Linn Energy Announces Record Results in Second Quarter 2008


HOUSTON, Aug. 7, 2008 (PRIME NEWSWIRE) -- Linn Energy, LLC (Nasdaq:LINE) announced today financial and operating results for the three and six months ended June 30, 2008 and its outlook for the remainder of the year. The Company highlights the following:



 * Record average production of 223.6 million cubic feet of natural 
   gas equivalent per day (MMcfe/d) compared to mid-point guidance of 
   220.0 MMcfe/d;

 * Lease operating expense of $1.44 per thousand cubic feet of 
   natural gas equivalent (Mcfe) compared to guidance of $1.45 per 
   Mcfe;

 * Record adjusted EBITDA of $162.1 million compared to guidance of 
   $136.0 million;

 * Record distribution coverage ratio of 1.57x compared to guidance 
   of 1.23x;

 * Increased projected distribution coverage ratio of 1.27x for 2008 
   compared to guidance of 1.18x;

 * Commodity hedge restructuring; and

 * Completed $256 million senior notes offering, sale of Appalachian 
   Basin assets for a contract price of $600 million and announced 
   the sale of the Verden assets for a contract price of $185 
   million, which provide increased financial flexibility.

"Second quarter 2008 proved to be another record setting quarter for Linn Energy," said Michael C. Linn, Chairman and Chief Executive Officer. "The Company posted the highest production rates, adjusted EBITDA and distributable cash flow in its history. In addition to our strong quarterly results, we have taken several steps to continue to improve our balance sheet. With our recent bond offering, sale of Appalachian Basin assets and the pending sale of the Verden assets, we will have significantly strengthened our financial flexibility to pursue growth through continued successful drilling and acquisitions."

Second Quarter 2008 Results (Comparative Results for First Quarter 2008 Reflect Continuing Operations)

During the second quarter 2008, Linn Energy generated adjusted EBITDA (a non-GAAP financial measure) of $162.1 million compared to $127.3 million for the first quarter 2008. The Company's distribution coverage ratio was 1.57x for the quarter, compared to guidance of 1.23x. Adjusted EBITDA is the primary measure used by Company management to evaluate cash flow and the Company's ability to sustain or increase distributions. A reconciliation of adjusted EBITDA to net income is provided in this release (see Schedule 1). The most significant reconciling items between net income to adjusted EBITDA are interest expense and non-cash items including the change in fair value of derivatives and depreciation, depletion and amortization.

Average production was 223.6 MMcfe/d for the second quarter 2008, compared to 195.6 MMcfe/d for the first quarter 2008. The increase in production volumes was primarily attributable to acquisition and drilling activities. Realized prices per barrel (Bbl) for oil and NGL production were $81.10 and $70.55, respectively, for the second quarter 2008, compared to $74.98 and $65.84 per Bbl for the first quarter 2008. Realized prices for natural gas were $9.92 per thousand cubic feet (Mcf) for the second quarter 2008, compared to $8.22 per Mcf for the first quarter 2008. Lease operating expense was $1.44 per Mcfe for the second quarter 2008, compared to mid-point guidance of $1.45 per Mcfe.

Oil, natural gas and NGL revenues were $255.6 million for the second quarter 2008, compared to $175.9 million for the first quarter 2008. The increase in oil, natural gas and NGL revenues was primarily attributable to acquisition and drilling activities and higher realized commodity prices.

The Company utilizes commodity and interest rate hedging to capture cash flow margin and reduce cash flow volatility. Due to the significant increase in commodity prices during the second quarter, the Company reported a loss on derivatives from oil and gas hedges of approximately $870.8 million for the quarter, including $773.4 million of non-cash change in fair value of hedge positions covering anticipated future production through 2014. In addition to the loss on oil and gas derivatives, the Company also reported a non-cash gain on interest rate hedges of $35.8 million during the second quarter 2008. Non-cash losses or gains do not affect adjusted EBITDA, cash flow from operations or the Company's ability to pay its cash distributions.

For the second quarter 2008, the Company reported a net loss from continuing operations of $725.4 million, or $6.35 per unit, which includes a non-cash loss of $773.4 million, or $6.76 per unit, from the change in fair value of commodity hedges covering future production, a non-cash gain of $35.8 million, or $0.31 per unit, on interest rate hedges and a realized loss of $68.2 million, or $0.60 per unit, from hedge cancellations. Excluding these items, adjusted net income from continuing operations for the second quarter 2008 would have been $80.4 million, or $0.70 per unit. Adjusted net income from continuing operations is a non-GAAP financial measure and a reconciliation of adjusted net income from continuing operations to net income from continuing operations is provided in this release (see Schedule 2). Adjusted net income is presented because the excluded items affect the comparability of operating results from period to period.

Operational Update

In the Mid-Continent region, during the second quarter 2008 the Company operated a total of 10 drilling rigs and completed 49 wells with a 100% success rate. In the Texas Panhandle Granite Wash area of the Mid-Continent region, five rigs drilled 10 wells during the quarter, and for the first six months the Company completed 21 wells. In the Frye Ranch and Stiles Ranch areas of the Texas Panhandle, 11 wells were completed with initial production rates that averaged 2.8 MMcfe/d during the first six months of 2008. In the Buffalo Wallow and Dyco areas, nine wells were completed during the first half of 2008 with initial production rates that averaged 2.0 MMcfe/d. The Company anticipates drilling 26 wells in the Texas Panhandle Granite Wash area during the remainder of 2008. Drilling continues to progress in the Twin Channel joint venture area, where the Company has elected to participate in 20 wells to date with funds provided by its partner. Average initial production for the first 10 wells that have been completed has been approximately 2.2 MMcfe/d. The Company's Granite Wash drilling program results continue to exceed expectations.

