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| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

|                                                                          |                             |
|-------------------------------------------------------------------------------|----------------------------------|
| Delaware                                                                      | 65-1177591                       |
| (State or other jurisdiction of incorporation or organization)                | (IRS EmployerIdentification No.) |
| 600 Travis, Suite 5100Houston, Texas                                          |  77002                      |
| (Address of principal executive offices)                                      | (Zip Code)                       |
|                                                                          |
| (281) 840-4000(Registrant’s telephone number, including area code) |

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|             Large accelerated filer  x      Accelerated filer    ̈     Non-accelerated filer   ̈    Smaller reporting company   ̈ |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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TABLE OF CONTENTS

|     |                                                                                                                                            | Page     |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|     |                                                                                                                                            |     |   |
|     | Glossary of Terms                                                                                                                               | ii       |   |
|     |                                                                                                                                            |     |   |
|     | Part I - Financial Information                                                                                                                  |     |   |
| Item 1.  | Financial Statements                                                                                                                            |     |   |
|     | Condensed Consolidated Balance Sheets as of September 30, 2010, and December 31, 2009                                                 | 1   |   |
|     | Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2010, and September 30, 2009 | 2   |   |
|     | Condensed Consolidated Statement of Unitholders’ Capital for the nine months ended September 30, 2010                                | 3   |   |
|     | Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2010, and September 30, 2009                  | 4   |   |
|     | Notes to Condensed Consolidated Financial Statements                                                                                            | 5   |   |
| Item 2.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                     | 22  |   |
| Item 3.  | Quantitative and Qualitative Disclosures About Market Risk                                                                                      | 44  |   |
| Item 4.  | Controls and Procedures                                                                                                                         | 45  |   |
|     |                                                                                                                                            |     |   |
|     | Part II - Other Information                                                                                                                     |     |   |
| Item 1.  | Legal Proceedings                                                                                                                               | 46  |   |
| Item 1A. | Risk Factors                                                                                                                                    | 46  |   |
| Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                     | 47  |   |
| Item 3.  | Defaults Upon Senior Securities                                                                                                                 | 47  |   |
| Item 4.  | Reserved                                                                                                                                        | 47  |   |
| Item 5.  | Other Information                                                                                                                               | 47  |   |
| Item 6.  | Exhibits                                                                                                                                        | 48  |   |
|     |                                                                                                                                            |     |   |
|     | Signature                                                                                                                                       | 49  |   |

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Table of Contents

GLOSSARY OF TERMS

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Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.              Financial Statements

LINN ENERGY, LLC

|                                                                                                                                |   | September 30,                 |      | December 31, |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|-----------|-------------------|
|                                                                                                                                |   | 2010                               |      | 2009              |
|                                                                                                                                |   | (Unaudited)                        |      |              |   |
|                                                                                                                                |   | (in thousands,except unit amounts) |
| ASSETS                                                                                                                              |   |                               |      |
| Current assets:                                                                                                                     |   |                               |      |              |   |   |
| Cash and cash equivalents                                                                                                           |   | $                                  | 418,060   |              |   | $ | 22,231 |   |
| Accounts receivable – trade, net                                                                                              |   |                               | 162,432   |              |   |   | 109,311 |   |
| Derivative instruments                                                                                                              |   |                               | 314,456   |              |   |   | 249,756 |   |
| Other current assets                                                                                                                |   |                               | 43,261    |              |   |   | 28,162 |   |
| Total current assets                                                                                                                |   |                               | 938,209   |              |   |   | 409,460 |   |
|                                                                                                                                |   |                               |      |              |   |   |   |   |
| Noncurrent assets:                                                                                                                  |   |                               |      |              |   |   |   |   |
| Oil and natural gas properties (successful efforts method)                                                                          |   |                               | 5,083,662 |              |   |   | 4,076,795 |   |
| Less accumulated depletion and amortization                                                                                         |   |                               | (622,216  | )                 |   |   | (463,413 | ) |
|                                                                                                                                |   |                               | 4,461,446 |              |   |   | 3,613,382 |   |
|                                                                                                                                |   |                               |      |              |   |   |   |   |
| Other property and equipment                                                                                                        |   |                               | 139,445   |              |   |   | 118,867 |   |
| Less accumulated depreciation                                                                                                       |   |                               | (32,149   | )                 |   |   | (23,583 | ) |
|                                                                                                                                |   |                               | 107,296   |              |   |   | 95,284 |   |
|                                                                                                                                |   |                               |      |              |   |   |   |   |
| Derivative instruments                                                                                                              |   |                               | 179,125   |              |   |   | 145,457 |   |
| Other noncurrent assets                                                                                                             |   |                               | 132,590   |              |   |   | 76,673 |   |
|                                                                                                                                |   |                               | 311,715   |              |   |   | 222,130 |   |
| Total noncurrent assets                                                                                                             |   |                               | 4,880,457 |              |   |   | 3,930,796 |   |
| Total assets                                                                                                                        |   | $                                  | 5,818,666 |              |   | $ | 4,340,256 |   |
|                                                                                                                                |   |                               |      |              |   |   |   |   |
| LIABILITIES AND UNITHOLDERS’ CAPITAL                                                                                          |   |                               |      |              |   |   |   |   |
| Current liabilities:                                                                                                                |   |                               |      |              |   |   |   |   |
| Accounts payable and accrued expenses                                                                                               |   | $                                  | 203,341   |              |   | $ | 124,358 |   |
| Derivative instruments                                                                                                              |   |                               | 2,859     |              |   |   | 51,025 |   |
| Other accrued liabilities                                                                                                           |   |                               | 88,920    |              |   |   | 33,922 |   |
| Total current liabilities                                                                                                           |   |                               | 295,120   |              |   |   | 209,305 |   |
|                                                                                                                                |   |                               |      |              |   |   |   |   |
| Noncurrent liabilities:                                                                                                             |   |                               |      |              |   |   |   |   |
| Credit facility                                                                                                                     |   |                               | ―   |              |   |   | 1,100,000 |   |
| Senior notes, net                                                                                                                   |   |                               | 2,741,735 |              |   |   | 488,831 |   |
| Derivative instruments                                                                                                              |   |                               | 8,733     |              |   |   | 53,923 |   |
| Other noncurrent liabilities                                                                                                        |   |                               | 43,264    |              |   |   | 36,193 |   |
| Total noncurrent liabilities                                                                                                        |   |                               | 2,793,732 |              |   |   | 1,678,947 |   |
|                                                                                                                                |   |                               |      |              |   |   |   |   |
| Unitholders’ capital:                                                                                                         |   |                               |      |              |   |   |   |   |
| 147,419,333 units and 129,940,617 units issued and outstanding at September 30, 2010, and December 31, 2009, respectively |   |                               | 2,247,170 |              |   |   | 2,098,599 |   |
| Accumulated income                                                                                                                  |   |                               | 482,644   |              |   |   | 353,405 |   |
|                                                                                                                                |   |                               | 2,729,814 |              |   |   | 2,452,004 |   |
| Total liabilities and unitholders’ capital                                                                                    |   | $                                  | 5,818,666 |              |   | $ | 4,340,256 |   |

