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LINN Energy Reports Second-Quarter 2018 Results


HOUSTON, Aug. 08, 2018 (GLOBE NEWSWIRE) — LINN Energy, Inc. (OTCQB: LNGG) (“LINN” or the “Company”) announces financial and operating results for the second quarter 2018 and highlights the following:

  • Executed strategic plan to separate into two public companies, LINN, which owns a 50% equity interest in Roan Resources, LLC (“Roan”), and Riviera Resources, Inc. (“Riviera”), on August 7, 2018
  • Strong balance sheet with no debt and a second quarter ending cash balance of approximately $301 million
  • Returned more than $660 million of capital to LINN shareholders through share repurchases
  • Blue Mountain Midstream LLC (“Blue Mountain”) successfully started up the Chisholm Trail III cryogenic gas plant located in the core of the prolific Merge/SCOOP/STACK plays
  • Riviera management team to host conference call Thursday, August 23, 2018 at 10 a.m. (Central)

“It is remarkable what our Company and Board has accomplished since our reorganization. We successfully completed our merger with Citizen Energy to create the largest and only pure play growth company in the prolific Merge/SCOOP/STACK basin.  Blue Mountain, a wholly owned subsidiary of Riviera, recently commissioned a state of the art cryogenic natural gas processing facility with 250 mmcfe a day of designed processing capacity to service the rapidly expanding Merge/SCOOP/STACK basin.  We sold almost $2 billion of assets, in over 20 separate transactions, at a significant premium to proved developed PV-10. This allowed us tremendous financial flexibility to pay off all our debt, return more than $660 million of capital to our shareholders and build a significant cash balance. Finally, we completed our strategic plan to separate into two public companies, LINN, which owns a 50% equity interest in Roan, and Riviera, allowing us to unlock the value of the two companies. I would like to thank our employees for their hard work in executing our vision and look forward to the bright futures of Roan and Riviera,” said David Rottino, LINN’s President and Chief Executive Officer and President and Chief Executive Officer of Riviera.

The condensed consolidated results herein include the Riviera business, because the spin-off of Riviera from LINN (the “Spin-Off”) occurred after the quarter ended. As such, our financial information after the impact of the Spin-Off may not be meaningful to investors.  Please read the “Risk Factors” included in the Company’s Quarterly Report on Form 10-Q for the second quarter 2018, which will be filed later today with the Securities and Exchange Commission.

Key Financial Results (1)
  Second Quarter
$ in millions 2018 2017
Average daily production (MMcfe/d) 312 710
Oil, natural gas and NGL sales $87 $243
Income from continuing operations $7 $223
Loss from discontinued operations, net of income taxes $0 $(3)
Net income $7 $220
Adjusted EBITDAX (a non-GAAP financial measure) (2) $11 $112
LINN Adjusted EBITDAX for Roan (a non-GAAP financial measure)(3) $31 N/A
Net cash provided by operating activities $4 $55
Oil and natural gas capital $7 $71
Total capital $42 $96

(1) All amounts reflect continuing operations with the exception of net income, for the second quarter of 2017 and 2018.  The amounts do not, however, reflect the separation of Riviera from LINN, which occurred on August 7, 2018.
(2) Excludes Adjusted EBITDAX from discontinued operations of approximately $12 million for the three months ended June 30, 2017. Includes severance expense of $14 million for the three months ended June 30, 2018.
(3) Represents the Adjusted EBITDAX for LINN’s 50% equity interest in Roan for the period from April 1, 2018, to June 30, 2018. See Schedule 1 below for a reconciliation of Adjusted EBITDA

Completed Spin-Off of Riviera Resources, Inc.
As previously disclosed, the Company completed the Spin-Off on August 7, 2018 after the market closed. The Spin-Off was effected through a pro rata distribution of all of the outstanding shares of Riviera’s common stock to LINN stockholders of record as of 5:00 p.m. on August 3, 2018, the record date for the Spin-Off.  On August 7, 2018, the distribution date for the Spin-Off, each LINN stockholder received one share of Riviera common stock for each share of LINN common stock held by such stockholder on the record date.