In the shallow Texas Panhandle Brown Dolomite formation of the Mid-Continent region, the Company operated four rigs and drilled 34 wells during the quarter, and for the first six months 78 wells were completed with a 100% success rate. The Company plans to drill approximately 22 additional wells in this region during the remainder of 2008.

In the Naval Reserve Unit, the Company has completed 35 water flood reactivation projects that returned non-producing and injector wells back to active service resulting in a production increase of approximately 100 barrels of oil per day. During the first six months of 2008, the Company drilled 16 wells in the Osage Hominy Unit to the Okesa formation and eight wells are currently being completed. The Company is also permitting 15 wells to begin development of the Chat formation in Osage County, Oklahoma.

Sale of Appalachian Basin and Verden Assets

On July 1, 2008, the Company completed the sale of its interests in oil and gas properties located in the Appalachian Basin to XTO Energy, Inc. for a contract price of $600 million, subject to closing adjustments. The Company used net proceeds from the sale to reduce indebtedness. The assets include approximately 197 Bcfe of proved reserves at December 31, 2007, with production of approximately 25 MMcfe/d.

In addition, on June 3, 2008, the Company entered into an agreement to sell certain of its assets in the Verden area in Oklahoma to Laredo Petroleum, Inc. for a contract price of $185 million, subject to closing adjustments. The Company plans to use net proceeds from the sale to reduce indebtedness. The Verden assets include approximately 50,000 net acres and 45 Bcfe of proved reserves at December 31, 2007, with production of approximately 12 MMcfe/d.

Cash Distributions

In July 2008, the Company's Board of Directors declared a quarterly cash distribution of $0.63 per unit, or $2.52 per unit on an annualized basis, with respect to the second quarter 2008. The distribution will be paid on August 14, 2008 to unitholders of record as of the close of business on August 7, 2008.

Hedge Restructuring Update

In the third quarter 2008, the Company made several changes to its commodity derivative portfolio, comprised of the following:

Oil Swap Restructuring

The Company took advantage of the relative strength of crude oil prices in 2013 and 2014 by reallocating swap value from those years and canceling in-the-money collars to raise swap prices in years 2009 through 2012, as detailed in the table below.



                              Year   Year   Year   Year   Year   Year
                              2009   2010   2011   2012   2013   2014
                             ------ ------ ------ ------ ------ ------
 Fixed Price Oil Swaps:
 Before Restructuring:
  Hedged Volume (MBbls)       2,437  2,150  2,073  2,025    900     --
  Average Price ($/Bbl)      $78.07 $78.28 $79.65 $77.65 $72.22 $   --
 After Restructuring:
  Hedged Volume (MBbls)       2,437  2,150  2,073  2,025  2,275  2,200
  Average Price ($/Bbl)      $90.00 $90.00 $84.22 $84.22 $84.22 $84.22

                                    Year     Year
                                    2013     2014
                                  -------- --------
 Oil Collars:
 Before Restructuring:
  Hedged Volume (MBbls)             1,375    2,200
  Average Floor Price ($/Bbl)     $110.00  $110.00
  Average Ceiling Price ($/Bbl)   $152.00  $152.00
 After Restructuring:
  Hedged Volume (MBbls)                --       --
  Average Floor Price ($/Bbl)     $    --  $    --
  Average Ceiling Price ($/Bbl)   $    --  $    --

Oil Put Strike Increase

The Company also took advantage of the increase in crude oil prices by locking in these gains in the form of put strike increases. The Company increased the weighted average put strike price from $72.13 to $120.00 per barrel in 2009 and from $70.56 to $110.00 per barrel in 2010 for a total cost of $60.6 million.

Use of Non-GAAP Measures

Adjusted EBITDA from continuing operations and adjusted net income from continuing operations are non-GAAP financial measures that are reconciled to their most comparable GAAP financial measures in Schedules 1 and 2 in this press release.

Conference Call

As previously announced, management will host a teleconference call on August 7, 2008 at 10:00 AM Central/11:00 AM Eastern to discuss the Company's second quarter 2008 results and its outlook for the remainder of the year. Prepared remarks by senior management will be followed by a question and answer period.

Investors and analysts are invited to participate in the call by phone at (800) 901-5231 (Passcode: 57706655) or via the internet at www.linnenergy.com. A replay of the call will be available on the Company's website or by phone at (888) 286-8010 (Passcode: 87384202) for a seven-day period following the call.

ABOUT LINN ENERGY

Linn Energy is an independent oil and gas company focused on the development and acquisition of long life properties which complement its asset profile in producing basins within the United States. More information about Linn Energy is available on the internet at www.linnenergy.com.

This press release includes "forward-looking statements." All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements include but are not limited to forward-looking statements about acquisitions and the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company's drilling program, production, hedging activities, capital expenditure levels and other guidance included in this press release. These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include risks relating to the Company's financial performance and results, availability of sufficient cash flow to pay distributions and execute its business plan, prices and demand for oil, gas and natural gas liquids, the ability to replace reserves and efficiently develop current reserves and other important factors that could cause actual results to differ materially from those projected as described in the Company's reports filed with the Securities and Exchange Commission. See "Risk Factors" in the Company's Annual Report filed on Form 10-K and other public filings and press releases.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

The financial summary follows; all amounts within are unaudited.



                              Schedule 1
                           Linn Energy, LLC
          Explanation and Reconciliation of Adjusted EBITDA

Adjusted EBITDA

This press release includes the non-generally accepted accounting principle ("non-GAAP") financial measure of adjusted EBITDA. The accompanying schedules provide reconciliations of this non-GAAP financial measure to its most directly comparable financial measure calculated and presented in accordance with United States generally accepted accounting principles ("GAAP"). This non-GAAP financial measure should not be considered as an alternative to GAAP measures, such as net income, operating income or any other GAAP measure of liquidity or financial performance.