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Table of Contents

LINN ENERGY, LLC

|                                                         |   | Three Months EndedSeptember 30,    |        | Nine Months EndedSeptember 30, |
|--------------------------------------------------------------|--------|-----------------------------------------|-------------|-------------------------------------|
|                                                         |   | 2010                                    |        | 2009                                |   | 2010 |   | 2009 |
|                                                         |   | (in thousands, except per unit amounts) |
| Revenues and other:                                          |   |                                    |        |                                |   |   |   |   |   |   |   |   |
| Oil, natural gas and natural gas liquids sales               |   | $                                       | 177,306     |                                |   | $ | 102,989 |   |   | $ | 479,887 |   |   | $ | 274,759 |   |
| Gains (losses) on oil and natural gas derivatives            |   |                                    | 43,505      |                                |   |   | (14,065 | ) |   |   | 263,299 |   |   |   | (85,525 | ) |
| Natural gas marketing revenues                               |   |                                    | 635         |                                |   |   | 1,351 |   |   |   | 3,252 |   |   |   | 3,050 |   |
| Other revenues                                               |   |                                    | 915         |                                |   |   | 150 |   |   |   | 1,363 |   |   |   | 1,757 |   |
|                                                         |   |                                    | 222,361     |                                |   |   | 90,425 |   |   |   | 747,801 |   |   |   | 194,041 |   |
| Expenses:                                                    |   |                                    |        |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Lease operating expenses                                     |   |                                    | 41,901      |                                |   |   | 33,453 |   |   |   | 111,490 |   |   |   | 100,322 |   |
| Transportation expenses                                      |   |                                    | 5,154       |                                |   |   | 6,367 |   |   |   | 15,030 |   |   |   | 11,850 |   |
| Natural gas marketing expenses                               |   |                                    | 468         |                                |   |   | 98 |   |   |   | 2,209 |   |   |   | 1,318 |   |
| General and administrative expenses                          |   |                                    | 23,751      |                                |   |   | 19,655 |   |   |   | 71,545 |   |   |   | 63,247 |   |
| Exploration costs                                            |   |                                    | 281         |                                |   |   | 861 |   |   |   | 4,297 |   |   |   | 4,625 |   |
| Bad debt expenses                                            |   |                                    | (70         | )                                   |   |   | 500 |   |   |   | (89 | ) |   |   | 500 |   |
| Depreciation, depletion and amortization                     |   |                                    | 62,482      |                                |   |   | 49,440 |   |   |   | 169,614 |   |   |   | 151,934 |   |
| Taxes, other than income taxes                               |   |                                    | 12,011      |                                |   |   | 5,965 |   |   |   | 32,602 |   |   |   | 21,414 |   |
| (Gains) losses on sale of assets and other, net              |   |                                    | 6,073       |                                |   |   | 1,999 |   |   |   | 5,699 |   |   |   | (24,717 | ) |
|                                                         |   |                                    | 152,051     |                                |   |   | 118,338 |   |   |   | 412,397 |   |   |   | 330,493 |   |
| Other income and (expenses):                                 |   |                                    |        |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense, net of amounts capitalized                 |   |                                    | (53,497     | )                                   |   |   | (28,025 | ) |   |   | (127,119 | ) |   |   | (65,696 | ) |
| Losses on interest rate swaps                                |   |                                    | (11,501     | )                                   |   |   | (25,709 | ) |   |   | (67,908 | ) |   |   | (25,362 | ) |
| Other, net                                                   |   |                                    | (1,136      | )                                   |   |   | (757 | ) |   |   | (5,428 | ) |   |   | (1,987 | ) |
|                                                         |   |                                    | (66,134     | )                                   |   |   | (54,491 | ) |   |   | (200,455 | ) |   |   | (93,045 | ) |
| Income (loss) from continuing operations before income taxes |   |                                    | 4,176       |                                |   |   | (82,404 | ) |   |   | 134,949 |   |   |   | (229,497 | ) |
| Income tax expense                                           |   |                                    | (33         | )                                   |   |   | (58 | ) |   |   | (5,710 | ) |   |   | (379 | ) |
| Income (loss) from continuing operations                     |   |                                    | 4,143       |                                |   |   | (82,462 | ) |   |   | 129,239 |   |   |   | (229,876 | ) |
|                                                         |   |                                    |        |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued operations:                                     |   |                                    |        |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Losses on sale of assets, net of taxes                       |   |                                    | ―     |                                |   |   | ― |   |   |   | ― |   |   |   | (718 | ) |
| Loss from discontinued operations, net of taxes              |   |                                    | ―     |                                |   |   | (1,247 | ) |   |   | ― |   |   |   | (2,186 | ) |
|                                                         |   |                                    | ―     |                                |   |   | (1,247 | ) |   |   | ― |   |   |   | (2,904 | ) |
| Net income (loss)                                            |   | $                                       |  4,143 |                                |   | $ | (83,709 | ) |   | $ |  129,239 |   |   | $ | (232,780 | ) |
|                                                         |   |                                    |        |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) per unit – continuing operations:        |   |                                    |        |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                        |   | $                                       | 0.03        |                                |   | $ | (0.69 | ) |   | $ | 0.91 |   |   | $ | (1.97 | ) |
| Diluted                                                      |   | $                                       | 0.03        |                                |   | $ | (0.69 | ) |   | $ | 0.91 |   |   | $ | (1.97 | ) |
| Loss per unit – discontinued operations:               |   |                                    |        |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                        |   | $                                       | ―     |                                |   | $ | (0.01 | ) |   | $ | ― |   |   | $ | (0.03 | ) |
| Diluted                                                      |   | $                                       | ―     |                                |   | $ | (0.01 | ) |   | $ | ― |   |   | $ | (0.03 | ) |
| Net income (loss) per unit:                                  |   |                                    |        |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                        |   | $                                       | 0.03        |                                |   | $ | (0.70 | ) |   | $ | 0.91 |   |   | $ | (2.00 | ) |
| Diluted                                                      |   | $                                       | 0.03        |                                |   | $ | (0.70 | ) |   | $ | 0.91 |   |   | $ | (2.00 | ) |
| Weighted average units outstanding:                          |   |                                    |        |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                        |   |                                    | 145,956     |                                |   |   | 119,792 |   |   |   | 140,598 |   |   |   | 116,610 |   |
| Diluted                                                      |   |                                    | 146,458     |                                |   |   | 119,792 |   |   |   | 141,006 |   |   |   | 116,610 |   |
|                                                         |   |                                    |        |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Distributions declared per unit                              |   | $                                       | 0.63        |                                |   | $ | 0.63 |   |   | $ | 1.89 |   |   | $ | 1.89 |   |

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Table of Contents

LINN ENERGY, LLC

|                                                                 |   | Units          |    | Unitholders’Capital |   | AccumulatedIncome |      | TreasuryUnits(at Cost) |   | TotalUnitholders’Capital |
|----------------------------------------------------------------------|--------|----------------|---------|---------------------------|--------|-------------------|-----------|------------------------|--------|--------------------------------|
|                                                                 |   | (in thousands) |
|                                                                 |   |           |    |                      |   |              |      |                   |   |                           |   |   |   |   |   |
| December 31, 2009                                               |   |           | 129,941 |                      |   | $                 | 2,098,599 |                   |   | $                              | 353,405 |   |   | $ | ― |   |   | $ | 2,452,004 |   |
| Sale of units, net of underwriting discounts and expenses of $17,563 |   |           | 17,250  |                      |   |              | 413,687   |                   |   |                           | — |   |   |   | — |   |   |   | 413,687 |   |
| Issuance of units                                                    |   |           | 724     |                      |   |              | 2,694     |                   |   |                           | — |   |   |   | — |   |   |   | 2,694 |   |
| Cancellation of units                                                |   |           | (496    | )                         |   |              | (11,832   | )                      |   |                           | — |   |   |   | 11,832 |   |   |   | — |   |
| Purchase of units                                                    |   |           |    |                      |   |              | —   |                   |   |                           | — |   |   |   | (11,832 | ) |   |   | (11,832 | ) |
| Distributions to unitholders                                         |   |           |    |                      |   |              | (268,343  | )                      |   |                           | — |   |   |   | — |   |   |   | (268,343 | ) |
| Unit-based compensation expenses                                     |   |           |    |                      |   |              | 10,546    |                   |   |                           | — |   |   |   | — |   |   |   | 10,546 |   |
| Excess tax benefit from unit-based compensation                      |   |           |    |                      |   |              | 1,819     |                   |   |                           | — |   |   |   | — |   |   |   | 1,819 |   |
| Net income                                                           |   |           |    |                      |   |              | —   |                   |   |                           | 129,239 |   |   |   | — |   |   |   | 129,239 |   |
| September 30, 2010                                              |   |           | 147,419 |                      |   | $                 | 2,247,170 |                   |   | $                              | 482,644 |   |   | $ | — |   |   | $ | 2,729,814 |   |

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Table of Contents

LINN ENERGY, LLC

|                                                                                     |   | Nine Months EndedSeptember 30, |
|------------------------------------------------------------------------------------------|--------|-------------------------------------|
|                                                                                     |   | 2010                                |   | 2009 |
|                                                                                     |   | (in thousands)                      |
| Cash flow from operating activities:                                                     |   |                                |   |   |   |   |
| Net income (loss)                                                                        |   | $                                   | 129,239 |   |   | $ | (232,780 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |   |                                |   |   |   |   |   |   |
| Depreciation, depletion and amortization                                                 |   |                                | 169,614 |   |   |   | 151,934 |   |
| Unit-based compensation expenses                                                         |   |                                | 10,546 |   |   |   | 11,473 |   |
| Bad debt expenses                                                                        |   |                                | (89 | ) |   |   | 500 |   |
| Amortization and write-off of deferred financing fees and other                          |   |                                | 20,729 |   |   |   | 14,231 |   |
| Gains on sale of assets and other, net                                                   |   |                                | (619 | ) |   |   | (22,572 | ) |
| Deferred income tax                                                                      |   |                                | 2,956 |   |   |   | ― |   |
| Mark-to-market on derivatives:                                                           |   |                                |   |   |   |   |   |   |
| Total (gains) losses                                                                     |   |                                | (195,391 | ) |   |   | 110,887 |   |
| Cash settlements                                                                         |   |                                | 218,559 |   |   |   | 299,114 |   |
| Cash settlements on canceled derivatives                                                 |   |                                | (123,865 | ) |   |   | 48,977 |   |
| Premiums paid for derivatives                                                            |   |                                | (91,027 | ) |   |   | (93,606 | ) |
| Changes in assets and liabilities:                                                       |   |                                |   |   |   |   |   |   |
| (Increase) decrease in accounts receivable – trade, net                            |   |                                | (43,173 | ) |   |   | 39,260 |   |
| Decrease in other assets                                                                 |   |                                | 15,894 |   |   |   | 365 |   |
| Increase (decrease) in accounts payable and accrued expenses                             |   |                                | 15,483 |   |   |   | (3,232 | ) |
| Increase in other liabilities                                                            |   |                                | 54,563 |   |   |   | 5,573 |   |
| Net cash provided by operating activities                                                |   |                                | 183,419 |   |   |   | 330,124 |   |
|                                                                                     |   |                                |   |   |   |   |   |   |
| Cash flow from investing activities:                                                     |   |                                |   |   |   |   |   |   |
| Acquisition of oil and natural gas properties, net of cash acquired                      |   |                                | (894,521 | ) |   |   | (116,694 | ) |
| Development of oil and natural gas properties                                            |   |                                | (104,694 | ) |   |   | (152,149 | ) |
| Purchases of other property and equipment                                                |   |                                | (15,030 | ) |   |   | (5,832 | ) |
| Proceeds from sale of properties and equipment                                           |   |                                | 696 |   |   |   | 26,682 |   |
| Net cash used in investing activities                                                    |   |                                | (1,013,549 | ) |   |   | (247,993 | ) |
|                                                                                     |   |                                |   |   |   |   |   |   |
| Cash flow from financing activities:                                                     |   |                                |   |   |   |   |   |   |
| Proceeds from sale of units                                                              |   |                                | 431,250 |   |   |   | 102,781 |   |
| Proceeds from borrowings                                                                 |   |                                | 3,170,816 |   |   |   | 599,203 |   |
| Repayments of debt                                                                       |   |                                | (2,020,000 | ) |   |   | (513,893 | ) |
| Distributions to unitholders                                                             |   |                                | (268,343 | ) |   |   | (221,430 | ) |
| Financing fees, offering expenses and other, net                                         |   |                                | (77,751 | ) |   |   | (64,169 | ) |
| Excess tax benefit from unit-based compensation                                          |   |                                | 1,819 |   |   |   | — |   |
| Purchase of units                                                                        |   |                                | (11,832 | ) |   |   | (2,696 | ) |
| Net cash provided by (used in) financing activities                                      |   |                                | 1,225,959 |   |   |   | (100,204 | ) |
|                                                                                     |   |                                |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                     |   |                                | 395,829 |   |   |   | (18,073 | ) |
| Cash and cash equivalents:                                                               |   |                                |   |   |   |   |   |   |
| Beginning                                                                                |   |                                | 22,231 |   |   |   | 28,668 |   |
| Ending                                                                                   |   | $                                   | 418,060 |   |   | $ | 10,595 |   |

