With the market's spotlight shining brightly these days on its hedging practices, LINN Energy (LINEQ) updated investors as it delivered its fourth-quarter and full-year results. This past year was a landmark year for the company, marked by growth in several key areas. Let's drill down and hit the highlights. 

LINN Energy as you likely know is a different kind of energy company. As an upstream oil and gas producer structured similarly to a master limited partnership, the metrics by which we judge LINN are different from how you'd judge a more traditional exploration and production company. While we're still interested in production and reserve growth, when it comes to its financial results, distributable cash flow is the more important metric here. As you might have guessed its earnings-per-share number is typically affected by those same hedging practices that are under the microscope.

Producing results
LINN's average daily production jumped 88% in the fourth quarter to 800 million cubic feet equivalent per day, or MMcfe/d. For the full-year production jumped 82% to 671 MMcfe/d from just 369 MMcfe/d in 2011. This growth was primarily driven by $2.8 billion in acquisitions over the past year, including two separate deals with BP (BP 0.13%), each over a billion dollars. In both cases BP was selling mature producing assets and taking the cash to bolster its balance sheet.

LINN loves those type of deals as it can pick up long-life, low-decline assets to grow its current production while also picking up future upside as it continues to drill on those acquired acres. Over the past year LINN invested capital which grew its production organically by 15%. A bulk of that capital has been focused on the oil-producing Hotshooter zone of the Granite Wash. In the past year the company has drilled 26 wells in that very profitable zone which contributed to LINN's exceptional results.

Reserving for the future
Its this liquids-rich drilling program which helped boost LINN's reserve replacement ratio 150% over the past year. When combined with assets acquired over the past year, LINN's reserve replacement ratio was 869% which is a crucial metric as its reserves are the lifeblood of the company. Over the past year it was able to increase its total proved reserves by 1.4 trillion cubic feet equivalent to 4.8 trillion cubic feet equivalent or up 42% over 2011 reserves. LINN's ability to replace reserves both organically through the drill bit and by acquisitions ensures that it can maintain and grow its distribution to investors for decades to come.

Delivering returns
LINN's production growth delivered a 35% increase in adjusted EBITDA for the fourth quarter and 40% for the full year. Despite the many moving parts, LINN was also able to deliver a distribution coverage ratio of 1.07 times for the fourth quarter and 1.14 times for the full year. That's after increasing its distribution by 5% last April.

A coverage ratio in the MLP space needs to be above 1.0 times before the company gets into trouble and LINN prefers its ratio to be above 1.2 times. While the company didn't deliver as conservative ratio last year, it will in 2013 thanks in part to its announced acquisition of Berry Petroleum (NYSE: BRY) in conjunction with LinnCo (NASDAQ: LNCO). That very cash flow accretive deal will enable LINN and LinnCo to raise the payout to investors while maintaining a more conservative payout ratio.   

My Foolish take
There are a lot of moving parts here with LINN, but the bottom line on LINN is that the company delivered exceptional financial and operational results over the past year. It was a transformational year for the company as the IPO of LinnCo really took the company to another level, as the Berry Petroleum acquisition attests. Stay tuned to Fool.com as we continue to follow this unique story in the oil and gas industry.