assurances
|
64
|
|
13.06
|
Waiver
|
64
|
|
13.07
|
Entire Agreement and Modification
|
64
|
|
13.08
|
Assignments, Successors, and No Third Party Rights
|
64
|
|
13.09
|
Severability
|
65
|
|
13.10
|
Article and Section Headings, Construction
|
65
|
|
13.11
|
Counterparts
|
65
|
|
13.12
|
Press Release
|
65
|
|
13.13
|
Confidentiality
|
66
|
|
13.14
|
Name Change
|
66
|
|
13.15
|
Preparation of Agreement
|
66
|
|
13.16
|
Appendices, Exhibits and Schedules
|
66
|
Exhibit A
|
Leases
|
Exhibit A-1
|
Fee Minerals
|
Exhibit A-2
|
Waterflood Units
|
Exhibit A-3
|
Gathering System
|
Exhibit A-4
|
Easements and Surface Interests
|
Exhibit A-5
|
Real Property
|
Exhibit B
|
Wells
|
Exhibit C
|
Personal Property
|
Exhibit D
|
Vehicles
|
Exhibit E
|
Excluded Assets
|
Exhibit F
|
Form of Assignment and Bill of Sale
|
Exhibit G
|
Form of Certificates
|
Exhibit H
|
Form of TSA
|
Exhibit I
|
Form of Deed
|
Exhibit J
|
Available Employee Limits
|
Exhibit K
|
Severance Plan
|
Exhibit L
|
Form of IT Equipment Assignment
|
Schedule 2.07(a)
|
Allocation of Purchase Price (TXPS Wells)
|
Schedule 2.07(b)
|
Allocation of Purchase Price (Waterflood Units)
|
Schedule 3.02(b)
|
No Conflict
|
Schedule 3.04
|
Taxes
|
Schedule 3.05
|
Assumed Litigation and Retained Litigation
|
Schedule 3.07
|
Compliance with Legal Requirements
|
Schedule 3.09
|
Imbalances
|
Schedule 3.10
|
Material Contracts
|
Schedule 3.11
|
Consents and Preferential Purchase Rights
|
Schedule 3.12
|
Permits
|
Schedule 3.13
|
Current Commitments
|
Schedule 3.14
|
Environmental Laws
|
Schedule 3.15
|
Wells
|
Schedule 3.16(a)
|
Seller Benefit Plans
|
Schedule 5.02
|
Certain Authorized Pre-Closing Actions
|
(a)
|
Each Seller Party shall deliver (and execute, as appropriate), or cause to be delivered (and executed, as appropriate), to Buyer:
|
(i)
|
the Instruments of Conveyance in the appropriate number for recording in the real property records where the Assets are located;
|
(ii)
|
possession of the Assets (except the Specified Receivables and the Suspense Funds, which shall be conveyed to Buyer by way of one or more adjustments to the Purchase Price as provided in
Section 2.05(c)(i)(F)
and
2.05(c)(ii)(E)
);
|
(iii)
|
a certificate, in substantially the form set forth in
Exhibit G
executed by an officer of such Seller Party, certifying on behalf of such Seller Party that the conditions to Closing set forth in
Sections 7.01
and
7.02
have been fulfilled;
|
(iv)
|
a Treasury Regulation Section 1.1445-2(b)(2) statement, certifying that such Seller Party is not a “foreign person” within the meaning of the Code;
|
(v)
|
an executed counterpart of the Preliminary Settlement Statement;
|
(vi)
|
for each Well operated by such Seller Party or its Affiliate on the Closing Date, such regulatory documentation on forms prepared by Buyer as is necessary to designate Buyer as operator of such Wells;
|
(vii)
|
a recordable release in a form reasonably acceptable to Buyer of any trust, mortgages, financing statements, fixture filings and security agreements, in each case, securing indebtedness for borrowed money made by such Seller Party or its Affiliates affecting the Assets; and
|
(viii)
|
an executed counterpart of the TSA; and
|
(ix)
|
such documents as Buyer or counsel for Buyer may reasonably request, including letters-in-lieu of transfer order to purchasers of production from the Wells (which shall be prepared and provided by Buyer and reasonably satisfactory to Seller).
|
(b)
|
Buyer shall deliver (and execute, as appropriate) to Seller:
|
(i)
|
the Preliminary Amount (less the Deposit Amount) by wire transfer to the accounts specified by Seller in written notices given by Seller to Buyer at least two (2) Business Days prior to the Closing Date;
|
(ii)
|
the Instruments of Conveyance in the appropriate number for recording in the real property records where the Assets are located;
|
(iii)
|
a certificate, in substantially the form set forth in
Exhibit G
executed by an officer of Buyer, certifying on behalf of Buyer that the conditions to Closing set forth in
Sections 8.01
and
8.02
have been fulfilled;
|
(iv)
|
an executed counterpart of the Preliminary Settlement Statement;
|
(v)
|
for each Well operated by any Seller Party or its Affiliate on the Closing Date, such regulatory documentation as is necessary to designate Buyer as operator of such Wells and the other Assets;
|
(vi)
|
evidence of replacement bonds, guarantees, and other sureties pursuant to
Section 6.03(a)
and evidence of such other authorizations and qualifications as may be necessary for Buyer to own and operate the Assets;
|
(vii)
|
an executed counterpart of the TSA; and
|
(viii)
|
such other documents as Seller or counsel for Seller may reasonably request, including letters-in-lieu of transfer order to purchasers of production from the Wells (which shall be prepared and provided by Buyer and reasonably satisfactory to Seller).
|
(a)
|
Buyer shall be entitled to all production and products from or attributable to the Assets from and after the Effective Time and the proceeds thereof, and to all other income, proceeds, receipts, and credits earned with respect to the Assets on or after the Effective Time, and shall be responsible for (and entitled to any refunds with respect to) all Property Costs attributable to the Assets and incurred from and after the Effective Time. Seller shall be entitled to all production and products from or attributable to the Assets prior to the Effective Time and the proceeds thereof, and shall be responsible for (and entitled to any refunds with respect to) all Property Costs attributable to the Assets and incurred prior to the Effective Time. “Earned” and “incurred,” as used in this Agreement, shall be interpreted in accordance with generally accepted accounting principles and Council of Petroleum Accountants Society (COPAS) standards.
|
(b)
|
Without limiting the allocation of costs and receipts set forth in
Section 2.05(a)
, for each Well or Unit operated by Seller or its Affiliate, (i) Seller or its Affiliate shall retain overhead charges and rates received by Seller or its Affiliate in its capacity as “Operator” under any operating agreement or COPAS accounting procedure attributable to such Well or Unit for time periods between the Effective Time and Closing, (ii) Seller or its Affiliate shall be entitled to deduct and retain as overhead charges for the Assets a total amount
|
(c)
|
The Purchase Price shall be, without duplication,
|
(i)
|
increased by the following amounts:
|
(A)
|
the aggregate amount of (i) proceeds received by Buyer from the sale of Hydrocarbons produced from and attributable to the Assets during any period prior to the Effective Time to which Seller is entitled under
Section 2.05(a)
(net
of any (x) Royalties and (y) gathering, processing, transportation and other midstream costs) and (ii) other proceeds received with respect to the Assets for which Seller would otherwise be entitled under
Section 2.05(a)
;
|
(B)
|
the amount of all Asset Taxes allocable to Buyer pursuant to
Section 13.02(b)
but paid or economically borne by Seller;
|
(C)
|
the aggregate amount of all non-reimbursed Property Costs (other than Asset Taxes) that have been paid by Seller that are attributable to the ownership and operation of the Assets after the Effective Time (including prepayments with respect to any period after the Effective Time);
|
(D)
|
the amount of any other upward adjustment specifically provided for in this Agreement or mutually agreed upon by the Parties;
|
(E)
|
to the extent that proceeds for such volumes have not been received by Seller, an amount equal to the value of all Hydrocarbons attributable to the Wells in storage facilities, stock tanks, pipelines or plants as of the Effective Time;
|
(F)
|
the amount equal to fifty percent (50%) of all Specified Receivables attributable to any period prior to the Effective Time;
|
(G)
|
if applicable, the amount, if any, of Imbalances in favor of Seller,
multiplied by
$2.80 per Mcf, or, to the extent that the applicable Contracts provide for cash balancing, the actual cash balance amount determined to be due to Seller as of the Effective Time; and
|
(ii)
|
decreased by the following amounts:
|
(A)
|
the aggregate amount of (i) proceeds received by Seller from the sale of Hydrocarbons produced from and attributable to the Assets from and after the Effective Time to which Buyer is entitled under
Section 2.05(a)
(net
of any (x) Royalties and (y) gathering, processing, transportation and other midstream costs) and (ii) other proceeds received by Seller with respect to the Assets for which Buyer would otherwise be entitled under
Section 2.05(a)
;
|
(B)
|
the amount of all Asset Taxes allocable to Seller pursuant to
Section 13.02(b)
but paid or economically borne by Buyer;
|
(C)
|
the aggregate amount of all downward adjustments pursuant to
Article 11
;
|
(D)
|
the aggregate amount of all non-reimbursed Property Costs (other than Asset Taxes) that are attributable to the ownership or operation of the Assets prior to the Effective Time (excluding prepayments with respect to any period after the Effective Time) and paid by Buyer;
|
(E)
|
the amount of the Suspense Funds;
|
(F)
|
the amount of any other downward adjustment specifically provided for in this Agreement or mutually agreed upon by the Parties; and
|
(G)
|
if applicable, the amount, if any, of Imbalances owing by Seller,
multiplied by
$2.80 per Mcf, or, to the extent that the applicable Contracts provide for cash balancing, the actual cash balance amount determined to be owed by Seller as of the Effective Time.