As of the Spin-Off, LINN stockholders owned one share each of:

  • LINN (OTCQB: LNGG), which owns a 50% equity interest in Roan Resources LLC, which is focused on the accelerated development of the Merge/SCOOP/STACK play in Oklahoma;
  • Riviera (OTCQX: RVRA), an independent oil and gas company with a strategic focus on efficiently operating its mature low-decline assets, developing its growth-oriented assets, and returning capital to shareholders. Riviera’s assets consist of:
    • LINN’s legacy properties located in the Hugoton Basin, East Texas, North Louisiana, Michigan/Illinois, the Uinta Basin and Mid-Continent regions; and
    • Blue Mountain Midstream LLC, a midstream company centered in the core of the Merge play in the Anadarko Basin.

Trading of LINN Shares and Riviera Shares
LINN shares continue to trade on the OTCQB Market under the ticker symbol “LNGG”. Riviera is now an independent reporting company that will trade on the OTCQX Market under the ticker symbol “RVRA”.

Strong Balance Sheet
From its successful divestiture program in 2017 and 2018, the Company has extinguished all outstanding debt. As of June 30, 2018, the Company had no borrowings outstanding under its $425 million revolving credit facility and had approximately $378 million available borrowing capacity inclusive of outstanding letters of credit. LINN has a second quarter ending cash balance of approximately $301 million. Prior to the Spin-Off transaction, all but $40 million of cash was transferred to Riviera. The remaining cash at LINN will be available for use by LINN to fund certain obligations of the Company arising after the Spin-Off and prior to any consolidation with Roan. LINN will transfer any such remaining cash to Riviera prior to any consolidation of LINN and Roan.

Share Repurchases
Since its financial reorganization, the Company has returned more than $640 million of capital to LINN shareholders through the share repurchase program, tender offer and the employee liquidity program. The Company also retired approximately $20 million of Class A-2 units related to the Linn Energy HoldCo, LLC profits interest.

Second Quarter 2018 Activity
Production averaged 312 MMcfe/d for the second quarter 2018, exceeding the midpoint of guidance.  The Company outperformed guidance despite a production shut-in in the Hugoton field caused by a third party pipeline issue.  The Company continued to participate in significant non-operated drilling activity in the NW STACK.

Commissioned Chisholm III Cryogenic Gas Plant
Blue Mountain, a former subsidiary of the Company that became a subsidiary of Riviera in connection with the Spin-Off, completed a major processing capacity addition to its Chisholm Trail system at the end of the second quarter 2018 with the successful start up of the Chisholm Trail III cryogenic gas plant. Located in the core of the prolific Merge/SCOOP/STACK plays, the plant is a state of the art cryogenic processing facility with an initial design capacity of 150 million cubic feet per day (“MMcf/d”) and total designed processing capacity of 250 MMcf/d.

Roan Resources
Roan Resources was formed in the second quarter of 2017 and is focused on the accelerated development of approximately 154,000 net acres in the prolific Merge/SCOOP/STACK play of Oklahoma.

During the second quarter of 2018, Roan operated six to seven drilling rigs in the Merge and drilled 25 operated wells with lateral lengths ranging between one-to-two miles. Completion activity in the second quarter remained slower while awaiting the start-up of Blue Mountain’s Chisolm Trail cryogenic plant. Therefore, net production averaged approximately 36,400 BOE/d, down slightly from first quarter.  The cryogenic plant is now operating and current net average production is approximately 45,000 BOE/d.  Roan’s exit-rate production for 2018 is projected to be between 58,000 and 64,000 net BOE/d.

Roan brought online several impressive wells during the quarter. The Dutch 1H-33-28 (9,700’ lateral) and Dutch 1H-4-9 (7,475’ lateral) had an average 30-day IP rate of 1,918 BOE/d (67% liquids) and 1,360 BOE/d (66% liquids), respectively.  The Spectacular Bid 18-11-6 2H (4,915’ lateral) had an average 30-day IP rate of 1,728 BOE/d (75% liquids) and the Barbour 1-10-7 1H (4,960’ lateral) had an average 30-day IP rate of 1,487 BOE/d (56% liquids). All four wells are in Canadian county targeting the Woodford or Mayes formation. Roan currently has 13 drilled but uncompleted (“DUC”) wells.