The Company defines adjusted EBITDA as net income (loss) from continuing operations plus the following adjustments:



 * Net operating cash flow from acquisitions and divestitures, 
   effective date through closing date;
 * Interest expense;
 * Depreciation, depletion and amortization;
 * Write-off of deferred financing fees and other;
 * (Gain) loss on sale of assets;
 * Accretion of asset retirement obligation;
 * Unrealized (gain) loss on commodity derivatives;
 * Unrealized (gain) loss on interest rate derivatives;
 * Realized loss on canceled derivatives;
 * Unit-based compensation and warrant expenses;
 * Data license expenses; and
 * Income tax (benefit) provision.

Adjusted EBITDA is a significant non-GAAP performance metric used by Company management to indicate (prior to the establishment of any reserves by its Board of Directors) the cash distributions the Company expects to pay unitholders. Specifically, this financial measure indicates to investors whether or not the Company is generating cash flow at a level that can sustain or support an increase in its quarterly distribution rates. Adjusted EBITDA is also a quantitative metric used throughout the investment community with respect to publicly-traded partnerships and limited liability companies.



 The following presents a reconciliation of consolidated net loss 
 from continuing operations to adjusted EBITDA:

                        Three Months Ended          Six Months Ended
                  ------------------------------  --------------------
                   June 30,  March 31,  June 30,   June 30,   June 30,
                     2008       2008      2007       2008       2007
                  ---------  ---------  --------  ----------  --------
                                     (in thousands)
 Net loss from
  continuing
  operations      $(725,381) $(258,959) $(17,064) $ (984,340) $(85,485)
 Plus:
  Net operating
   cash flow from
   acquisitions,
   effective date
   through closing
   date(1)              346      8,321     1,923       8,667     4,693
  Interest
   expense, cash     24,054     23,354     4,659      47,408     8,416
  Interest
   expense,
   noncash             (722)     1,939       (38)      1,217       174
  Depreciation,
   depletion and
   amortization      50,402     44,081     6,736      94,483    12,470
  Write-off of
   deferred
   financing fees
   and other          3,377         --      (255)      3,377       549
  (Gain) loss on
   sale of assets        (4)        --        60          (4)     (885)
  Accretion of
   asset
   retirement
   obligation           484        402       160         886       206
  Unrealized loss
   on commodity
   derivatives      773,397    253,547    24,887   1,037,382    94,401
  Reclassification
   of derivative
   settlements(2)        --     10,438      (980)         --    (2,360)
  Unrealized
   (gain) loss on
   interest rate
   derivatives      (35,825)    37,952      (274)      2,127      (115)
  Realized loss on
   canceled
   derivatives(3)    68,197         --        --      68,197        --
  Unit-based
   compensation
   and warrant
   expenses           3,874      3,611     3,851       7,485     7,503
  Data license
   expenses              47      2,428        --       2,475        --
  Income tax
   (benefit)
   provision(4)        (164)       209       179          45     4,030
                  ---------  ---------  --------  ----------  --------
 Adjusted EBITDA
  from continuing
  operations      $ 162,082  $ 127,323  $ 23,844  $  289,405  $ 43,597
                  =========  =========  ========  ==========  ========
 Adjusted EBITDA
  from
  discontinued
  operations      $     863  $  13,718  $ 11,760  $   14,581  $ 24,251
                  =========  =========  ========  ==========  ========
 
 (1) Includes net operating cash flow from acquisitions through the 
     date of this report.

 (2) During the second quarter 2008, the Company revised its 
     classification of realized and unrealized gains (losses) on gas 
     derivative contracts in order to match realized gains (losses) 
     with the related production.  All prior periods amounts have 
     been reclassified to conform to current period presentation.  
     This reclassification had no effect on the Company's reported 
     net income.

 (3) During the three and six months ended June 30, 2008, the Company 
     canceled (before the contract settlement date) hedge contracts 
     on estimated future gas production primarily associated with 
     properties in the Appalachian Basin resulting in a realized loss 
     of approximately $68.2 million.

 (4) The Company's taxable subsidiaries generated net operating 
     losses for the year ended December 31, 2006.  Management has 
     subsequently recovered expenses through an intercompany charge 
     for services from Linn Operating, Inc. to Linn Energy which 
     resulted in a corresponding tax expense in the three and six 
     months ended June 30, 2007.

                              Schedule 2
                           Linn Energy, LLC
        Explanation and Reconciliation of Adjusted Net Income

 Adjusted Net Income from Continuing Operations

 Adjusted net income from continuing operations is a non-GAAP 
 performance measure used by Company management to evaluate its 
 operational performance from oil and gas properties, prior to 
 derivative gains and losses.  The following presents a 
 reconciliation of consolidated net loss from continuing operations 
 to adjusted net income from continuing operations:

                        Three Months Ended          Six Months Ended
                  ------------------------------  --------------------
                   June 30,  March 31,  June 30,   June 30,   June 30,
                     2008       2008      2007       2008       2007
                  ---------  ---------  --------  ----------  --------
                        (in thousands, except per unit amounts)