|
(d)
|
As soon as practicable after the Closing, but no later than one hundred twenty (120) days following the Closing Date, Seller shall prepare and submit to Buyer a statement (the “
Final Settlement Statement
”) setting forth each adjustment or payment which was not finally determined as of the Closing Date and showing the values used to determine such adjustments to reflect the final adjusted Purchase Price. On or before thirty (30) days after receipt of the Final Settlement Statement, Buyer shall deliver to Seller a written report containing any changes that Buyer proposes be made to the Final Settlement Statement and an explanation of any such changes and the reasons therefor together with any supporting information (the “
Dispute Notice
”). During such thirty (30)-day period, Buyer shall be given reasonable access to Seller’s books and records relating to the matters required to be
|
(a)
|
The execution, delivery, and performance of this Agreement and the Contemplated Transactions have been duly and validly authorized by all necessary limited liability company action on the part of such Seller Party. This Agreement has been duly executed and delivered by such Seller Party and at the Closing, all instruments executed and delivered by such Seller Party at or in connection with the Closing shall have been duly executed and delivered by such Seller Party. This Agreement constitutes the legal, valid, and binding obligation of such Seller Party, enforceable against such Seller Party in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy or other similar laws affecting the rights and remedies of creditors generally and by general principles of equity (regardless of whether such enforceability is considered in a Proceeding in equity or at law). Upon execution and delivery by such Seller Party of the Instruments of Conveyance at the Closing, such Instruments of Conveyance shall constitute legal, valid and binding transfers and conveyances of the Assets. Upon the execution and delivery by such Seller Party of any other documents at the Closing (collectively with the Instruments of Conveyance, such Seller Party’s “
Seller Closing Documents
”), such Seller Closing Documents shall constitute the legal, valid, and binding obligations of such Seller Party, enforceable against such Seller Party in accordance with their terms, except as such enforceability may be limited by applicable bankruptcy or other similar laws affecting the rights and remedies of creditors generally and by general principles of equity (regardless of whether such enforceability is considered in a Proceeding in equity or at law).
|
(b)
|
Except as set forth in
Schedule 3.02(b)
, and assuming the receipt of all Consents and the waiver of all Preferential Purchase Rights (in each case) applicable to the Contemplated Transactions, and assuming compliance with the HSR Act, neither the execution and
|
(i)
|
contravene, conflict with, or result in a violation of (A) any provision of the Organizational Documents of such Seller Party, or (B) any resolution adopted by the board of directors, managers or officers of such Seller Party;
|
(ii)
|
contravene, conflict with, or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions, to terminate, accelerate, or modify any terms of, or to exercise any remedy or obtain any relief under, any Contract or agreement or any Legal Requirement or Order to which such Seller Party, or any of the Assets, may be subject;
|
(iii)
|
contravene, conflict with, or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental Authorization that relates to the Assets; or
|
(iv)
|
result in the imposition or creation of any Encumbrance upon or with respect to any of the Assets, except for Permitted Encumbrances.
|
(a)
|
any Applicable Contract that is a Hydrocarbon purchase and sale, transportation, gathering, treating, processing, or similar Applicable Contract that is not terminable without penalty on ninety (90) days’ or less notice;
|
(b)
|
any Applicable Contract that can reasonably be expected to result in aggregate payments by such Seller Party of more than Two Hundred Thousand Dollars ($200,000) net to such Seller Party’s interest during the current or any subsequent fiscal year or more than Five Hundred Thousand ($500,000) in the aggregate net to such Seller Party’s interest over the term of such Applicable Contract (based on the terms thereof and contracted (or if none, current) quantities where applicable);
|
(c)
|
any Applicable Contract that is an indenture, mortgage, loan, credit agreement, sale-leaseback, guaranty of any obligation, bond, letter of credit, or similar financial Contract; and
|
(d)
|
any Applicable Contract that constitutes a partnership agreement, joint venture agreement, area of mutual interest agreement, joint development agreement, joint operating agreement, farmin or farmout agreement or similar Contract where the primary obligation has not been completed prior to the Effective Time (in each case, excluding any tax partnership).
|
(a)
|
Schedule 3.16(a)
contains a true and complete list of each “employee benefit plan,” as defined in Section 3(3) of ERISA, and all other retirement, pension, deferred compensation, bonus, incentive, severance, executive life insurance, vacation, stock purchase, stock option, phantom stock, equity, employment, profit sharing, retention, stay bonus, change of control and other compensation or benefit plans, programs, agreements
|
(b)
|
THIS
SECTION 3.16
CONTAINS THE EXCLUSIVE REPRESENTATIONS AND WARRANTIES OF SUCH SELLER PARTY WITH RESPECT TO EMPLOYEE BENEFITS MATTERS. NO OTHER PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED AS CONSTITUTING A REPRESENTATION OR WARRANTY REGARDING SUCH MATTERS.
|
(a)
|
This Agreement constitutes the legal, valid, and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy or other similar laws affecting the rights and remedies of creditors generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Upon the execution and delivery by Buyer of the Instruments of Conveyance and any other documents executed and delivered by Buyer at the Closing (collectively, “
Buyer’s Closing Documents
”), Buyer’s Closing
|
(b)
|
Neither the execution and delivery of this Agreement by Buyer nor the consummation or performance of any of the Contemplated Transactions by Buyer shall give any Person the right to prevent, delay, or otherwise interfere with any of the Contemplated Transactions.
|
(c)
|
Neither the execution and delivery of this Agreement by Buyer nor the consummation or performance of any of the Contemplated Transactions by Buyer shall (i) contravene, conflict with, or result in a violation of any provision of the Organizational Documents of Buyer, (ii) contravene, conflict with, or result in a violation of any resolution adopted by the board of managers, or members of Buyer, or (iii) contravene, conflict with, or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions, to terminate, accelerate, or modify any terms of, or to exercise any remedy or obtain any relief under, any agreement or any Legal Requirement or Order to which Buyer may be subject.
|
(d)
|
Buyer is not and shall not be required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.
|
(a)
|
Between the Execution Date and the Defect Notice Date (but excluding the Dead Period), to the extent doing so would not violate applicable Legal Requirements, Seller’s obligations to any Third Party or other restrictions on Seller, Seller shall afford Buyer and its Representatives access, by appointment only, during Seller’s regular hours of business to reasonably appropriate Seller’s personnel, any Seller operated Assets, contracts, books and records, and other documents and data related to the Assets, except any such contracts, books and records, or other documents and data that are Excluded Assets or that cannot, without unreasonable effort or expense, be separated from any contracts, books and records, or other documents and data that are Excluded Assets (and upon Buyer’s request,
|
(b)
|
Notwithstanding the provisions of
Section 5.01(a)
, (i) Buyer’s investigation shall be conducted in a manner that minimizes interference with the operation of the business of Seller and any applicable Third Parties, and (ii) Buyer’s right of access shall not entitle Buyer to operate equipment or conduct subsurface or other invasive testing or sampling. Environmental review shall not exceed the review contemplated by a Phase I Environmental Site Assessment without Seller’s prior written permission, which may be withheld in Seller’s sole discretion, subject to the provisions of
Section 11.09
.
|
(c)
|
Buyer acknowledges that, pursuant to its right of access to the Records and the Assets, Buyer will become privy to confidential and other information of Seller and Seller’s Affiliates and the Assets and that such confidential information shall be held confidential by Buyer and Buyer’s Representatives in accordance with the terms of the Confidentiality Agreement. If the Closing should occur, the foregoing confidentiality restriction on Buyer, including the Confidentiality Agreement, shall terminate (except as to the Excluded Assets);
provided
that such termination of the Confidentiality Agreement shall not relieve any party thereto from any liability thereunder for the breach of such agreement prior to the Execution Date.
|
(a)
|
not transfer, sell, hypothecate, encumber, or otherwise dispose of any of the Assets, except as required under any Leases or Contracts, and except for sales of Hydrocarbons, equipment and inventory in the ordinary course of business;
|
(b)
|
not abandon any Asset (except the abandonment or expiration of Leases in accordance with their terms, including with respect to leases not capable of producing in paying quantities after the expiration of their primary terms or for failure to pay delay rentals or shut-in royalties or similar types of lease maintenance payments, which shall, in each case, be at Seller’s sole discretion);
|
(c)
|
not commence, propose, or agree to participate in any single operation with respect to the Wells or Leases with an anticipated cost in excess of Two Hundred Thousand Dollars ($200,000) net to Seller’s interest, except for any emergency operations;
|
(d)
|
not execute, terminate, cancel, extend, or materially amend or modify any Material Contract or Lease other than the execution or extension of a Contract for the sale, exchange, transportation, gathering, treating, or processing of Hydrocarbons terminable without penalty on ninety (90) days’ or shorter notice.