Additional information on Roan’s operations, activity, financials and guidance can be found in the Roan Investor Presentation that was posted to LINN’s website on July 30, 2018 and in the second quarter supplemental presentation located on LINN’s website.

Second Quarter Actuals versus Guidance
  Q2 Actuals  Q2 Guidance
Net Production (MMcfe/d) 312 295 – 325
Natural gas (MMcf/d) 238 230 – 255
Oil (Bbls/d) 1,800 1,650 – 1,750
NGL (Bbls/d) 10,518 9,250 – 10,000
Other revenues, net (in thousands) (1) $ 9,027 $ 10,000 – $ 12,000
 
Operating Costs (in thousands) $ 52,598 $ 48,000 – $ 54,000
Lease operating expenses $ 24,088 $ 24,000 – $ 27,000
Transportation expenses $ 21,213 $ 17,000 – $ 19,000
Taxes, other than income taxes $ 7,297 $ 7,000 – $ 8,000
General and administrative expenses (2) $ 20,044 $ 20,000 – $ 22,000
General and administrative severance expenses $ 14,163 $ 11,000 – $ 14,000
 
Targets (Mid-Point) (in thousands)
Adjusted EBITDAX (3) $ 11,135 $6,000
Interest expense(4) $ — $ —
Oil and natural gas capital $ 7,167 $9,000
Total capital $ 42,026 $54,000
Weighted Average NYMEX Differentials
Natural gas (MMBtu) ($ 0.32) ($ 0.52) – ($ 0.43)
Oil (Bbl) ($ 1.22) ($ 2.90) – ($ 2.50)
NGL price as a % of NYMEX oil price 35% 30% – 34%

(1) Includes other revenues and margin on marketing activities
(2) Excludes share-based compensation expenses and severance expenses
(3) Includes a reduction to EBITDAX for estimated severance expenses, costs associated with managing assets divested during 2018, associated divestment costs, required transition services under purchase and sale agreements and estimated separation costs
(4) Excludes non cash interest expense

Earnings Call / Form 10‑Q
The Company will file its second quarter form 10-Q with the Securities and Exchange Commission later today. The Company will not be hosting a conference call or webcast in connection with its second quarter 2018 results. Supplemental information can be found at the following link on our website: http://ir.linnenergy.com/presentations.cfm.

Riviera Resources Investor Conference Call
As previously announced, Riviera will host a conference call Thursday, August 23, 2018 at 10 a.m. (Central) to discuss additional strategic and financial information related to Riviera and its wholly owned subsidiary, Blue Mountain Midstream LLC. Investors and analysts are invited to participate in the call by dialing (844) 625-4392, or (409) 497-0988 for international calls using Conference ID: 2336839. Interested parties may also listen over the internet at www.RivieraResourcesInc.com.

A replay of the call will be available on Riviera’s website or by phone until September 6, 2018.  The number for the replay is (855) 859-2056 or (404) 537-3406 for international calls using Conference ID: 2336839. Presentation materials will be made available prior to the start of the call on Riviera’s website www.RivieraResourcesInc.com under the Investor Relations tab on the date of the events.

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 current focus is the development of the Merge/SCOOP/STACK in Oklahoma through its equity interest in Roan Resources LLC.

About Roan Resources LLC
Roan is an independent oil and natural gas company headquartered in Oklahoma City, Oklahoma, focused on the development, exploration and acquisition of unconventional oil and natural gas reserves in the Merge, SCOOP and STACK plays in Oklahoma. Roan was formed in the second quarter of 2017 by LINN and Citizen Energy II, LLC (“Citizen”). In exchange for their contributions, LINN and Citizen each received a 50% equity interest in Roan. Roan’s operations team took over field operations from LINN and Citizen in early 2018. For more information, please visit www.RoanResources.com.

About Riviera Resources
Riviera Resources is an independent oil and gas company with a strategic focus on efficiently operating its mature low-decline assets, developing its growth-oriented assets, and returning capital to shareholders. Riviera’s assets consist of properties located in the Hugoton Basin, East Texas, North Louisiana, Michigan/Illinois, the Uinta Basin and Mid-Continent regions; and Blue Mountain Midstream LLC, a wholly owned subsidiary centered in the core of the Merge play in the Anadarko Basin. More information about Riviera and Blue Mountain Midstream LLC, is available at Riviera’s website, www.RivieraResourcesInc.com.

