Linn Energy
05/11/2017

LINN Energy Reports First-Quarter 2017 Results

HOUSTON, May 11, 2017 (GLOBE NEWSWIRE) -- LINN Energy, Inc. (OTCQB:LNGG) (“LINN” or the “Company”) announced today financial and operating results for the first quarter of 2017 and provided updated guidance for the second quarter and full-year 2017.

The Company highlights the following:

“We continue to work hand-in-hand with the new board to identify and execute on strategic opportunities to maximize value,” said Mark E. Ellis, President and Chief Executive Officer. “As previously announced, we entered into an agreement to divest of our Jonah and Pinedale assets for $581.5 million. This represents the first step in our transition to a growth-oriented E&P company. We are aggressively pursuing higher return opportunities in the SCOOP / STACK / Merge play where we are increasing rig activity and building out our midstream business. In addition, we are pursuing other emerging horizontal plays in the Mid-Continent, Rockies, North Louisiana and East Texas. In 2017, we plan to test horizontal potential in each of these areas. Our employees are the key driver to unlocking value from these opportunities and I would like to thank them for their commitment to the Company’s success.”

Key Financial Results

  First Quarter      
$ in millions, except per unit amounts 2017(1)   2016(2)  
Average daily production (MMcfe/d)   779       858    
Total revenues   $393     $347    
Total assets   $3,645       $9,439(4)    
Net income (loss) $2,390     $(1,348)    
Adjusted EBITDAX (a non-GAAP financial measure) $128     $335    
Total debt $  834     $8,170    
Total debt / Adjusted EBITDAX(3) 1.63x       6.10x    
Net cash provided by (used in) operating activities $ (3)(5)     $270    
Oil and natural gas capital $57     $24    
Total capital $65     $28    
(1) All amounts reflect the combined results of the one month ended March 31, 2017 (successor) and the two months ended February 28, 2017 (predecessor)
(2) All amounts reflect continuing operations with the exception of total assets and net loss for 2016
(3) Annualized
(4) Includes Berry assets of $2,772 million
(5) Includes funding of professional fees escrow account and general unsecured claims cash distribution pool of approximately $80 million recorded to restricted cash 

Signed Agreement to Sell Jonah and Pinedale Assets for $581.5 Million 
As previously announced, the Company signed a definitive agreement to sell its interests in the Jonah and Pinedale Anticline fields located in western Wyoming to Jonah Energy LLC for a contract price of $581.5 million.  The transaction is expected to close in the second quarter of 2017 and is subject to satisfactory completion of title and environmental due diligence, as well as the satisfaction of closing conditions. Net proceeds from the sale are expected to be used to reduce outstanding borrowings under the Company’s revolving credit facility and/or term loan. The Company continues to market the previously announced non-core asset sales and there is significant interest in each of the packages.

Balance Sheet and Liquidity 
At the end of the first quarter, total assets were approximately $3.6 billion and total liabilities were approximately $1.6 billion, including approximately $834 million of total debt. As of March 31, 2017, the Company had $540 million drawn on a $1.4 billion credit facility and a $294 million term loan outstanding, resulting in approximately $853 million of liquidity including $7 million of outstanding letters of credit. The planned asset sales are expected to further reduce leverage, improve liquidity and increase financial flexibility.

Positive Results Continue in the Merge
In the first quarter, the Company drilled 3 gross (1.86 net) and completed 4 gross (2.14 net) operated horizontal wells targeting the Mississippi and Woodford. To date, the Company has drilled and completed 9 gross (6.66 net) operated horizontal wells with an average normalized peak IP-30 rate of more than 1,450 BOE/d. Over the past two quarters, LINN has improved cycle times by more than 40% to ~30 days (spud to spud) on two-mile laterals and expects to see additional efficiency gains in 2017.