 Net loss from
  continuing
  operations      $(725,381) $(258,959) $(17,064) $ (984,340) $(85,485)
 Plus:
  Unrealized loss
   on commodity
   derivatives      773,397    253,547    24,887   1,037,382    94,401
  Reclassification
   of derivative
   settlements           --     10,438      (980)         --    (2,360)
  Unrealized
   (gain) loss on
   interest rate
   derivatives      (35,825)    37,952      (274)      2,127      (115)
  Realized loss on
   canceled
   derivatives       68,197         --        --      68,197        --
                  ---------  ---------  --------  ----------  --------
 Adjusted net
  income from
  continuing
  operations      $  80,388  $  42,978  $  6,569  $  123,366  $  6,441
                  =========  =========  ========  ==========  ========

 Net loss from
  continuing
  operations per
  unit - basic    $   (6.35) $   (2.28) $  (0.29) $    (8.63) $  (1.63)
 Plus, per unit:
  Unrealized loss
   on commodity
   derivatives         6.76       2.24      0.42        9.09      1.80
  Reclassification
   of derivative
   settlements           --       0.09     (0.02)         --     (0.05)
  Unrealized
   (gain) loss on
   interest rate
   derivatives        (0.31)      0.33        --        0.02        --
  Realized loss on
   canceled
   derivatives         0.60         --        --        0.60        --
                  ---------  ---------  --------  ----------  --------
 Adjusted net
  income from
  continuing
  operations per
  unit - basic    $    0.70  $    0.38  $   0.11  $     1.08  $   0.12
                  =========  =========  ========  ==========  ========

                              Schedule 3
                           Linn Energy, LLC
                Consolidated Statements of Operations

                       Three Months Ended           Six Months Ended
                 ------------------------------  ---------------------
                  June 30,  March 31,  June 30,    June 30,   June 30,
                    2008       2008      2007        2008       2007
                 ---------  ---------  --------  -----------  --------
                        (in thousands, except per unit amounts)
 Revenues:
  Oil, gas and
   natural gas
   liquid sales  $ 255,586  $ 175,872  $ 32,495  $   431,458  $ 56,062
  Loss on oil and
   gas
   derivatives    (870,804)  (268,794)  (17,707)  (1,139,598)  (78,148)
  Natural gas
   marketing
   revenues          3,593      2,816     2,740        6,409     4,661
  Other revenues       642        479       487        1,121     1,132
                 ---------  ---------  --------  -----------  --------
                  (610,983)   (89,627)   18,015     (700,610)  (16,293)
                 ---------  ---------  --------  -----------  --------
 Expenses:
  Operating
   expenses         46,641     36,121     9,743       82,762    17,609
  Natural gas
   marketing
   expenses          3,260      2,417     2,323        5,677     3,975
  General and
   administrative
   expenses         18,171     19,227    11,887       37,398    22,193
  Data license
   expenses             47      2,428        --        2,475        --
  Depreciation,
   depletion and
   amortization     50,402     44,081     6,736       94,483    12,470
                 ---------  ---------  --------  -----------  --------
                   118,521    104,274    30,689      222,795    56,247
                 ---------  ---------  --------  -----------  --------
                  (729,504)  (193,901)  (12,674)    (923,405)  (72,540)
                 ---------  ---------  --------  -----------  --------
 Other income and
  (expenses):
  Interest
   expense, net
   of amounts
   capitalized     (23,332)   (25,293)   (4,621)     (48,625)   (8,590)
  Gain (loss) on
   interest rate
   swaps            31,604    (39,393)      274       (7,789)      197
  Other, net        (4,313)      (163)      136       (4,476)     (522)
                 ---------  ---------  --------  -----------  --------
                     3,959    (64,849)   (4,211)     (60,890)   (8,915)
                 ---------  ---------  --------  -----------  -------- 
 Loss from
  continuing
  operations
  before income
  taxes           (725,545)  (258,750)  (16,885)    (984,295)  (81,455)
 Income tax
  benefit
  (provision)          164       (209)     (179)         (45)   (4,030)
                 ---------  ---------  --------  -----------  --------
 Loss from
  continuing
  operations      (725,381)  (258,959)  (17,064)    (984,340)  (85,485)
 Income (loss)
  from
  discontinued
  operations, net
  of taxes          13,239       (400)      (62)      12,839       512
                 ---------  ---------  --------  -----------  --------
   Net loss      $(712,142) $(259,359) $(17,126) $  (971,501) $(84,973)
                 =========  =========  ========  ===========  ========

 Net income
  (loss) per
  unit:
  Loss from
   continuing
   operations -
   basic         $   (6.35) $   (2.28) $  (0.29) $     (8.63) $  (1.63)
                 =========  =========  ========  ===========  ========
  Loss from
   continuing
   operations -
   diluted       $   (6.35) $   (2.28) $  (0.29) $     (8.63) $  (1.63)
                 =========  =========  ========  ===========  ========

  Income (loss)
   from
   discontinued
   operations,
   net of taxes -
   basic         $    0.12  $      --  $     --  $      0.11  $   0.01
                 =========  =========  ========  ===========  ========
  Income (loss)
   from
   discontinued
   operations,
   net of taxes -
   diluted       $    0.12  $      --  $     --  $      0.11  $   0.01
                 =========  =========  ========  ===========  ========

  Net loss -
   basic         $   (6.23) $   (2.28) $  (0.29) $     (8.52) $  (1.62)
                 =========  =========  ========  ===========  ========
  Net loss -
   diluted       $   (6.23) $   (2.28) $  (0.29) $     (8.52) $  (1.62)
                 =========  =========  ========  ===========  ========

 Weighted average
  units
  outstanding:
  Units - basic    114,252    113,757    59,293      114,005    52,413
                 =========  =========  ========  ===========  ========
  Units - diluted  114,252    113,757    59,293      114,005    52,413
                 =========  =========  ========  ===========  ========