|
(a)
|
The Parties understand that none of the insurance currently maintained by Seller or Seller’s Affiliates covering the Assets, nor any of the bonds, letters of credit, or guaranties, if any, posted by Seller or Seller’s Affiliates with Governmental Bodies or co-owners and relating to the Assets will be transferred to Buyer. On or before the Closing Date, Buyer (and, as applicable, its Affiliate Scout Energy Management LLC, to the extent Buyer appoints Scout Energy Management LLC as its agent to operate any of the Assets) shall obtain, and deliver to Seller evidence of, all necessary replacement bonds, letters of credit, and guaranties, and evidence of such other authorizations, qualifications, and approvals as may be necessary for Buyer to own and, with respect to Assets currently operated by Seller or its Affiliates, operate the Assets. Promptly following the Closing, Buyer shall obtain or cause to be obtained in the name of Buyer or, as applicable, its Affiliate Scout Energy Management LLC, such insurance covering the Assets as would be obtained by a reasonably prudent operator in a similar situation.
|
(b)
|
Promptly (but in no event later than thirty (30) days) after Closing, Buyer shall, at its sole cost and expense, make all filings with Governmental Bodies necessary to assign and transfer the Assets and title thereto and to comply with applicable Legal Requirements, and Seller shall reasonably assist Buyer with such filings. Buyer shall indemnify, defend, and hold harmless Seller Group from and against all Damages arising out of Buyer’s holding of such title or operatorship of the Assets after the Closing and prior to the securing of any necessary Consents and approvals of the Contemplated Transactions from Governmental Bodies.
|
(a)
|
by mutual written consent of Seller and Buyer;
|
(b)
|
by Buyer, if Seller has committed a material Breach of this Agreement and such Breach causes any of the conditions to Closing set forth in
Article 7
not to be satisfied (or, if prior to Closing, such Breach is of such a magnitude or effect that it will not be possible for such condition to be satisfied);
provided
,
however
, that in the case of a Breach that is capable of being cured, Seller shall have a period of ten (10) Business Days following receipt of such notice to attempt to cure the Breach and the termination under this
Section 9.01(b)
shall not become effective unless Seller fails to cure such Breach prior to the end of such ten (10) Business Day period;
provided
,
further
, if (i) Seller’s conditions to Closing have been satisfied or waived in full, (ii) Seller is not in material Breach of the terms of this Agreement and (iii) all of Buyer’s conditions to Closing have been satisfied or waived, then the refusal or willful or negligent delay by Seller to timely close the Contemplated Transactions shall constitute a material Breach of this Agreement;
|
(c)
|
by Seller, if Buyer has committed a material Breach of this Agreement and such breach causes any of the conditions to Closing set forth in
Article 8
not to be satisfied (or, if prior to Closing, such Breach is of such a magnitude or effect that it will not be possible for such condition to be satisfied);
provided
,
however
, that in the case of a Breach that is capable of being cured, Buyer shall have a period of ten (10) Business Days following receipt of such notice to attempt to cure the Breach and the termination under this
Section 9.01(c)
shall not become effective unless Buyer fails to cure such Breach prior to the end of such ten (10) Business Day period;
provided
,
further
, if (i) Buyer’s conditions to Closing have been satisfied or waived in full, (ii) Buyer is not in material Breach of the terms of this Agreement and (iii) all of Seller’s conditions to Closing have been satisfied or waived, then the refusal or willful or negligent delay by Buyer to timely close the Contemplated Transactions shall constitute a material Breach of this Agreement;
|
(d)
|
by either Seller or Buyer if the Closing has not occurred on or before March 30, 2018 (the “
Outside Date
”), or such later date as the Parties may agree upon in writing;
provided
that such failure does not result primarily from the terminating Party’s material Breach of this Agreement;
|
(e)
|
by either Seller or Buyer if (i) any Legal Requirement has made the consummation of the Contemplated Transactions illegal or otherwise prohibited, or (ii) a Governmental Body has issued an Order, or taken any other action permanently restraining, enjoining, or otherwise prohibiting the consummation of the Contemplated Transactions, and such order, decree, ruling, or other action has become final and non-appealable;
|
(f)
|
by Seller if the Closing condition in
Section 8.08
is not satisfied (or not possible of being satisfied at Closing);
|
(g)
|
by Buyer if the Closing condition in
Section 7.08
is not satisfied (or not possible of being satisfied at Closing; or
|
(h)
|
by Seller if Buyer fails to deposit the Deposit Amount into the Escrow Account on or before 5:00 p.m. (Central Time) on the first (1st) Business Day after the Execution Date.
|
(a)
|
If this Agreement is terminated pursuant to
Section 9.01
, all further obligations of the Parties under this Agreement shall terminate;
provided
that (a) such termination shall not impair nor restrict the rights of either Party against the other with respect to the Deposit Amount pursuant to
Section 9.02(b)
, (b) except to the extent either Party has received the Deposit Amount (or, with respect to Buyer, damages in an amount up to the Deposit Amount) as liquidated damages pursuant to
Section 9.02(b)
, the termination of this Agreement shall not relieve any Party from liability for any failure to perform or observe in any material respect any of its agreements or covenants contained herein which are to be performed or observed at or prior to Closing, (c) except to the extent either Party has received the Deposit Amount (or, with respect to Buyer, damages in an amount up to the Deposit Amount) as liquidated damages pursuant to
Section 9.02(b)
, to the extent such termination results from the material Breach by a Party of any of its covenants or
|
(b)
|
Notwithstanding anything to the contrary in
Section 9.02(a)
:
|
(i)
|
If Seller has the right to terminate this Agreement (A) pursuant to
Section 9.01(c)
or (B) pursuant to
Section 9.01(d)
, if at such time Seller could have terminated this Agreement pursuant to
Section 9.01(c)
(without regard to any cure periods contemplated therein), then, in either case, Seller shall have the right, at its sole discretion, to receive the Deposit Amount as liquidated damages (and not as a penalty). If Seller elects to terminate this Agreement pursuant to this
Section 9.02(b)(i)
and receive the Deposit Amount as liquidated damages, (x) the Parties shall, within two (2) Business Days of Seller’s election, execute and deliver to the Escrow Agent a joint instruction letter directing the Escrow Agent to release the Deposit Amount to Seller and (y) Seller shall be free to enjoy immediately all rights of ownership of the Assets and to sell, transfer, encumber, or otherwise dispose of the Assets to any Person without any restriction under this Agreement.
|
(ii)
|
If Buyer has the right to terminate this Agreement (A) pursuant to
Section 9.01(b)
or (B) pursuant to
Section 9.01(d)
, if at such time Seller could have terminated this Agreement pursuant to
Section 9.01(b)
(without regard to any cure periods contemplated therein), then, in either case, Buyer shall have the right, at its sole discretion, to either (1) enforce specific performance by Buyer of this Agreement, without posting any bond or the necessity of proving the inadequacy as a remedy of monetary damages, in which event the Deposit Amount will be applied as called for herein, or (2) if Buyer does not seek and successfully enforce specific performance, terminate this Agreement and (in addition to retention of the Deposit Amount) seek to recover damages from Seller in an amount up to, but not exceeding the Deposit Amount, as liquidated damages (and not as a penalty). If Buyer elects to terminate this Agreement pursuant to this
Section 9.02(b)(ii)
and seek damages in an amount up to the Deposit Amount as liquidated damages, the Parties shall, within two (2) Business Days of Buyer’s election, (x) execute and deliver to the Escrow Agent a joint instruction letter directing the Escrow Agent to release the Deposit Amount to Buyer and (y) Seller shall be free to enjoy immediately all rights of ownership of the Assets and to sell, transfer, encumber, or otherwise dispose of the Assets to any Person without any restriction under this Agreement.
|
(c)
|
The Parties recognize that the actual damages for a Party’s material Breach of this Agreement would be difficult or impossible to ascertain with reasonable certainty and agree that the Deposit Amount would be a reasonable liquidated damages amount for such material Breach.
|
(d)
|
If this Agreement is terminated by either Buyer or Seller pursuant to
Section 9.01
for any reason other than as described in
Section 9.02(b)
, then, in any such case, the Parties shall, within two (2) Business Days of such termination, execute and deliver to the Escrow Agent a joint instruction letter directing the Escrow Agent to release the Deposit Amount to Buyer.
|
(a)
|
any Breach of any representation or warranty made by Seller in this Agreement, or in any certificate delivered by Seller pursuant to this Agreement;
|
(b)
|
any Breach by Seller of any covenant, obligation, or agreement of Seller in this Agreement;
|
(c)
|
the Retained Liabilities;
|
(d)
|
the use, ownership or operation of the Excluded Assets; and
|
(e)
|
the use, ownership or operation of the Retained Assets.
|
(a)
|
any Breach of any representation or warranty made by Buyer in this Agreement or in any certificate delivered by Buyer pursuant to this Agreement;
|
(b)
|
any Breach by Buyer of any covenant, obligation, or agreement of Buyer in this Agreement;
|
(c)
|
any Damages arising out of or relating to Buyer’s or its Affiliate’s access to the Assets and contracts, books and records and other documents and data relating thereto prior to the
|
(d)
|
the Assumed Liabilities.