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Table of Contents

LINN ENERGY, LLC

| (1) | Basis of Presentation |
|-----|-----------------------|

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Table of Contents

| (2) | Acquisitions and Divestitures |
|-----|-------------------------------|

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Table of Contents

| Assets:                        |   |   |    |
|--------------------------------|--------|--------|---------|
| Cash acquired                  |   | $      | 15,367  |   |
| Current and noncurrent assets  |   |   | 32,170  |   |
| Oil and natural gas properties |   |   | 864,829 |   |
| Total assets acquired          |   | $      | 912,366 |   |
|                           |   |   |    |   |
| Liabilities:                   |   |   |    |   |
| Current liabilities            |   | $      | 32,024  |   |
| Asset retirement obligations   |   |   | 4,974   |   |
| Total liabilities assumed      |   | $      | 36,998  |   |
| Net assets acquired            |   | $      | 875,368 |   |

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Table of Contents

| (3) | Unitholders’ Capital |
|-----|----------------------------|

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Table of Contents

| (4) | Oil and Natural Gas Capitalized Costs |
|-----|---------------------------------------|

|                                        |   | September 30,2010 |      | December 31,2009 |
|---------------------------------------------|--------|------------------------|-----------|-----------------------|
|                                        |   | (in thousands)         |
| Proved properties:                          |   |                   |      |                  |   |   |
| Leasehold acquisition                       |   | $                      | 4,224,209 |                  |   | $ | 3,398,292 |   |
| Development                                 |   |                   | 728,093   |                  |   |   | 600,436 |   |
| Unproved properties                         |   |                   | 131,360   |                  |   |   | 78,067 |   |
|                                        |   |                   | 5,083,662 |                  |   |   | 4,076,795 |   |
| Less accumulated depletion and amortization |   |                   | (622,216  | )                     |   |   | (463,413 | ) |
|                                        |   | $                      | 4,461,446 |                  |   | $ | 3,613,382 |   |

| (5) | Unit-Based Compensation |
|-----|-------------------------|

|                                   |   | Three Months EndedSeptember 30, |   | Nine Months EndedSeptember 30, |
|----------------------------------------|--------|--------------------------------------|--------|-------------------------------------|
|                                   |   | 2010                                 |   | 2009                                |   | 2010 |   | 2009 |
|                                   |   | (in thousands)                       |
|                                   |   |                                 |   |                                |   |   |   |   |   |   |   |   |
| General and administrative expenses    |   | $                                    | 3,070  |                                |   | $ | 3,435 |   |   | $ | 10,280 |   |   | $ | 11,204 |   |
| Lease operating expenses               |   |                                 | 76     |                                |   |   | 84 |   |   |   | 266 |   |   |   | 269 |   |
| Total unit-based compensation expenses |   | $                                    | 3,146  |                                |   | $ | 3,519 |   |   | $ | 10,546 |   |   | $ | 11,473 |   |
| Income tax benefit                     |   | $                                    | 1,162  |                                |   | $ | — |   |   | $ | 3,897 |   |   | $ | — |   |

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| (6) | Debt |
|-----|------|

|                         |   | September 30, 2010           |    | December 31, 2009 |
|------------------------------|--------|-----------------------------------|---------|------------------------|
|                         |   | Carrying Value                    |    | FairValue (1)          |   | InterestRate (2) |   | CarryingValue |   | FairValue (1) |   | InterestRate (2) |
|                         |   | (in millions, except percentages) |
|                         |   |                              |    |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Credit facility              |   | $                                 | ― |                   |   | $ | ― |   |   |   | ― |   |   | $ | 1,100 |   |   | $ | 1,100 |   |   |   | 2.98 | % |
| 11.75% senior notes due 2017 |   |                              | 250     |                   |   |   | 280 |   |   |   | 12.73 | % |   |   | 250 |   |   |   | 279 |   |   |   | 12.73 | % |
| 9.875% senior notes due 2018 |   |                              | 256     |                   |   |   | 286 |   |   |   | 10.25 | % |   |   | 256 |   |   |   | 271 |   |   |   | 10.25 | % |
| 8.625% senior notes due 2020 |   |                              | 1,300   |                   |   |   | 1,373 |   |   |   | 9.00 | % |   |   | ― |   |   |   | ― |   |   |   | ― |   |
| 7.75% senior notes due 2021  |   |                              | 1,000   |                   |   |   | 1,003 |   |   |   | 8.00 | % |   |   | ― |   |   |   | ― |   |   |   | ― |   |
| Less current maturities      |   |                              | ― |                   |   |   | ― |   |   |   |   |   |   |   | ― |   |   |   | ― |   |   |   |   |   |
|                         |   |                              | 2,806   |                   |   | $ | 2,942 |   |   |   |   |   |   |   | 1,606 |   |   | $ | 1,650 |   |   |   |   |   |
| Unamortized discount         |   |                              | (64     | )                      |   |   |   |   |   |   |   |   |   |   | (17 | ) |   |   |   |   |   |   |   |   |
| Total debt, net of discount  |   | $                                 | 2,742   |                   |   |   |   |   |   |   |   |   |   | $ | 1,589 |   |   |   |   |   |   |   |   |   |

|   | (1) | The carrying value of the Credit Facility is estimated to be substantially the same as its fair value.  Fair values of the senior notes were estimated based on prices quoted from third-party financial institutions. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Represents variable interest rate for the Credit Facility and effective interest rates for the senior notes. |
|--------|-----|--------------------------------------------------------------------------------------------------------------|

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| (7) | Derivatives |
|-----|-------------|

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|                                      |   | September 30 – December 31,2010 |   | 2011   |   | 2012   |   | 2013   |   | 2014   |    | 2015   |
|-------------------------------------------|--------|-------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Natural gas positions:                    |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |
| Fixed price swaps:                        |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |
| Hedged volume (MMMBtu)                    |   |                                            | 9,891  |   |   |   | 31,901 |   |   |   | 49,410  |   |   |   | 49,275 |   |   |   | 49,275 |   |   |   | 49,275 |   |
| Average price ($/MMBtu)                   |   | $                                               | 8.90   |   |   | $      | 9.50   |   |   | $      | 5.97    |   |   | $ | 5.97 |   |   | $ | 5.97 |   |   | $ | 5.97 |   |
| Puts:                                     |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MMMBtu)                    |   |                                            | 1,740  |   |   |   | 6,960  |   |   |   | 25,364  |   |   |   | 25,295 |   |   |   | ― |   |   |   | ― |   |
| Average price ($/MMBtu)                   |   | $                                               | 8.50   |   |   | $      | 9.50   |   |   | $      | 6.25    |   |   | $ | 6.25 |   |   | $ | ― |   |   | $ | ― |   |
| PEPL puts: (1)                            |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MMMBtu)                    |   |                                            | 2,659  |   |   |   | 13,259 |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |
| Average price ($/MMBtu)                   |   | $                                               | 7.85   |   |   | $      | 8.50   |   |   | $      | ― |   |   | $ | ― |   |   | $ | ― |   |   | $ | ― |   |
| Total:                                    |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MMMBtu)                    |   |                                            | 14,290 |   |   |   | 52,120 |   |   |   | 74,774  |   |   |   | 74,570 |   |   |   | 49,275 |   |   |   | 49,275 |   |
| Average price ($/MMBtu)                   |   | $                                               | 8.66   |   |   | $      | 9.25   |   |   | $      | 6.07    |   |   | $ | 6.07 |   |   | $ | 5.97 |   |   | $ | 5.97 |   |
|                                      |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil positions:                            |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed price swaps: (2)                    |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MBbls)                     |   |                                            | 538    |   |   |   | 2,803  |   |   |   | 4,484   |   |   |   | 4,471 |   |   |   | 4,654 |   |   |   | 1,643 |   |
| Average price ($/Bbl)                     |   | $                                               | 90.00  |   |   | $      | 89.91  |   |   | $      | 95.88   |   |   | $ | 95.88 |   |   | $ | 89.03 |   |   | $ | 87.04 |   |
| Puts:                                     |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MBbls)                     |   |                                            | 562    |   |   |   | 2,352  |   |   |   | 2,196   |   |   |   | 2,190 |   |   |   | ― |   |   |   | ― |   |
| Average price ($/Bbl)                     |   | $                                               | 110.00 |   |   | $      | 75.00  |   |   | $      | 75.00   |   |   | $ | 75.00 |   |   | $ | ― |   |   | $ | ― |   |
| Collars:                                  |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MBbls)                     |   |                                            | 62     |   |   |   | 276    |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |
| Average floor price ($/Bbl)               |   | $                                               | 90.00  |   |   | $      | 90.00  |   |   | $      | ― |   |   | $ | ― |   |   | $ | ― |   |   | $ | ― |   |
| Average ceiling price ($/Bbl)             |   | $                                               | 112.00 |   |   | $      | 112.25 |   |   | $      | ― |   |   | $ | ― |   |   | $ | ― |   |   | $ | ― |   |
| Total:                                    |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MBbls)                     |   |                                            | 1,162  |   |   |   | 5,431  |   |   |   | 6,680   |   |   |   | 6,661 |   |   |   | 4,654 |   |   |   | 1,643 |   |
| Average price ($/Bbl)                     |   | $                                               | 99.68  |   |   | $      | 83.46  |   |   | $      | 89.01   |   |   | $ | 89.01 |   |   | $ | 89.03 |   |   | $ | 87.04 |   |
|                                      |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Natural gas basis differential positions: |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PEPL basis swaps: (1)                     |   |                                            |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MMMBtu)                    |   |                                            | 10,791 |   |   |   | 35,541 |   |   |   | 34,066  |   |   |   | 31,700 |   |   |   | ― |   |   |   | ― |   |
| Hedged differential ($/MMBtu)             |   | $                                               | (0.97  | )      |   | $      | (0.96  | )      |   | $      | (0.95   | )      |   | $ | (1.01 | ) |   | $ | ― |   |   | $ | ― |   |

|   | (1) | Settle on the Panhandle Eastern Pipeline (“PEPL”) spot price of natural gas to hedge basis differential associated with natural gas production in the Mid-Continent Deep and Mid-Continent Shallow regions. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | As presented in the table above, the Company has certain outstanding fixed price oil swaps on 8,250 Bbls of daily production which may be extended annually at a price of $100.00 per Bbl for each of the years ending December 31, 2015, December 31, 2016, and December 31, 2017, if the counterparties determine that the strike prices are in-the-money on a designated date in each respective preceding year.  The extension for each year is exercisable without respect to the other years. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                  |   | September 30,2010 |    | December 31,2009 |
|-----------------------|--------|------------------------|---------|-----------------------|
|                  |   | (in thousands)         |
| Assets:               |   |                   |    |                  |   |   |
| Commodity derivatives |   | $                      | 762,142 |                  |   | $ | 549,879 |   |
| Interest rate swaps   |   |                   | ― |                  |   |   | 2,603 |   |
|                  |   | $                      | 762,142 |                  |   | $ | 552,482 |   |
| Liabilities:          |   |                   |    |                  |   |   |   |   |
| Commodity derivatives |   | $                      | 280,153 |                  |   | $ | 192,573 |   |
| Interest rate swaps   |   |                   | ― |                  |   |   | 69,644 |   |
|                  |   | $                      | 280,153 |                  |   | $ | 262,217 |   |

