1.028 Billion of non cash expenses in last years income statement
Non cash expenses are deducted from income but available for use by a business.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization increased by approximately $272 million or 81% to approximately $606 million for the year ended December 31, 2012, from approximately $334 million for the year ended December 31, 2011. Higher total production volumes were the primary reason for the increased expense. Depreciation, depletion and amortization per Mcfe decreased to $2.47 per Mcfe for the year ended December 31, 2012, from $2.48 per Mcfe for the year ended December 31, 2011.
Impairment of Long-Lived Assets
During the year ended December 31, 2012, the Company recorded noncash impairment charges, before and after tax, of approximately $422 million associated with proved oil and natural gas properties related to a decline in commodity prices. The Company recorded no impairment charge for the year ended December 31, 2011. See Note 1 and “Critical Accounting Policies and Estimates” below for additional information.
Thanks so much for working on the noncash. I had already noted the impairment charge, which you could argue should carry even less weight given Linn's hedges. Along those lines, I was trying to explain to a friend of mine that "reserves" are not the same thing as "oil in place" and that impairment and depletion did not mean that there was less oil and gas.
If you have time, would you just glance over the figures I posted under the previous "Production" post, and let me know if there is anything you disagree with or would like to amplify? Where I am now is that Linn is worth at least $27.50 and probably $30. I still give the BRY merger a 50/50 chance.
Oil and gas accounting is so distinct that it is a separate field in accounting. Reserves come in all flavors but the important ones are proven reserves and are oil and gas that can be reasonably expected to be economically produced at current prices. Check out the Supplemental Presentation dated 4/1/13. The numbers that you are looking for or there. Also in the annual report that can be accessed on Linn's site.