|
(a)
|
Promptly after receipt by an indemnified party under
Section 10.02
or
10.03
of a Third Party claim for Damages or notice of the commencement of any Proceeding against it, such indemnified party shall, if a claim is to be made against an indemnifying Party under such Section, give notice to the indemnifying Party of the commencement of such claim or Proceeding, together with a claim for indemnification pursuant to this
Article 10
. The failure of any indemnified party to give notice of a Third Party claim or Proceeding as provided in this
Section 10.06
shall not relieve the indemnifying Party of its obligations under this
Article 10
except to the extent such failure results in insufficient time being available to permit the indemnifying Party to effectively defend against the Third Party claim or participate in the Proceeding or otherwise prejudices the indemnifying Party’s ability to defend against the Third Party claim or participate in the Proceeding.
|
(b)
|
If any Proceeding referred to in
Section 10.06(a)
is brought against an indemnified party and the indemnified party gives notice to the indemnifying Party of the commencement of such Proceeding, the indemnifying Party shall be entitled to participate in such Proceeding and, to the extent that it wishes (unless (i) the indemnifying Party is also a party to such Proceeding and the indemnified party determines in good faith that joint representation would be inappropriate, or (ii) the indemnifying Party fails to provide reasonable assurance to the indemnified party of its financial capacity to defend such Proceeding and provide indemnification with respect to such Proceeding), to assume the defense of such Proceeding with counsel reasonably satisfactory to the indemnified party, and, after notice from the indemnifying Party to the indemnified party of the indemnifying Party’s election to assume the defense of such Proceeding, the indemnifying Party shall not, as long as it diligently conducts such defense, be liable to the indemnified party under this
Article 10
for any fees of other counsel or any other expenses with respect to the defense of such Proceeding, in each case subsequently incurred by the indemnified party in connection with the defense of such Proceeding. Notwithstanding anything to the contrary in this Agreement, the indemnifying Party shall not be entitled to assume or continue control of the defense of any such Proceeding if (A) such Proceeding relates to or arises in connection with any criminal proceeding, (B) such Proceeding seeks an injunction or equitable relief against any indemnified Party, (C) if the indemnified party is Buyer and such Proceeding has or would reasonably be expected to result in Damages in excess of the amount set forth in
Section 10.05
(i.e., twenty percent (20%) of the unadjusted Purchase Price), or (D) the indemnifying Party has failed or is failing to defend in good faith such Proceeding. If the indemnifying Party assumes the defense of a Proceeding, no compromise or settlement of such Third Party claims or Proceedings may be effected by the indemnifying Party without the indemnified party’s prior written consent unless (A) there is no finding or admission of any violation of Legal Requirements or any violation of the rights of any Person and no effect on any other Third Party claims that may be made against the indemnified party, and (B) the sole relief provided is monetary damages that are paid in full by the indemnifying Party, and (C) the indemnified party shall have no liability with respect to any compromise or settlement of such Third Party claims or Proceedings effected without its consent.
|
(a)
|
EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE INSTRUMENTS OF CONVEYANCE, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, AND DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT, OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO BUYER (INCLUDING ANY OPINION, INFORMATION, OR ADVICE THAT MAY HAVE BEEN PROVIDED TO BUYER OR ITS AFFILIATES OR REPRESENTATIVES BY ANY AFFILIATES OR REPRESENTATIVES OF SELLER OR BY ANY INVESTMENT BANK OR INVESTMENT BANKING FIRM, ANY PETROLEUM ENGINEER OR ENGINEERING FIRM, SELLER’S COUNSEL, OR ANY OTHER AGENT, CONSULTANT, OR REPRESENTATIVE OF SELLER). WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE INSTRUMENTS OF CONVEYANCE, SELLER EXPRESSLY DISCLAIMS AND NEGATES ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE, OR OTHERWISE, RELATING TO (A) THE TITLE TO ANY OF THE ASSETS, (B) THE CONDITION OF THE ASSETS (INCLUDING ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS), IT BEING DISTINCTLY UNDERSTOOD THAT THE ASSETS ARE BEING SOLD “AS IS,” “WHERE IS,” AND “WITH ALL FAULTS AS TO ALL MATTERS,” (C) ANY INFRINGEMENT BY SELLER OF ANY PATENT OR PROPRIETARY RIGHT OF ANY THIRD PARTY, (D) ANY INFORMATION, DATA, OR OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED TO BUYER BY OR ON BEHALF OF SELLER (INCLUDING THE EXISTENCE OR EXTENT OF HYDROCARBONS OR THE MINERAL RESERVES, THE RECOVERABILITY OF SUCH RESERVES, ANY PRODUCT PRICING ASSUMPTIONS, AND THE ABILITY TO SELL HYDROCARBON PRODUCTION AFTER THE CLOSING), AND (E) THE ENVIRONMENTAL CONDITION AND OTHER CONDITION OF THE ASSETS AND ANY POTENTIAL LIABILITY ARISING FROM OR RELATED TO THE ASSETS.
|
(b)
|
Buyer acknowledges and affirms that it has made its own independent investigation, analysis, and evaluation of the Contemplated Transactions and the Assets (including Buyer’s own estimate and appraisal of the extent and value of Seller’s Hydrocarbon reserves attributable to the Assets and an independent assessment and appraisal of the environmental risks associated with the acquisition of the Assets). Buyer acknowledges that in entering into this Agreement, it has relied on the aforementioned investigation and the express representations and warranties of Seller contained in this Agreement and the Seller Closing Documents.
Buyer hereby irrevocably covenants to refrain from, directly or indirectly, asserting any claim, or commencing, instituting, or causing to be commenced, any Proceeding of any kind against Seller or its Affiliates, alleging facts contrary to the foregoing acknowledgment and affirmation.
|
(a)
|
If Seller fails to obtain any Consent necessary for the transfer of any Asset to Buyer, Seller’s failure shall be handled as follows:
|
(i)
|
If the Consent is not a Required Consent, then the affected Assets shall nevertheless be conveyed at the Closing as part of the Assets. Any Damages that arise due to the failure to obtain such Consent shall be borne by Buyer, and Buyer shall defend, release, indemnify and hold harmless Seller Group from and against the same.
|
(ii)
|
If the Consent is a Required Consent, the Purchase Price shall be adjusted downward by the Allocated Value of the affected Assets (which affected Assets shall include all Leases and Wells affected by the Applicable Contract or Lease for which a Consent is refused), and the affected Assets shall be treated as Retained Assets.
|
(b)
|
Notwithstanding the provisions of
Section 11.03(a)
, if Seller obtains a Required Consent described in
Section 11.03(a)(ii)
within one hundred eighty (180) days after the Closing, then Seller shall promptly deliver conveyances of the affected Asset(s) to Buyer and Buyer shall pay to Seller an amount equal to the Allocated Value of the affected Asset(s) in accordance with wire transfer instructions provided by Seller (subject to the adjustments set forth in
Section 2.05)
.
|
(a)
|
if the Parties agree on the Title Defect Value, then that amount shall be the Title Defect Value;
|
(b)
|
if the Title Defect is an Encumbrance that is undisputed and liquidated in amount, then the Title Defect Value shall be the amount necessary to be paid to remove the Title Defect from the Title Defect Property;
|
(c)
|
if the Title Defect represents a discrepancy between (i) Seller’s Net Revenue Interest for the Title Defect Property and (ii) the Net Revenue Interest set forth for such Title Defect Property in
Schedule 2.07(a)
or
Schedule 2.07(b)
, as applicable, and there is also a proportionate reduction in Working Interest for such Title Defect Property, then the Title Defect Value shall be the product of the Allocated Value of such Title Defect Property,
multiplied
by a fraction, the numerator of which is the Net Revenue Interest decrease and the denominator of which is the Net Revenue Interest set forth for such Title Defect Property in
Schedule 2.07(a)
or
Schedule 2.07(b)
, as applicable; and
|
(d)
|
if the Title Defect represents an Encumbrance upon or other defect in title to the Title Defect Property of a type not described above, then the Title Defect Value shall be determined by taking into account the Allocated Value of the Title Defect Property, the portion of the Title Defect Property affected by the Title Defect, the legal effect of the Title Defect, the potential economic effect of the Title Defect over the life of the Title Defect Property, the values placed upon the Title Defect by Buyer and Seller and such other reasonable factors as are necessary to make a proper evaluation.
|
(a)
|
Seller shall have the right to cure any Title Defect on or before sixty (60) days after the Closing Date or, if later, after the date of resolution of such Title Defect or the Title Defect Value by an Expert pursuant to
Section 11.15
(the “
Title Defect Cure Period
”) by giving written notice to Buyer of its election to cure prior to the Closing Date or, if later, after the applicable Expert Decision date. If Seller elects to cure and:
|
(i)
|
actually cures the Title Defect (“
Cure
”), prior to the Closing, then the Asset affected by such Title Defect shall be conveyed to Buyer at the Closing, and no Purchase Price adjustment will be made for such Title Defect; or
|
(ii)
|
does not cure the Title Defect prior to the Closing, then Seller shall:
|
(A)
|
convey the affected Asset to Buyer and Buyer shall pay for the affected Asset at the Closing;
provided, however
that if Seller is unable to Cure the Title Defect within the time provided in this
Section 11.06
, then Seller shall include a downward adjustment in the Final Settlement Statement equal to the Title Defect Value for such Asset; or
|
(B)
|
if and only if Buyer agrees to this remedy in its sole discretion, indemnify Buyer against all Damages (up to the Allocated Value of the applicable Title Defect Property) resulting from such Title Defect with respect to such Title Defect Property pursuant to an indemnity agreement prepared by Seller in a form and substance reasonably acceptable to Buyer.