The Company also participated in 5 gross (0.35 net) non-operated horizontal completions in the first quarter. Operated and non-operated horizontal net production in the Merge increased to 8,000 BOE/d by the end of the first quarter. With the addition of a second rig to the program in April and a target to drill 25 gross operated wells in 2017, the Company forecasts to exit 2017 with a horizontal net production rate of approximately 16,700 BOE/d. Recent well results are highlighted below and reflect all LINN operated horizontal wells completed in the Merge to date.

  LINN Operated Well Working 
Interest
First
Production
Zone Lateral 
Length (ft)
Peak IP-30 
(BOE/d)(1)
Normalized 
Peak IP-30(1&2)
(BOE/d)

Oil(1)
Total
% Liquids 
1 Barbour 12-10-7 1H 90 % Mar-16 Woodford 4,209 668 1,587   29 %   50%
2 Hinparr 31-6-10-5 1XH 90 % Nov-16 Mississippi 9,898 2,268 2,291 70 % 76%
3 McNeff 22-10-5 1H 99 % Dec-16 Mississippi 4,391 961 2,189 44 % 54%
4 Braum 28-21-10-6 1XH 95 % Dec-16 Woodford 10,206 1,445 1,416 13 % 30%
5 Braum 33-4-10-6 1XH 77 % Dec-16 Woodford 10,179 769 755 35 % 56%
6 Langston 13-24-9-6 1XH 34 % Jan-17 Woodford 10,135 842 831 19 % 42%
7 Jackson 25-24-10-6 1XH 62 % Jan-17   Mississippi   9,769 1,612 1,650 47 % 63%
8 Doris 12-13-10-6 1XH 58 % Mar-17 Woodford 10,042 1,455 1,449 47 % 62%
9 Dream Cooler 13-12-10-6 2XH 59 % Mar-17 Mississippi 9,637 1,242 1,289 23 % 53%
(1)  Calculated from gross 2-stream volumes
(2)  The average Peak IP-30 rate shown has been normalized to a 10,000 ft. lateral 

LINN’s Chisholm Trail Midstream Business in the Merge is Enhancing Value 
The positive production results in the Merge continue to increase demand for our Chisholm Trail midstream business. The refrigeration facility is currently processing approximately 40 MMcf/d and construction has been approved on a cryogenic plant with designed capacity of 250 MMcf/d. The Company has signed agreements dedicating its Merge acreage to Chisholm Trail for gathering and processing. The Company estimates that a midstream business of this type at full capacity could generate annual EBITDAX (a non-GAAP financial measure) between $100 million and $125 million.

Activity Increases in the NW STACK 
The Company holds a significant acreage position in the NW STACK that is 99%+ held by production. The primary horizontal drilling targets are the Osage and Meramec formations. Industry activity has significantly increased in the area, with 43 horizontal well permits in the first quarter of 2017 compared to 18 in the first quarter of 2016. There are 17 rigs currently running and recently several companies have announced acreage acquisitions in the area. In the first quarter of 2017, the Company participated in 2 gross (0.24 net) non-operated horizontal completions in the NW STACK.

Pursuing Emerging Growth Opportunities 
The Company continues to pursue emerging horizontal opportunities in the Mid-Continent, Rockies, North Louisiana and East Texas. We plan to test horizontal potential in each of these areas and remain committed to the capital investment necessary to maximize the value of these assets. In the first quarter, LINN added one rig in North Louisiana and is currently drilling a Lower Red horizontal well on our Ruston acreage.

Updated 2017 Guidance 
2017 Capital has been increased $18 million to $413 million due to a 25% design capacity increase for the Chisholm Trail cryogenic plant. The tables below exclude the impact of asset sales and the Company will provide updated guidance in future quarters as the transactions close. In addition, the Company estimates reorganization costs of approximately $20 million for the remaining three quarters of the year.