 Distributions
  declared per
  unit           $    0.63  $    0.63  $   0.52  $      1.26  $   1.04
                 =========  =========  ========  ===========  ========

                              Schedule 4
                           Linn Energy, LLC
             Operating Statistics - Continuing Operations

                           Three Months Ended        Six Months Ended
                      ----------------------------  ------------------
                      June 30,  March 31, June 30,  June 30,  June 30,
                        2008      2008      2007      2008      2007
                      --------  --------  --------  --------  --------  

 Average daily
  production -
  continuing
  operations:
  Gas (MMcf/d)           130.6     122.4      16.4     126.1      15.2
  Oil (MBbls/d)            9.3       7.8       2.7       8.6       2.5
  NGL (MBbls/d)            6.2       4.4       2.2       5.3       1.8
  Total (MMcfe/d)        223.6     195.6      45.8     209.5      41.0

 Average daily
  production -
  discontinued
  operations:
  Total (MMcfe/d)         24.0      24.8      22.8      24.4      23.4

 Weighted average
  prices (hedged):(1)
  Gas (Mcf)           $   9.92  $   8.22  $   8.89  $   9.10  $   9.13
  Oil (Bbl)           $  81.10  $  74.98  $  60.71  $  78.37  $  60.29
  NGL (Bbl)           $  70.55  $  65.84  $  52.63  $  68.60  $  53.81

 Weighted average
  prices (unhedged):(2)
  Gas (Mcf)           $   9.96  $   7.66  $   6.16  $   8.85  $   6.33
  Oil (Bbl)           $ 114.99  $  90.45  $  52.99  $ 103.88  $  49.24
  NGL (Bbl)           $  70.55  $  65.84  $  51.42  $  68.60  $  50.08

 Representative NYMEX
  oil and gas prices:
  Gas (MMBtu)         $  10.94  $   8.03  $   7.55  $   9.49  $   7.16
  Oil (Bbl)           $ 123.98  $  97.90  $  65.03  $ 110.94  $  61.65

 Costs per Mcfe of
  production:
  Operating expenses:
   Lease operating
    and other         $   1.44  $   1.31  $   1.72  $   1.38  $   1.79
   Production and ad
    valorem taxes     $   0.85  $   0.72  $   0.62  $   0.79  $   0.58
  General and
   administrative
   expenses(3)        $   0.89  $   1.08  $   2.85  $   0.98  $   2.99
  Depreciation,
   depletion and
   amortization       $   2.48  $   2.48  $   1.62  $   2.48  $   1.68

 (1) Includes the effect of realized gains (losses) of $(29.2) 
     million, $(4.8) million and $6.2 million on derivatives for the 
     three months ended June 30, 2008, March 31, 2008 and June 30, 
     2007, respectively.  Includes the effect of realized gains 
     (losses) of $(34.0) million and $13.9 million on derivatives for 
     the six months ended June 30, 2008 and 2007, respectively. 
     During the three and six months ended June 30, 2008, the Company 
     canceled (before the contract settlement date) derivative 
     contracts on estimated future gas production primarily 
     associated with properties in the Appalachian Basin resulting in 
     a realized loss of approximately $68.2 million.  The realized 
     losses for the three and six months ended June 30, 2008 noted 
     above exclude this loss.

 (2) Does not include the effect of realized gains (losses) on 
     derivatives.

 (3) The measure for the three months ended June 30, 2008, March 31, 
     2008 and June 30, 2007 includes approximately $3.8 million, $3.6 
     million and $3.9 million, respectively, of non-cash unit-based 
     compensation and unit warrant expenses.  Excluding these 
     amounts, general and administrative expenses for the three 
     months ended June 30, 2008, March 31, 2008 and June 30, 2007 
     were $0.70 per Mcfe, $0.88 per Mcfe and $1.93 per Mcfe, 
     respectively.  The measure for the six months ended June 30, 
     2008 and 2007 includes approximately $7.4 million and $7.5 
     million, respectively, of non-cash unit-based compensation and 
     unit warrant expenses.  Excluding these amounts, general and 
     administrative expenses for the six months ended June 30, 2008 
     and 2007 were $0.79 per Mcfe and $1.98 per Mcfe, respectively. 
     This is a non-GAAP measure used by Company management to analyze 
     its performance.

                              Schedule 5
                           Linn Energy, LLC
                     Selected Balance Sheet Data

                                                June 30,   December 31,
                                                  2008        2007
                                              -----------  -----------
                                                   (in thousands)
                   Assets

 Total current assets                         $   296,148  $   183,159
 Oil and gas properties and related
  equipment, net                                3,615,908    3,491,476
 Property and equipment, net                       17,811       32,024
 Other assets                                      87,088      101,044
 Noncurrent assets held for sale                  557,472           --
                                              -----------  -----------
  Total assets                                $ 4,574,427  $ 3,807,703
                                              ===========  ===========

     Liabilities and Unitholders' Capital

 Total current liabilities                    $   626,441  $   242,727
 Credit facility                                1,826,000    1,443,000
 Term loan                                        156,398           --
 Senior notes, net                                250,000           --
 Other noncurrent liabilities                     767,490       95,335
 Noncurrent liabilities held for sale               8,020           --
                                              -----------  -----------
  Total liabilities                             3,634,349    1,781,062
 Unitholders' capital                             940,078    2,026,641
                                              -----------  -----------
  Total liabilities and unitholders' capital  $ 4,574,427  $ 3,807,703
                                              ===========  ===========

                              Schedule 6
                           Linn Energy, LLC
                       Selected Cash Flow Data

                                                   Six Months Ended
                                                       June 30,
                                                ----------------------
                                                   2008        2007
                                                ----------  ----------
                                                    (in thousands)

 Net cash provided by (used in) operating
  activities(1)(2)                              $   60,583  $  (19,387)
 Net cash used in investing activities            (672,883)   (587,334)
 Net cash provided by financing activities         620,471     601,084
                                                ----------  ----------
 Net increase (decrease) in cash                     8,171      (5,637)

 Cash and cash equivalents:
  Beginning                                          1,441       6,595
                                                ----------  ----------
  Ending                                        $    9,612  $      958
                                                ==========  ==========

 (1) The six months ended June 30, 2008 and 2007 includes premiums 
     paid for derivatives of approximately $1.3 million and $53.0 
     million, respectively.