|
(b)
|
Seller and Buyer shall attempt to agree on the existence and Title Defect Value for all Title Defects. Representatives of the Parties, knowledgeable in title matters, shall meet during the Title Defect Cure Period for this purpose. However, either Party may at any time prior to the final resolution of the applicable Title Defect hereunder submit any disputed Title
|
(a)
|
Seller shall have the right to remediate or cure an Environmental Defect to the extent of the Lowest Cost Response on or before sixty (60) days after the Defect Notice Date or, if later, after the date of resolution of such Environmental Defect or the Environmental Defect Value by an Expert (the “
Environmental Defect Cure Period
”) by giving written notice to Buyer to that effect prior to the Closing Date or, if later, after the applicable Expert Decision date, together with Seller’s proposed plan and timing for such remediation, and Seller shall remain liable for all Damages arising out of or in connection with such Environmental Defect until such time as such remediation or cure is completed. If Seller elects to pursue remediation or cure as set forth in this clause (a), Seller shall implement such remediation or cure in a manner that is in compliance with all applicable Legal Requirements in a prompt and timely fashion for the type of remediation or cure. If Seller elects to pursue remediation or cure and:
|
(i)
|
completes a Complete Remediation of an Environmental Defect prior to the Closing Date, the affected Unit(s), Lease(s) or Well(s) shall be included in the Assets conveyed at Closing, and no Purchase Price adjustment will be made for such Environmental Defect;
|
(ii)
|
does not complete a Complete Remediation prior to the Closing, unless Seller elects to exclude such Asset(s) in accordance with this
Section 11.11
, then Seller shall convey the affected Asset(s) to Buyer and Buyer shall pay for the affected Asset(s) at the Closing;
provided, however
that if Seller is unable to complete a Complete Remediation of the Environmental Defect within the time provided in this
Section 11.11
, then Seller shall include a downward adjustment in the Final Settlement Statement equal to the Environmental Defect Value for such Asset(s).
|
(b)
|
Seller and Buyer shall attempt to agree on the existence and Environmental Defect Value of all Environmental Defects. Representatives of the Parties, knowledgeable in environmental matters, shall meet for this purpose. However, a Party may at any time prior to the final resolution of the applicable Environmental Defect hereunder elect to submit any disputed item to arbitration in accordance with the procedures set forth in
Section 11.15
. If a contested Environmental Defect cannot be resolved prior to the Closing, the affected Asset(s) (together with any other Assets appurtenant thereto) shall be included with the Assets conveyed to Buyer at Closing and the Purchase Price shall be reduced by the estimated Environmental Defect Value set forth in the Environmental Defect Notice for such contested Environmental Defect, and the final determination of the Environmental Defect and/or Environmental Defect Value shall be resolved pursuance to
Section 11.15
.
|
(a)
|
Each matter referred to this
Section 11.15
(a “
Disputed Matter
”) shall be conducted in accordance with the Commercial Arbitration Rules of the AAA as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code), but only to the extent that such rules do not conflict with the terms of this
Section 11.15
. Any notice from one Party to the other referring a dispute to this
Section 11.15
shall be referred to herein as an “
Expert Proceeding Notice
”.
|
(b)
|
The arbitration shall be held before a one member arbitration panel (the “
Expert
”), mutually agreed by the Parties. The Expert must (a) be a neutral party who has never been an officer, director or employee of or performed material work for a Party or any Party’s Affiliate within the preceding five (5)-year period and (b) agree in writing to keep strictly confidential the specifics and existence of the dispute as well as all proprietary records of the Parties reviewed by the Expert in the process of resolving such dispute. The Expert must have not less than ten (10) years’ experience as a lawyer in the State of Oklahoma with experience in exploration and production issues. If disputes exist with respect to both title and environmental matters, the Parties may mutually agree to conduct separate arbitration proceedings with the title disputes and environmental disputes being submitted to separate Experts. If, within five (5) Business Days after delivery of an Expert Proceeding Notice, the Parties cannot mutually agree on an Expert, then within seven (7) Business Days after delivery of such Expert Proceeding Notice, each Party shall provide the other with a list of three (3) acceptable, qualified experts, and within ten (10) Business Days after delivery of such Expert Proceeding Notice, the Parties shall each separately rank from one through six in order of preference each proposed expert on the combined lists, with a rank of one being the most preferred expert and the rank of six being the least preferred expert, and provide their respective rankings to the Dallas office of the AAA. Based on those rankings, the AAA will appoint the expert with the combined lowest numerical ranking to serve as the Expert for the Disputed Matters. If the rankings result in a tie or the AAA is otherwise unable to determine an Expert using the Parties’ rankings, the AAA will appoint an arbitrator from one of the Parties’ lists as soon as practicable upon receiving the Parties’ rankings. Each Party will be responsible for paying one-half (1/2) of the fees charged by the AAA for the services provided in connection with this
Section 11.15(b)
.
|
(c)
|
Within five (5) Business Days following the receipt by either Party of the Expert Proceeding Notice, the Parties will exchange their written description of the proposed resolution of the Disputed Matters. Provided that no resolution has been reached, within five (5) Business Days following the selection of the Expert, the Parties shall submit to the Expert the following: (i) this Agreement, with specific reference to this
Section 11.15
and the other applicable provisions of this
Article 11
, (ii) Buyer’s written description of the proposed resolution of the Disputed Matters, together with any relevant supporting materials, (iii) Seller’s written description of the proposed resolution of the Disputed
|
(d)
|
The Expert shall make its determination by written decision within fifteen (15) days following receipt of the materials described in
Section 11.15(c)
above (the “
Expert Decision
”). The Expert Decision with respect to the Disputed Matters shall be limited to the selection of the single proposal for the resolution of the aggregate Disputed Matters proposed by a Party that best reflects the terms and provisions of this Agreement,
i.e.
, the Expert must select either Buyer’s proposal or Seller’s proposal for resolution of the aggregate Disputed Matters.
|
(e)
|
The Expert Decision shall be final and binding upon the Parties, without right of appeal, absent manifest error. In making its determination, the Expert shall be bound by the rules set forth in this
Article 11
. The Expert may consult with and engage disinterested Third Parties to advise the Expert, but shall disclose to the Parties the identities of such consultants. Any such consultant shall not have worked as an employee or consultant for either Party or its Affiliates during the five (5)-year period preceding the arbitration nor have any financial interest in the dispute.
|
(f)
|
The Expert shall act as an expert for the limited purpose of determining the specific matters submitted for resolution herein and shall not be empowered to award damages, interest, or penalties to either Party with respect to any matter. Each Party shall bear its own legal fees and other costs of preparing and presenting its case. All costs and expenses of the Expert shall be borne by the non-prevailing Party in any such arbitration proceeding.
|
(a)
|
Except as otherwise expressly provided in this Agreement, each Party to this Agreement shall bear its respective expenses incurred in connection with the preparation, execution, and performance of this Agreement and the Contemplated Transactions, including all fees and expenses of agents, representatives, counsel, and accountants. However, the prevailing Party in any Proceeding brought under or to enforce this Agreement, excluding any expert proceeding pursuant to
Section 11.15
or
Section 2.05(d)
, shall be entitled to recover court costs and arbitration costs, as applicable, and reasonable attorneys’ fees from the non-prevailing Party or Parties, in addition to any other relief to which such Party is entitled.