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|                       |   | Three Months EndedSeptember 30, |    | Nine Months EndedSeptember 30, |
|----------------------------|--------|--------------------------------------|---------|-------------------------------------|
|                       |   | 2010                                 |    | 2009                                |   | 2010 |   | 2009 |
|                       |   | (in thousands)                       |
| Realized gains (losses):   |   |                                 |    |                                |   |   |   |   |   |   |   |   |
| Commodity derivatives      |   | $                                    | 82,910  |                                |   | $ | 97,209 |   |   | $ | 228,573 |   |   | $ | 328,165 |   |
| Interest rate swaps        |   |                                 | ― |                                |   |   | (10,958 | ) |   |   | (8,021 | ) |   |   | (31,629 | ) |
| Canceled derivatives       |   |                                 | (49,590 | )                                   |   |   | 44,780 |   |   |   | (123,865 | ) |   |   | 48,977 |   |
|                       |   | $                                    | 33,320  |                                |   | $ | 131,031 |   |   | $ | 96,687 |   |   | $ | 345,513 |   |
| Unrealized gains (losses): |   |                                 |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Commodity derivatives      |   | $                                    | (39,405 | )                                   |   | $ | (156,054 | ) |   | $ | 34,726 |   |   | $ | (462,727 | ) |
| Interest rate swaps        |   |                                 | 38,089  |                                |   |   | (14,751 | ) |   |   | 63,978 |   |   |   | 6,327 |   |
|                       |   | $                                    | (1,316  | )                                   |   | $ | (170,805 | ) |   | $ | 98,704 |   |   | $ | (456,400 | ) |
| Total gains (losses):      |   |                                 |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Commodity derivatives      |   | $                                    | 43,505  |                                |   | $ | (14,065 | ) |   | $ | 263,299 |   |   | $ | (85,525 | ) |
| Interest rate swaps        |   |                                 | (11,501 | )                                   |   |   | (25,709 | ) |   |   | (67,908 | ) |   |   | (25,362 | ) |
|                       |   | $                                    | 32,004  |                                |   | $ | (39,774 | ) |   | $ | 195,391 |   |   | $ | (110,887 | ) |

| (8) | Fair Value Measurements on a Recurring Basis |
|-----|----------------------------------------------|

|                  |   | September 30, 2010 |
|-----------------------|--------|-------------------------|
|                  |   | Level 2                 |   | Netting (1) |   | Total |
|                  |   | (in thousands)          |
| Assets:               |   |                    |   |   |   |   |   |   |   |
| Commodity derivatives |   | $                       | 762,142 |   |   | $ | (268,561 | ) |   | $ | 493,581 |   |
|                  |   |                    |   |   |   |   |   |   |   |   |   |   |
| Liabilities:          |   |                    |   |   |   |   |   |   |   |   |   |   |
| Commodity derivatives |   | $                       | 280,153 |   |   | $ | (268,561 | ) |   | $ | 11,592 |   |

|   | (1) | Represents counterparty netting under agreements governing such derivatives. |
|--------|-----|------------------------------------------------------------------------------|

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| (9) | Asset Retirement Obligations |
|-----|------------------------------|

| Asset retirement obligations at December 31, 2009  |   | $      | 33,135 |   |
|---------------------------------------------------------|--------|--------|--------|--------|
| Liabilities added from acquisitions                     |   |   | 4,974  |   |
| Liabilities added from drilling                         |   |   | 166    |   |
| Current year accretion expense                          |   |   | 2,017  |   |
| Settlements                                             |   |   | (148   | )      |
| Asset retirement obligations at September 30, 2010 |   | $      | 40,144 |   |

| (10) | Commitments and Contingencies |
|------|-------------------------------|

| (11) | Earnings Per Unit |
|------|-------------------|

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|                                        |   | Income (Loss)(Numerator) |     | Units(Denominator) |   | Per UnitAmount |
|---------------------------------------------|--------|--------------------------|----------|--------------------|--------|----------------|
|                                        |   |  (in thousands)     |     |               |
| Three months ended September 30, 2010: |   |                     |     |               |   |           |   |   |   |
| Income from continuing operations:          |   |                     |     |               |   |           |   |   |   |
| Allocated to units                          |   | $                        | 4,143    |               |   |           |   |   |   |   |
| Allocated to unvested restricted units      |   |                     | (46      | )                  |   |           |   |   |   |   |
|                                        |   | $                        | 4,097    |               |   |           |   |   |   |   |
| Income per unit:                            |   |                     |     |               |   |           |   |   |   |   |
| Basic income per unit                       |   |                     |     |               |   |           | 145,956 |   |   | $ | 0.03 |   |
| Dilutive effect of unit equivalents         |   |                     |     |               |   |           | 502 |   |   |   | ― |   |
| Diluted income per unit                     |   |                     |     |               |   |           | 146,458 |   |   | $ | 0.03 |   |
|                                        |   |                     |     |               |   |           |   |   |   |   |   |   |
| Three months ended September 30, 2009: |   |                     |     |               |   |           |   |   |   |   |   |   |
| Loss from continuing operations:            |   |                     |     |               |   |           |   |   |   |   |   |   |
| Allocated to units                          |   | $                        | (82,462  | )                  |   |           |   |   |   |   |   |   |
| Allocated to unvested restricted units      |   |                     | —  |               |   |           |   |   |   |   |   |   |
|                                        |   | $                        | (82,462  | )                  |   |           |   |   |   |   |   |   |
| Loss per unit:                              |   |                     |     |               |   |           |   |   |   |   |   |   |
| Basic loss per unit                         |   |                     |     |               |   |           | 119,792 |   |   | $ | (0.69 | ) |
| Dilutive effect of unit equivalents         |   |                     |     |               |   |           | — |   |   |   | — |   |
| Diluted loss per unit                       |   |                     |     |               |   |           | 119,792 |   |   | $ | (0.69 | ) |
|                                        |   |                     |     |               |   |           |   |   |   |   |   |   |
| Nine months ended September 30, 2010:  |   |                     |     |               |   |           |   |   |   |   |   |   |
| Income from continuing operations:          |   |                     |     |               |   |           |   |   |   |   |   |   |
| Allocated to units                          |   | $                        | 129,239  |               |   |           |   |   |   |   |   |   |
| Allocated to unvested restricted units      |   |                     | (1,361   | )                  |   |           |   |   |   |   |   |   |
|                                        |   | $                        | 127,878  |               |   |           |   |   |   |   |   |   |
| Income per unit:                            |   |                     |     |               |   |           |   |   |   |   |   |   |
| Basic income per unit                       |   |                     |     |               |   |           | 140,598 |   |   | $ | 0.91 |   |
| Dilutive effect of unit equivalents         |   |                     |     |               |   |           | 408 |   |   |   | ― |   |
| Diluted income per unit                     |   |                     |     |               |   |           | 141,006 |   |   | $ | 0.91 |   |
|                                        |   |                     |     |               |   |           |   |   |   |   |   |   |
| Nine months ended September 30, 2009:  |   |                     |     |               |   |           |   |   |   |   |   |   |
| Loss from continuing operations:            |   |                     |     |               |   |           |   |   |   |   |   |   |
| Allocated to units                          |   | $                        | (229,876 | )                  |   |           |   |   |   |   |   |   |
| Allocated to unvested restricted units      |   |                     | —  |               |   |           |   |   |   |   |   |   |
|                                        |   | $                        | (229,876 | )                  |   |           |   |   |   |   |   |   |
| Loss per unit:                              |   |                     |     |               |   |           |   |   |   |   |   |   |
| Basic loss per unit                         |   |                     |     |               |   |           | 116,610 |   |   | $ | (1.97 | ) |
| Dilutive effect of unit equivalents         |   |                     |     |               |   |           | — |   |   |   | — |   |
| Diluted loss per unit                       |   |                     |     |               |   |           | 116,610 |   |   | $ | (1.97 | ) |

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| (12) | Income Taxes |
|------|--------------|

| (13) | Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows |
|------|---------------------------------------------------------------------------------------------------------------------------|

|                 |   | September 30,2010 |   | December 31, 2009 |
|----------------------|--------|------------------------|--------|------------------------|
|                 |   | (in thousands)         |
|                 |   |                   |   |                   |   |   |
| Accrued compensation |   | $                      | 12,922 |                   |   | $ | 14,378 |   |
| Accrued interest     |   |                   | 75,484 |                   |   |   | 18,332 |   |
| Other                |   |                   | 514    |                   |   |   | 1,212 |   |
|                 |   | $                      | 88,920 |                   |   | $ | 33,922 |   |

|                                                                                                       |   | Nine Months EndedSeptember 30, |
|------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|
|                                                                                                       |   | 2010                                |   | 2009 |
|                                                                                                       |   | (in thousands)                      |
|                                                                                                       |   |                                |   |   |   |   |
| Cash payments for interest, net of amounts capitalized                                                     |   | $                                   | 55,404 |   |   | $ | 50,990 |   |
| Cash payments for income taxes                                                                             |   | $                                   | 1,785 |   |   | $ | 922 |   |
| Noncash investing activities:                                                                              |   |                                |   |   |   |   |   |   |
| In connection with the acquisition of oil and natural gas properties, liabilities were assumed as follows: |   |                                |   |   |   |   |   |   |
| Fair value of assets acquired                                                                              |   | $                                   | 896,999 |   |   | $ | 116,882 |   |
| Cash paid, net of cash acquired                                                                            |   |                                | (872,621 | ) |   |   | (116,694 | ) |
| Receivables from sellers                                                                                   |   |                                | 12,620 |   |   |   | 2,729 |   |
| Liabilities assumed                                                                                        |   | $                                   | 36,998 |   |   | $ | 2,917 |   |