 (2) The six months ended June 30, 2008 includes a realized loss of 
     approximately $68.2 million associated with the Company's 
     cancellation (before the contract settlement date) of derivative 
     contracts on estimated future gas production primarily 
     associated with properties in the Appalachian Basin.

                              Schedule 7
                           Linn Energy, LLC
                Guidance Table (Continuing Operations)

                    Q3 2008E          Q4 2008E         FY 2008E(1)
               ----------------- ----------------- -------------------

 Net Production
  and Other
  Revenues:
  Gas (MMcf/d)     137 -     142     136 -     142      131  -     135
  Oil (Bbls/d)   9,190 -   9,530   9,360 -   9,790    8,920  -   9,110
  NGL (Bbls/d)   3,930 -   4,080   4,320 -   4,520    4,680  -   4,780
  Total
   (MMcfe/d)       216 -     224     218 -     228      213 -      218

  Other
   revenues,
   net (in
   thousands)
   (2)         $   750 - $ 1,000 $   750 - $ 1,000 $  3,000 - $  4,000

 Costs (in
  thousands):
  LOE and
   other(3)    $27,250 - $31,250 $28,000 - $32,000 $110,000 - $114,000
  Production
   and ad
   valorem
   taxes        16,500 -  18,500  15,500 -  17,500   62,000 -   66,000
               -------   ------- -------   ------- --------   --------
   Total
    operating
    expenses   $43,750 - $49,750 $43,500 - $49,500 $172,000 - $180,000
               =======   ======= =======   ======= ========   ========

  General and
   administrative
   expenses -
   non-GAAP(4) $14,000 - $16,000 $15,000 - $17,000 $ 59,000 - $ 63,000

  Depreciation,
   depletion and
   amortiza-
   tion        $52,000 - $54,000 $52,500 - $55,000 $199,000 - $203,000
 Costs per Mcfe
  (Mid-Point):
  LOE and
   other(3)        $    1.45         $    1.46          $    1.42
  Production
   and ad
   valorem
   taxes                0.87              0.80               0.81
                   ---------         ---------          ---------
   Total
    operating
    expenses       $    2.32         $    2.26          $    2.23
                   =========         =========          =========

  General and
   administrative
   expenses -
   non-GAAP(4)     $    0.74         $    0.78          $    0.77

  Depreciation,
   depletion and
   amortiza-
   tion            $    2.62         $    2.62          $    2.55

 Targets
  (Mid-Point)
  (in thousands):
  Adjusted
   EBITDA(5)       $ 131,500         $ 136,500          $ 557,500
  Interest
   expense,
   cash(6)           (24,500)          (24,500)           (96,500)
  Maintenance
   capital
   expenditures      (24,000)          (25,000)           (92,250)
                   ---------         ---------          ---------
  Distributable
   cash flow
                   $  83,000         $  87,000          $ 368,750
                   =========         =========          =========

  Distributable
   cash flow
   per unit(7)     $    0.72         $    0.76          $    3.21
  Distribution
   per unit
   (7)(8)          $    0.63         $    0.63          $    2.52
  Distribution
   coverage
   ratio (7)(8)         1.15x            1.20x               1.27x

 Weighted
  Average NYMEX
  Differentials:
  Gas
   (MMBtu)(9)  $ (1.40) - $(1.00) $ (1.35)- $(0.95) $ (1.35) - $ (0.95)
  Oil(Bbl)     $(10.00) - $(8.00) $(10.00)- $(8.00) $(10.00) - $ (7.00)
  NGL
   realization
   on crude
   oil price(%)    60% - 65%          60% - 65%             65%

 Unhedged Commodity Price                                Q3       Q4
  Assumptions:           July     August   September  Average  Average
                       --------  --------  ---------  -------  -------
  Gas (MMBtu)          $  13.11  $   9.22  $   9.00  $  10.44  $  9.00
  Oil (Bbl)            $ 133.48  $ 120.00  $ 120.00  $ 124.49  $120.00

 Notes to Guidance Table:

 (1) For accounting reporting requirements, Linn Energy will present 
     Appalachian Basin operations in discontinued operations for the 
     entire fiscal year 2008.  Accordingly, guidance for FY 2008E 
     excludes first quarter results from the Appalachian Basin and 
     reflects the Company's historical and projected results on a 
     continuing operations basis. The following items for FY 2008E 
     guidance have been adjusted to remove effects of Appalachian 
     Basin operations for the full year: production, other revenues, 
     operating expenses, general and administrative expenses, 
     adjusted EBITDA, interest expense, maintenance capital 
     expenditures, distributable cash flow and commodity pricing 
     differentials.

 (2) Includes other revenues and margin on natural gas marketing 
     activities.

 (3) Includes accretion of asset retirement obligation, which 
     represents a non-cash charge.

 (4) Excludes unit-based compensation, which represents a non-cash 
     charge based on equity-related compensation.