|
(b)
|
All Transfer Taxes and all required documentary, filing and recording fees and expenses in connection with the filing and recording of the assignments, conveyances or other Instruments of Conveyance required to convey title to the Assets to Buyer shall be borne by Buyer. Seller shall retain responsibility for, and shall bear, all Asset Taxes assessed with respect to the Assets for (i) any period ending prior to the Effective Time and (ii) the portion of any Straddle Period ending immediately prior to the Effective Time. All Asset Taxes with respect to the Assets arising on or after the Effective Time (including the portion of any Straddle Period beginning at the Effective Time) shall be allocated to and borne by Buyer. For purposes of allocation between the Parties of Asset Taxes assessed with respect to the Assets for any Straddle Period, (A) Asset Taxes that are attributable to the severance or production of Hydrocarbons shall be allocated based on severance or production occurring before the Effective Time (which shall be Seller’s responsibility) and from and after the Effective Time (which shall be Buyer’s responsibility); (B) Asset Taxes that are based upon or related to income or receipts or imposed on a transactional basis (other than such Asset Taxes described in clause (A)) shall be allocated based on revenues from sales occurring before the Effective Time (which shall be Seller’s responsibility) and from and after the Effective Time (which shall be Buyer’s responsibility); and (C) Asset Taxes that are ad valorem, property or other Asset Taxes imposed on a periodic basis shall be allocated
pro rata
per day between the portion of the Straddle Period ending
|
(c)
|
Except as required by applicable Legal Requirements, in respect of Asset Taxes, (i) Seller shall be responsible for timely remitting all (A) Asset Taxes due (excluding Ad Valorem and Property Taxes) with respect to the Assets for periods ending prior to the Closing Date, (B) Ad Valorem and Property Taxes due with respect to the Assets for periods ending prior to the Effective Time (no matter when due), and (C) Ad Valorem and Property Taxes due with respect to the Assets due prior to the Closing Date (subject, in each case, to Seller’s right to reimbursement by Buyer under
Section 13.02(b)
), (ii) Buyer shall be responsible for timely remitting all (A) Asset Taxes (excluding Ad Valorem and Property Taxes) with respect to the Assets for periods ending on or after the Closing Date, and (B) all Ad Valorem and Property Taxes due on or after the Closing Date (subject, in each case, to Buyer’s right to reimbursement by Seller under
Section 13.02(b)
), in each case, to the applicable taxing authority, (iii) Seller shall prepare and timely file any (A) Tax Return for Asset Taxes (excluding Ad Valorem and Property Taxes) with respect to the Assets required to be filed for periods ending prior to the Closing Date, and (B) Tax Return for Ad Valorem and Property Taxes with respect to the Assets due prior to the Closing Date, and (iv) Buyer shall prepare and timely file any (A) Tax Return for Asset Taxes (excluding Ad Valorem and Property Taxes) with respect to the Assets required to be filed for periods ending on or after the Closing Date, and (B) Tax Return for Ad Valorem and Property Taxes in respect to the Assets required to be filed on or after the Closing Date (including Tax Returns related to any Straddle Period). Each Party shall indemnify and hold the other Party harmless for any failure to file such Tax Returns and to make such payments. Buyer shall prepare all such Tax Returns relating to any Straddle Period on a basis consistent with past practice except to the extent otherwise required by applicable Legal Requirements. Buyer shall provide Seller with a copy of any Tax Return relating to any Straddle Period for Seller’s review at least ten (10) days prior to the due date for the filing of such Tax Return (or within a commercially reasonable period after the end of the relevant Taxable period, if such Tax Return is required to be filed less than ten (10) days after the close of such Taxable period), and Buyer shall incorporate all reasonable comments of Seller provided to Buyer in advance of the due date for the filing of such Tax Return.
|
(d)
|
Buyer and Seller agree to furnish or cause to be furnished to the other, upon request, as promptly as practicable, such information and assistance relating to the Assets, including
|
Email:
|
anthony.speier@kirkland.com
|
|
SELLER
:
|
|
|
|
|
|
Linn Energy Holdings, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ David B. Rottino
|
|
Name:
|
David B. Rottino
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
Linn Operating, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ David B. Rottino
|
|
Name:
|
David B. Rottino
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
BUYER
:
|
|||
|
|
|||
|
Scout Energy Group IV, LP
|
|||
|
By Scout Energy Group IV GP, LLC,
its general partner
|
|||
|
|
|||
|
|
|||
|
By:
|
/s/ Jon Piot
|
||
|
Name:
|
Jon Piot
|
||
|
Title:
|
Managing Director
|
1.
|
Linn Additional Leases
.
|
a.
|
Subpart (ii) of the definition of “
Linn Additional Leases
” is hereby deleted in its entirety and replaced and substituted with the following for all purposes: “…, (ii) after April 1, 2017 and prior 5:00 pm (Central Time) on October 27, 2017, as long as Linn has entered into a definitive agreement to acquire such interest prior to the Closing (for which both written notice of, and a copy of, such definitive agreement (including all exhibits) has been provided to Citizen prior to Closing); or, alternatively, other oil and gas leases identified to Citizen by Linn prior to Closing as Linn Additional Leases for which there is a commitment to acquire but the acquisition has not closed, such as with regard to leases that have been executed but have not been released to Linn pending payment of the bonus, or leases to be acquired in connection with a pending OCC pooling order, or leases acquired by a broker (insofar as the acquisition by the broker was prior to Closing) for which the broker owes Linn an assignment thereof (insofar as the documentation and instruments evidencing such commitments relative to these other leases have been provided to Citizen in writing on or before 5:00 pm Central Time on the date that is seven (7) Business Days after Closing),…” (any such Linn Additional Lease acquired under subpart (ii) of the definition for such term is referred to herein as a “
Deferred Linn Additional Lease
”).
|
b.
|
Notwithstanding anything to the contrary in
Section 4.2(e)(i)
of the Contribution Agreement, with respect to each Linn Additional Lease that was not listed on
Exhibit A-5-1
as of the date the Contribution Agreement was executed (individually, a “
Subsequent Linn Additional Lease
”, and collectively, the “
Subsequent Linn Additional Leases
”), Linn shall be deemed to be in compliance with its disclosure obligations in
Section 4.2(e)(i)
of the Contribution Agreement with respect to such Subsequent Linn Additional Lease to the extent it provides the information required in
Section 4.2(e)(i)
of the Contribution Agreement with respect to such Linn Additional Lease on or before the day that is 15 Business Days after the Closing, provided that in the case of any Deferred Linn Additional Lease, Linn shall be deemed to be in compliance with its disclosure obligations in
Section 4.2(e)(i)
of the Contribution Agreement with respect to such Deferred Linn Additional Lease to the extent it provides the information required by
Section 4.2(e)(i)
of the Contribution Agreement with respect to such Deferred Linn Additional Lease on or before the day that is the earlier of five (5) Business Days after such Party’s acquisition of such Deferred Linn Additional Lease and October 27, 2017.
|
c.
|
Notwithstanding anything to the contrary in the Contribution Agreement, (i) the Review Period for any Linn Additional Lease other than an Initial Linn Additional Lease shall expire on November 30, 2017, and the Title Cure Period for any such Linn Additional Lease shall expire on December 7, 2017; and (ii) the Review Period for any Initial Linn Additional Lease expired on August 28, 2017.
|
d.
|
Notwithstanding anything to the contrary in the Contribution Agreement, “Linn Cost Credited Asset Acquisition Costs” shall exclude all actual attorneys’ fees, broker fees, abstract costs, title opinion costs, title curative costs and other associated Third Party costs of due diligence incurred by the applicable Party in connection with the acquisition of any Linn Cost Credited Lease and associated Linn Additional Asset, and shall instead be deemed to include $100 of such Third Party due diligence costs per Net Acre of each relevant Linn Cost Credited Lease.
|
e.
|
The term “
Initial Linn Additional Lease
” shall mean any Linn Additional Lease that was listed on
Exhibit A-5-1
as of the date the Contribution Agreement was executed.
|
2.
|
Citizen Additional Leases
.
|
a.
|
Subpart (ii) of the definition of “
Citizen Additional Leases
” is hereby deleted in its entirety and replaced and substituted with the following for all purposes: “…, (ii) after April 1, 2017 and prior 5:00 pm (Central Time) on October 27, 2017, as long as Citizen has entered into a definitive agreement to acquire such interest prior to the Closing (for which both written notice of, and a copy of, such definitive agreement (including all exhibits) has been provided to
|
b.
|
Notwithstanding anything to the contrary in
Section 4.3(e)(i)
of the Contribution Agreement, with respect to each Citizen Additional Lease that was not listed on
Exhibit A-5-2
as of the date the Contribution Agreement was executed (individually, a “
Subsequent Citizen Additional Lease
”, and collectively, the “
Subsequent Citizen Additional Leases
”), Citizen shall be deemed to be in compliance with its disclosure obligations in
Section 4.3(e)(i)
of the Contribution Agreement with respect to such Subsequent Citizen Additional Lease to the extent it provides the information required in
Section 4.3(e)(i)
of the Contribution Agreement with respect to such Citizen Additional Lease on or before the day that is 15 Business Days after the Closing, provided that in the case of any Deferred Citizen Additional Lease, Citizen shall be deemed to be in compliance with its disclosure obligations in
Section 4.3(e)(i)
of the Contribution Agreement with respect to such Deferred Citizen Additional Lease to the extent it provides the information required by
Section 4.3(e)(i)
of the Contribution Agreement with respect to such Deferred Citizen Additional Lease on or before the day that is the earlier of five (5) Business Days after such Party’s acquisition of such Deferred Citizen Additional Lease and October 27, 2017.
|
c.
|
Notwithstanding anything to the contrary in the Contribution Agreement, (i) the Review Period for any Citizen Additional Lease other than an Initial Citizen Additional Lease shall expire on November 30, 2017, and the Title Cure Period for any such Citizen Additional Lease shall expire on December 7, 2017; and (ii) the Review Period for any Initial Citizen Additional Lease expired on August 28, 2017.
|
d.
|
Notwithstanding anything to the contrary in the Contribution Agreement, “Citizen Cost Credited Asset Acquisition Costs” shall exclude all actual attorneys’ fees, broker fees, abstract costs, title opinion costs, title curative costs and other associated Third Party costs of due diligence incurred by the applicable Party in connection with the acquisition of any Citizen Cost Credited Lease and associated Citizen Additional Asset, and shall instead be
|
e.