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Item 2.             Management’s Discussion and Analysis of Financial Condition and Results of Operations

|   | · | Mid-Continent Deep, which includes the Texas Panhandle Deep Granite Wash formation and deep formations in Oklahoma and Kansas; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | Mid-Continent Shallow, which includes the Texas Panhandle Brown Dolomite formation and shallow formations in Oklahoma, Louisiana and Illinois; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | California, which includes the Brea Olinda Field of the Los Angeles Basin; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | Permian Basin, which includes areas in West Texas and Southeast New Mexico; and |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | Michigan, which includes the Antrim Shale formation in the northern part of the state. |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | oil, natural gas and NGL sales of approximately $177.3 million, compared to $103.0 million for the third quarter of 2009; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | · | average daily production of 283 MMcfe/d, compared to 217 MMcfe/d for the third quarter of 2009; |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | realized gains on commodity derivatives of approximately $82.9 million, compared to $142.0 million for the third quarter of 2009; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | adjusted EBITDA of approximately $185.0 million, compared to $142.4 million for the third quarter of 2009; |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | adjusted net income of approximately $56.3 million, compared to $45.9 million for the third quarter of 2009; |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | capital expenditures, excluding acquisitions, of approximately $74.5 million, compared to $24.5 million for the third quarter of 2009; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 37 wells drilled (36 successful), compared to six wells drilled (all successful) for the third quarter of 2009. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | oil, natural gas and NGL sales of approximately $479.9 million, compared to $274.8 million for the nine months ended September 30, 2009; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | average daily production of 251 MMcfe/d, compared to 218 MMcfe/d for the nine months ended September 30, 2009; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | realized gains on commodity derivatives of approximately $228.6 million, compared to $377.2 million for the nine months ended September 30, 2009; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | adjusted EBITDA of approximately $511.4 million, compared to $423.8 million for the nine months ended September 30, 2009; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | adjusted net income of approximately $156.3 million, compared to $154.3 million for the nine months ended September 30, 2009; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | · | capital expenditures, excluding acquisitions, of approximately $147.4 million, compared to $128.0 million for the nine months ended September 30, 2009; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 75 wells drilled (74 successful), compared to 66 wells drilled (65 successful) for the nine months ended September 30, 2009. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

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|                                      |   | October 25 – December 31, 2010 |   | 2011   |   | 2012   |   | 2013   |   | 2014   |    | 2015   |
|-------------------------------------------|--------|------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Natural gas positions:                    |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |
| Fixed price swaps:                        |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |
| Hedged volume (MMMBtu)                    |   |                                           | 6,595  |   |   |   | 31,901 |   |   |   | 49,410  |   |   |   | 50,278 |   |   |   | 54,202 |   |   |   | 53,837 |   |
| Average price ($/MMBtu)                   |   | $                                              | 8.90   |   |   | $      | 9.50   |   |   | $      | 5.97    |   |   | $ | 5.96 |   |   | $ | 5.93 |   |   | $ | 5.95 |   |
| Puts:                                     |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MMMBtu)                    |   |                                           | 1,160  |   |   |   | 19,297 |   |   |   | 25,364  |   |   |   | 25,295 |   |   |   | 23,178 |   |   |   | 23,178 |   |
| Average price ($/MMBtu)                   |   | $                                              | 8.50   |   |   | $      | 5.98   |   |   | $      | 6.25    |   |   | $ | 6.25 |   |   | $ | 5.00 |   |   | $ | 5.00 |   |
| PEPL puts: (1)                            |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MMMBtu)                    |   |                                           | 1,772  |   |   |   | 13,259 |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |
| Average price ($/MMBtu)                   |   | $                                              | 7.85   |   |   | $      | 8.50   |   |   | $      | ― |   |   | $ | ― |   |   | $ | ― |   |   | $ | ― |   |
| Total:                                    |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MMMBtu)                    |   |                                           | 9,527  |   |   |   | 64,457 |   |   |   | 74,774  |   |   |   | 75,573 |   |   |   | 77,380 |   |   |   | 77,015 |   |
| Average price ($/MMBtu)                   |   | $                                              | 8.66   |   |   | $      | 8.24   |   |   | $      | 6.07    |   |   | $ | 6.06 |   |   | $ | 5.65 |   |   | $ | 5.66 |   |
|                                      |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Oil positions:                            |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed price swaps: (2)                    |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MBbls)                     |   |                                           | 538    |   |   |   | 4,737  |   |   |   | 6,734   |   |   |   | 7,318 |   |   |   | 7,026 |   |   |   | 1,643 |   |
| Average price ($/Bbl)                     |   | $                                              | 90.00  |   |   | $      | 88.25  |   |   | $      | 93.16   |   |   | $ | 97.58 |   |   | $ | 93.58 |   |   | $ | 87.04 |   |
| Puts:                                     |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MBbls)                     |   |                                           | 562    |   |   |   | 2,352  |   |   |   | 2,196   |   |   |   | 2,190 |   |   |   | ― |   |   |   | ― |   |
| Average price ($/Bbl)                     |   | $                                              | 110.00 |   |   | $      | 75.00  |   |   | $      | 75.00   |   |   | $ | 75.00 |   |   | $ | ― |   |   | $ | ― |   |
| Collars:                                  |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MBbls)                     |   |                                           | 62     |   |   |   | 276    |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |   |   | ― |   |
| Average floor price ($/Bbl)               |   | $                                              | 90.00  |   |   | $      | 90.00  |   |   | $      | ― |   |   | $ | ― |   |   | $ | ― |   |   | $ | ― |   |
| Average ceiling price ($/Bbl)             |   | $                                              | 112.00 |   |   | $      | 112.25 |   |   | $      | ― |   |   | $ | ― |   |   | $ | ― |   |   | $ | ― |   |
| Total:                                    |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MBbls)                     |   |                                           | 1,162  |   |   |   | 7,365  |   |   |   | 8,930   |   |   |   | 9,508 |   |   |   | 7,026 |   |   |   | 1,643 |   |
| Average price ($/Bbl)                     |   | $                                              | 99.68  |   |   | $      | 84.09  |   |   | $      | 88.69   |   |   | $ | 92.38 |   |   | $ | 93.58 |   |   | $ | 87.04 |   |
|                                      |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Natural gas basis differential positions: |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PEPL basis swaps: (1)                     |   |                                           |   |   |   |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hedged volume (MMMBtu)                    |   |                                           | 7,194  |   |   |   | 35,541 |   |   |   | 37,735  |   |   |   | 38,854 |   |   |   | 42,194 |   |   |   | 42,194 |   |
| Hedged differential ($/MMBtu)             |   | $                                              | (0.97  | )      |   | $      | (0.96  | )      |   | $      | (0.89   | )      |   | $ | (0.89 | ) |   | $ | (0.39 | ) |   | $ | (0.39 | ) |

|   | (1) | Settle on the Panhandle Eastern Pipeline (“PEPL”) spot price of natural gas to hedge basis differential associated with natural gas production in the Mid-Continent Deep and Mid-Continent Shallow regions. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | As presented in the table above, the Company has certain outstanding fixed price oil swaps on 14,750 Bbls of daily production which may be extended annually at a price of $100.00 per Bbl for each of the years ending December 31, 2015, December 31, 2016, and December 31, 2017, if the counterparties determine that the strike prices are in-the-money on a designated date in each respective preceding year.  The extension for each year is exercisable without respect to the other years. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                                         |   | Three Months EndedSeptember 30, |    |   |   |
|--------------------------------------------------------------|--------|--------------------------------------|---------|--------|--------|
|                                                         |   |  2010                           |    | 2009   |   | Variance |
|                                                         |   | (in thousands)                       |
| Revenues and other:                                          |   |                                 |    |   |   |   |   |   |   |
| Natural gas sales                                            |   | $                                    | 53,801  |   |   | $ | 35,208 |   |   | $ | 18,593 |   |
| Oil sales                                                    |   |                                 | 95,625  |   |   |   | 50,135 |   |   |   | 45,490 |   |
| NGL sales                                                    |   |                                 | 27,880  |   |   |   | 17,646 |   |   |   | 10,234 |   |
| Total oil, natural gas and NGL sales                         |   |                                 | 177,306 |   |   |   | 102,989 |   |   |   | 74,317 |   |
| Gains (losses) on oil and natural gas derivatives            |   |                                 | 43,505  |   |   |   | (14,065 | ) |   |   | 57,570 |   |
| Natural gas marketing revenues                               |   |                                 | 635     |   |   |   | 1,351 |   |   |   | (716 | ) |
| Other revenues                                               |   |                                 | 915     |   |   |   | 150 |   |   |   | 765 |   |
|                                                         |   | $                                    | 222,361 |   |   | $ | 90,425 |   |   | $ | 131,936 |   |
| Expenses:                                                    |   |                                 |    |   |   |   |   |   |   |   |   |   |
| Lease operating expenses                                     |   | $                                    | 41,901  |   |   | $ | 33,453 |   |   | $ | 8,448 |   |
| Transportation expenses                                      |   |                                 | 5,154   |   |   |   | 6,367 |   |   |   | (1,213 | ) |
| Natural gas marketing expenses                               |   |                                 | 468     |   |   |   | 98 |   |   |   | 370 |   |
| General and administrative expenses (1)                      |   |                                 | 23,751  |   |   |   | 19,655 |   |   |   | 4,096 |   |
| Exploration costs                                            |   |                                 | 281     |   |   |   | 861 |   |   |   | (580 | ) |
| Bad debt expenses                                            |   |                                 | (70     | )      |   |   | 500 |   |   |   | (570 | ) |
| Depreciation, depletion and amortization                     |   |                                 | 62,482  |   |   |   | 49,440 |   |   |   | 13,042 |   |
| Taxes, other than income taxes                               |   |                                 | 12,011  |   |   |   | 5,965 |   |   |   | 6,046 |   |
| Losses on sale of assets and other, net                      |   |                                 | 6,073   |   |   |   | 1,999 |   |   |   | 4,074 |   |
|                                                         |   | $                                    | 152,051 |   |   | $ | 118,338 |   |   | $ | 33,713 |   |
| Other income and (expenses)                                  |   | $                                    | (66,134 | )      |   | $ | (54,491 | ) |   | $ | (11,643 | ) |
| Income (loss) from continuing operations before income taxes |   | $                                    | 4,176   |   |   | $ | (82,404 | ) |   | $ | 86,580 |   |
|                                                         |   |                                 |    |   |   |   |   |   |   |   |   |   |
| Adjusted EBITDA (2)                                          |   | $                                    | 184,964 |   |   | $ | 142,378 |   |   | $ | 42,586 |   |
| Adjusted net income (2)                                      |   | $                                    | 56,301  |   |   | $ | 45,924 |   |   | $ | 10,377 |   |