$ in millions   Merge     Rest of LINN     2017 Capital  
Horizontal development $100 $65 $165
Vertical development and optimization   - $95 $95
Land, seismic and water infrastructure                                           $34 $6 $40
Oil and natural gas capital $134 $166 $300
Plant and pipeline / Midstream $100 $2 $102
Administrative   - $11 $11
Total Capital $234 $179 $413

First Quarter Actuals and Guidance

 
  2017 Actuals (4)(5)   Q1 2017E (4)
Net Production                  
               
Natural gas (MMcf/d)  496       475    -    495
Oil (Bbls/d)  25,300       25,000    -    27,000
NGL (Bbls/d)  22,000       21,000    -    24,000
Total (MMcfe/d)  779       750    -    800
               
Other revenues, net (in thousands) (1) $21,508       $13,500   -   $15,500
               
Costs (in thousands)              
               
Lease operating expenses $80,390       $76,000   -   $84,000
Transportation expenses $39,695       $38,000   -   $42,000
Taxes, other than income taxes $23,249       $22,000   -   $26,000
Total operating expenses $143,334       $136,000   -   $152,000
               
General and administrative expenses (2)(3) $27,724       $30,000   -   $36,000
               
Costs per Mcfe (Mid-Point)              
               
Lease operating expenses $ 1.15             $1.14      
Transportation expenses $ 0.57             $0.57      
Taxes, other than income taxes $ 0.33             $0.35      
Total operating expenses $ 2.05             $2.06      
               
General and administrative expenses (2)(3) $0.40             $0.47      
                   
Targets (Mid-Point) (in thousands)                  
                   
Adjusted EBITDAX $128,134             $122,000      
                   
Interest expense $23,323             $25,000      
                   
Oil and natural gas capital $56,806             $56,000      
                     
Total capital $65,488             $84,000      
                   
Weighted Average NYMEX Differentials                  
                   
Natural gas (MMBtu) (.23)       ($0.32)   -   ($0.22)
Oil (Bbl) (3.26)       ($4.50)   -   ($3.50)
NGL price as a % of crude oil price 45%             40% - 45%      
_____________________________________________
(1)  First two months includes other revenues, margin on marketing activities and ~$6 million of Berry management fee reimbursements
(2)  First two months includes G&A expenses related to operating Berry’s assets.  See footnote (1) for ~$6 million of Berry management fee reimbursements in “other revenues, net”
(3)  As included in operating cash flow and excludes share-based compensation expenses of approximately $54 million
(4)  Does not include any post-emergence restructuring costs
(5)  Does not include effect of asset sales or related severance costs
 

Second Quarter and Full Year 2017 Guidance Update

 
  Q2 2017E (4)(5)    FY 2017E (1)(2)(4)(5)
Net Production                        
                         
Natural gas (MMcf/d)  460   -   510    470    -   520  
Oil (Bbls/d)  24,000   -   27,000    25,000    -   28,000  
NGL (Bbls/d)  21,000   -   23,000    21,000    -   23,000  
Total (MMcfe/d)  730   -   810    745    -   825  
                         
Other revenues, net (in thousands) $9,000   -   $10,000   $44,000   -   $48,000  
                         
Costs (in thousands)                        
                         
Lease operating expenses (3) $75,000     $83,000   $302,000   -   $336,000  
Transportation expenses  37,000     42,000     151,000   -   168,000  
Taxes, other than income taxes  22,000      26,000    91,000   -   101,000  
Total operating expenses $134,000     $151,000   $544,000   -   $605,000  
                         
General and administrative expenses (2)(3) $27,000     $30,000   $115,000   -   $125,000  
                         
Costs per Mcfe (Mid-Point)                        
                         
Lease operating expenses (3)     $1.13           $1.11      
Transportation expenses     $0.56           $0.56      
Taxes, other than income taxes     $0.34           $0.33      
Total operating expenses     $2.03           $2.00      
                         
General and administrative expenses (2)(3)     $0.41           $0.42      
                         
Targets (Mid-Point) (in thousands)                        
                         
