HOUSTON, Dec. 19, 2011 (GLOBE NEWSWIRE) -- LINN Energy, LLC (Nasdaq:LINE) announced today a 2012 oil and natural gas capital program of $880 million. The capital program will be focused primarily on low-risk, high-rate-of-return, liquids drilling.
The company expects to drill or participate in approximately 340 wells in 2012. Approximately 53 percent of its capital program will be allocated to the Granite Wash to drill or participate in 75 horizontal wells, 23 percent to the Permian Basin to drill or participate in almost 100 wells, 6 percent to the Bakken and 6 percent to the Cleveland play. The balance of the capital program will primarily focus on workover, recompletion, optimization and facilities projects.
"LINN delivered exceptional results again in 2011. The company grew organic production by 30 percent and closed $1.6 billion in acquisitions, while also raising our quarterly cash distribution by 5 percent," said Mark E. Ellis, President and Chief Executive Officer. "We expect our 2012 capital program, coupled with a full year of production from assets acquired in 2011, to deliver a 40 percent production increase. Half of that growth is expected to come from organic projects."
Granite Wash Inventory Update
LINN closed its recently announced Granite Wash acquisition for approximately $530 million, subject to post-closing adjustments. To date, LINN has drilled 36 operated horizontal wells in the play. Going into 2011, the company had identified 200 horizontal drilling locations in the Granite Wash. The knowledge gained through its horizontal drilling program enabled the company to add 200 additional horizontal drilling locations to its inventory in 2011, and the recent acquisition added another 200 locations.
LINN will begin its 2012 horizontal drilling program with a total of 600 drilling locations that should provide a 10-year drilling inventory in the Texas portion of the play alone. The company plans to drill 59 operated horizontal wells and anticipates the program will generate rates of return in excess of 50 percent. The company also plans to participate in 16 non-operated horizontal wells in 2012.
Commodity Hedge Update
The company strengthened its commodity hedge positions and fully hedged production volumes associated with its Granite Wash acquisition. Based on current production estimates, expected natural gas production is 100 percent hedged at prices above $5.45 per Mcf through 2015. Expected oil production is 100 percent hedged at prices above $97 per Bbl through 2013 and approximately 80 percent at prices above $95 per Bbl in 2014 and 2015. (Supplemental commodity hedge information is available at www.linnenergy.com.)
2012 Financial and Operational Guidance
The table below sets forth estimated financial and operational guidance for 2012.
| FY 2012E | |
| Net production (MMcfe/d) | 520 |
| Adjusted EBITDA (millions) | $1,175 |
| Distributable cash flow per unit | $3.30 |
| Distribution coverage ratio | 1.20x |
| Distribution per unit (1) | $2.76 |
| Growth capital (millions) | $580 |
| Maintenance capital (millions) | $300 |
| (1) 2012 assumes current run rate of $0.69 per unit per quarter or $2.76 per unit annualized. | |
ABOUT LINN ENERGY
LINN Energy's mission is to acquire, develop and maximize cash flow from a growing portfolio of long-life oil and natural gas assets. LINN Energy is a top-20 U.S. independent oil and natural gas development company, with approximately 3.2 Tcfe of proved reserves in producing U.S. basins as of Dec. 31, 2010 (pro forma for closed 2011 acquisitions). More information about LINN Energy is available at www.linnenergy.com.
The LINN Energy logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6573
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, natural 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.