| (1) | General and administrative expenses for the three months ended September 30, 2010, and September 30, 2009, include approximately $3.1 million and $3.4 million, respectively, of noncash unit-based compensation expenses. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | This is a non-GAAP measure used by management to analyze the Company’s performance.  See “Non-GAAP Financial Measures” on page 40 for a reconciliation of the non-GAAP financial measure to its most directly comparable financial measure calculated and presented in accordance with GAAP. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                     |   | Three Months EndedSeptember 30, |   |   |   |
|------------------------------------------|--------|--------------------------------------|--------|--------|--------|
|                                     |   | 2010                                 |   | 2009   |   | Variance |
| Average daily production:                |   |                                 |   |   |   |   |   |   |   |
| Natural gas (MMcf/d)                     |   |                                 | 143    |   |   |   | 122 |   |   |   | 17 | % |
| Oil (MBbls/d)                            |   |                                 | 14.6   |   |   |   | 8.8 |   |   |   | 66 | % |
| NGL (MBbls/d)                            |   |                                 | 8.9    |   |   |   | 7.1 |   |   |   | 25 | % |
| Total (MMcfe/d)                          |   |                                 | 283    |   |   |   | 217 |   |   |   | 30 | % |
|                                     |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Weighted average prices (hedged): (1)    |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Natural gas (Mcf)                        |   | $                                    | 8.32   |   |   | $ | 8.38 |   |   |   | (1 | )% |
| Oil (Bbl)                                |   | $                                    | 91.80  |   |   | $ | 109.30 |   |   |   | (16 | )% |
| NGL (Bbl)                                |   | $                                    | 34.21  |   |   | $ | 27.06 |   |   |   | 26 | % |
|                                     |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Weighted average prices (unhedged): (2)  |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Natural gas (Mcf)                        |   | $                                    | 4.09   |   |   | $ | 3.14 |   |   |   | 30 | % |
| Oil (Bbl)                                |   | $                                    | 71.42  |   |   | $ | 61.90 |   |   |   | 15 | % |
| NGL (Bbl)                                |   | $                                    | 34.21  |   |   | $ | 27.06 |   |   |   | 26 | % |
|                                     |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Average NYMEX prices:                    |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Natural gas (MMBtu)                      |   | $                                    | 4.38   |   |   | $ | 3.39 |   |   |   | 29 | % |
| Oil (Bbl)                                |   | $                                    | 76.20  |   |   | $ | 68.86 |   |   |   | 11 | % |
|                                     |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Costs per Mcfe of production:            |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Lease operating expenses                 |   | $                                    | 1.61   |   |   | $ | 1.67 |   |   |   | (4 | )% |
| Transportation expenses                  |   | $                                    | 0.20   |   |   | $ | 0.32 |   |   |   | (38 | )% |
| General and administrative expenses (3)  |   | $                                    | 0.91   |   |   | $ | 0.98 |   |   |   | (7 | )% |
| Depreciation, depletion and amortization |   | $                                    | 2.40   |   |   | $ | 2.47 |   |   |   | (3 | )% |
| Taxes, other than income taxes           |   | $                                    | 0.46   |   |   | $ | 0.30 |   |   |   | 53 | % |

| (1) | Includes the effect of realized gains on derivatives of approximately $82.9 million and $97.2 million (excluding $44.8 million of realized net gains on canceled contracts) for the three months ended September 30, 2010, and September 30, 2009, respectively. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| (3) | General and administrative expenses for the three months ended September 30, 2010, and September 30, 2009, include approximately $3.1 million and $3.4 million, respectively, of noncash unit-based compensation expenses.  Excluding these amounts, general and administrative expenses for the three months ended September 30, 2010, and September 30, 2009, were $0.79 per Mcfe and $0.81 per Mcfe, respectively.  This is a non-GAAP measure used by management to analyze the Company’s performance. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                |   | Three Months EndedSeptember 30, |   |   |   |     |    |   |
|-------------------------------------|--------|--------------------------------------|--------|--------|--------|----------|---------|--------|
|                                |   | 2010                                 |   | 2009   |   | Variance |
| Average daily production (MMcfe/d): |   |                                 |   |   |   |     |    |   |   |   |   |   |
| Mid-Continent Deep                  |   |                                 | 136    |   |   |     | 132     |   |   |   | 4 |   |   |   | 3 | % |
| Mid-Continent Shallow               |   |                                 | 66     |   |   |     | 71      |   |   |   | (5 | ) |   |   | (7 | )% |
| California                          |   |                                 | 14     |   |   |     | 14      |   |   |   | — |   |   |   | — |   |
| Permian Basin                       |   |                                 | 36     |   |   |     | — |   |   |   | 36 |   |   |   | — |   |
| Michigan                            |   |                                 | 31     |   |   |     | — |   |   |   | 31 |   |   |   | — |   |
|                                |   |                                 | 283    |   |   |     | 217     |   |   |   | 66 |   |   |   | 30 | % |

----

Table of Contents

----

Table of Contents

|                                             |   | Three Months EndedSeptember 30, |    |   |   |
|--------------------------------------------------|--------|--------------------------------------|---------|--------|--------|
|                                             |   | 2010                                 |    | 2009   |   | Variance |
|                                             |   | (in thousands)                       |
|                                             |   |                                 |    |   |   |   |   |   |   |
| Interest expense, net of amounts capitalized     |   | $                                    | (53,497 | )      |   | $ | (28,025 | ) |   | $ | (25,472 | ) |
| Realized losses on interest rate swaps           |   |                                 | ― |   |   |   | (10,958 | ) |   |   | 10,958 |   |
| Realized losses on canceled interest rate swaps  |   |                                 | (49,590 | )      |   |   | ― |   |   |   | (49,590 | ) |
| Unrealized gains (losses) on interest rate swaps |   |                                 | 38,089  |   |   |   | (14,751 | ) |   |   | 52,840 |   |
| Other, net                                       |   |                                 | (1,136  | )      |   |   | (757 | ) |   |   | (379 | ) |
|                                             |   | $                                    | (66,134 | )      |   | $ | (54,491 | ) |   | $ | (11,643 | ) |

----

Table of Contents

|                                                         |   | Nine Months EndedSeptember 30, |     |   |   |
|--------------------------------------------------------------|--------|-------------------------------------|----------|--------|--------|
|                                                         |   | 2010                                |     | 2009   |   | Variance |
|                                                         |   | (in thousands)                      |
| Revenues and other:                                          |   |                                |     |   |   |   |   |   |   |
| Natural gas sales                                            |   | $                                   | 158,114  |   |   | $ | 111,749 |   |   | $ | 46,365 |   |
| Oil sales                                                    |   |                                | 237,815  |   |   |   | 119,171 |   |   |   | 118,644 |   |
| NGL sales                                                    |   |                                | 83,958   |   |   |   | 43,839 |   |   |   | 40,119 |   |
| Total oil, natural gas and NGL sales                         |   |                                | 479,887  |   |   |   | 274,759 |   |   |   | 205,128 |   |
| Gains (losses) on oil and natural gas derivatives            |   |                                | 263,299  |   |   |   | (85,525 | ) |   |   | 348,824 |   |
| Natural gas marketing revenues                               |   |                                | 3,252    |   |   |   | 3,050 |   |   |   | 202 |   |
| Other revenues                                               |   |                                | 1,363    |   |   |   | 1,757 |   |   |   | (394 | ) |
|                                                         |   | $                                   | 747,801  |   |   | $ | 194,041 |   |   | $ | 553,760 |   |
| Expenses:                                                    |   |                                |     |   |   |   |   |   |   |   |   |   |
| Lease operating expenses                                     |   | $                                   | 111,490  |   |   | $ | 100,322 |   |   | $ | 11,168 |   |
| Transportation expenses                                      |   |                                | 15,030   |   |   |   | 11,850 |   |   |   | 3,180 |   |
| Natural gas marketing expenses                               |   |                                | 2,209    |   |   |   | 1,318 |   |   |   | 891 |   |
| General and administrative expenses (1)                      |   |                                | 71,545   |   |   |   | 63,247 |   |   |   | 8,298 |   |
| Exploration costs                                            |   |                                | 4,297    |   |   |   | 4,625 |   |   |   | (328 | ) |
| Bad debt expenses                                            |   |                                | (89      | )      |   |   | 500 |   |   |   | (589 | ) |
| Depreciation, depletion and amortization                     |   |                                | 169,614  |   |   |   | 151,934 |   |   |   | 17,680 |   |
| Taxes, other than income taxes                               |   |                                | 32,602   |   |   |   | 21,414 |   |   |   | 11,188 |   |
| (Gains) losses on sale of assets and other, net              |   |                                | 5,699    |   |   |   | (24,717 | ) |   |   | 30,416 |   |
|                                                         |   | $                                   | 412,397  |   |   | $ | 330,493 |   |   | $ | 81,904 |   |
| Other income and (expenses)                                  |   | $                                   | (200,455 | )      |   | $ | (93,045 | ) |   | $ | (107,410 | ) |
| Income (loss) from continuing operations before income taxes |   | $                                   | 134,949  |   |   | $ | (229,497 | ) |   | $ | 364,446 |   |
|                                                         |   |                                |     |   |   |   |   |   |   |   |   |   |
| Adjusted EBITDA (2)                                          |   | $                                   | 511,446  |   |   | $ | 423,790 |   |   | $ | 87,656 |   |
| Adjusted net income (2)                                      |   | $                                   | 156,299  |   |   | $ | 154,257 |   |   | $ | 2,042 |   |