Adjusted EBITDAX     $116,000           $496,000      
                         
Interest expense     $13,000           $60,000      
                         
Oil and natural gas capital     $52,000           $300,000      
                         
Total capital     $88,000           $413,000      
                         
Weighted Average NYMEX Differentials                        
                         
Natural gas (MMBtu) ($0.15)    -   ($0.35)   ($0.35)    -   ($0.15)  
Oil (Bbl) ($5.00)   -   ($3.00)   ($5.00)    -   ($3.00)  
NGL price as a % of crude oil price     34% - 38%           34% - 42%      
                         
Unhedged Commodity Price Assumptions Apr         May   Jun       FY 2017E  
Natural gas (MMBtu) $3.18        $3.14   $3.28       $3.33  
Oil (Bbl) $51.12        $49.33   $49.33       $50.51  
NGL (Bbl) $18.41        $17.80   $17.84       $19.06  
_____________________________________________
(1)  Includes other revenues, margin on marketing activities and ~$6 million of Berry management fee reimbursements for the first quarter
(2)  First quarter includes two months of G&A expenses related to operating Berry’s assets.  See footnote (1) for ~$6 million of Berry management fee reimbursements in “other revenues, net”
(3)  As included in operating cash flow and excludes share-based compensation expenses
(4)  Does not include any post-emergence restructuring costs
(5)  Does not include the effect of asset sales or related severance costs
 

Hedging Update as of April 30, 2017

Natural Gas

  2017 2018 2019
  Volume 
  (MMMBtu/d)  
  Average Price 
(per MMBtu)
Volume 
  (MMMBtu/d)  
  Average Price  
(per MMBtu)
Volume 
  (MMMBtu/d)  
  Average Price  
(per MMBtu)
Swaps       370 $3.17 131 $3.01 31 $2.97

Oil

  2017 2018 2019
    Volume  
(Bbls/d)
  Average Price  
(per Bbl)
  Volume  
(Bbls/d)
  Average Price  
(per Bbl)
  Volume  
(Bbls/d)
  Average Price  
(per Bbl)
Swaps        12,000 $52.13 1,500 $54.07 - -
Collars -  - 5,000 $50.00 - $55.00 5,000 $50.00 - $55.00

Update on Public Common Stock Listing 
LINN Energy, Inc. (OTCQB:LNGG) announced April 10, 2017 that its common stock was approved for trading on the OTCQB market under the symbol LNGG. Investors can find real-time quotes and market information for the Company on www.otcmarkets.com. The Company currently has approximately 89.2 million shares issued and outstanding, with a total of 9.9 million shares reserved for issuance under the Company’s Omnibus Incentive Pan (of which 3.7 million have been issued to date as restricted stock units).

Form 10‑Q / Earnings Call / Upcoming Conferences
LINN plans to file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, with the Securities and Exchange Commission on May 11, 2017 and will host a conference call on Thursday, May 11, 2017 at 10 a.m. (CDT) to discuss the Company’s first quarter 2017 results. A replay of the call and a transcript will be available on the Company’s website until May 25, 2017. Additionally, we plan to attend the upcoming UBS conference in late May and the RBC conference in early June.

Link to the Company’s website: http://www.linnenergy.com
Link to presentations: http://ir.linnenergy.com/presentations.cfm

About LINN Energy  
LINN Energy, Inc. was formed in February 2017 as the reorganized successor to Linn Energy, LLC. Headquartered in Houston, Texas, the Company’s core focus is the upstream and midstream development of the SCOOP / STACK / Merge in Oklahoma. Additionally, the Company is pursuing emerging horizontal opportunities in the Mid-Continent, Rockies, North Louisiana and East Texas while continuing to add value by efficiently operating and applying new technology to a diverse set of long-life producing assets.