 (5) Includes effects of the Company's hedge positions, cash flow 
     adjustments from acquisition and divestiture activities and 
     other expenses.  Guidance includes cash losses on interest rate 
     hedges of approximately $2 million in Q3 and Q4 2008E and 
     approximately $10 million in FY 2008E.  Guidance for Q3 2008E 
     has also been adjusted for the pending Verden sale, which is 
     expected to close during the quarter, to reflect a reduction of 
     approximately $5.3 million.

 (6) Includes accrued interest expense on the Company's outstanding 
     senior notes.

 (7) Assumes 115 million units outstanding.

 (8) Based on current quarterly distribution of $0.63 per unit, or 
     $2.52 per unit on an annualized basis.

 (9) Includes effects of basis swaps associated with gas production 
     in the Mid-Continent.

                              Schedule 8
                           Linn Energy, LLC
               Guidance Table - Commodity Hedge Summary

                                     Q3 2008E    Q4 2008E    FY 2008E
                                    ----------  ----------  ----------
 Gas Positions:
   Fixed Price Swaps:
     Hedged Volume (MMMBtu)            10,176       9,936      38,256
     Average Price ($/MMBtu)         $   8.67    $   8.68    $   8.61
   Puts:
     Hedged Volume (MMMBtu)             1,766       1,766       8,621
     Average Price ($/MMBtu)         $   8.07    $   8.07    $   8.20
   PEPL Puts:(1)
     Hedged Volume (MMMBtu)               964         964       3,854
     Average Price ($/MMBtu)         $   7.85    $   7.85    $   7.85
   Total:
     Hedged Volume (MMMBtu)            12,906      12,666      50,731
     Average Price ($/MMBtu)         $   8.53    $   8.53    $   8.48

 Oil Positions:
   Fixed Price Swaps:
     Hedged Volume (MBbls)                688         688       2,621
     Average Price ($/Bbl)           $  82.11    $  82.11    $  81.49
   Puts:(2)
     Hedged Volume (MBbls)                467         467       1,826
     Average Price ($/Bbl)           $  73.34    $  73.34    $  72.90
   Total:
     Hedged Volume (MBbls)              1,155       1,155       4,447
     Average Price ($/Bbl)           $  78.57    $  78.57    $  77.96

 Gas Basis Differential Positions:
   PEPL Basis Swaps:(3)
     Hedged Volume (MMMBtu)             9,037       9,037      36,146
     Hedged Differential ($/MMBtu)   $  (0.95)   $  (0.95)   $  (0.95)

 Notes to Hedge Summary:

 Includes positions covering production for all months within periods 
 specified.

 (1) Settle on the PEPL spot price of gas to hedge basis differential 
     associated with gas production in the Mid-Continent region.

 (2) The Company uses oil puts to hedge oil production and NGL 
     revenues.

 (3) Represents a swap of the basis between NYMEX and the PEPL spot 
     price of gas of $(0.95) per MMBtu for the volumes hedged.

                              Schedule 9
                           Linn Energy, LLC
                      Commodity Hedge Portfolio

 The following table shows the Company's annual commodity derivative 
 positions, at August 1, 2008, for each of the years ending 
 December 31, 2008 through December 31, 2014.

              Year     Year     Year     Year     Year    Year   Year
              2008     2009     2010     2011     2012    2013   2014
            -------  -------  -------  -------  -------  ------ ------
 Gas
  Positions:
 Fixed Price
  Swaps:
  Hedged
   Volume
   (MMMBtu)  38,256   39,586   39,566   31,901   29,662      --     --
 Average
  Price
  ($/MMBtu) $  8.61  $  8.53  $  8.20  $  8.27  $  8.46  $   -- $   --
 Puts:
  Hedged
   Volume
   (MMMBtu)   8,621    6,960    6,960    6,960       --      --     --
  Average
   Price
   ($/MMBtu)$  8.20  $  7.50  $  7.50  $  7.50  $    --  $   -- $   --
 PEPL
  Puts:(1)
  Hedged
   Volume
   (MMMBtu)   3,854    5,334   10,634   13,259    5,934      --     --
  Average
   Price
  ($/MMBtu) $  7.85  $  7.85  $  7.85  $  7.85  $  7.85  $   -- $    --
 Total:
  Hedged
   Volume
   (MMMBtu)  50,731   51,880   57,160   52,120   35,596      --     --
  Average
   Price
  ($/MMBtu) $  8.48  $  8.32  $  8.05  $  8.06  $  8.36  $   -- $   --

 Oil
  Positions:
 Fixed Price
  Swaps:
  Hedged
   Volume
   (MBbls)    2,621    2,437    2,150    2,073    2,025   2,275  2,200
  Average
   Price
   ($/Bbl)  $ 81.49  $ 90.00  $ 90.00  $ 84.22  $ 84.22  $84.22 $84.22
 Puts:(2)
  Hedged
   Volume
   (MBbls)    1,826    1,843    2,250    2,352      500      --     --
  Average
   Price
   ($/Bbl)  $ 72.90  $120.00  $110.00  $ 69.11  $ 77.73  $   -- $   --
 Collars:
  Hedged
   Volume
   (MBbls)       --      250      250      276      348      --     --
   Average
    Floor
    Price
    ($/Bbl) $    --  $ 90.00  $ 90.00  $ 90.00  $ 90.00  $   -- $   --
   Average
    Ceiling
    Price
    ($/Bbl) $    --  $114.25  $112.00  $112.25  $112.35  $   -- $   --
 Total:
  Hedged
   Volume
   (MBbls)    4,447    4,530    4,650    4,701    2,873   2,275  2,200
  Average
   Price
   ($/Bbl)  $ 77.96  $102.21  $ 99.68  $ 77.00  $ 83.79  $84.22 $84.22

 Gas Basis
  Differential
  Positions:
 PEPL Basis
  Swaps:(3)
  Hedged
   Volume
   (MMMBtu)  36,146   34,666   29,366   26,741   34,066      --     --
  Hedged
   Differential
  ($/MMBtu) $ (0.95) $ (0.95) $ (0.95) $ (0.95) $ (0.95) $   -- $   --

 Notes to Hedge Portfolio:

 (1) Settle on the PEPL spot price of gas to hedge basis differential 
     associated with gas production in the Mid-Continent region.