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 and operational performance and results of the Company and Roan Resources LLC, uncertainties relating to the Company’s and Riviera’s ability to realize the anticipated benefits of the Spin-Off, the potential negative effects of the Spin-Off, 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 and the regulatory environment. 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 Report 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.

CONTACTS: LINN Energy, Inc.
Investor Relations
(281) 840-4110
[email protected]

Condensed Consolidated Balance Sheets (Unaudited)
June 30,
2018
December 31,
2017
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 301,365 $ 464,508
Accounts receivable – trade, net 64,686 140,485
Derivative instruments 3,934 9,629
Restricted cash 43,387 56,445
Other current assets 46,659 79,771
Assets held for sale 22 106,963
Total current assets 460,053 857,801
Noncurrent assets:
Oil and natural gas properties (successful efforts method) 785,815 950,083
Less accumulated depletion and amortization (59,870 ) (49,619 )
725,945 900,464
Other property and equipment 566,861 480,729
Less accumulated depreciation (44,412 ) (28,658 )
522,449 452,071
Derivative instruments 1,254 469
Deferred income taxes 169,691 198,417
Equity method investments 473,269 464,926
Other noncurrent assets 5,264 6,975
649,478 670,787
Total noncurrent assets 1,897,872 2,023,322
Total assets $ 2,357,925 $ 2,881,123
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 179,887 $ 253,975
Stock-based payment liability 111,792
Derivative instruments 5,536 10,103
Other accrued liabilities 19,830 58,617
Liabilities held for sale 43,302
Total current liabilities 317,045 365,997
Noncurrent liabilities:
Derivative instruments 24 2,849
Asset retirement obligations and other noncurrent liabilities 105,531 160,720
Total noncurrent liabilities 105,555 163,569
Equity:
Class A common stock 79 84
Additional paid-in capital 1,427,458 1,899,642
Retained earnings 507,788 432,860
Total common stockholders’ equity 1,935,325 2,332,586
Noncontrolling interests 18,971
Total equity 1,935,325 2,351,557
Total liabilities and equity $ 2,357,925 $ 2,881,123
Condensed Consolidated Statements of Operations (Unaudited)
Successor
Three Months Ended June 30,
2018 2017
(in thousands, except per share amounts)
Revenues and other:
Oil, natural gas and natural gas liquids sales $ 87,004 $ 243,167
Gains (losses) on oil and natural gas derivatives (7,525 ) 45,714
Marketing revenues 42,967 12,547
Other revenues 6,387 6,391
128,833 307,819
Expenses:
Lease operating expenses 24,088 71,057
Transportation expenses 21,213 37,388
Marketing expenses 40,327 6,976
General and administrative expenses 92,395 34,458
Exploration costs 53 811
Depreciation, depletion and amortization 21,980 51,987
Taxes, other than income taxes 7,297 17,871
Gains on sale of assets and other, net (101,777 ) (306,878 )
105,576 (86,330 )
Other income and (expenses):
Interest expense, net of amounts capitalized (584 ) (7,551 )
Earnings (losses) from equity method investments (9,327 ) 91
Other, net 538 (1,163 )
(9,373 ) (8,623 )
Reorganization items, net (1,259 ) (3,377 )
Income from continuing operations before income taxes 12,625 382,149
Income tax expense 5,722 158,770
Income from continuing operations 6,903 223,379
Loss from discontinued operations, net of income taxes (3,322 )
Net income 6,903 220,057
Net income attributable to noncontrolling interests 1,799
Net income attributable to common stockholders $ 5,104 $ 220,057
Income (loss) per share/unit attributable to common stockholders:
Income from continuing operations per share – Basic $ 0.06 $ 2.49
Income from continuing operations per share – Diluted $ 0.06 $ 2.47
Loss from discontinued operations per share – Basic $ $ (0.04 )
Loss from discontinued operations per share – Diluted $ $ (0.04 )
Net income per share – Basic $ 0.06 $ 2.45
Net income per share – Diluted $ 0.06 $ 2.43
Weighted average shares outstanding – Basic 78,718 89,849
Weighted average shares outstanding – Diluted 79,277 90,484
Condensed Consolidated Statements of Operations (Unaudited)
Successor Predecessor
Six Months
Ended
June 30, 2018
Four Months
Ended
June 30, 2017
Two Months
Ended
February 28, 2017
(in thousands, except per share and per unit amounts)
Revenues and other:
Oil, natural gas and natural gas liquids sales $ 223,880 $ 323,492 $ 188,885
Gains (losses) on oil and natural gas derivatives (22,555 ) 33,755 92,691
Marketing revenues 89,234 15,461 6,636
Other revenues 12,281 8,419 9,915