Forward-Looking Statements
Statements made in this press release that are not historical facts are “forward-looking statements.” These statements are based on certain assumptions and expectations made by the Company which reflect management’s experience, estimates and perception of historical trends, current conditions, and anticipated future developments. 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 anticipated in the forward-looking statements. These include risks relating to financial performance and results, ability to improve our financial results and profitability following emergence from bankruptcy, availability of sufficient cash flow to execute our business plan, ability to execute planned asset sales, continued low or further declining commodity prices and demand for oil, natural gas and natural gas liquids, ability to hedge future production, ability to replace reserves and efficiently develop current reserves, the capacity and utilization of midstream facilities, the regulatory environment and other important factors that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. These and other important factors could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Please read “Risk Factors” in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other public filings. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information or future events.

Condensed Consolidated Balance Sheets (Unaudited)
 
  Successor     Predecessor
  March 31, 2017     December 31, 2016 
(in thousands)            
ASSETS            
Current assets:            
Cash and cash equivalents $ 1,072       $ 694,857  
Accounts receivable – trade, net 181,034       198,064  
Derivative instruments 2,406        
Restricted cash 81,766       1,602  
Other current assets 91,005       106,011  
Total current assets 357,283       1,000,534  
             
Noncurrent assets:            
Oil and natural gas properties (successful efforts method) 2,203,893       13,232,959  
Less accumulated depletion and amortization (15,351 )     (9,999,560 )
  2,188,542       3,233,399  
             
Other property and equipment 445,951       636,487  
Less accumulated depreciation (4,197 )     (224,547 )
  441,754       411,940  
             
Derivative instruments 8,960        
Deferred income taxes 624,704        
Other noncurrent assets 23,352       14,718  
  657,016       14,718  
Total noncurrent assets 3,287,312       3,660,057  
Total assets $ 3,644,595       $ 4,660,591  
             
LIABILITIES AND EQUITY (DEFICIT)            
Current liabilities:            
Accounts payable and accrued expenses $ 334,160       $ 295,077  
Derivative instruments 18,701       82,508  
Current portion of long-term debt, net 28,125       1,937,729  
Other accrued liabilities 48,829       26,304  
Total current liabilities 429,815       2,341,618  
           
Derivative instruments       11,349  
Long-term debt 805,625        
Other noncurrent liabilities 350,981       399,607  
Liabilities subject to compromise       4,305,005  
           
           
Temporary Equity          
  Redeemable noncontrolling interests 29,350      
Stockholders’/unitholders’ equity (deficit):          
Predecessor units issued and outstanding       5,386,885  
Predecessor accumulated deficit       (7,783,873 )
Successor Class A common stock 89        
Successor additional paid-in capital 2,035,991        
Successor accumulated deficit (7,256 )      
Total stockholders’/unitholders’ equity (deficit) 2,028,824       (2,396,988 )
Total liabilities and equity (deficit) $ 3,644,595       $ 4,660,591  

 

Condensed Consolidated Statements of Operations (Unaudited)
 
  Successor     Predecessor
  One Month 
Ended 
March 31, 2017
    Two Months 
Ended 
February 28, 2017
  Three Months 
Ended 
March 31, 2016
(in thousands, except per share and per unit amounts)            
Revenues and other:            
Oil, natural gas and natural gas liquids sales $ 87,445       $ 203,766     $ 199,849  
Gains (losses) on oil and natural gas derivatives (11,959 )     92,691     109,453  
Marketing revenues 2,914       6,636     9,061  
Other revenues 2,033       9,925     28,336  
  80,433       313,018     346,699  
Expenses:            
Lease operating expenses 27,166       53,224     88,387  
Transportation expenses 13,723       25,972     41,994  
Marketing expenses 2,539       4,820     7,833  
General and administrative expenses 10,411       71,745     83,720  
Exploration costs 55       93     2,693  
Depreciation, depletion and amortization 21,362       56,484     105,215  
Impairment of long-lived assets           123,316  
Taxes, other than income taxes 7,502       15,747     19,754  
Losses on sale of assets and other, net 445       672     1,269  
  83,203       228,757     474,181  
Other income and (expenses):            
Interest expense, net of amounts capitalized (4,917 )     (18,406 )   (85,267 )
Other, net (388 )     (149 )   68  
  (5,305 )     (18,555 )   (85,199 )
Reorganization items, net (2,565 )     2,331,189      
Income (loss) from continuing operations before income taxes (10,640 )     2,396,895     (212,681 )
Income tax expense (benefit) (3,384 )     (166 )   10,246  
Income (loss) from continuing operations (7,256 )     2,397,061     (222,927 )
Loss from discontinued operations, net of income taxes           (1,124,819 )
Net income (loss) $ (7,256 )     $ 2,397,061     $ (1,347,746 )
             