|
The term “
Initial Citizen Additional Lease
” shall mean any Citizen Additional Lease that was listed on
Exhibit A-5-2
as of the date the Contribution Agreement was executed.
|
3.
|
Subsequent Closing
. Notwithstanding anything to the contrary in the Contribution Agreement, (i) the Parties shall not contribute and convey the Citizen Additional Assets (other than the Initial Citizen Additional Leases and related Citizen Additional Assets) or Linn Additional Assets (other than the Initial Linn Additional Leases and related Linn Additional Assets) at the initial Closing to be held on the Scheduled Closing Date, and (ii) the Parties shall have a subsequent Closing with regard to all Deferred Linn Additional Leases and Deferred Citizen Additional Leases on December 8, 2017.
|
4.
|
Initial Value Closing Adjustments
. Notwithstanding anything to the contrary in the Contribution Agreement, (i) the Parties desire that all adjustments to the Linn Consideration Units and the Citizen Consideration Units be applied in connection with the Post-Closing Linn Statement (and the calculation of the Final Linn Adjustment Amount) and Post-Closing Citizen Statement (and the calculation of the Final Citizen Adjustment Amount), and (ii) the Linn Closing Settlement Statement and Citizen Closing Settlement Statement shall be provided for information purposes only in connection with the initial Closing to be held on the Scheduled Closing Date, but the Preliminary Linn Adjustment Amount and Preliminary Citizen Adjustment Amount shall each be deemed to be zero solely for purposes of initial Closing to be held on the Scheduled Closing Date.
|
5.
|
Curative Process
.
|
a.
|
Linn hereby designates Justin Vick to be Linn’s representative (as such Person may be replaced by Linn by written notice to Citizen from time to time, the “
Linn Curative Representative
”) with respect to all matters relating to curative work for any Linn Title Defect or any Citizen Title Defect. Citizen hereby designates Brian Wade to be Citizen’s representative (as such Person may be replaced by Citizen by written notice to Linn from time to time, the “
Citizen Curative Representative
”) with respect to all matters relating to curative work for any Linn Title Defect or any Citizen Title Defect. The Linn Curative Representative and Citizen Curative Representative shall each use commercially reasonable efforts to discuss, cooperate and mutually agree curative actions (or partially curative actions) proposed by the Linn Curative Representative with respect to Linn Title Defects and by the Citizen Curative Representative with respect to Citizen Title Defects. Each of Linn and Citizen agrees to cause the Company to issue limited powers of attorney to the Linn Curative Representative and the Citizen Curative Representative to implement any curative actions agreed by such Persons. Notwithstanding anything stated
|
6.
|
Certain Provisions
. The Parties acknowledge and agree that following Sections of the Contribution Agreement are incorporated herein by reference
mutatis mutandis
: Sections 1.2 (References and Rules of Construction), 17.1 (Governing Law), 17.2 (Conspicuous Language), 17.3 (Dispute Resolution), 17.4 (Counterparts), 17.5 (Notices), 17.6 (Expenses), 17.7 (Waiver; Rights Cumulative), 17.10 (Parties in Interest), 17.11 (Binding Effect), 17.12 (Preparation of Agreement), 17.13 (Severability), 17.14 (Limitation on Damages), 17.15 (Assignment), and 17.9 (Amendment).
|
7.
|
Ratification
. Except as modified by this Amendment, the Contribution Agreement remains in full force and effect in accordance with its terms.
|
|
PARTIES
:
|
|
|
|
|
|
LINN ENERGY HOLDINGS, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ Candice Wells
|
|
Name:
|
Candice Wells
|
|
Title:
|
Senior Vice President, General Counsel and Corporate Secretary
|
|
|
|
|
|
|
|
LINN OPERATING, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ Candice Wells
|
|
Name:
|
Candice Wells
|
|
Title:
|
Senior Vice President, General Counsel and Corporate Secretary
|
|
CITIZEN ENERGY II, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ James R. Woods
|
|
Name:
|
James R. Woods
|
|
Title:
|
Manager
|
|
ROAN RESOURCES LLC
|
|
|
|
|
|
By: Citizen Energy II, LLC, its sole member
|
|
|
|
|
|
|
|
|
By:
|
/s/ James Woods
|
|
Name:
|
James Woods
|
|
Title:
|
Manager
|
1.
|
Linn Title Benefits
.
|
a.
|
The last sentence of Section 4.2(b) is hereby deleted in its entirety and replaced with the following for all purposes: “Notwithstanding the foregoing, any Linn Title Benefits (i) within a Linn Section included in an asserted Linn Title Defect or (ii) created as a result of curing an asserted Linn Title Defect will be treated as a Linn Title Benefit if asserted prior to the Review Period so long as (x) Linn submits a Linn Title Benefit Notice in compliance with the previous sentence on or before November 30, 2017 or (y) Linn and Citizen agree to the existence and value of the Linn Title Benefit on or before December 7, 2017. The Parties agree that written agreement of the Linn Curative Representative and the Citizen Curative Representative (including agreement by email between the Curative Representatives) will be sufficient evidence of such agreement.
|
b.
|
For avoidance of doubt no Linn Title Benefit included as a result of this Amendment will not be used in any other manner than to reduce the Linn Title
|
2.
|
Citizen Title Benefits
.
|
a.
|
The last sentence of Section 4.3(b) is hereby deleted in its entirety and replaced with the following for all purposes: “Notwithstanding the foregoing, any Citizen Title Benefits (i) within a Citizen Section included in an asserted Citizen Title Defect or (ii) created as a result of curing an asserted Citizen Title Defect will be treated as a Citizen Title Benefit if asserted prior to the Review Period so long as (x) Citizen submits a Citizen Title Benefit Notice in compliance with the previous sentence on or before November 30, 2017 or (y) Linn and Citizen agree to the existence and value of the Citizen Title Benefit on or before December 7, 2017. The Parties agree that written agreement of the Linn Curative Representative and the Citizen Curative Representative (including agreement by email between the Curative Representatives) will be sufficient evidence of such agreement.
|
b.
|
For avoidance of doubt no Citizen Title Benefit included as a result of this Amendment will not be used in any other manner than to reduce the Citizen Title Defect Amount as described by Section 4.3(d)(iv) of the Contribution Agreement. Citizen Title Benefits permitted solely as a result of this Amendment may not be used as Citizen Cost Credited Leases.
|
3.
|
Certain Provisions
. The Parties acknowledge and agree that following Sections of the Contribution Agreement are incorporated herein by reference
mutatis mutandis
: Sections 1.2 (References and Rules of Construction), 17.1 (Governing Law), 17.2 (Conspicuous Language), 17.3 (Dispute Resolution), 17.4 (Counterparts), 17.5 (Notices), 17.6 (Expenses), 17.7 (Waiver; Rights Cumulative), 17.10 (Parties in Interest), 17.11 (Binding Effect), 17.12 (Preparation of Agreement), 17.13 (Severability), 17.14 (Limitation on Damages), 17.15 (Assignment), and 17.9 (Amendment).
|
4.
|
Ratification
. Except as modified by this Amendment, the Contribution Agreement remains in full force and effect in accordance with its terms.
|
|
PARTIES
:
|
|
|
|
|
|
ROAN HOLDCO LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ David B. Rottino
|
|
Name: David B. Rottino
|
|
|
Title: Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
LINN OPERATING, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ David B. Rottino
|
|
Name: David B. Rottino
|
|
|
Title: Executive Vice President and Chief Financial Officer
|
|
ROAN RESOURCES LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ David B. Rottino
|
|
Name:
|
David B. Rottino
|
|
Title:
|
Operating Committee Member
|
|
CITIZEN ENERGY II, LLC
|
|
|
|
|
|
|
|
|
By:
|
/s/ James Woods
|
|
Name:
|
James Woods
|
|
Title:
|
Vice President – Land
|
1.
|
Linn Lease Designation Notices and Citizen Lease Designation Notices
.
|
a.
|
The deadline to submit any Linn Lease Designation Notices under Section 4.2(e)(ii) of the Contribution Agreement shall be the date that the Post-Closing Linn Statement is due, and shall be delivered in connection with (and as part of) the delivery of the delivery of the Post-Closing Linn Statement.
|
b.
|
The deadline to submit any Citizen Lease Designation Notices under Section 4.3(e)(ii) of the Contribution Agreement shall be the date that the Post-Closing Citizen Statement is due, and shall be delivered in connection with (and as part of) the delivery of the delivery of the Post-Closing Citizen Statement.
|
c.
|
The Parties acknowledge and agree that notwithstanding Section 17.5 of the Contribution Agreement, email notification shall be sufficient for purposes of providing a Linn Lease Designation Notice and/or Citizen Designation Notice, as applicable.
|
2.
|
Definition of
“
Linn Substitute Leases
”. The definition of “Linn Substitute Leases” is deleted in its entirety and replaced with the following: “
Linn Substitute
|
3.
|
Definition of
“
Citizen Substitute Leases
”. The definition of “Citizen Substitute Leases” is deleted in its entirety and replaced with the following: “
Citizen Substitute Leases
” means any Citizen Additional Leases utilized to offset Citizen Title Defects and Citizen Environmental Defects properly asserted by Linn with respect to the Citizen Assets for which the Initial Citizen Agreed Value is to be adjusted downward by designating one or more Citizen Additional Leases (in whole or in part) to offset the aggregate adjustment for such Citizen Title Defects and Citizen Environmental Defects, in each case at no cost to the Company or such designee and without Citizen receiving any additional Units or any other consideration therefor from the Company or such designee.
|
4.
|
Status of Curative
.
|
a.
|
(i) On or before December 5, 2017, Linn shall use commercially reasonable efforts to provide, and (ii) in no event later than the Subsequent Closing for the Citizen Additional Leases and the Linn Additional Leases on December 8, 2017, Linn shall provide, written notice delivered by mail or electronically (for which email notification from David Rottino shall be deemed sufficient) to Citizen, acknowledging the following as to each and every Citizen Title Defect asserted by Linn as of such date: (A) which such Citizen Title Defects have been cured, (B) which Citizen Title Defects have been waived, and (C) which Citizen Title Defects remain in dispute (for which a written notice to resolve such dispute as a Title Dispute under Section 4.4 of the Contribution Agreement has been provided prior to the earlier of the date of such notice or December 7, 2017).