302,840 381,127 298,127
Expenses:
Lease operating expenses 71,972 95,687 49,665
Transportation expenses 40,307 51,111 25,972
Marketing expenses 82,082 9,515 4,820
General and administrative expenses 137,174 44,869 71,745
Exploration costs 1,255 866 93
Depreciation, depletion and amortization 50,445 71,901 47,155
Taxes, other than income taxes 15,749 24,948 14,877
(Gains) losses on sale of assets and other, net (207,852 ) (306,394 ) 829
191,132 (7,497 ) 215,156
Other income and (expenses):
Interest expense, net of amounts capitalized (988 ) (11,751 ) (16,725 )
Earnings from equity method investments 16,018 130 157
Other, net 369 (1,551 ) (149 )
15,399 (13,172 ) (16,717 )
Reorganization items, net (3,210 ) (5,942 ) 2,331,189
Income from continuing operations before income taxes 123,897 369,510 2,397,443
Income tax expense (benefit) 45,896 153,455 (166 )
Income from continuing operations 78,001 216,055 2,397,609
Loss from discontinued operations, net of income taxes (3,254 ) (548 )
Net income 78,001 212,801 2,397,061
Net income attributable to noncontrolling interests 3,073
Net income attributable to common stockholders/unitholders $ 74,928 $ 212,801 $ 2,397,061
Income (loss) per share/unit attributable to common stockholders/unitholders:
Income from continuing operations per share/unit – Basic $ 0.95 $ 2.41 $ 6.80
Income from continuing operations per share/unit – Diluted $ 0.93 $ 2.40 $ 6.80
Loss from discontinued operations per share/unit – Basic $ $ (0.04 ) $ (0.01 )
Loss from discontinued operations per share/unit – Diluted $ $ (0.04 ) $ (0.01 )
Net income per share/unit – Basic $ 0.95 $ 2.37 $ 6.79
Net income per share/unit – Diluted $ 0.93 $ 2.36 $ 6.79
Weighted average shares/units outstanding – Basic 78,817 89,849 352,792
Weighted average shares/units outstanding – Diluted 79,764 90,065 352,792
Condensed Consolidated Statements of Cash Flows (Unaudited)
Successor Predecessor
Six Months
Ended
June 30, 2018
Four Months
Ended
June 30, 2017
Two Months
Ended
February 28, 2017
(in thousands)
Cash flow from operating activities:
Net income $ 78,001 $ 212,801 $ 2,397,061
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations 3,254 548
Depreciation, depletion and amortization 50,445 71,901 47,155
Deferred income taxes 46,031 131,055 (166 )
(Gains) losses on derivatives 22,555 (33,755 ) (92,691 )
Cash settlements on derivatives (25,037 ) 7,929 (11,572 )
Share-based compensation expenses 66,374 19,599 50,255
Amortization and write-off of deferred financing fees 824 82 1,338
(Gains) losses on sale of assets and other, net (224,091 ) (293,800 ) 1,069
Reorganization items, net (2,359,364 )
Changes in assets and liabilities:
(Increase) decrease in accounts receivable – trade, net 76,465 27,212 (7,216 )
(Increase) decrease in other assets 35,828 (9,146 ) 528
Increase (decrease) in accounts payable and accrued expenses (52,538 ) (89,755 ) 20,949
Increase (decrease) in other liabilities (22,955 ) 22,421 2,801
Net cash provided by operating activities – continuing operations 51,902 69,798 50,695
Net cash provided by operating activities – discontinued operations 13,966 8,781
Net cash provided by operating activities 51,902 83,764 59,476
Cash flow from investing activities:
Development of oil and natural gas properties (45,938 ) (61,534 ) (50,597 )
Purchases of other property and equipment (87,377 ) (27,287 ) (7,409 )
Proceeds from sale of properties and equipment and other 369,489 697,829 (166 )
Net cash provided by (used in) investing activities – continuing operations 236,174 609,008 (58,172 )
Net cash used in investing activities – discontinued operations (1,645 ) (584 )
Net cash provided by (used in) investing activities 236,174 607,363 (58,756 )
Cash flow from financing activities:
Proceeds from rights offerings, net 514,069
Repurchases of shares (393,647 )
Proceeds from borrowings 160,000
Repayments of debt (876,570 ) (1,038,986 )
Payment to holders of claims under the Predecessor’s second lien notes (30,000 )
Distributions to noncontrolling interests (12,174 ) (2,973 )
Cash settlements of equity classified RSUs (58,162 )
Other (294 ) (87 ) (6,015 )
Net cash used in financing activities – continuing operations (464,277 ) (719,630 ) (560,932 )
Net cash used in financing activities – discontinued operations
Net cash used in financing activities (464,277 ) (719,630 ) (560,932 )
Net decrease in cash, cash equivalents and restricted cash (176,201 ) (28,503 ) (560,212 )
Cash, cash equivalents and restricted cash:
Beginning 520,953 144,022 704,234
Ending $ 344,752 $ 115,519 $ 144,022