 (2) The Company uses oil puts to hedge oil production and NGL 
     revenues.

 (3) Represents a swap of the basis between NYMEX and the PEPL spot 
     price of gas of $(0.95) per MMBtu for the volumes hedged.

                             Schedule 10
                           Linn Energy, LLC
       Summary Historical and Projected 2008 Quarterly Results
                       (Continuing Operations)

                                                    Projected
                          Historical          (Guidance Mid-Points)
                      ------------------  ----------------------------
                                                                 FY
                        Q1(1)     Q2(1)     Q3E       Q4E     2008E(1)
                      --------  --------  --------  --------  --------
 Net Production and
  Other Revenues:
  Gas (MMcf/d)             122       131       140       139       133
  Oil (Bbls/d)           7,815     9,340     9,360     9,575     9,015
  NGL (Bbls/d)           4,365     6,155     4,005     4,420     4,730
  Total (MMcfe/d)          196       224       220       223       215

  Other revenues, net
   (in thousands)(2)  $    878  $    975  $    875  $    875  $  3,500

 Costs (in
  thousands):
  LOE and other(3)    $ 23,299  $ 29,321  $ 29,250  $ 30,000  $112,000
  Production and ad
   valorem taxes        12,822    17,320    17,500    16,500    64,000
                      --------  --------  --------  --------  --------
   Total operating
    expenses          $ 36,121  $ 46,641  $ 46,750  $ 46,500  $176,000
                      ========  ========  ========  ========  ========

  General and
   administrative
   expenses -
   non-GAAP(4)        $ 15,646  $ 14,324  $ 15,000  $ 16,000  $ 61,000

  Depreciation,
   depletion and
   amortization       $ 44,081  $ 50,402  $ 53,000  $ 53,750  $201,000

 Costs per Mcfe:
  LOE and other(3)    $   1.31  $   1.44  $   1.45  $   1.46  $   1.42
  Production and ad
   valorem taxes          0.72      0.85      0.87      0.80      0.81
                      --------  --------  --------  --------  --------
   Total operating
    expenses          $   2.03  $   2.29  $   2.32  $   2.26  $   2.23
                      ========  ========  ========  ========  ========

  General and
   administrative
   expenses -
   non-GAAP(4)        $   0.88  $   0.70  $   0.74  $   0.78  $   0.77

  Depreciation,
   depletion and
   amortization       $   2.48  $   2.48  $   2.62  $   2.62  $   2.55

 Targets (in
  thousands):
  Adjusted EBITDA(5)  $127,323  $162,082  $131,500  $136,500  $557,500
  Interest expense,
   cash(6)             (23,354)  (24,054)  (24,500)  (24,500)  (96,500)
  Maintenance capital
   expenditures        (19,250)  (24,000)  (24,000)  (25,000)  (92,250)
                      --------  --------  --------  --------  --------
  Distributable cash
   flow               $ 84,719  $114,028  $ 83,000  $ 87,000  $368,750
                      ========  ========  ========  ========  ========

  Distributable cash
   flow per unit(7)   $   0.74  $   0.99  $   0.72  $   0.76  $   3.21
  Distribution per
   unit(7)(8)         $   0.63  $   0.63  $   0.63  $   0.63  $   2.52
  Distribution
   coverage
   ratio(7)(8)            1.17x     1.57x     1.15x     1.20x     1.27x

 Notes to Quarterly Summary:

 (1) For accounting reporting requirements, Linn Energy will present 
     Appalachian Basin operations in discontinued operations for the 
     entire fiscal year 2008.  Accordingly, guidance for FY 2008E 
     excludes first quarter results from the Appalachian Basin and 
     reflects the Company's historical and projected results on a 
     continuing operations basis.  The following items for FY 2008E 
     guidance have been adjusted to remove effects of Appalachian 
     Basin operations for the full year: production, other revenues, 
     operating expenses, general and administrative expenses, 
     adjusted EBITDA, interest expense, maintenance capital 
     expenditures, distributable cash flow and commodity pricing 
     differentials.

 (2) Includes other revenues and margin on natural gas marketing 
     activities.

 (3) Includes accretion of asset retirement obligation, which 
     represents a non-cash charge.

 (4) Excludes unit-based compensation, which represents a non-cash 
     charge based on equity-related compensation.  Such expenses were 
     approximately $3.8 million and $3.6 million for the three months 
     ended June 30 and March 31, 2008, respectively.

 (5) Includes effects of the Company's hedge positions, cash flow 
     adjustments from acquisition and divestiture activities and 
     other expenses.  Guidance includes cash losses on interest rate 
     hedges of approximately $2 million in Q3 and Q4 2008E and 
     approximately $10 million in FY 2008E.  Guidance for Q3 2008E 
     has also been adjusted for the pending Verden sale, which is 
     expected to close during the quarter, to reflect a reduction of 
     approximately $5.3 million.

 (6) Represents cash interest expense for historical periods and 
     includes accrued interest expense on the Company's outstanding 
     senior notes for future periods.

 (7) Assumes 115 million units outstanding.

 (8) Based on current quarterly distribution of $0.63 per unit, or 
     $2.52 per unit on an annualized basis.


            

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