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b.
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(i) On or before December 5, 2017, Citizen shall use commercially reasonable efforts to provide, and (ii) in no event later than the Subsequent Closing for the Citizen Additional Leases and the Linn Additional Leases on December 8, 2017, Citizen shall provide, written notice delivered by mail or electronically (for which email notification from James Woods shall be deemed sufficient), acknowledging the following as to each and every Linn Title Defect asserted by Citizen as of such date: (A) which such Linn Title Defects have been cured, (B) which Linn Title Defects have been waived, and (C) which Linn Title Defects remain in dispute (for which a written notice to resolve such dispute as a Title Dispute under Section 4.4 of the
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c.
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Prior to the Post-Closing Settlement Date, the Linn Curative Representative and Citizen Curative Representative shall prepare an accounting of the status of all Linn Title Defects and all Citizen Title Defects as of such date, which accounting shall take into account the notifications set forth in this Section 4 and shall note any dispute notices delivered in accordance with the Contribution Agreement. The Parties shall use commercially reasonable efforts to update such accounting until the later to occur of the Final Linn Adjustment Determination Date and the Final Citizen Adjustment Determination Date.
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5.
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Conveyance of Exhibit A-1 Leases
. The Parties acknowledge and agree that certain oil and gas leases were intended to be set forth on Exhibit A-1 (Part I) or Exhibit A-1 (Part II), as applicable, but were omitted in error. Such leases shall be included in the conveyances to be delivered at the subsequent closing on December 8, 2017. To the extent the conveyance of such oil and gas leases cures or partially cures any asserted Linn Title Defect or Citizen Title Defect, as applicable, such cure or partial cure shall be set forth in the accounting set forth in Section 4 above.
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6.
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Certain Provisions
. The Parties acknowledge and agree that following Sections of the Contribution Agreement are incorporated herein by reference
mutatis mutandis
: Sections 1.2 (References and Rules of Construction), 17.1 (Governing Law), 17.2 (Conspicuous Language), 17.3 (Dispute Resolution), 17.4 (Counterparts), 17.5 (Notices), 17.6 (Expenses), 17.7 (Waiver; Rights Cumulative), 17.10 (Parties in Interest), 17.11 (Binding Effect), 17.12 (Preparation of Agreement), 17.13 (Severability), 17.14 (Limitation on Damages), 17.15 (Assignment), and 17.9 (Amendment).
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7.
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Ratification
. Except as modified by this Amendment, the Contribution Agreement remains in full force and effect in accordance with its terms.
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PARTIES
:
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LINN ENERGY HOLDINGS, LLC
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By:
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/s/ David B. Rottino
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Name:
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David B. Rottino
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Title:
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Executive Vice President and Chief Financial Officer
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LINN OPERATING, LLC
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By:
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/s/ David B. Rottino
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Name:
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David B. Rottino
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Title:
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Executive Vice President and Chief Financial Officer
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ROAN RESOURCES LLC
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By:
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/s/ David B. Rottino
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Name:
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David B. Rottino
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Title:
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Operating Committee Member
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CITIZEN ENERGY II, LLC
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By:
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/s/ James Woods
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Name:
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James Woods
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Title:
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Vice President – Land
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Name of Subsidiary
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Jurisdiction of
Incorporation or Organization
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Linn Energy Holdco LLC
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Delaware
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Linn Energy Holdco II LLC
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Delaware
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Linn Energy Holdings, LLC
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Delaware
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Roan Holdco LLC
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Delaware
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•
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Report as of December 31, 2017 on Reserves and Revenue of Certain Properties owned by Linn Operating, Inc.;
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•
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Report as of December 31, 2016 on Reserves and Revenue of Certain Properties owned by Linn Energy, LLC; and
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•
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Report as of December 31, 2015 on Reserves and Revenue owned by Linn Energy, LLC.
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•
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Report as of December 31, 2017 on Reserves and Revenue of Certain Properties owned by Roan Resources, LLC.
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/s/ Mark E. Ellis
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Mark E. Ellis
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President and Chief Executive Officer
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/s/ David B. Rottino
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David B. Rottino
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Executive Vice President and Chief Financial Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 27, 2018
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/s/ Mark E. Ellis
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Mark E. Ellis
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President and Chief Executive Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 27, 2018
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/s/ David B. Rottino
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David B. Rottino
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Executive Vice President and Chief Financial Officer
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Proved
Developed
Producing
(M$)
|
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Proved Developed Non-Producing (M$)
|
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Total Proved Developed (M$)
|
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Proved Undeveloped (M$)
|
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Total
Proved
(M$)
|
|
|
|
|
|
|
|
|
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Future Gross Revenue
|
|
6,205,037
|
|
338,835
|
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6,543,872
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187,480
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6,731,352
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Production and Ad Valorem Taxes
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408,275
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30,558
|
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438,833
|
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8,973
|
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447,806
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Operating Expenses
|
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3,210,732
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121,482
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3,332,214
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30,912
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3,363,126
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Net Profits Interest Expenses
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1,167
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0
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1,167
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0
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1,167
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Capital Costs
|
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0
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35,639
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35,639
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50,126
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85,765
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Abandonment Costs
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|
400,758
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|
62
|
|
400,820
|
|
404
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401,224
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Future Net Revenue
|
|
2,184,105
|
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151,094
|
|
2,335,199
|
|
97,065
|
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2,432,264
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Present Worth at 10 Percent
|
|
1,121,010
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37,659
|
|
1,158,669
|
|
41,719
|
|
1,200,388
|
|
|
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Note: Future income taxes have not been taken into account in the preparation of these estimates.
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Submitted,
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/s/
DeGOLYER and MacNAUGHTON
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DeGOLYER and MacNAUGHTON
Texas Registered Engineering Firm F-716
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/s/
Gregory K. Graves, P.E.
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Gregory K. Graves, P.E.
Senior Vice President
DeGolyer and MacNaughton
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1.
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That I am a Senior Vice President with DeGolyer and MacNaughton, which company did prepare the letter report addressed to Linn dated February 6, 2018, and that I, as Senior Vice President, was responsible for the preparation of this letter report.
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2.
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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 Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers; and that I have in excess of 33 years of experience in oil and gas reservoir studies and reserves evaluations.
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/s/
Gregory K. Graves, P.E.
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Gregory K. Graves, P.E.
Senior Vice President
DeGolyer and MacNaughton
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Proved
Developed
Producing
(M$)
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Proved
Developed
Non-Producing
(M$)
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Total
Proved
Developed
(M$)
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Proved
Undeveloped
(M$)
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Total
Proved
(M$)
|
|
|
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|
|
|
|
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Future Gross Revenue
|
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1,651,717
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159,817
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1,811,534
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3,458,931
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5,270,465
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Production and Taxes
|
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84,504
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6,816
|
|
91,320
|
|
156,264
|
|
247,584
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Operating Expenses
|
|
490,483
|
|
43,961
|
|
534,444
|
|
882,696
|
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1,417,140
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Capital Costs
|
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0
|
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0
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0
|
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715,805
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715,805
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Abandonment Costs
|
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23,742
|
|
245
|
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23,987
|
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5,977
|
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29,964
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Future Net Revenue
|
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1,052,988
|
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108,795
|
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1,161,783
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1,698,189
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2,859,972
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Present Worth at 10 Percent
|
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606,165
|
|
62,112
|
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668,277
|
|
527,392
|
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1,195,669
|
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|
|
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Note: Future income taxes have not been taken into account in the preparation of these estimates.
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/s/ Gregory K. Graves, P.E.
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Gregory K. Graves, P.E.
Senior Vice President
DeGolyer and MacNaughton
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1.
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That I am a Senior Vice President with DeGolyer and MacNaughton, which company did prepare the letter report addressed to Roan dated February 14, 2018, and that I, as Senior Vice President, was responsible for the preparation of this letter report.
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2.
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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 Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers; and that I have in excess of 33 years of experience in oil and gas reservoir studies and reserves evaluations.
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/s/ Gregory K. Graves, P.E.
|
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Gregory K. Graves, P.E.
Senior Vice President
DeGolyer and MacNaughton
|