Schedule 1 – 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 June 30, 
2018 2017
  (in thousands)
Net income $   6,903 $   220,057
Plus (less):
Income from discontinued operations 3,322
Interest expense 584 7,551
Income tax expense 5,722 158,770
Depreciation, depletion and amortization 21,980 51,987
Exploration costs 53 811
EBITDAX 35,242 442,498
Plus (less):
Noncash (gains) losses on oil and natural gas derivatives 6,955 (43,567 )
Accrued settlements on oil derivative contracts related to current production period (2) 935 1,583
Share-based compensation expenses 58,188 15,422
(Earnings) losses from equity method investments 9,327 (91 )
Gains on sale of assets and other, net (3) (100,771 ) (307,290 )
Reorganization items, net (4) 1,259 3,377
Adjusted EBITDAX $   11,135 $   111,932
Six Months Ended June 30,
2018 2017(1)
(in thousands)
Net income $   78,001 $   2,609,862
Plus (less):
Income from discontinued operations 3,802
Interest expense 988 28,476
Income tax expense 45,896 153,289
Depreciation, depletion and amortization 50,445 119,056
Exploration costs 1,255 959
EBITDAX 176,585 2,915,444
Plus (less):
Noncash (gains) losses on oil and natural gas derivatives 17,491 (130,089 )
Accrued settlements on oil derivative contracts related to current production period (2) 1,568 2,885
Share-based compensation expenses 75,225 69,854
Earnings from equity method investments (16,018 ) (287 )
Gains on sale of assets and other, net (3) (206,882 ) (307,120 )
Reorganization items, net (4) 3,210 (2,325,247 )
Adjusted EBITDAX $   51,179 $   225,440

(1) All amounts reflect the combined results of the four months ended June 30, 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 and gains or losses on inventory valuation.
(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.

Roan Resources LLC Adjusted EBITDAX (LINN’s 50% Equity Interest)
Three Months ended
June 30, 2018
(in thousands)
Net loss $ (11,378 )
Plus (less):
Interest expense 544
Depreciation, depletion and amortization 12,300
Exploration costs 5,317
EBITDAX 6,783
  Noncash losses on oil and natural gas derivatives 22,415
Share-based compensation expenses 1,417
Adjusted EBITDAX $ 30,615
Six Months ended
June 30, 2018
(in thousands)
Net income $ 6,162
Plus (less):
Interest expense 1,443
Depreciation, depletion and amortization 23,233
Exploration costs 9,242
EBITDAX 40,080
  Noncash losses on oil and natural gas derivatives 24,964
Share-based compensation expenses 2,564
Adjusted EBITDAX $ 67,608

 



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