| (1) | General and administrative expenses for the nine months ended September 30, 2010, and September 30, 2009, include approximately $10.3 million and $11.2 million, respectively, of noncash unit-based compensation expenses. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | This is a non-GAAP measure used by management to analyze the Company’s performance.  See “Non-GAAP Financial Measures” on page 40 for a reconciliation of the non-GAAP financial measure to its most directly comparable financial measure calculated and presented in accordance with GAAP. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                     |   | Nine Months EndedSeptember 30, |   |   |   |
|------------------------------------------|--------|-------------------------------------|--------|--------|--------|
|                                     |   | 2010                                |   | 2009   |   | Variance |
| Average daily production:                |   |                                |   |   |   |   |   |   |   |
| Natural gas (MMcf/d)                     |   |                                | 131    |   |   |   | 129 |   |   |   | 2 | % |
| Oil (MBbls/d)                            |   |                                | 12.0   |   |   |   | 8.8 |   |   |   | 36 | % |
| NGL (MBbls/d)                            |   |                                | 8.0    |   |   |   | 6.1 |   |   |   | 31 | % |
| Total (MMcfe/d)                          |   |                                | 251    |   |   |   | 218 |   |   |   | 15 | % |
|                                     |   |                                |   |   |   |   |   |   |   |   |   |   |
| Weighted average prices (hedged): (1)    |   |                                |   |   |   |   |   |   |   |   |   |   |
| Natural gas (Mcf)                        |   | $                                   | 8.66   |   |   | $ | 8.16 |   |   |   | 6 | % |
| Oil (Bbl)                                |   | $                                   | 96.01  |   |   | $ | 113.69 |   |   |   | (16 | )% |
| NGL (Bbl)                                |   | $                                   | 38.35  |   |   | $ | 26.47 |   |   |   | 45 | % |
|                                     |   |                                |   |   |   |   |   |   |   |   |   |   |
| Weighted average prices (unhedged): (2)  |   |                                |   |   |   |   |   |   |   |   |   |   |
| Natural gas (Mcf)                        |   | $                                   | 4.42   |   |   | $ | 3.18 |   |   |   | 39 | % |
| Oil (Bbl)                                |   | $                                   | 72.57  |   |   | $ | 49.68 |   |   |   | 46 | % |
| NGL (Bbl)                                |   | $                                   | 38.35  |   |   | $ | 26.47 |   |   |   | 45 | % |
|                                     |   |                                |   |   |   |   |   |   |   |   |   |   |
| Average NYMEX prices:                    |   |                                |   |   |   |   |   |   |   |   |   |   |
| Natural gas (MMBtu)                      |   | $                                   | 4.59   |   |   | $ | 3.93 |   |   |   | 17 | % |
| Oil (Bbl)                                |   | $                                   | 77.65  |   |   | $ | 57.19 |   |   |   | 36 | % |
|                                     |   |                                |   |   |   |   |   |   |   |   |   |   |
| Costs per Mcfe of production:            |   |                                |   |   |   |   |   |   |   |   |   |   |
| Lease operating expenses                 |   | $                                   | 1.63   |   |   | $ | 1.69 |   |   |   | (4 | )% |
| Transportation expenses                  |   | $                                   | 0.22   |   |   | $ | 0.20 |   |   |   | 10 | % |
| General and administrative expenses (3)  |   | $                                   | 1.04   |   |   | $ | 1.06 |   |   |   | (2 | )% |
| Depreciation, depletion and amortization |   | $                                   | 2.47   |   |   | $ | 2.56 |   |   |   | (4 | )% |
| Taxes, other than income taxes           |   | $                                   | 0.48   |   |   | $ | 0.36 |   |   |   | 33 | % |

| (1) | Includes the effect of realized gains on derivatives of approximately $228.6 million and $328.2 million (excluding $49.0 million of realized net gains on canceled contracts) for the nine months ended September 30, 2010, and September 30, 2009, respectively. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| (3) | General and administrative expenses for the nine months ended September 30, 2010, and September 30, 2009, include approximately $10.3 million and $11.2 million, respectively, of noncash unit-based compensation expenses.  Excluding these amounts, general and administrative expenses for the nine months ended September 30, 2010, and September 30, 2009, were $0.89 per Mcfe and $0.88 per Mcfe, respectively.  This is a non-GAAP measure used by management to analyze the Company’s performance. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                |   | Nine Months EndedSeptember 30, |   |   |   |     |    |   |
|-------------------------------------|--------|-------------------------------------|--------|--------|--------|----------|---------|--------|
|                                |   | 2010                                |   | 2009   |   | Variance |
| Average daily production (MMcfe/d): |   |                                |   |   |   |     |    |   |   |   |   |   |
| Mid-Continent Deep                  |   |                                | 132    |   |   |     | 137     |   |   |   | (5 | ) |   |   | (4 | )% |
| Mid-Continent Shallow               |   |                                | 66     |   |   |     | 67      |   |   |   | (1 | ) |   |   | (1 | )% |
| California                          |   |                                | 14     |   |   |     | 14      |   |   |   | — |   |   |   | — |   |
| Permian Basin                       |   |                                | 22     |   |   |     | — |   |   |   | 22 |   |   |   | — |   |
| Michigan                            |   |                                | 17     |   |   |     | — |   |   |   | 17 |   |   |   | — |   |
|                                |   |                                | 251    |   |   |     | 218     |   |   |   | 33 |   |   |   | 15 | % |

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|                                            |   | Nine Months EndedSeptember 30, |     |   |   |
|-------------------------------------------------|--------|-------------------------------------|----------|--------|--------|
|                                            |   | 2010                                |     | 2009   |   | Variance |
|                                            |   | (in thousands)                      |
|                                            |   |                                |     |   |   |   |   |   |   |
| Interest expense, net of amounts capitalized    |   | $                                   | (127,119 | )      |   | $ | (65,696 | ) |   | $ | (61,423 | ) |
| Realized losses on interest rate swaps          |   |                                | (8,021   | )      |   |   | (31,629 | ) |   |   | 23,608 |   |
| Realized losses on canceled interest rate swaps |   |                                | (123,865 | )      |   |   | (60 | ) |   |   | (123,805 | ) |
| Unrealized gains on interest rate swaps         |   |                                | 63,978   |   |   |   | 6,327 |   |   |   | 57,651 |   |
| Other, net                                      |   |                                | (5,428   | )      |   |   | (1,987 | ) |   |   | (3,441 | ) |
|                                            |   | $                                   | (200,455 | )      |   | $ | (93,045 | ) |   | $ | (107,410 | ) |

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|                                                 |   | Nine Months EndedSeptember 30, |       |   |   |
|------------------------------------------------------|--------|-------------------------------------|------------|--------|--------|
|                                                 |   | 2010                                |       | 2009   |   | Variance |
|                                                 |   | (in thousands)                      |       |
| Net cash:                                            |   |                                |       |   |   |   |   |   |   |
| Provided by operating activities (1)                 |   | $                                   | 183,419    |   |   | $ | 330,124 |   |   | $ | (146,705 | ) |
| Used in investing activities                         |   |                                | (1,013,549 | )      |   |   | (247,993 | ) |   |   | (765,556 | ) |
| Provided by (used in) financing activities           |   |                                | 1,225,959  |   |   |   | (100,204 | ) |   |   | 1,326,163 |   |
| Net increase (decrease) in cash and cash equivalents |   | $                                   | 395,829    |   |   | $ | (18,073 | ) |   | $ | 413,902 |   |

| (1) | The nine months ended September 30, 2010, and September 30, 2009, include premiums paid for commodity derivatives of approximately $91.0 million and $93.6 million, respectively. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                |   | Nine Months EndedSeptember 30, |
|---------------------------------------------------------------------|--------|-------------------------------------|
|                                                                |   | 2010                                |   | 2009 |
|                                                                |   | (in thousands)                      |
| Cash flow from investing activities:                                |   |                                |   |   |   |   |
| Acquisition of oil and natural gas properties, net of cash acquired |   | $                                   | (894,521 | ) |   | $ | (116,694 | ) |
| Capital expenditures                                                |   |                                | (119,724 | ) |   |   | (157,981 | ) |
| Proceeds from sale of properties and equipment                      |   |                                | 696 |   |   |   | 26,682 |   |
|                                                                |   | $                                   | (1,013,549 | ) |   | $ | (247,993 | ) |

|                      |   | Nine Months EndedSeptember 30, |
|---------------------------|--------|-------------------------------------|
|                      |   | 2010                                |   | 2009 |
|                      |   | (in thousands)                      |
| Proceeds from borrowings: |   |                                |   |   |   |   |
| Credit facility           |   | $                                   | 920,000 |   |   | $ | 361,500 |   |
| Senior notes              |   |                                | 2,250,816 |   |   |   | 237,703 |   |
|                      |   | $                                   | 3,170,816 |   |   | $ | 599,203 |   |
| Repayments of debt:       |   |                                |   |   |   |   |   |   |
| Credit facility           |   | $                                   | (2,020,000 | ) |   | $ | (513,893 | ) |

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| Date Paid     |   | Period Covered by Distribution      |   | DistributionPer Unit |   | TotalDistribution |
|---------------|--------|-------------------------------------|--------|----------------------|--------|-------------------|
|          |   |                                |   |                 |   |              | (in millions) |
|          |   |                                |   |                 |   |              |   |   |
| August 2010   |   | April 1 – June 30, 2010       |   | $                    | 0.63   |              |   | $ | 92.9 |   |
| May 2010      |   | January 1 – March 31, 2010    |   | $                    | 0.63   |              |   | $ | 93.1 |   |
| February 2010 |   | October 1 – December 31, 2009 |   | $                    | 0.63   |              |   | $ | 82.3 |   |

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|   | · | Net operating cash flow from acquisitions and divestitures, effective date through closing date; |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | Interest expense; |
|--------|--------|-------------------|

|   | · | Depreciation, depletion and amortization; |
|--------|--------|-------------------------------------------|

|   | · | Impairment of goodwill and long-lived assets; |
|--------|--------|-----------------------------------------------|

|   | · | Write-off of deferred financing fees and other; |
|--------|--------|-------------------------------------------------|

|   | · | (Gains) losses on sale of assets and other, net; |
|--------|--------|--------------------------------------------------|

|   | · | Provision for legal matters; |
|--------|--------|------------------------------|

|   | · | Unrealized (gains) losses on commodity derivatives; |
|--------|--------|-----------------------------------------------------|

|   | · | Unrealized (gains) losses on interest rate derivatives; |
|--------|--------|---------------------------------------------------------|

|   | · | Realized (gains) losses on interest rate derivatives; |
|--------|--------|-------------------------------------------------------|

|   | · | Realized (gains) losses on canceled derivatives; |
|--------|--------|--------------------------------------------------|

|   | · | Unit-based compensation expenses; |
|--------|--------|-----------------------------------|

|   | · | Exploration costs; and |
|--------|--------|------------------------|

|   | · | Income tax (benefit) expense. |
|--------|--------|-------------------------------|