             
Basic and diluted income (loss) per share/unit – continuing operations $ (0.08 )     $ 6.79     $ (0.64 )
Basic and diluted loss per share/unit – discontinued operations $       $     $ (3.19 )
Basic and diluted net income (loss) per share/unit $ (0.08 )     $ 6.79     $ (3.83 )
Basic and diluted weighted average shares/units outstanding 89,848     352,792   352,234  

 

Condensed Consolidated Statements of Cash Flows (Unaudited)
 
  Successor     Predecessor
  One Month 
Ended 
March 31, 2017
    Two Months 
Ended 
February 28, 2017
  Three Months 
Ended 
March 31, 2016
(in thousands)            
Cash flow from operating activities:            
Net income (loss) $ (7,256 )     $ 2,397,061     $ (1,347,746 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:            
Loss from discontinued operations           1,124,819  
Depreciation, depletion and amortization 21,362       56,484     105,215  
Impairment of long-lived assets           123,316  
Deferred income taxes (3,384 )     (166 )   9,422  
Noncash (gains) losses on oil and natural gas derivatives 17,741       (104,263 )   225,258  
Share-based compensation expenses 4,177       50,255     12,425  
Amortization and write-off of deferred financing fees 3       1,338     4,676  
Losses on sale of assets and other, net 345       1,069     2,226  
Reorganization items, net       (2,359,364 )    
                   
Changes in assets and liabilities:            
(Increase) decrease in accounts receivable – trade, net 26,614       (7,216 )   (16,082 )
(Increase) decrease in other assets (2,620 )     402     (8,225 )
Increase in restricted cash       (80,164 )    
Increase (decrease) in accounts payable and accrued expenses (43,476 )     20,949     (630 )
Increase in other liabilities 4,187       2,801     35,713  
Net cash provided by (used in) operating activities – continuing operations 17,693       (20,814 )   270,387  
                   
Net cash provided by operating activities – discontinued operations           20,641  
                   
    Net cash provided by (used in) operating activities 17,693       (20,814 )   291,028  
             
Cash flow from investing activities:            
Development of oil and natural gas properties (20,244 )     (50,739 )   (70,407 )
Purchases of other property and equipment (2,466 )     (7,851 )   (6,404 )
Proceeds from sale of properties and equipment and other 326       (166 )   (280 )
Net cash used in investing activities – continuing operations (22,384 )     (58,756 )   (77,091 )
Net cash used in investing activities – discontinued operations           (14,330 )
    Net cash used in investing activities (22,384 )     (58,756 )   (91,421 )
             
Cash flow from financing activities:            
Proceeds from rights offering, net       514,069      
Proceeds from borrowings 30,000           978,500  
Repayments of debt (96,250 )     (1,038,986 )   (100,000 )
Payment to holders of claims under the second lien notes       (30,000 )    
Other 17,658       (6,015 )   (20,719 )
Net cash provided by (used in) financing activities – continuing operations (48,592 )     (560,932 )   857,781  
                   
Net cash from financing activities – discontinued operations            
    Net cash provided by (used in) financing activities (48,592 )     (560,932 )   857,781  
             
Net increase (decrease) in cash and cash equivalents (53,283 )     (640,502 )   1,057,388  
Cash and cash equivalents:            
Beginning 54,355       694,857     2,168  
Ending 1,072       54,355     1,059,556  
Less cash and cash equivalents of discontinued operations at end of period           (7,334 )
Ending – continuing operations $ 1,072       $ 54,355     $ 1,052,222  

Adjusted EBITDAX (Non-GAAP Measure)

The non-GAAP financial measure of adjusted EBITDAX, as defined by the Company, may not be comparable to similarly titled measures used by other companies.  Therefore, this non-GAAP measure should be considered in conjunction with net income (loss) and other performance measures prepared in accordance with GAAP.  Adjusted EBITDAX should not be considered in isolation or as a substitute for GAAP.

Adjusted EBITDAX is a measure used by Company management to evaluate the Company's operational performance and for comparisons to the Company's industry peers.  Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company's financial results.

The following presents a reconciliation of net income (loss) to adjusted EBITDAX:

  Three Months Ended March 31,
  2017(1)    2016
               
  (in thousands)
Net income (loss) $     2,389,805     $     (1,347,746 )
Plus (less):    
Loss from discontinued operations         1,124,819  
Interest expense   23,323       85,267  
Income tax expense (benefit)   (3,550 )     10,246  
Depreciation, depletion and amortization   77,846       105,215  
Exploration costs   148       2,693  
EBITDAX   2,487,572       (19,506 )
Plus (less):          
Impairment of long-lived assets         123,316  
Noncash (gains) losses on oil and natural gas derivatives   (86,522 )     225,258  
Accrued settlements on oil derivative contracts related to current production period (2)                                                                 1,302       (7,862 )
Share-based compensation expenses   54,432       12,425  
Write-off of deferred financing fees         16  
(Gains) losses on sale of assets and other, net (3)   (26 )     1,358  
Reorganization items, net (4)   (2,328,624 )      
Adjusted EBITDAX $     128,134     $     335,005  

In addition, the Company reported the following other items:

  Three Months Ended March 31,                                            
     2017(1)     2016  
               
  (in thousands)  
Prepetition restructuring costs included in general and administrative expenses (5) $  ―     $ 17,164    
Premiums paid for put options that settled during the period (6)       (37,485 )  
 
(1)  All amounts reflect the combined results of the one month ended March 31, 2017 (successor) and the two months ended February 28, 2017 (predecessor).
(2)  Represent amounts related to oil derivative contracts that settled during the respective period (contract terms had expired) but cash had not been received as of the end of the period.
(3)  Primarily represent gains or losses on the sale of assets, gains or losses on inventory valuation and amortization of basis difference for equity method investments.
(4)  Represent costs and income directly associated with the Company’s filing for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code since the petition date, and also include adjustments to reflect the carrying value of certain liabilities subject to compromise at their estimated allowed claim amounts, as such adjustments are determined.
(5)  Represent restructuring costs incurred by the Company prior to its filing for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code, which are included in general and administrative expenses.
(6)  Represent premiums paid at inception for put options that settled during the respective period.  The Company has not purchased any put options since 2012.

The following presents the Company’s calculation of total debt to adjusted EBITDAX:

  Three Months Ended March 31,                                      
  2017(1)     2016(2)  
                 
  (in thousands, except ratios)    
Total debt (3) $     833,750     $     8,170,040    
Adjusted EBITDAX $     128,134     $     335,005    
Adjusted EBITDAX (Annualized twelve months) $     512,536     $     1,340,020    
                 
Total debt / Adjusted EBITDAX (4)   1.63x       6.10x    
 
(1)  Adjusted EBITDAX reflects the combined results of the one month ended March 31, 2017 (successor) and the two months ended February 28, 2017 (predecessor).
(2)  Information presented for 2016 relates only to LINN Energy’s continuing operations.
(3)  Total debt as of March 31, 2017, and March 31, 2016, respectively.
(4)  Calculated as total debt divided by adjusted EBITDAX (annualized twelve months).

CONTACTS: LINN Energy, Inc.

Investors:

Thomas Belsha, Vice President — Investor Relations
Brandon Powell, Analyst — Investor Relations
(281) 840-4110
ir@linnenergy.com