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|                                                                                            |   | Three Months EndedSeptember 30, |    | Nine Months EndedSeptember 30, |
|-------------------------------------------------------------------------------------------------|--------|--------------------------------------|---------|-------------------------------------|
|                                                                                            |   | 2010                                 |    | 2009                                |   | 2010 |   | 2009 |
|                                                                                            |   | (in thousands)                       |
|                                                                                            |   |                                 |    |                                |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations                                                        |   | $                                    | 4,143   |                                |   | $ | (82,462 | ) |   | $ | 129,239 |   |   | $ | (229,876 | ) |
| Plus:                                                                                           |   |                                 |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Net operating cash flow from acquisitions and divestitures, effective date through closing date |   |                                 | 4,200   |                                |   |   | 3,593 |   |   |   | 22,717 |   |   |   | 3,593 |   |
| Interest expense, cash                                                                          |   |                                 | 16,125  |                                |   |   | 21,978 |   |   |   | 55,818 |   |   |   | 50,990 |   |
| Interest expense, noncash                                                                       |   |                                 | 37,372  |                                |   |   | 6,047 |   |   |   | 71,301 |   |   |   | 14,706 |   |
| Depreciation, depletion and amortization                                                        |   |                                 | 62,482  |                                |   |   | 49,440 |   |   |   | 169,614 |   |   |   | 151,934 |   |
| Write-off of deferred financing fees and other                                                  |   |                                 | ― |                                |   |   | ― |   |   |   | 2,076 |   |   |   | 204 |   |
| (Gains) losses on sale of assets and other, net                                                 |   |                                 | 1,276   |                                |   |   | 2,361 |   |   |   | 1,946 |   |   |   | (23,290 | ) |
| Provision for legal matters                                                                     |   |                                 | 5,000   |                                |   |   | ― |   |   |   | 5,000 |   |   |   | ― |   |
| Unrealized (gains) losses on commodity derivatives                                              |   |                                 | 39,405  |                                |   |   | 156,054 |   |   |   | (34,726 | ) |   |   | 462,727 |   |
| Unrealized (gains) losses on interest rate derivatives                                          |   |                                 | (38,089 | )                                   |   |   | 14,751 |   |   |   | (63,978 | ) |   |   | (6,327 | ) |
| Realized losses on interest rate derivatives                                                    |   |                                 | ― |                                |   |   | 10,958 |   |   |   | 8,021 |   |   |   | 31,629 |   |
| Realized (gains) losses on canceled derivatives                                                 |   |                                 | 49,590  |                                |   |   | (44,780 | ) |   |   | 123,865 |   |   |   | (48,977 | ) |
| Unit-based compensation expenses                                                                |   |                                 | 3,146   |                                |   |   | 3,519 |   |   |   | 10,546 |   |   |   | 11,473 |   |
| Exploration costs                                                                               |   |                                 | 281     |                                |   |   | 861 |   |   |   | 4,297 |   |   |   | 4,625 |   |
| Income tax expense                                                                              |   |                                 | 33      |                                |   |   | 58 |   |   |   | 5,710 |   |   |   | 379 |   |
| Adjusted EBITDA from continuing operations                                                      |   | $                                    | 184,964 |                                |   | $ | 142,378 |   |   | $ | 511,446 |   |   | $ | 423,790 |   |

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|                                                                  |   | Three Months EndedSeptember 30,    |    | Nine Months EndedSeptember 30, |
|-----------------------------------------------------------------------|--------|-----------------------------------------|---------|-------------------------------------|
|                                                                  |   | 2010                                    |    | 2009                                |   | 2010 |   | 2009 |
|                                                                  |   | (in thousands, except per unit amounts) |
|                                                                  |   |                                    |    |                                |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations                              |   | $                                       | 4,143   |                                |   | $ | (82,462 | ) |   | $ | 129,239 |   |   | $ | (229,876 | ) |
| Plus:                                                                 |   |                                    |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized (gains) losses on commodity derivatives                    |   |                                    | 39,405  |                                |   |   | 156,054 |   |   |   | (34,726 | ) |   |   | 462,727 |   |
| Unrealized (gains) losses on interest rate derivatives                |   |                                    | (38,089 | )                                   |   |   | 14,751 |   |   |   | (63,978 | ) |   |   | (6,327 | ) |
| Realized (gains) losses on canceled derivatives                       |   |                                    | 49,590  |                                |   |   | (44,780 | ) |   |   | 123,865 |   |   |   | (48,977 | ) |
| (Gains) losses on sale of assets, net                                 |   |                                    | 1,252   |                                |   |   | 2,361 |   |   |   | 1,899 |   |   |   | (23,290 | ) |
| Adjusted net income from continuing operations                        |   | $                                       | 56,301  |                                |   | $ | 45,924 |   |   | $ | 156,299 |   |   | $ | 154,257 |   |
|                                                                  |   |                                    |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from continuing operations per unit – basic       |   | $                                       | 0.03    |                                |   | $ | (0.69 | ) |   | $ | 0.91 |   |   | $ | (1.97 | ) |
| Plus, per unit:                                                       |   |                                    |    |                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized (gains) losses on commodity derivatives                    |   |                                    | 0.26    |                                |   |   | 1.30 |   |   |   | (0.24 | ) |   |   | 3.96 |   |
| Unrealized (gains) losses on interest rate derivatives                |   |                                    | (0.26   | )                                   |   |   | 0.12 |   |   |   | (0.45 | ) |   |   | (0.05 | ) |
| Realized (gains) losses on canceled derivatives                       |   |                                    | 0.34    |                                |   |   | (0.37 | ) |   |   | 0.87 |   |   |   | (0.42 | ) |
| (Gains) losses on sale of assets, net                                 |   |                                    | 0.01    |                                |   |   | 0.02 |   |   |   | 0.01 |   |   |   | (0.20 | ) |
| Adjusted net income from continuing operations per unit – basic |   | $                                       | 0.38    |                                |   | $ | 0.38 |   |   | $ | 1.10 |   |   | $ | 1.32 |   |

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|   | · | business strategy; |
|--------|--------|--------------------|

|   | · | acquisition strategy; |
|--------|--------|-----------------------|

|   | · | financial strategy; |
|--------|--------|---------------------|

|   | · | drilling locations; |
|--------|--------|---------------------|

|   | · | oil, natural gas and NGL reserves; |
|--------|--------|------------------------------------|

|   | · | realized oil, natural gas and NGL prices; |
|--------|--------|-------------------------------------------|

|   | · | production volumes; |
|--------|--------|---------------------|

|   | · | lease operating expenses, general and administrative expenses and development costs; |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | future operating results; and |
|--------|--------|-------------------------------|

|   | · | plans, objectives, expectations and intentions. |
|--------|--------|-------------------------------------------------|

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Item 3.             Quantitative and Qualitative Disclosures About Market Risk

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Item 4.             Controls and Procedures

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PART II – OTHER INFORMATION

Item 1.             Legal Proceedings

Item 1A.          Risk Factors

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Item 2.             Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.             Defaults Upon Senior Securities

Item 4.             Reserved

Item 5.             Other Information

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Item 6.             Exhibits

| Exhibit Number |       | Description |
|----------------|------------|-------------|
| 2              | .1*† | —     | Purchase and Sale Agreement, dated September 3, 2010, between Linn Energy Holdings, LLC, as purchaser and Patriot Resources Partners LLC, as seller |
| 2              | .2*† | —     | Purchase and Sale Agreement, dated September 3, 2010, between Linn Energy Holdings, LLC, as purchaser and Crownrock, LP, as seller |
| 2              | .3*† | —     | Purchase and Sale Agreement, dated September 2, 2010, between Linn Energy Holdings, LLC, as purchaser and Element Petroleum, LP, as seller |
| 3              | .1         | —     | Third Amended and Restated Limited Liability Company Agreement of Linn Energy, LLC, dated September 3, 2010 (incorporated herein by reference to Exhibit 3.1 to Current Report on Form 8-K filed September 7, 2010) |
| 4              | .1         | —     | Indenture, dated September 13, 2010, among Linn Energy, LLC, Linn Energy Finance Corp., the Subsidiary Guarantors named therein and U. S. Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K filed September 13, 2010) |
| 4              | .2         | —     | Registration Rights Agreement, dated September 13, 2010, among Linn Energy, LLC, Linn Energy Finance Corp., the Subsidiary Guarantors named therein and the representatives of the Initial Purchasers named therein (incorporated herein by reference to Exhibit 4.2 to Current Report on Form 8-K filed September 7, 2010) |
| 10             | .1*        | —     | Fourth Amendment, dated October 15, 2010, to Fourth Amended and Restated Credit Agreement among Linn Energy, LLC as Borrower, BNP Paribas, as Administrative Agent, and the Lenders and agents Party thereto |
| 31             | .1*        | —     | Section 302 Certification of Mark E. Ellis, President and Chief Executive Officer of Linn Energy, LLC |
| 31             | .2*        | —     | Section 302 Certification of Kolja Rockov, Executive Vice President and Chief Financial Officer of Linn Energy, LLC |
| 32             | .1*        | —     | Section 906 Certification of Mark E. Ellis, President and Chief Executive Officer of Linn Energy, LLC |
| 32             | .2*        | —     | Section 906 Certification of Kolja Rockov, Executive Vice President and Chief Financial Officer of Linn Energy, LLC |
| 101            | .INS**     | —     | XBRL Instance Document |
| 101            | .SCH**     | —     | XBRL Taxonomy Extension Schema Document |
| 101            | .CAL**     | —     | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101            | .DEF**     | —     | XBRL Taxonomy Extension Definition Linkbase Document |
| 101            | .LAB**     | —     | XBRL Taxonomy Extension Label Linkbase Document |
| 101            | .PRE**     | —     | XBRL Taxonomy Extension Presentation Linkbase Document |

| * | Filed herewith. |
|---|-----------------|

| ** | Furnished herewith. |
|----|---------------------|

| † | The schedules to this agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K.  The Company will furnish copies of such schedules to the Securities and Exchange Commission upon request. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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SIGNATURE

|                        | LINN ENERGY, LLC                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        | (Registrant)                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Date: October 28, 2010 | /s/  David B. Rottino                                                                                                                                                                                                                                                                                                                                                                                                    |
|                        | David B. Rottino                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                        | Senior Vice President of Finance, Business Developmentand Chief Accounting Officer                                                         |
|                        | (As Duly Authorized Officer and Chief Accounting Officer)                                                                                                                                                                                                                                                                                                                                                                          |

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